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What changed in EASTMAN KODAK CO's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of EASTMAN KODAK CO's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+349 added−381 removedSource: 10-K (2024-03-14) vs 10-K (2023-03-16)

Top changes in EASTMAN KODAK CO's 2023 10-K

349 paragraphs added · 381 removed · 260 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

116 edited+37 added−39 removed146 unchanged
Biggest changeFailure to comply with such laws and regulations or liabilities imposed as a result of such laws and regulations could have an adverse effect on our business, results of operations and financial condition. ● If Kodak fails to maintain effective internal controls over financial reporting, we may not be able to accurately report our financial results, which could have a material adverse effect on Kodak ’ s operations, investor confidence in our business and the trading prices of our securities. ● Kodak may have additional tax liabilities. 10 Table of Contents ● Kodak ’ s future pension and other postretirement benefit plan costs and required level of contributions could be unfavorably impacted by changes in actuarial assumptions, market performance of plan assets and obligations imposed by legislation or pension authorities which could adversely affect our financial position, results of operations, and cash flow. ● Kodak may be required to recognize impairments in the value of our goodwill and/or other long-lived assets which could adversely affect our results of operations.
Biggest changeSummary of Legal, Regulatory and Compliance Risks ● Legal proceedings and governmental investigations could have a material adverse effect on our business operations and prospects, reputation, financial condition, results of operations and stock price. ● Our business and financial condition can be impaired by improper conduct by any of our employees, agents, or business partners. ● Failure to comply with privacy, data protection and cyber security laws and regulations could have a materially adverse effect on Kodak ’ s reputation, results of operations or financial condition. ● Failure to comply with environmental laws and regulations or liabilities imposed as a result of such laws and regulations could have an adverse effect on our business, results of operations and financial condition. ● If Kodak fails to maintain effective internal controls over financial reporting, we may not be able to accurately report our financial results, which could have a material adverse effect on Kodak ’ s operations, investor confidence in our business and the trading prices of our securities. ● Kodak may have additional tax liabilities. ● Kodak ’ s future pension and other postretirement benefit plan costs and required level of contributions could be unfavorably impacted by changes in actuarial assumptions, market performance of plan assets and obligations imposed by legislation or pension authorities which could adversely affect our financial position, results of operations, and cash flow. ● Kodak may be required to recognize impairments in the value of our trade name and/or other long-lived assets which could adversely affect our results of operations. 10 Table of Contents Summary of Risks Related to the Company ’ s Common Stock ● The conversion of the Series B Preferred Stock and Series C Preferred Stock into shares of the Company ’ s common stock may dilute the value for the current holders of the Company ’ s common stock. ● The holder of the Series C Preferred Stock may influence the composition of the Board and future actions taken by the Board. ● The resale of the Company ’ s common stock may adversely affect the price of our common stock. ● The resale of a significant portion of the Company ’ s securities or certain accumulations or transfers of the Company ’ s securities could result in a change of control of the Company and the loss of favorable tax attributes. ● The Company ’ s stock price has been and may continue to be volatile.
Brand The Brand segment includes licensing of the Kodak brand to third parties. Kodak currently licenses its brand for use with a range of products including digital, instant print and 35mm film cameras, printing and scanning consumer use devices, batteries, apparel and eyewear.
Brand The Brand segment includes licensing of the Kodak brand to third parties. Kodak currently licenses its brand for use with a range of products including digital, instant print and 35mm film cameras, printing and scanning consumer use devices, eyewear, batteries and apparel.
Kodak intends to continue efforts to grow its portfolio of brand licenses to generate both ongoing royalty streams and upfront payments. Brand licensees use the Kodak brand on their products and use their own distribution channels. 6 Table of Contents RAW MATERIALS The raw materials used by Kodak are many and varied and are generally readily available.
Kodak intends to continue efforts to grow its portfolio of brand licenses to generate both ongoing royalty streams and upfront payments. Brand licensees use the Kodak brand on their own products and use their own distribution channels. 6 Table of Contents RAW MATERIALS The raw materials used by Kodak are many and varied and are generally readily available.
Kodak’s success greatly depends on identifying, attracting, engaging, developing, and retaining a highly skilled workforce in multiple areas within Kodak. Outside the U.S. there are employees in certain countries that are represented by unions or similar organizations, such as works councils, or are covered by collective bargaining agreements .
Kodak’s success depends on identifying, attracting, engaging, developing, and retaining a highly skilled workforce in multiple areas within Kodak. Outside the U.S. there are employees in certain countries that are represented by unions or similar organizations, such as works councils, or are covered by collective bargaining agreements.
Kodak’s need for additional liquidity could significantly increase and our supply could be materially disrupted if a significant portion of our key suppliers took one or more of the actions described above, which could have a material adverse effect on our sales, customer satisfaction, cash flows, liquidity and financial position. 19 Table of Contents Due to the nature of the products we sell and Kodak ’ s worldwide distribution, Kodak is exposed to fluctuations in foreign currency exchange rates, interest rates and commodity costs which, together with tariffs that may be imposed, may adversely impact our results of operations and financial position.
Kodak’s need for additional liquidity could significantly increase and our supply could be materially disrupted if a significant portion of our key suppliers took one or more of the actions described above, which could have a material adverse effect on our sales, customer satisfaction, cash flows, liquidity and financial position. 18 Table of Contents Due to the nature of the products we sell and Kodak ’ s worldwide distribution, Kodak is exposed to fluctuations in foreign currency exchange rates, interest rates and commodity costs which, together with tariffs that may be imposed, may adversely impact our results of operations and financial position.
Kodak’s assessment and response may as a result be incomplete or inferior when compared to our competitors, which could adversely affect our product roadmaps and associated revenue streams. Kodak has reduced the scope of our corporate-focused research and development activities.
Kodak’s assessment and response may as a result be incomplete or inferior when compared to our competitors, which could adversely affect our product roadmaps and associated revenue streams. Kodak has reduced the scope of its corporate-focused research and development activities.
Kodak has not generated positive operating cash flows without supplementing such cash flow from operations with financing and monetization transactions over the past several years. Kodak's businesses may not grow or continue to generate the same or enough cash flow.
Kodak has not consistently generated positive operating cash flows without supplementing such cash flow from operations with financing and monetization transactions over the past several years. Kodak's businesses may not grow or continue to generate the same or enough cash flow.
If Kodak is unable to provide competitive financing solutions to our customers or if we extend credit to customers whose creditworthiness deteriorates, our revenues, profitability and financial position could be adversely impacted. 20 Table of Contents Risks Related to Kodak ’ s Indebtedness and Access to Capital Markets The Company ’ s substantial monetary obligations require a portion of our cash flow be used to fund other obligations rather than be invested in the business and could adversely affect our ability to fund our operations.
If Kodak is unable to provide competitive financing solutions to our customers or if we extend credit to customers whose creditworthiness deteriorates, our revenues, profitability and financial position could be adversely impacted. 19 Table of Contents Risks Related to Kodak ’ s Indebtedness and Access to Capital Markets The Company ’ s substantial monetary obligations require a portion of our cash flow to be used to fund other obligations rather than be invested in the business and could adversely affect our ability to fund our operations.
Kodak’s ability to obtain capital and the costs of such capital are dependent on numerous factors, including: • Covenants in the Credit Agreements; • Obtaining a consent from the holders of Series B and C Preferred Stock for the issuance of additional preferred shares which rank senior or pari passu to the Series B and C Preferred Stock; • Investor confidence in Kodak and the markets in which we operate; • Our financial performance and projected financial performance and the financial performance and projected financial performance of our subsidiaries; • Our levels of debt and redemption obligations; • Our ability to generate positive cash flow; • Our ability to consummate monetization transactions including asset sales; • Our requirements for posting collateral under various commercial agreements; • Our current non-investment grade credit rating; • Our long-term business prospects; and • General economic and capital market conditions.
Kodak’s ability to obtain capital and the costs of such capital are dependent on numerous factors, including: • Covenants in the Credit Agreements; • Obtaining a consent from the holders of Series B and C Preferred Stock for the issuance of additional preferred shares which rank senior or pari passu to the Series B and C Preferred Stock; 20 Table of Contents • Investor confidence in Kodak and the markets in which we operate; • Our financial performance and projected financial performance and the financial performance and projected financial performance of our subsidiaries; • Our levels of debt and redemption obligations; • Our ability to generate positive cash flow; • Our ability to consummate monetization transactions including asset sales; • Our requirements for posting collateral under various commercial agreements; • Our current non-investment grade credit rating; • Our long-term business prospects; and • General economic and capital market conditions.
Kodak holds portfolios of patents in several areas important to its business, including specific technologies such as lithographic printing plates and related equipment systems; digital printing workflow and color management proofing systems; color and black-and-white electrophotographic printing systems including key press components and toners; commercial inkjet writing systems and components, presses and inks; custom and specialty materials for 3D printing, functional printing materials, material formulations, and deposition modalities; engineered microparticles for specific functions; security materials; and embedded information.
Kodak holds portfolios of patents in several areas important to its business, including specific technologies such as lithographic printing plates and related equipment systems; digital printing workflow and color management proofing systems; key press components and toners for color and black-and-white electrophotographic printing systems; commercial inkjet writing systems and components, presses and inks; custom and specialty materials for 3D printing, functional printing materials, material formulations, and deposition modalities; engineered microparticles for specific functions; and security materials.
It may take Kodak longer than planned to generate positive cash flow from operations, which would have a material adverse effect on our liquidity and financial position.
It may take Kodak longer than planned to generate consistent positive cash flow from operations, which would have a material adverse effect on our liquidity and financial position.
The occurrence of any of these business disruptions could cause disruptions to Kodak’s operations or the operations of our suppliers, distributors and resellers, or customers and have a material adverse effect on Kodak’s results of operations and financial condition. 18 Table of Contents Certain of Kodak’s critical business functions, including our manufacturing and field service operations, cannot be performed remotely, and an inability of Kodak’s employees to physically work at our or our customers’ locations due to disruptions in service could harm Kodak’s operations, perhaps significantly.
The occurrence of any of these business disruptions could cause disruptions to Kodak’s operations or the operations of our suppliers, distributors and resellers, or customers and have a material adverse effect on Kodak’s results of operations and financial condition. 17 Table of Contents Certain of Kodak’s critical business functions, including our manufacturing and field service operations, cannot be performed remotely, and an inability of Kodak’s employees to physically work at our or our customers’ locations due to disruptions in service could harm Kodak’s operations, perhaps significantly.
Future announcements or disclosures concerning the Company, our strategic initiatives, our sales and profitability, quarterly variations in actual or anticipated operating results or comparable sales, any failure to meet analysts’ expectations, sales of large blocks of our common stock and developments concerning the investigations, lawsuits and claims relating to the DFC Announcement, among other factors, could cause the market price of our common stock to fluctuate substantially. 27 Table of Contents ITEM 1B.
Future announcements or disclosures concerning the Company, our strategic initiatives, our sales and profitability, quarterly variations in actual or anticipated operating results or comparable sales, any failure to meet analysts’ expectations, sales of large blocks of our common stock and developments concerning the investigations, lawsuits and claims relating to the DFC Announcement, among other factors, could cause the market price of our common stock to fluctuate substantially. 26 Table of Contents ITEM 1B.
Some of the risks Kodak faces include: 8 Table of Contents Summary of Risks Related to Kodak ’ s Business and Operations ● Kodak ’ s business, financial condition and results of operations have been and may continue to be adversely affected by global economic and geopolitical conditions, including the impact of the COVID-19 pandemic, the war in Ukraine, inflation, rising interest rates, and slowdowns in customer demand. ● The ability to generate positive operating cash flows will be necessary for Kodak to continue to operate our business. ● If Kodak is unable to continue successful development, funding, and commercialization of products in businesses upon which we are focused or do so within an acceptable timeframe, Kodak ’ s financial performance could be adversely affected. ● If Kodak is unable to successfully or timely implement cost structure reductions, Kodak ’ s business, financial condition and results of operations could be negatively affected. ● The loss of one or more of Kodak ’ s key personnel, or our failure to attract and retain other highly qualified personnel in the future, could harm our business. ● If Kodak cannot effectively anticipate or rapidly respond to technology trends and develop and market new products to respond to changing customer needs and preferences, our revenue, earnings and cash flow could be adversely affected. ● Kodak ’ s investment in new products and services may not achieve expected returns. ● If Kodak does not manage product reliability, yield and quality, our product launch plans may be delayed, our financial results may be adversely impacted, and our reputation may be harmed. ● Aging manufacturing facilities and equipment could lead to failures of equipment and systems. ● Cyber-attacks or other data security incidents that disrupt Kodak ’ s operations or result in the breach or other compromise of proprietary of confidential information about our workforce, our customers, or other third parties could disrupt our business, harm our reputation, cause us to lose customers, and expose us to costly regulatory enforcement and litigation, any of which could lead to material adverse effects on Kodak ’ s results of operations, business and financial condition. ● If Kodak fails to manage distribution of our products and services properly, our revenue, gross margins and earnings could be adversely impacted. ● Kodak ’ s inability to effectively complete and manage strategic transactions could adversely impact our business performance, including our financial results. ● Failure to successfully manage the development and improvement of IT systems could diminish or delay any anticipated efficiencies and operational improvements, and our operations and business could be disrupted. ● If Kodak cannot protect the intellectual property rights on which our business depends, or if third parties assert that we violate their intellectual property rights, our revenue, earnings, expenses and liquidity may be adversely impacted. ● If the reputation of Kodak or its brand erodes significantly, it could have a material impact on our financial results. ● Increased competition, including price competition, could have a material adverse impact on Kodak ’ s revenue, gross margins, cash flow and market share. ● Business disruptions could seriously harm Kodak ’ s future revenue and financial condition. 9 Table of Contents ● Kodak relies on third-party suppliers and service providers to support our manufacturing, logistics, and business operations and faces the risks associated with reliance on external business partners. ● Due to the nature of the products we sell and Kodak ’ s worldwide distribution, Kodak is exposed to fluctuations in foreign currency exchange rates, interest rates and commodity costs which, together with tariffs that may be imposed, may adversely impact our results of operations and financial position. ● Kodak faces additional costs and risks associated with our worldwide business operations. ● An inability to provide competitive financing arrangements to Kodak ’ s customers or extension of credit to customers whose creditworthiness deteriorates could adversely impact our revenue, profitability and financial position.
Some of the risks Kodak faces include: 8 Table of Contents Summary of Risks Related to Kodak ’ s Business and Operations ● Kodak ’ s business, financial condition and results of operations have been and may continue to be adversely affected by global economic and geopolitical conditions, including wars and other hostilities, medical epidemics, inflation, rising interest rates, and slowdowns in customer demand. ● The ability to generate positive operating cash flows will be necessary for Kodak to continue to operate our business. ● If Kodak is unable to continue successful development, funding, and commercialization of products in businesses upon which we are focused or do so within an acceptable timeframe, Kodak ’ s financial performance could be adversely affected. ● If Kodak is unable to successfully or timely implement cost structure reductions, Kodak ’ s business, financial condition and results of operations could be negatively affected. ● The loss of one or more of Kodak ’ s key personnel, or our failure to attract and retain other highly qualified personnel in the future, could harm our business. ● If Kodak cannot effectively anticipate or rapidly respond to technology trends and develop and market new products to respond to changing customer needs and preferences, our revenue, earnings and cash flow could be adversely affected. ● Kodak ’ s investment in new products and services may not achieve expected returns. ● If Kodak does not manage product reliability, yield and quality, our product launch plans may be delayed, our financial results may be adversely impacted, and our reputation may be harmed. ● Aging manufacturing facilities and equipment could lead to failures of equipment and systems. ● I f Kodak fails to manage distribution of our products and services properly, our revenue, gross margins and earnings could be adversely impacted. ● Cyber-attacks or other data security incidents that disrupt Kodak ’ s operations or result in the breach or other compromise of proprietary of confidential information about our workforce, our customers, or other third parties could disrupt our business, harm our reputation, cause us to lose customers, and expose us to costly regulatory enforcement and litigation, any of which could lead to material adverse effects on Kodak ’ s results of operations, business and financial condition. ● If Kodak cannot protect the intellectual property rights on which our business depends, or if third parties assert that we violate their intellectual property rights, our revenue, earnings, expenses and liquidity may be adversely impacted. ● Kodak ’ s inability to effectively complete and manage strategic transactions could adversely impact our business performance, including our financial results. ● Failure to successfully manage the development and improvement of IT systems could diminish or delay any anticipated efficiencies and operational improvements, and our operations and business could be disrupted. ● If the reputation of Kodak or its brand erodes significantly, it could have a material impact on our financial results. ● Increased competition, including price competition, could have a material adverse impact on Kodak ’ s revenue, gross margins, cash flow and market share. ● Business disruptions could seriously harm Kodak ’ s future revenue and financial condition. ● Kodak relies on third-party suppliers and service providers to support our manufacturing, logistics, and business operations and faces the risks associated with reliance on external business partners. 9 Table of Contents ● Due to the nature of the products we sell and Kodak ’ s worldwide distribution, Kodak is exposed to fluctuations in foreign currency exchange rates, interest rates and commodity costs which, together with tariffs that may be imposed, may adversely impact our results of operations and financial position. ● Kodak faces additional costs and risks associated with our worldwide business operations. ● An inability to provide competitive financing arrangements to Kodak ’ s customers or extension of credit to customers whose creditworthiness deteriorates could adversely impact our revenue, profitability and financial position.
Product reliability, yield and quality issues can impair our relationships with new or existing customers and adversely affect our brand image; product quality issues can result in recalls, warranty, or other service obligations and litigation; and our reputation as a producer of high quality products could suffer, all of which could adversely affect our business as well as our financial results. 14 Table of Contents Aging manufacturing facilities and equipment could lead to failures of equipment and systems.
Product reliability, yield and quality issues can impair our relationships with new or existing customers and adversely affect our brand image; product quality issues can result in recalls, warranty, or other service obligations and litigation; and our reputation as a producer of high quality products could suffer, all of which could adversely affect our business as well as our financial results. 14 Table of Contents Aging manufacturing facilities and equipment could lead to failures of equipment and systems and require capital investment.
For further information on these investigations and lawsuits, see Note 12, “Commitments and Contingencies” in the Notes to Financial Statements. Legal proceedings in general, and securities and class action litigation and regulatory investigations in particular, can be expensive and disruptive.
For further information on these investigations and lawsuits, see Note 12, “Commitments and Contingencies” in the Notes to Financial Statements. Legal proceedings in general, and securities, class action and patent infringement litigation and regulatory investigations in particular, can be expensive and disruptive.
Kodak is focused on developing and delivering products and technologies that can drive sustainability performance by increasing operational efficiency, minimizing resource use, reducing costs over time and empowering customers to meet their own sustainability objectives.
Kodak is focused on developing and delivering products and technologies that can drive sustainability and profitability by increasing operational efficiency, minimizing resource use, reducing costs over time and empowering customers to meet their own sustainability objectives.
Certain accumulations or transfers of the Company’s outstanding securities not involving these holders, could also cause such an “ownership change”. For more information on the Company’s tax attributes refer to Note 18, “Income Taxes”.
Certain accumulations or transfers of the Company’s outstanding securities not involving these holders, could also cause such an “ownership change”. For more information on the Company’s tax attributes refer to Note 17, “Income Taxes”.
If any default or event of default occurs under the Term Loan Credit Agreement or 2021 Convertible Notes and the Company is not able to either cure it or obtain a waiver from the holders of the Term Loan Credit Agreement or 2021 Convertible Notes, such holders may declare all of the Company’s outstanding obligations under the Term Loan Credit Agreement and 2021 Convertible Notes, together with accrued interest and fees, to be immediately due and payable.
If any default or event of default occurs under the Term Loan Credit Agreement and the Company is not able to either cure it or obtain a waiver from the holders of the Term Loan Credit Agreement, such holders may declare all of the Company’s outstanding obligations under the Term Loan Credit Agreement, together with accrued interest and fees, to be immediately due and payable.
Kodak maintains a large worldwide portfolio of pending applications and issued patents. • Industrial Film and Chemicals : • Offers professional and consumer still photographic film, as well as industrial film, including films used by the electronics industry to produce printed circuit boards. 5 Table of Contents • Includes related component businesses: Specialty Chemicals; Solvent Recovery; and Polyester Film.
Kodak maintains a large worldwide portfolio of pending applications and issued patents. • Industrial Film and Chemicals : • Offers professional and consumer still photographic film, as well as industrial film, including films used by the electronics industry to produce printed circuit boards. • Includes related component businesses: Specialty Chemicals; Solvent Recovery; and Polyester Film.
Worldwide operations could be subject to earthquakes, power shortages or outages, internet, systems and telecommunications failures, cyber-attacks, terrorism and other physical security threats, water shortages, tsunamis, floods, hurricanes, typhoons, fires, extreme weather conditions, failure of critical infrastructure, medical epidemics, including the COVID-19 pandemic, political or economic instability, including war and protests, and other natural or manmade disasters or business interruptions, for which Kodak is predominantly self-insured.
Worldwide operations could be subject to earthquakes, power shortages or outages, internet, systems and telecommunications failures, cyber-attacks, terrorism and other physical security threats, water shortages, tsunamis, floods, hurricanes, typhoons, fires, extreme weather conditions, failure of critical infrastructure, medical epidemics, political or economic instability, including war and protests, and other natural or manmade disasters or business interruptions, for which Kodak is predominantly self-insured.
There are no assurances: • Kodak’s businesses will generate sufficient cash flow from operations; • Kodak will be able to repatriate or move cash to locations where and when it is needed; • Kodak will meet all conditions associated with borrowings or issuing letters of credit under the ABL Credit Agreement; • Kodak will realize cost savings, earnings growth or operating improvements resulting from the execution of our business and restructuring plan; • Kodak will not have to expend cash defending lawsuits regardless of the merits of any claims raised; or • Future sources of funding will be available in amounts sufficient to enable funding of our liquidity needs.
There are no assurances: • Kodak’s businesses will generate sufficient cash flow from operations; • Kodak will be able to repatriate or move cash to locations where and when it is needed; • Kodak will meet all conditions associated with borrowings or issuing letters of credit under the Amended and Restated L/C Facility Agreement; • Kodak will realize cost savings, earnings growth or operating improvements resulting from the execution of our business and restructuring plan; • Kodak will not have to expend cash defending lawsuits regardless of the merits of any claims raised; or • Future sources of funding will be available in amounts sufficient to enable funding of our liquidity needs.
Refer to the Business Overview and Strategy section of Item 7, “Management’s Discussion and Analysis” for additional information on the opportunities related to Advanced Materials and Chemicals growth initiatives. Net sales for Industrial Film and Chemicals accounted for 15%, 14% and 13% of Kodak’s total net revenue for the years ended December 31, 2022, 2021 and 2020, respectively.
Refer to the Business Overview and Strategy section of Item 7, “Management’s Discussion and Analysis” for additional information on the opportunities related to Advanced Materials and Chemicals growth initiatives. Net sales for Industrial Film and Chemicals business accounted for 18%, 15% and 14% of Kodak’s total net revenue for the years ended December 31, 2023, 2022 and 2021, respectively.
Changes to such laws and regulations could limit the sale of certain of our products in certain jurisdictions or require modifications to our products that may be costly, time consuming or infeasible. 24 Table of Contents Non-compliance with applicable laws or liability incurred without regard to fault could have a material adverse effect on our business, results of operations and financial condition.
Changes to such laws and regulations could increase our cost of doing business, limit the sale of certain of our products in certain jurisdictions or require modifications to our products that may be costly, time consuming or infeasible. 23 Table of Contents Non-compliance with applicable laws or liability incurred without regard to fault could have a material adverse effect on our business, results of operations and financial condition.
However, there can be no assurance that our employees, consultants or agents will not take actions in violation of our policies for which we may be ultimately responsible, or that our policies and procedures will be adequate or will be determined to be adequate by regulators.
However, there can be no assurance that our employees, agents or business partners will not take actions in violation of our policies for which we may be ultimately deemed responsible, or that our policies and procedures will be adequate or will be determined to be adequate by regulators.
At least some of these macro-economic factors may again put pressure on the cost of providing pension and benefits. There can be no assurance we will succeed in limiting cost increases. 25 Table of Contents Kodak may be required to recognize impairments in the value of our goodwill and/or other long-lived assets which could adversely affect our results of operations.
At least some of these macro-economic factors may again put pressure on the cost of providing pension and benefits. There can be no assurance we will succeed in limiting cost increases. Kodak may be required to recognize impairments in the value of our trade name and/or other long-lived assets which could adversely affect our results of operations.
Risks Related to the Company ’ s Common Stock The conversion of the Series B Preferred Stock, Series C Preferred Stock and 2021 Convertible Notes into shares of the Company ’ s common stock may dilute the value for the current holders of the Company ’ s common stock.
Risks Related to the Company ’ s Common Stock The conversion of the Series B Preferred Stock and Series C Preferred Stock into shares of the Company ’ s common stock may dilute the value for the current holders of the Company ’ s common stock.
Even if we believe the claims are without merit, these claims may have the following negative impacts on our business: • claims can be time consuming and costly to defend and may distract management’s attention and resources; • claims of intellectual property infringement may require us to redesign affected products, enter into costly settlement or license agreements or pay costly damage awards, or face a temporary or permanent injunction prohibiting us from marketing or selling certain of our products; • even if we have an agreement with a third party to indemnify us against such costs, the indemnifying party may be unable to uphold such party’s contractual obligations; and • if we cannot or do not license the infringed technology at all, license the technology on reasonable terms or substitute similar technology from another source, Kodak’s revenue and earnings could be adversely impacted. 17 Table of Contents Finally, Kodak uses open source software in connection with some of our products and services.
Even if we believe the claims are without merit, these claims may have the following negative impacts on our business: • claims can be time consuming and costly to defend and may distract management’s attention and resources; • claims of intellectual property infringement may require us to redesign affected products, enter into costly settlement or license agreements or pay costly damage awards, or face a temporary or permanent injunction prohibiting us from marketing or selling certain of our products; • even if we have an agreement with a third party to indemnify us against such costs, the indemnifying party may be unable to uphold such party’s contractual obligations; and • if we cannot or do not license the infringed technology at all, license the technology on reasonable terms or substitute similar technology from another source, Kodak’s revenue and earnings could be adversely impacted.
As a result, these holders may influence the composition of the Board and future actions taken by the Board.
As a result, these parties may influence the composition of the Board and future actions taken by the Board.
Lithographic aluminum is the primary material used in the manufacture of offset printing plates. Kodak procures lithographic aluminum coils from several suppliers with pricing based on prevailing market prices for aluminum. Lithographic aluminum is experiencing significantly increased prices and demand. Electronic components are used in the manufacturing of commercial printers and other electronic devices.
Lithographic aluminum is the primary material used in the manufacture of offset printing plates. Kodak procures lithographic aluminum coils from several suppliers with pricing largely based on prevailing market prices for aluminum. Electronic components are used in the manufacturing of commercial printers and other electronic devices.
Based on the capitalization of the Company as of December 31, 2022, the conversion of all Convertible Securities would result in the issuance to holders thereof of approximately 23% of the outstanding common stock after giving effect to such conversion.
Based on the capitalization of the Company as of December 31, 2023, the conversion of all Convertible Securities would result in the issuance to holders thereof of approximately 21% of the outstanding common stock after giving effect to such conversion.
If any default or event of default occurs under the LC Credit Agreement or ABL Credit Agreement and the Company is not able to either cure it or obtain a waiver from the requisite lenders under the LC Credit Agreement and ABL Credit Agreement, the administrative agent under the LC Credit Agreement and ABL Credit Agreement may, and at the request of the requisite lenders for that facility must, declare all of the Company’s outstanding obligations under the LC Credit Agreement and ABL Credit Agreement, together with accrued interest and fees, to be immediately due and payable.
If any default or event of default occurs under the Amended and Restated L/C Facility Agreement and the Company is not able to either cure it or obtain a waiver from the requisite lenders under the Amended and Restated L/C Facility Agreement, the administrative agent under the Amended and Restated L/C Facility Agreement may, and at the request of the requisite lenders for that facility must, declare all of the Company’s outstanding obligations under the Amended and Restated L/C Facility Agreement, together with accrued interest and fees, to be immediately due and payable.
Commercial success depends on many factors, including innovativeness, developer support, and effective distribution and marketing. If customers do not perceive Kodak’s latest offerings as providing significant new functionality or other value, they may reduce their purchases of new products or upgrades, unfavorably affecting our revenue.
Commercial success depends on many factors, including innovation, manufacturing capability, and effective distribution and marketing. If customers do not perceive Kodak’s latest offerings as providing significant new functionality or other value, they may reduce their purchases of new products or upgrades, unfavorably affecting our revenue.
Kodak tests goodwill and indefinite lived intangible assets for impairment annually or whenever events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Kodak evaluates other long-lived assets for impairments whenever events or changes in circumstances indicate the carrying value may not be recoverable.
Kodak tests indefinite-lived intangible assets for impairment annually or whenever events occur or circumstances change that would more likely than not reduce the fair value below its carrying amount. Kodak evaluates other long-lived assets for impairments whenever events or changes in circumstances indicate the carrying value may not be recoverable.
DESCRIPTION OF THE BUSINESS Kodak’s operations are classified into four reportable segments: Traditional Printing, Digital Printing, Advanced Materials and Chemicals and Brand. The balance of Kodak’s continuing operations, which do not meet the criteria of a reportable segment, are reported in All Other and primarily represent the Eastman Business Park ("EBP") operations.
DESCRIPTION OF THE BUSINESS Kodak’s operations are classified into three reportable segments: Print, Advanced Materials and Chemicals, and Brand. The balance of Kodak’s continuing operations, which do not meet the criteria of a reportable segment, are reported in All Other and primarily represent the Eastman Business Park ("EBP") operations.
Specialty Chemicals also includes specialty materials for batteries (e.g., electric vehicles ("EV") and others) and specific functional materials for personal care products. • Offers specialty inks and dispersions to third parties. • Offers coating and product commercialization services: offerings include both pilot-scale and production scale roll-to-roll coating capabilities utilizing Kodak’s assets and know-how to commercialize and manufacture third-party products. • Motion Picture: • Includes the motion picture film business serving the entertainment industry.
Specialty Chemicals also includes materials for batteries (e.g., electric vehicles ("EV") and others) and specific functional materials for personal care products. • Offers specialty inks and dispersions to third parties. • Offers coating and product commercialization services: offerings include both pilot-scale and production scale roll-to-roll coating capabilities utilizing Kodak’s assets and know-how to commercialize and manufacture third-party products.
Kodak’s customers may decide to outsource their imaging and printing needs or may purchase imaging and printing services and needs from other suppliers. In addition, it is difficult to predict successfully the products and services our customers will demand.
Kodak’s customers may decide to outsource their imaging and printing needs or may purchase imaging and printing services from other suppliers in order to meet their needs. In addition, it is difficult to always successfully anticipate the products and services our customers will demand.
Kodak relies on third-party suppliers and service providers to support our manufacturing, logistics, and business operations and faces the risks associated with reliance on external business partners. Kodak relies on third-party suppliers for goods and services to support our manufacturing, logistics, and business operations.
Kodak relies on third-party suppliers and service providers to support our manufacturing, logistics, and business operations and faces the risks associated with reliance on external business partners. Kodak relies on third-party suppliers for goods and services, many of which are unique, to support our manufacturing, logistics, and business operations.
Kodak may not achieve significant revenue from new product, service, and distribution channel investments for several years, if at all. New products and services may not be profitable, and even if they are profitable, operating margins for some new products and businesses may not be as high as the margins Kodak has experienced historically. Developing new technologies is complex.
That may mean Kodak does not achieve significant revenue from new product, service, and distribution channel investments for several years, if at all. New products and services may not be profitable, and even if they are profitable, operating margins for some new products and businesses may not be as high as the margins Kodak has experienced historically.
For additional discussion regarding known impacts of the COVID-19 pandemic, the war in Ukraine and the global economic environment, see Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations“ in this Annual Report on Form 10-K. The ability to generate positive operating cash flows will be necessary for Kodak to continue to operate our business.
For additional discussion regarding known impacts of the war in Ukraine, the conflicts involving Israel and the global economic environment, see Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations“ in this Annual Report on Form 10-K. 11 Table of Contents The ability to generate positive operating cash flows will be necessary for Kodak to continue to operate our business.
Suppliers may choose to unilaterally withhold products, components or services. In addition, Kodak may experience shortages in supply and disruptions in service and supply as a result of unexpected demand, transportation and logistical limitations, and/or disruptions or production difficulties at our suppliers, such as disruptions due to fires, medical epidemics, other natural disasters or events outside of a supplier’s control.
In addition, Kodak may experience shortages in supply and disruptions in service and supply as a result of unexpected demand, product obsolescence, transportation and logistical limitations, and/or disruptions or production difficulties at our suppliers, such as disruptions due to fires, medical epidemics, other natural disasters or events outside of a supplier’s control.
Summary of Risks Related to Kodak ’ s Indebtedness and Access to Capital Markets ● The Company ’ s substantial monetary obligations require a portion of our cash flow be used to fund other obligations rather than be invested in the business and could adversely affect our ability to fund our operations. ● The availability of borrowings and letters of credit under the ABL Credit Agreement and LC Credit Agreement is limited by the amount of various types of assets and, under certain circumstances, the administrative agent under the ABL Credit Agreement will have greater control over Kodak ’ s cash. ● Kodak may desire additional capital funding and such capital may not be available to us and/or may be limited. ● There can be no assurance the Company will be able to comply with the terms of our various credit facilitie s. ● The current non-investment grade status and Kodak ’ s financial condition may adversely impact Kodak ’ s commercial operations, increase our liquidity requirements and increase the cost of refinancing opportunities.
Summary of Risks Related to Kodak ’ s Indebtedness and Access to Capital Markets ● The Company ’ s substantial monetary obligations require a portion of our cash flow to be used to fund other obligations rather than be invested in the business and could adversely affect our ability to fund our operations. ● The availability of letters of credit under the Amended and Restated Letter of Credit Facility Agreement ("Amended and Restated L/C Facility Agreement") is limited by the amount of cash on deposit with the administrative agent . ● Kodak may desire additional capital funding and such capital may not be available to us and/or may be limited. ● There can be no assurance the Company will be able to comply with the terms of our various credit facilitie s. ● The current non-investment grade status and Kodak ’ s financial condition may adversely impact Kodak ’ s commercial operations, increase our liquidity requirements and increase the cost of refinancing opportunities.
Our innovative, award-winning products, combined with our customer-first approach, allow us to attract customers worldwide. Kodak is committed to environmental stewardship, including industry leadership in developing sustainable solutions for print. The Company was founded by George Eastman in 1880 and incorporated in 1901 in the State of New Jersey. Kodak is headquartered in Rochester, New York.
Kodak's innovative, award-winning products, combined with its customer-first approach, make us the partner of choice for commercial printers worldwide. Kodak is committed to environmental stewardship, including industry leadership in developing sustainable solutions for print. The Company was founded by George Eastman in 1880 and incorporated in 1901 in the State of New Jersey. Kodak is headquartered in Rochester, New York.
In compliance with certain agreements to which the Company is a party, we have registered the resale of an aggregate of up to 44,490,032 shares of common stock that are either outstanding or issuable upon conversion of Preferred Stock or convertible notes.
In compliance with certain agreements to which the Company is a party, we have registered the resale of an aggregate of up to 41,333,435 shares of common stock that are either outstanding or issuable upon conversion of Preferred Stock.
Instead of the traditional process in which a plate is run through processing equipment containing a solution of developer, chemicals and water to set the image, KODAK SONORA Process Free Plates enable printers to set the image on the platesetter, then go directly to press.
Instead of the traditional process in which a plate is run through processing equipment containing a solution of developer, chemicals and water to set the image, KODAK SONORA Process Free Plates enable printers to set the image on the platesetter, then go directly to press. Processing variability is eliminated, so process-free plate users benefit from more consistent and stable plates.
Recently enacted laws and regulations, as well as any other change to existing laws, the introduction of new laws and regulations in this area, or the failure to comply with existing laws that are applicable, may subject Kodak to, among other things, additional costs or changes to our business practices, liability for monetary damages, fines and/or criminal prosecution, unfavorable publicity, restrictions on our ability to obtain and process information and allegations by our customers and clients that we have not performed our contractual obligations.
Failure to comply with existing and newly enacted laws and regulations that are applicable, may subject Kodak to, among other things, additional costs or changes to our business practices, liability for monetary damages, fines and/or criminal prosecution, unfavorable publicity, restrictions on our ability to obtain and process information and allegations by our customers and clients that we have not performed our contractual obligations.
Kodak utilizes temporary staffing programs to develop a pipeline of talent and provide additional support during peak periods. This includes working closely with local schools to provide apprentice and intern programs. Approximately 2% of its workforce is temporary. Diversity, Equality and Inclusion Kodak is focused on creating an inclusive and creative environment globally.
Kodak utilizes temporary staffing programs to develop a pipeline of talent and provide additional support during peak periods. This includes working closely with local schools to provide apprentice and intern programs. Less than 2% of its workforce is temporary. Diversity, Equity and Inclusion Kodak seeks to create an inclusive and creative environment globally.
More recent examples of data privacy laws include (but are not limited to) the EU’s General Data Protection Regulation (“GDPR”) and ePrivacy laws, California’s Consumer Privacy Act (“CCPA”) and Privacy Rights Act (“CPRA”), China’s Personal Information Protection Law (“PIPL”), and Brazil’s General Data Protection Law (“LGPD”).
Examples of data privacy laws include (but are not limited to) the EU’s General Data Protection Regulation (“GDPR”) and ePrivacy laws, California’s Consumer Privacy Act (“CCPA”) and other U.S. state privacy laws, China’s Personal Information Protection Law (“PIPL”), and Brazil’s General Data Protection Law (“LGPD”).
If Kodak is unable to successfully manage the development, improvement and transition of IT systems, anticipated efficiencies and operational improvements may be delayed or diminished, and we may experience cost overruns, disruption in our operations, or other business or reputational harm, any of which could have a material adverse effect on Kodak’s results of operations, business and financial condition.
If Kodak is unable to successfully manage the development, improvement and transition of IT systems, anticipated efficiencies and operational improvements may be delayed or diminished, and we may experience cost overruns, disruption in our operations, or other business or reputational harm, any of which could have a material adverse effect on Kodak’s results of operations, business and financial condition. 16 Table of Contents Kodak ’ s inability to effectively complete and manage strategic transactions could adversely impact our business performance, including our financial results.
We may not have adequate liquidity to post required amounts of additional collateral. The Company’s corporate family credit rating is currently below investment grade and there are no assurances our credit ratings will improve, or they will not decline, in the future. In addition, the Company may not continue to maintain credit ratings from the recognized rating agencies.
The Company’s corporate family credit rating is currently below investment grade and there are no assurances our credit ratings will improve, or they will not decline, in the future. In addition, the Company may not continue to maintain credit ratings from the recognized rating agencies.
Despite Kodak’s security controls over personal data, Kodak, may not prevent the improper disclosure of personal information. Improper disclosure of this information could harm our reputation or subject us to liability under laws which protect personal data, resulting in increased costs or loss of revenue. Kodak is subject to environmental laws and regulations.
Improper disclosure of this information could harm our reputation or subject us to liability under laws which protect personal data, resulting in increased costs or loss of revenue. Kodak is subject to environmental laws and regulations.
Kodak added its cloud-based PRINERGY On Demand Platform to its PRINERGY offerings in 2022. • The Software business includes digital front-end controllers which manage the delivery of personalized content to digital presses while controlling color and print consistency. 4 Table of Contents • Electrophotographic Printing Solutions: • NEXFINITY printers produce high-quality, differentiated printing of short-run, personalized print applications, such as direct mail, books, marketing collateral and photo products. • The ASCEND printer is a new electrophotographic press aimed at the retail, point of purchase and packaging markets.
Kodak added its cloud-based PRINERGY On Demand Platform to its PRINERGY offerings in 2022. • The Software business includes digital front-end controllers which manage the delivery of personalized content to digital presses while controlling color and print consistency. 4 Table of Contents • Electrophotographic Printing Solutions: • NEXFINITY printers produce high-quality, differentiated printing of short-run, personalized print applications, such as direct mail, books, marketing collateral and photo products. • Kodak ceased manufacturing of NEXFINITY printers effective December 2022.
In addition, the agent under the LC Credit Agreement and ABL Credit Agreement may, and at the request of the requisite lenders must, terminate the lenders’ commitments under that facility and cease making further loans.
In addition, the agent under the Amended and Restated L/C Facility Agreement may, and at the request of the requisite lenders must, terminate the lenders’ commitments under that facility and cease making further loans.
Kodak’s Advanced Materials and Chemicals products are distributed directly by Kodak and indirectly through dealers. Kodak Alaris, a professional and consumer still photographic film and chemicals customer, represented approximately 32% of total Advanced Materials and Chemicals segment revenues in both 2022 and 2021 and 30% in 2020. Products and services included in Kodak’s offerings are described below.
Kodak Alaris, a professional and consumer still photographic film and chemicals customer, represented approximately 34% of total Advanced Materials and Chemicals segment revenues in 2023 and 32% in both 2022 and 2021. Products and services included in Kodak’s offerings are described below.
Availability under the Company’s LC Credit Agreement is based on cash collateral in an amount greater than or equal to 103% of the aggregate amount of letters of credit issued and outstanding at any given time (the “LC Cash Collateral”).
Availability under the Company’s Amended and Restated L/C Facility Agreement is based on cash collateral in an amount greater than or equal to 104% of the aggregate amount of letters of credit issued and outstanding at any given time (the “L/C Cash Collateral”).
An unfavorable outcome of any governmental investigation or legal proceeding may have an adverse impact on our reputation, business, financial condition and results of operations, prospects, or stock price.
An unfavorable outcome of any governmental investigation or legal proceeding may have an adverse impact on our reputation, business, financial condition and results of operations, prospects, or stock price. Our business and financial condition can be impaired by improper conduct by any of our employees, agents, or business partners.
The 1,000,000 outstanding shares of the Company’s Series B Preferred Stock are convertible into shares of the Company’s common stock at a conversion rate of 9.5238 shares of common stock per share of Series B Preferred Stock, the 1,096,797 outstanding shares of the Company’s Series C Preferred Stock are convertible into shares of the Company’s common stock at a conversion rate of 10 shares of common stock per share of Series C Preferred Stock, and the 2021 Convertible Notes are convertible into shares of the Company’s common stock at a conversion rate of 100 shares of common stock per $1,000 principal amount of 2021 Convertible Notes.
The 1,000,000 outstanding shares of the Company’s Series B Preferred Stock are convertible into shares of the Company’s common stock at a conversion rate of 9.5238 shares of common stock per share of Series B Preferred Stock and the 1,138,443 outstanding shares of the Company’s Series C Preferred Stock are convertible into shares of the Company’s common stock at a conversion rate of 10 shares of common stock per share of Series C Preferred Stock.
As a result of the conversion of any issued and outstanding Series B Preferred Stock, Series C Preferred Stock or 2021 Convertible Notes (collectively, the “Convertible Securities”), the Company’s existing shareholders will own a smaller percentage of our outstanding common stock.
The outstanding shares of Series C Preferred Stock are expected to increase as a result of the payment of dividends. As a result of the conversion of any issued and outstanding Series B Preferred Stock or Series C Preferred Stock (collectively, the “Convertible Securities”), the Company’s existing shareholders will own a smaller percentage of our outstanding common stock.
Kodak is developing in-house life cycle assessment and carbon foot printing capabilities, which will help identify where the environmental footprint of Kodak’s products can be further reduced. 7 Table of Contents HUMAN CAPITAL As of January 1, 2023, Kodak employed approximately 4,200 employees across 35 countries.
Kodak continues to develop in-house life cycle assessment and carbon footprint capabilities, which will help identify where the environmental footprint of Kodak’s products can be further reduced. 7 Table of Contents HUMAN CAPITAL As of the end of 2023, Kodak employed approximately 4,000 employees across 34 countries.
Due to the global economic impact of the COVID-19 pandemic and the war in Ukraine, we have and may continue to experience additional operating costs due to increased cost of energy, shipping, raw materials and labor, limited availability of raw materials and component products, delays in shipping and transportation and a decline in customer demand.
Due to the global economic impact of the war in Ukraine, the conflicts involving Israel, medical epidemics, heightened levels of inflation and rising interest rates, we have and may continue to experience additional operating costs due to increased cost of energy, shipping, raw materials and labor, limited availability of raw materials and component products, delays in shipping and transportation and a decline in customer demand.
Production workflow software is used by customers to manage digital and conventional print content from file creation to output. Production workflow software manages content and color, reduces manual errors and helps customers manage the collaborative creative process.
Production workflow software is used by customers to manage digital and conventional print content from file creation to output. Production workflow software manages content and color, reduces manual errors and helps customers manage the collaborative creative process. Kodak believes it is a leader in production workflow solutions for the commercial print and packaging industries.
Kodak’s business may not generate cash flow in an amount sufficient to enable us to pay the principal or mandatory redemption price of, or interest and dividends on, the senior secured first lien term loans (the “Term Loans”) borrowed under the Credit Agreement, dated February 26, 2021, by and among the Company, the lenders party thereto (the “Term Loan Lenders”), and Alter Domus (US) LLC, as Administrative Agent (the “Term Loan Credit Agreement”), the 5.0% unsecured convertible notes held by the Term Loan Lenders (the “2021 Convertible Notes”), the 4.0% Series B Convertible Preferred Stock of the Company (the “Series B Preferred Stock”), and the 5.0% Series C Convertible Preferred Stock of the Company (the “Series C Preferred Stock”), or to fund Kodak’s other liquidity needs, including working capital, capital expenditures, product development efforts, restructuring actions, collateral requirements, strategic acquisitions, investments and alliances and other general corporate requirements. 12 Table of Contents If Kodak cannot fund our liquidity needs, we will have to take actions, such as reducing or delaying capital expenditures, product development efforts, strategic acquisitions, and investments and alliances; selling additional assets; restructuring or refinancing the Company’s debt; or seeking additional equity capital.
Kodak’s business may not generate cash flow in an amount sufficient to enable us to pay the principal or mandatory redemption price of, or interest and dividends on, the senior secured first lien term loans (the “Term Loans”) borrowed under the Amended and Restated Credit Agreement, dated June 30, 2023, by and among the Company, the lenders party thereto (the “Term Loan Lenders”), and Alter Domus (US) LLC, as Administrative Agent (the “Term Loan Credit Agreement”), the 4.0% Series B Convertible Preferred Stock of the Company (the “Series B Preferred Stock”), and the 5.0% Series C Convertible Preferred Stock of the Company (the “Series C Preferred Stock”), or to fund Kodak’s other liquidity needs, including working capital, capital expenditures, product development efforts, restructuring actions, collateral requirements, strategic acquisitions, investments and alliances and other general corporate requirements.
Applications of the VERSAMARK products include publishing, transactional, commercial print and direct mail. Net sales for Digital Printing accounted for 19%, 22% and 23% of Kodak’s total net revenue for the years ended December 31, 2022, 2021 and 2020, respectively.
Applications of the VERSAMARK products include publishing, transactional, commercial print and direct mail. Net sales for the Prepress business accounted for 56%, 59% and 57% of Kodak’s total net revenue for the years ended December 31, 2023, 2022 and 2021, respectively.
Other factors that could dilute or damage the reputation of Kodak and our brand include the failure of products and services to meet customer expectations, litigation and government investigations, negative or inaccurate comments in the media, including social media, and failure to meet and manage customer and industry expectations regarding the impact of our business on matters of social responsibility and environmental sustainability.
Other factors that could dilute or damage the reputation of Kodak and our brand include the failure of products and services to meet customer expectations, litigation and government investigations, negative or inaccurate comments in the media, including social media, and failure to meet and manage customer and industry expectations regarding the impact of our business on matters of social responsibility and environmental sustainability. 16 Table of Contents Increased competition, including price competition, could have a material adverse impact on Kodak ’ s revenue, gross margins, cash flow and market share.
Kodak’s reputation, and the reputation of our brand, form the foundation of our relationships with key stakeholders and other constituencies, including customers, suppliers, distributors, channel partners, consumers and investors. Any harm to the reputation of Kodak or our brand could have a material adverse impact on our results of operations, business and financial condition.
If the reputation of Kodak or its brand erodes significantly, it could have a material impact on our financial results. Kodak’s products and brand have worldwide recognition. Kodak’s reputation, and the reputation of our brand, form the foundation of our relationships with key stakeholders and other constituencies, including customers, suppliers, distributors, channel partners, consumers and investors.
Impairments could occur in the future if Kodak’s expected future cash flows or market capitalization decline, market or interest rate environments deteriorate, or if carrying values change materially compared with changes in their respective fair values.
Impairments could occur in the future if Kodak’s expected future cash flows decline, if there are significant changes in the discount rate or royalty rates, or if carrying values change materially compared with changes in their respective fair values.
Such claims may be made by competitors seeking to block or limit Kodak’s access to certain markets. Additionally, certain individuals and groups have purchased intellectual property assets for the sole purpose of making claims of infringement and attempting to extract settlements from companies like Kodak.
Additionally, certain individuals and groups have purchased intellectual property assets for the sole purpose of making claims of infringement and attempting to extract settlements from companies like Kodak.
Kodak is a global manufacturer focused on commercial print and advanced materials and chemicals. Kodak provides industry-leading hardware, software, consumables and services primarily to customers in commercial print, packaging, publishing, manufacturing and entertainment. With 31,000 patents earned over 130 years of R&D, we believe in the power of technology and science to enhance what the world sees and creates.
Kodak is a global manufacturer focused on commercial print and advanced materials and chemicals. With 79,000 patents earned over 130 years of research and development ("R&D"), Kodak believes in the power of technology and science to enhance what the world sees and creates.
The holder of the Series C Preferred Stock owns a large portion of the voting power of the Company ’ s outstanding securities, and the holders of the Series C Preferred Stock and 2021 Convertible Notes each have the right to nominate one member for election to the Company ’ s Board.
The holder of the Series C Preferred Stock owns a large portion of the voting power of the Company ’ s outstanding securities and has nominated one member of the Company ’ s Board.
Risks Related to Kodak ’ s Business and Operations Kodak ’ s business, financial condition and results of operations have been and may continue to be adversely affected by global economic and geopolitical conditions, including the impact of the COVID-19 pandemic, the war in Ukraine, inflation, rising interest rates, and slowdowns in customer demand. 11 Table of Contents Worsening global economic conditions, including those associated with the COVID-19 pandemic, the war in Ukraine, and rising interest rates, could have material adverse impacts on Kodak’s business, cash flows, employees, suppliers, customers, and others’ ability to conduct business, including increased operational costs, extended business shutdowns, reduced operations, restrictions or interruptions in shipping, manufacturing or installing products, reduced consumer demand and the reduced ability of our customers to make payments.
Worsening global economic conditions, including those associated with the war in Ukraine, the conflicts involving Israel, medical epidemics, heightened levels of inflation and rising interest rates, could have material adverse impacts on Kodak’s business, cash flows, employees, suppliers, customers, and others’ ability to conduct business, including increased operational costs, extended business shutdowns, reduced operations, restrictions or interruptions in shipping, manufacturing or installing products, reduced consumer demand and the reduced ability of our customers to make payments.
These investment areas include offset plates and CTP devices, digital printing using commercial inkjet, high resolution functional printing for electronic and optical solutions, specialty chemicals (including pharmaceutical products), coated materials used in electric vehicle/energy storage batteries and smart materials for light control and 3D printing. Each of these businesses requires additional investment and may not be successful.
Kodak has focused our investments in print, advanced materials, and chemicals. These investment areas include digital printing using commercial inkjet, high resolution functional printing for electronic and optical solutions, specialty chemicals (including pharmaceutical and reagent products), coated materials used in electric vehicle/energy storage batteries and smart materials for light control and 3D printing.
Other companies may hold patents on technologies used in Kodak’s industries and some of these companies may be aggressively seeking to expand, enforce or license their patent portfolios. Third parties may claim Kodak and our customers, licensees or other parties indemnified by us are infringing upon their intellectual property rights.
Other companies may hold patents on technologies used in Kodak’s industries and some of these companies may be aggressively seeking to expand, enforce or license their patent portfolios.
In carrying out our commercial business strategy, the current non-investment grade credit ratings have resulted and will likely continue to result in requirements that Kodak either prepay obligations or post significant amounts of collateral to support our business.
In carrying out our commercial business strategy, the current non-investment grade credit ratings have resulted and will likely continue to result in requirements that Kodak either prepay obligations or post significant amounts of collateral to support our business. 21 Table of Contents Should our ratings continue at their current levels, or should our ratings be further downgraded, we would expect these negative effects to continue and, in the case of a downgrade, become more pronounced.
A lower amount of cash generated from our businesses or higher expenses than expected, when coupled with our debt obligations, could adversely affect Kodak’s ability to fund our operations.
A lower amount of cash generated from our businesses or higher expenses than expected, when coupled with our debt obligations, could adversely affect Kodak’s ability to fund our operations. The availability of letters of credit under the Amended and Restated L/C Facility Agreement is limited by the amount of cash on deposit.
Companies which incorporate open source software into their products have, from time to time, faced claims challenging the ownership of open source software and/or compliance with open source license terms. As a result, Kodak could be subject to suits by parties claiming ownership of what we believe to be open source software or noncompliance with open source licensing terms.
As a result, Kodak could be subject to suits by parties claiming ownership of what we believe to be open-source software or noncompliance with open-source licensing terms.
Patent, copyright, trademark and trade secret laws in the United States and similar laws in other countries, and non-disclosure, confidentiality and other types of agreements with Kodak’s employees, customers, suppliers and other parties, may not be effective in establishing, maintaining, protecting and enforcing Kodak’s intellectual property rights. 16 Table of Contents Any of Kodak’s direct or indirect intellectual property rights could be challenged, invalidated, circumvented, infringed, diluted, disclosed or misappropriated, or such intellectual property rights may not be sufficient to permit us to take advantage of current market trends or otherwise to provide competitive advantages, which could result in costly product redesign efforts, discontinuance of certain product offerings or other competitive harm.
Any of Kodak’s direct or indirect intellectual property rights could be challenged, invalidated, circumvented, infringed, diluted, disclosed or misappropriated, or such intellectual property rights may not be sufficient to permit us to take advantage of current market trends or otherwise to provide competitive advantages, which could result in costly product redesign efforts, discontinuance of certain product offerings or other competitive harm.
These plates can be as small as 23cm x 27cm and as large as 126cm x 287cm. Unexposed plates are sold to commercial printing companies for use in the offset printing process. Kodak also manufactures equipment, known as CTP equipment, which images the plates with a laser.
Unexposed plates are sold to commercial printing companies for use in the offset printing process. Kodak also manufactures equipment, known as CTP equipment, which images the plates with a laser. The offset printing process transfers ink from the plate onto a rubber blanket and then onto the substrate to be printed.
Any requirement to disclose Kodak’s source code or pay damages for breach of contract could be harmful to our business results of operations and financial condition. If the reputation of Kodak or its brand erodes significantly, it could have a material impact on our financial results. Kodak’s products and brand have worldwide recognition.
Any requirement to disclose Kodak’s source code or pay damages for breach of contract could be harmful to our business results of operations and financial condition.
Kodak's major products are not dependent upon one single, material patent. Rather, the technologies that underlie Kodak's products are supported by an aggregation of patents having various remaining lives and expiration dates. There is no individual patent, or group of patents, whose expiration is expected to have a material impact on Kodak's results of operations.
Kodak's major products are not dependent upon one single, material patent. Rather, the technologies that underlie Kodak's products are supported by an aggregation of patents having various remaining lives and expiration dates along with know-how and trade secrets.
This environment demands Kodak continuously improve our design and coordination of security controls and contractual arrangements across our businesses and geographies. While Kodak has taken steps to comply with the GDPR, other applicable data protection laws, and the regulations and guidance published by applicable regulators, our efforts to achieve and remain in compliance may not be fully successful.
While Kodak has taken steps to comply with applicable data protection laws and the regulations and guidance published by applicable regulators, our efforts to achieve and remain in compliance may not be sufficient or fully successful. Despite Kodak’s security controls over personal data, Kodak, may not prevent the improper disclosure of personal information.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe complex features an on-site rail and wastewater treatment facility and manufacturing, distribution, lab and office space. Kodak uses and leases out space at Eastman Business Park as part of its strategy of adaptive and effective reuse of infrastructure, services, buildings and land. Other U.S. research and development groups are located in Dayton, Ohio and Columbus, Georgia.
Biggest changeKodak uses and leases out its space at Eastman Business Park as part of its strategy of adaptive and effective reuse of infrastructure, services, buildings and land. Other U.S. research and development groups are located in Dayton, Ohio and Columbus, Georgia. Outside the U.S., research and development groups are located in Canada, Israel, Germany, Japan and China.
ITEM 2. PROPERTIES Kodak's worldwide headquarters is located in Rochester, New York. Kodak owns 11 million square feet and leases, as a lessee, approximately 4 million square feet of space that includes administrative, research and development, manufacturing and marketing facilities in several worldwide locations. Out of the owned space, Kodak leases out approximately 1 million square feet to third-party tenants.
ITEM 2. PROPERTIES Kodak's worldwide headquarters is located in Rochester, New York. Kodak owns 11 million square feet and leases, as a lessee, approximately 4 million square feet of space that includes administrative, research and development, manufacturing and marketing facilities in several worldwide locations. Out of the owned space, Kodak leases out approximately 800,000 square feet to third-party tenants.
Digital Printing Traditional Printing Advanced Materials and Chemicals Rochester, New York, USA Rochester, New York, USA Rochester, New York, USA Dayton, Ohio, USA Columbus, Georgia, USA Xiamen, China Vancouver, Canada Osterode, Germany Vancouver, Canada (software development) Gunma, Japan Shanghai, China Shanghai, China (software development) Vancouver, Canada Regional distribution centers are located in various places within and outside of the United States.
Print Advanced Materials and Chemicals Rochester, New York, USA Rochester, New York, USA Columbus, Georgia, USA Xiamen, China Dayton, Ohio, USA Vancouver, Canada Osterode, Germany Vancouver, Canada Gunma, Japan Shanghai, China Regional distribution centers are located in various places within and outside of the United States.
Outside the U.S., research and development groups are located in Canada, Israel, Germany, Japan and China. The research and development groups work in close cooperation with manufacturing units and marketing organizations to develop new products and applications to serve both existing and new markets. Kodak has excess capacity in some locations.
The research and development groups work in close cooperation with manufacturing units and marketing organizations to develop new products and applications to serve both existing and new markets. Kodak has excess capacity in some locations. Kodak is pursuing the monetization of its excess capacity by selling or leasing the associated properties.
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Kodak is pursuing the monetization of its excess capacity by selling or leasing the associated properties.
Added
The complex features an on-site rail and wastewater treatment facility and manufacturing, distribution, lab and office space. Kodak owns over 600 acres of Eastman Business Park with the other 600 acres owned by unrelated third parties.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeBullwinkle Dave Bullwinkle has been the Chief Financial Officer and Senior Vice President of Kodak since July 2016 and the President of Eastman Business Park since November 2018. Bullwinkle is responsible for advancing the growth strategy for Eastman Business Park and leading Kodak's worldwide treasury, internal audit, controller and tax teams.
Biggest changeBullwinkle is responsible for leading Kodak's worldwide treasury, internal audit, controller and tax teams. Between November 2018 and July 2023, Bullwinkle held the role of President of Eastman Business Park where he was responsible for advancing the growth strategy for that business.
Michaels Richard Michaels was appointed Chief Accounting Officer and Corporate Controller of Kodak in April 2021. From 2011 until April 2021 Michaels served as the Kodak’s Assistant Corporate Controller. Michaels joined Kodak in 2004 as Controller for the Graphics Communications Group and held several other controller positions at the Company prior to becoming the Assistant Corporate Controller.
Michaels Richard Michaels was appointed Chief Accounting Officer and Corporate Controller of Kodak in April 2021. From 2011 until April 2021 Michaels served as Kodak’s Assistant Corporate Controller. Michaels joined Kodak in 2004 as Controller for the Graphics Communications Group and held several other controller positions at the Company prior to becoming the Assistant Corporate Controller.
ITEM 4. MINE SAFETY DISCLOSURES None. 28 Table of Contents INFORMATION ABOUT OUR EXECUTIVE OFFICERS Pursuant to General Instructions G (3) of Form 10-K, the following list is included as an unnumbered item in Part I of this report in lieu of being included in the Proxy Statement for the Annual Meeting of Shareholders. Name Age Positions Held James V.
ITEM 4. MINE SAFETY DISCLOSURES None. 29 Table of Contents INFORMATION ABOUT OUR EXECUTIVE OFFICERS Pursuant to General Instructions G (3) of Form 10-K, the following list is included as an unnumbered item in Part I of this report in lieu of being included in the Proxy Statement for the Annual Meeting of Shareholders. Name Age Positions Held James V.
Prior to joining Kodak, Bullwinkle worked as the Manager of Financial Reporting at Birds Eye Foods, Inc. and previously at PricewaterhouseCoopers from 1996 to 2002 in various roles including serving as an Assurance Manager. Bullwinkle is a Certified Public Accountant in the State of New York. 29 Table of Contents Roger W.
Prior to joining Kodak, Bullwinkle worked as the Manager of Financial Reporting at Birds Eye Foods, Inc. and previously at PricewaterhouseCoopers from 1996 to 2002 in various roles including serving as an Assurance Manager. Bullwinkle is a Certified Public Accountant in the State of New York. 30 Table of Contents Roger W.
Taber 68 Chief Technical Officer, Vice President, Senior Vice President Advanced Materials and Chemicals The executive officers' biographies follow: James V. Continenza James V. Continenza leads the transformation of Kodak as Executive Chairman and Chief Executive Officer. He was appointed by the Board as Executive Chairman in February 2019 and as Chief Executive Officer in July 2020.
Taber 69 Chief Technical Officer, Vice President, Senior Vice President Advanced Materials and Chemicals The executive officers' biographies follow: James V. Continenza James V. Continenza leads the transformation of Kodak as Executive Chairman and Chief Executive Officer. He was appointed by the Board as Executive Chairman in February 2019 and as Chief Executive Officer in July 2020.
He also serves on the Executive Committee of the Greater Rochester Chamber of Commerce and on the Board of Trustees for Roberts Wesleyan College and Northeastern Seminary. 30 Table of Contents PART II
He also serves on the Executive Committee of the Greater Rochester Chamber of Commerce and on the Board of Trustees for Roberts Wesleyan College and Northeastern Seminary. 31 Table of Contents PART II
Continenza 60 Executive Chairman and Chief Executive Officer David E. Bullwinkle 48 Chief Financial Officer, Senior Vice President and President of Eastman Business Park Roger W. Byrd 57 General Counsel, Secretary and Senior Vice President Richard T. Michaels 49 Chief Accounting Officer and Corporate Controller Terry R.
Continenza 61 Executive Chairman and Chief Executive Officer David E. Bullwinkle 49 Chief Financial Officer and Senior Vice President Roger W. Byrd 58 General Counsel, Secretary and Senior Vice President Richard T. Michaels 50 Chief Accounting Officer and Corporate Controller Terry R.
Previously, Continenza served on the boards of directors of Datasite LLC (formerly known as Merrill Corporation) from July 2013 to December 2020 and Cenveo Corporation, an industry leader in transformative publishing solutions, from September 2018 to September 2022. David E.
Previously, Continenza served on the boards of directors of Datasite LLC (formerly known as Merrill Corporation) from July 2013 to December 2020 and Cenveo Corporation, an industry leader in transformative publishing solutions, from September 2018 to September 2022. David E. Bullwinkle Dave Bullwinkle has been the Chief Financial Officer and Senior Vice President of Kodak since July 2016.
Bullwinkle joined Kodak in 2004 and has worked in several financial management roles at Kodak including Worldwide BU Controller, Assistant Corporate Controller and External Reporting Manager. He served as the Director of Corporate Financial Planning and Analysis and Vice President, Finance at Kodak from November 2010 to June 2016, and Director of Investor Relations from August 2013 to June 2016.
He served as the Director of Corporate Financial Planning and Analysis and Vice President, Finance at Kodak from November 2010 to June 2016, and as Director of Investor Relations from August 2013 to June 2016.
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He has also held leadership roles at STi Prepaid, LLC, a telecommunications company; Anchor Glass Container Corp., a leading manufacturer of glass containers; Teligent, Inc., a provider of communications services including voice, data, and internet access; Lucent Technologies Product Finance, a global leader in telecom equipment; and AT&T Inc., a telecommunications company.
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Bullwinkle joined Kodak in 2004 and has worked in several financial management roles at Kodak including Worldwide BU Controller, Assistant Corporate Controller and External Reporting Manager.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe graph tracks the performance of a $100 investment in our common stock and in each index (with the reinvestment of all dividends) from 12/31/2017 to 12/31/2022. 31 Table of Contents ISSUER PURCHASES OF EQUITY SECURITIES DURING THE QUARTER ENDED December 31, 2022 There were no issuer purchases of equity securities in the quarter ended December 31, 2022.
Biggest changeThe graph tracks the performance of a $100 investment in our common stock and in each index (with the reinvestment of all dividends) from 12/31/2018 to 12/31/2023.
Information regarding securities authorized for issuance under equity compensation plans is included in Item 12. “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” in this Annual Report under the caption “Equity Compensation Plan Information.” DIVIDEND INFORMATION No dividends on common stock were declared or paid during 2022 or 2021.
Information regarding securities authorized for issuance under equity compensation plans is included in Item 12. “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” in this Annual Report under the caption “Equity Compensation Plan Information.” DIVIDEND INFORMATION No dividends on common stock were declared or paid during 2023 or 2022.
ITEM 5. MARKET FOR REGISTRANT ’ S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The Company’s common stock is listed on the New York Stock Exchange (NYSE) under the symbol “KODK”. There were 770 shareholders of record of common stock on December 31, 2022.
ITEM 5. MARKET FOR REGISTRANT ’ S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The Company’s common stock is listed on the New York Stock Exchange (NYSE) under the symbol “KODK”. There were 693 shareholders of record of common stock on December 31, 2023.
The graph below matches Eastman Kodak Company's cumulative 5-Year total shareholder return on common stock with the cumulative total returns of the Russell 2000 index and the S&P Small Cap 600 Information Technology index.
Dividends for common shareholders may be restricted under Kodak’s debt and preferred stock agreements. The graph below matches Eastman Kodak Company's cumulative 5-Year total shareholder return on common stock with the cumulative total returns of the Russell 2000 index and the S&P 600 Information Technology index.
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Dividends for common shareholders may be restricted under Kodak’s Term Loan Credit Agreement, Amended ABL Credit Agreement, Letter of Credit Facility Agreement, the Series B Preferred Stock Agreement and the Series C Preferred Stock Agreement.
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The stock price performance included in this graph is not necessarily indicative of future stock price performance. 32 Table of Contents ISSUER PURCHASES OF EQUITY SECURITIES DURING THE QUARTER ENDED December 31, 2023 Total Number of Shares Purchased as Maximum That May Total Number Average Part of Publicly Be Purchased of Shares Price Paid Announced Plans under the Plans or Purchased (1) per Share or Programs (2) Programs (2) October 1 through 31, 2023 1,531 $ 3.89 N/A N/A November 1 through 30, 2023 — $ — N/A N/A December 1 through 31, 2023 — $ — N/A N/A Total 1,531 $ 3.89 (1) These purchases were made to satisfy tax withholding obligations in connection with the vesting of restricted stock units issued to employees.
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(2) Kodak does not have a publicly announced repurchase plan or program.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeKodak has started construction of a lab and manufacturing facility to manufacture reagents for healthcare applications within an existing building located at Eastman Business Park. • Film and related component manufacturing operations and Kodak Research Laboratories utilize capacity at EBP, which helps cost absorption for both Kodak operations and tenants at Eastman Business Park. • Kodak plans to capitalize on its intellectual property through new business or licensing opportunities, focusing on opportunities in smart material applications and printed electronics markets and also pursuing certain opportunities in 3D printing materials. 36 Table of Contents RESULTS OF OPERATIONS Year Ended Year Ended December 31, % of December 31, % of $ Change vs. 2022 Sales 2021 Sales 2021 Revenues $ 1,205 $ 1,150 $ 55 Cost of revenues 1,035 986 49 Gross profit 170 14 % 164 14 % 6 Selling, general and administrative expenses 153 13 % 177 15 % (24 ) Research and development costs 34 3 % 33 3 % 1 Restructuring costs and other 10 1 % 6 1 % 4 Other operating income, net (1 ) 0 % (6 ) -1 % 5 Loss from continuing operations before interest expense, pension income excluding service cost component, other charges (income), net and income taxes (26 ) (2 %) (46 ) (4 %) 20 Interest expense 40 3 % 33 3 % 7 Pension income excluding service cost component (98 ) (8 %) (102 ) (9 %) 4 Other charges (income), net 1 0 % (5 ) (0 %) 6 Earnings from continuing operations before income taxes 31 3 % 28 2 % 3 Provision for income taxes 5 0 % 4 0 % 1 NET EARNINGS $ 26 2 % $ 24 2 % $ 2 Revenues For the year ended December 31, 2022, revenues improved approximately $55 million compared with the same period in 2021 primarily due to improved pricing within Traditional Printing ($151 million), improved pricing and product mix as well as increased volume within Advanced Materials and Chemicals ($15 million and $11 million, respectively), improved product mix in Digital Printing ($5 million) and improved volume in Brand ($2 million).
Biggest change(in millions) 2023 Sales 2022 Sales 2022 Revenues $ 1,117 $ 1,205 $ (88 ) Cost of revenues 907 1,035 (128 ) Gross profit 210 19 % 170 14 % 40 Selling, general and administrative expenses 159 14 % 153 13 % 6 Research and development costs 34 3 % 34 3 % — Restructuring costs and other 7 1 % 10 1 % (3 ) Other operating expense (income), net 6 1 % (1 ) 0 % 7 Earnings (loss) from continuing operations before interest expense, pension income excluding service cost component, loss on early extinguishment of debt, other (income) charges, net and income taxes 4 0 % (26 ) (2 %) 30 Interest expense 52 5 % 40 3 % 12 Pension income excluding service cost component (161 ) (14 %) (98 ) (8 %) (63 ) Loss on early extinguishment of debt 27 2 % — - 27 Other (income) charges, net (1 ) (0 %) 1 0 % (2 ) Earnings from continuing operations before income taxes 87 8 % 31 3 % 56 Provision for income taxes 12 1 % 5 0 % 7 NET EARNINGS $ 75 7 % $ 26 2 % $ 49 Revenues For the year ended December 31, 2023, revenues declined approximately $88 million compared with the same period in 2022 primarily due to lower volume in Print ($154 million) and Advanced Materials and Chemicals ($11 million), partially offset by improved pricing and product mix within Print ($43 million) and Advanced Materials and Chemicals ($32 million).
In 2022, Kodak decreased employee benefit reserves by $15 million composed of a reduction in workers’ compensation reserves of approximately $13 million driven by changes in discount rates and a decrease in other employee benefit reserves of approximately $2 million, driven by both changes in discount rates and favorable experience.
Kodak decreased employee benefit reserves by $15 million in 2022 composed of a reduction in workers’ compensation reserves of approximately $13 million driven by changes in discount rates and a decrease in other employee benefit reserves of approximately $2 million, driven by both changes in discount rates and favorable experience.
The increase in the discount rate for Kodak’s major U.S. defined benefit pension plan from December 31, 2021 to December 31, 2022 resulted in a decrease in the projected benefit obligation of approximately $582 million at December 31, 2022. The increase in the discount rate for the U.S.
The increase in the discount rate for Kodak’s major U.S. defined benefit pension plan from December 31, 2021 to December 31, 2022 resulted in a decrease in the projected benefit obligation of approximately $582 million at December 31, 2022.
The integration of antennas is growing worldwide due to the rapid expansion of 5G and an overall increase in RF communications, and the ubiquity of glass surfaces makes transparent antennas attractive for multiple end‐use markets. o Reagent Manufacturing - Kodak plans to capitalize on its existing chemical manufacturing expertise, including current production of unregulated Key Starting Materials for pharmaceuticals, to implement an expansion into manufacturing Diagnostic Test Reagent solutions.
The integration of antennas is growing worldwide due to the rapid expansion of 5G and an overall increase in RF communications, and the ubiquity of glass surfaces makes transparent antennas attractive for multiple end‐use markets. • Reagent Manufacturing - Kodak plans to capitalize on its existing chemical manufacturing expertise, including current production of unregulated Key Starting Materials for pharmaceuticals, to implement an expansion into manufacturing Diagnostic Test Reagent solutions.
Wildcat has granted Kodak certain rights to negotiate a production or licensing arrangement with Wildcat when and if Wildcat’s technology reaches commercial readiness. o Light-Blocking Technology - Kodak plans to leverage a proprietary technology initially developed for electrophotographic toners to commercialize a carbon‐less fabric coating designed to offer superior light management, from complete blackout to selective light filtering, and coating compatibility with an unmatched range of fabrics.
Wildcat has granted Kodak certain rights to negotiate a production or licensing arrangement with Wildcat when and if Wildcat’s technology reaches commercial readiness. • Light-Blocking Technology - Kodak plans to leverage a proprietary technology initially developed for electrophotographic toners to commercialize a carbon‐less fabric coating designed to offer superior light management, from complete blackout to selective light filtering, and coating compatibility with an unmatched range of fabrics.
If the inter-company loan is not extended, refinanced or amended and the Hong Kong subsidiary does not pay any of the installments by the end of the 30-day grace period following notice by the Chinese subsidiary after a failure to pay on the due date of such installment, the Hong Kong subsidiary would default on the inter-company loan.
If the inter-company loan is not extended, refinanced or amended and the Hong Kong subsidiary does not pay any of the individual installments by the end of the 30-day grace period following notice by the Chinese subsidiary after a failure to pay on the due date of such installment, the Hong Kong subsidiary would default on the inter-company loan.
Due to changes in 2019 to the manner in which the required security deposit is determined, the Company has been required to post additional collateral over the last several years. At December 31, 2022, the Company had posted $75.0 million of collateral, representing 107% of the Company’s undiscounted actuarial workers’ compensation obligations.
Due to changes in 2019 to the manner in which the required security deposit is determined, the Company has been required to post additional collateral over the last several years. At December 31, 2022, the Company posted $75.0 million of collateral, representing 107% of the Company’s undiscounted actuarial workers’ compensation obligations.
Significant accounting policies used in the preparation of the Consolidated Financial Statements are more fully described in Note 1, “Basis of Presentation and Significant Accounting Policies”. The accounting policies most critical to the preparation of the consolidated financial statements and require the most difficult, subjective or complex judgments are described below.
Significant accounting policies used in the preparation of the Consolidated Financial Statements are more fully described in Note 1, “Basis of Presentation and Summary of Significant Accounting Policies”. The accounting policies most critical to the preparation of the consolidated financial statements and require the most difficult, subjective or complex judgments are described below.
The amounts repaid to the Chinese subsidiary may not be able to be loaned, repatriated or otherwise moved back to the U.S., in which case the Company’s U.S. liquidity would be reduced.
Any amounts repaid to the Chinese subsidiary may not be able to be loaned, repatriated or otherwise moved back to the U.S., in which case the Company’s U.S. liquidity would be reduced.
The Company is required to redeem all shares not converted prior to May 28, 2026 at $100 per share plus the amount of any accrued and unpaid dividends. Due to uncertainty regarding the number of shares that will be redeemed, the redemption amount has not been included in the above table. Refer to Note 10, "Redeemable, Convertible Preferred Stock".
The Company is required to redeem all shares not converted prior to May 28, 2026 at $100 per share plus the amount of any accrued and unpaid dividends. Due to uncertainty regarding the number of shares that will be redeemed, the redemption amount has not been included in the above table. Refer to Note 9, "Redeemable, Convertible Preferred Stock".
Sensitivity Analysis: The following table illustrates the sensitivity to a change to certain key assumptions used in the calculation of expense for the year ending December 31, 2023 and the projected benefit obligation (“PBO”) at December 31, 2022 for Kodak's major U.S. and non-U.S. defined benefit pension plans: Impact on 2023 Impact on PBO Pre-Tax Pension Expense December 31, 2022 (in millions) Increase (Decrease) Increase (Decrease) U.S.
Sensitivity Analysis: The following table illustrates the sensitivity to a change to certain key assumptions used in the calculation of expense for the year ending December 31, 2023 and the projected benefit obligation (“PBO”) at December 31, 2023 for Kodak's major U.S. and non-U.S. defined benefit pension plans: Impact on 2024 Impact on PBO Pre-Tax Pension Expense December 31, 2023 (in millions) Increase (Decrease) Increase (Decrease) U.S.
Purchase obligations exclude agreements that are cancelable without penalty. (4) Due to uncertainty regarding the completion of tax audits and possible outcomes, an estimate of the timing of payments related to uncertain tax positions and interest cannot be made. See Note 18, “Income Taxes,” for additional information regarding Kodak's uncertain tax positions.
Purchase obligations exclude agreements that are cancelable without penalty. (4) Due to uncertainty regarding the completion of tax audits and possible outcomes, an estimate of the timing of payments related to uncertain tax positions and interest cannot be made. See Note 17, “Income Taxes,” for additional information regarding Kodak's uncertain tax positions.
The war in Ukraine and the international response have disrupted Kodak’s ability to operate its Russian subsidiary in the ordinary course, affecting its ability to pay vendors and employees, receive amounts owed from customers in Russia and deliver product. Kodak is in the process of an orderly winding down of its Russian subsidiary and direct Russian operations.
The war in Ukraine and the international response have disrupted Kodak’s ability to operate its Russian subsidiary in the ordinary course, affecting its ability to pay vendors and employees, receive amounts owed from customers in Russia and deliver product. Kodak is in the process of an orderly winding down of its Russian subsidiary having ceased its direct Russian operations.
Asset gains and losses that are not yet reflected in the calculated value of plan assets are not included in amortization of unrecognized gains and losses. Kodak’s major U.S. defined benefit pension plan accounts for substantially all of Kodak’s net pension income and represents approximately 87% of the total fair value of major plan assets as of December 31, 2022.
Asset gains and losses that are not yet reflected in the calculated value of plan assets are not included in amortization of unrecognized gains and losses. Kodak’s major U.S. defined benefit pension plan accounts for substantially all of Kodak’s net pension income and represents approximately 87% of the total fair value of major plan assets as of December 31, 2023.
Cross references to Notes in this MD&A are to the Notes in the Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data". The discussion of the Company’s financial condition and results of operations for the year ended December 31, 2021 compared to the same period in 2020 is included in Part II, Item 7.
Cross references to Notes in this MD&A are to the Notes in the Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data". The discussion of the Company’s financial condition and results of operations for the year ended December 31, 2022 compared to the same period in 2021 is included in Part II, Item 7.
Significant differences in actual experience or significant changes in future assumptions would affect Kodak’s pension and other postretirement benefit costs and obligations. 51 Table of Contents Return on Plan Assets EROA is a long-term assumption, which Kodak reviews annually.
Significant differences in actual experience or significant changes in future assumptions would affect Kodak’s pension and other postretirement benefit costs and obligations. 50 Table of Contents Return on Plan Assets EROA is a long-term assumption, which Kodak reviews annually.
A discussion of opportunities and challenges related to Kodak’s strategy follows: • Traditional Printing’s digital plate products include traditional digital plates and KODAK SONORA Process Free Plates. SONORA Process Free Plates allow Kodak customers to skip the plate processing step prior to mounting plates on a printing press.
A discussion of opportunities and challenges related to Kodak’s strategy follows: • Print's digital plate products include traditional digital plates and KODAK SONORA Process Free Plates. SONORA Process Free Plates allow Kodak customers to skip the plate processing step prior to mounting plates on a printing press.
The following Management’s Discussion and Analysis ("MD&A") provides a historical and prospective narrative on the Company’s financial condition and results of operations for the year ended December 31, 2022 as compared to the year ended December 31, 2021.
The following Management’s Discussion and Analysis ("MD&A") provides a historical and prospective narrative on the Company’s financial condition and results of operations for the year ended December 31, 2023 as compared to the year ended December 31, 2022.
At December 31, 2022, the calculated value of the assets of Kodak’s major U.S. and non-U.S. defined benefit pension plans was approximately $4.1 billion and the fair value of the assets of Kodak’s major U.S. and non-U.S. defined benefit pension plans was approximately $4.2 billion.
At December 31, 2023, the calculated value of the assets of Kodak’s major U.S. and non-U.S. defined benefit pension plans was approximately $4.2 billion and the fair value of the assets of Kodak’s major U.S. and non-U.S. defined benefit pension plans was approximately $4.1 billion.
(5) For 2023, the Company is forecasting $12 million in contributions and net benefit payments for its Non-U.S. major defined benefit retirement plans and other postretirement benefit plans.
(5) For 2024, the Company is forecasting $12 million in contributions and net benefit payments for its Non-U.S. major defined benefit retirement plans and other postretirement benefit plans.
In addition, Kodak seeks to offset the impact of short-term and long-term market dynamics on pricing and volume pressures through innovations in Kodak product lines, including investing in digital print technologies. 35 Table of Contents • In Digital Printing, the PROSPER business is expected to grow as the legacy VERSAMARK business continues to decline as a percentage of the segment’s total revenue.
In addition, Kodak seeks to offset the impact of short-term and long-term market dynamics on pricing and volume pressures through innovations in Kodak product lines, including investing in digital print technologies. 36 Table of Contents • In Print's digital printing businesses, the PROSPER business is expected to grow as the legacy VERSAMARK business continues to decline as a percentage of the segment’s total revenue.
For 2023, the forecasted contribution (funded plans) and net benefit payment (unfunded plans) requirements for its non-U.S. defined benefit pension and postretirement plans are approximately $12 million.
For 2024, the forecasted contribution (funded plans) and net benefit payment (unfunded plans) requirements for its non-U.S. defined benefit pension and postretirement plans are approximately $12 million.
Important factors that could cause actual events or results to differ materially from the forward-looking statements include, among others, the risks and uncertainties described in more detail in this report on Form 10–K under the headings “Business,” “Risk Factors,” “Legal Proceedings” and/or “Management’s Discussion and Analysis of Financial Condition and Results of Operations–Liquidity and Capital Resources,” and in other filings the Company makes with the SEC from time to time, as well as the following: ● Continued sufficient availability of borrowings and letters of credit under the Amended ABL Credit Agreement and L/C Facility Agreement, Kodak’s ability to obtain additional or alternate financing if and as needed, Kodak’s continued ability to manage world-wide cash through inter-company loans, distributions and other mechanisms, and Kodak's ability to provide or facilitate financing for its customers; ● Kodak’s ability to improve and sustain its operating structure, cash flow, profitability and other financial results; ● Kodak’s ability to achieve strategic objectives, cash forecasts, financial projections, and projected growth; ● Kodak’s ability to achieve the financial and operational results contained in its business plans; ● Kodak’s ability to comply with the covenants in its various credit facilities; ● Kodak’s ability to fund continued investments, capital needs, collateral requirements and restructuring payments and service its debt and Series B Preferred Stock and Series C Preferred Stock; ● Changes in foreign currency exchange rates, commodity prices, interest rates and tariff rates; 32 Table of Contents ● The impact of the global economic environment, including inflationary pressures, medical epidemics such as the COVID-19 pandemic, geopolitical issues such as the war in Ukraine, and Kodak’s ability to effectively mitigate the associated increased costs of aluminum and other raw materials, energy, labor, shipping, delays in shipment and production times, and fluctuations in demand; ● The performance by third parties of their obligations to supply products, components or services to Kodak and Kodak’s ability to address supply chain disruptions and continue to obtain raw materials and components available from single or limited sources of supply, which may be adversely affected by the COVID-19 pandemic and the war in Ukraine; ● Kodak’s ability to effectively anticipate technology and industry trends and develop and market new products, solutions and technologies, including products based on its technology and expertise that relate to industries in which it does not currently conduct material business; ● Kodak’s ability to effectively compete with large, well-financed industry participants; ● Kodak’s ability to effect strategic transactions, such as investments, acquisitions, strategic alliances, divestitures and similar transactions, or to achieve the benefits sought to be achieved from such strategic transactions; ● Kodak’s ability to discontinue, sell or spin-off certain non-core businesses or operations, or otherwise monetize assets; ● The impact of the investigations, litigation and claims arising out of the circumstances surrounding the announcement on July 28, 2020, by the U.S.
Important factors that could cause actual events or results to differ materially from the forward-looking statements include, among others, the risks and uncertainties described in more detail in this report on Form 10–K under the headings “Business,” “Risk Factors,” “Legal Proceedings” and/or “Management’s Discussion and Analysis of Financial Condition and Results of Operations–Liquidity and Capital Resources,” and in other filings the Company makes with the SEC from time to time, as well as the following: ● Kodak’s ability to improve and sustain its operating structure, cash flow, profitability and other financial results; ● Kodak’s ability to achieve strategic objectives, cash forecasts, financial projections, and projected growth; ● Kodak’s ability to achieve the financial and operational results contained in its business plans; 33 Table of Contents ● Kodak’s ability to obtain additional or alternate financing if and as needed, Kodak's continued ability to manage world-wide cash through inter-company loans, distributions and other mechanisms, and Kodak's ability to provide or facilitate financing for its customers ; ● Kodak’s ability to fund continued investments, capital needs, collateral requirements and restructuring payments and service its debt and Series B Preferred Stock and Series C Preferred Stock; ● Changes in foreign currency exchange rates, commodity prices, interest rates and tariff rates; ● The impact of the global economic environment, including inflationary pressures, geopolitical issues such as the war in Ukraine and the conflicts involving Israel, medical epidemics, and Kodak’s ability to effectively mitigate the associated increased costs of aluminum and other raw materials, energy, labor, shipping, delays in shipment and production times, and fluctuations in demand; ● Kodak’s ability to effectively compete with large, well-financed industry participants or with competitors whose cost structure is lower than Kodak’s; ● The performance by third parties of their obligations to supply products, components or services to Kodak and Kodak’s ability to address supply chain disruptions and continue to obtain raw materials and components available from single or limited sources of supply, which may be adversely affected by the war in Ukraine, the conflicts involving Israel, and residual effects of the COVID-19 pandemic; ● Kodak’s ability to comply with the covenants in its various credit facilities; ● Kodak’s ability to effectively anticipate technology and industry trends and develop and market new products, solutions and technologies, including products based on its technology and expertise that relate to industries in which it does not currently conduct material business; ● Kodak’s ability to effect strategic transactions, such as investments, acquisitions, strategic alliances, divestitures and similar transactions, or to achieve the benefits sought to be achieved from such strategic transactions; ● Kodak’s ability to discontinue, sell or spin-off certain non-core businesses or operations, or otherwise monetize assets; ● The impact of the investigations, litigation and claims arising out of the circumstances surrounding the announcement on July 28, 2020, by the U.S.
Kodak’s strategy is to: • Focus product investment in core competency areas of print, advanced materials and chemicals, leveraging Kodak’s proprietary technologies to deliver technologically advanced products in the product goods packaging, graphic communications and functional printing markets; • Grow revenues through a focus on customers across Kodak’s print divisions, increasing overall share and profitability; • Promote the use of film and expand the applications of Kodak’s film and chemicals to best utilize the existing infrastructure; and • Continue to streamline processes to drive cost reductions and improve operating leverage.
Kodak’s strategy is to: • Focus product investment in core competency areas of print and advanced materials, leveraging Kodak’s proprietary technologies to deliver technologically advanced products in the product goods packaging, graphic communications and functional printing markets; • Grow profitability through a focus on customers across Kodak’s Print segment; • Promote the use of film and expand the applications of Kodak’s film and chemicals to best utilize the existing infrastructure; and • Continue to streamline processes to drive cost reductions and improve operating leverage.
In China, where approximately $24 million and $42 million of cash and cash equivalents was held as of December 31, 2022 and 2021, respectively, there are limitations related to net asset balances that may impact the ability to make cash available to other jurisdictions in the world.
In China, where approximately $29 million and $24 million of cash and cash equivalents was held as of December 31, 2023 and 2022, respectively, there are limitations related to net asset balances that may impact the ability to make cash available to other jurisdictions in the world.
The total net realized (losses) gains from these derivative investments that were included in the actual return on plan assets balance in the table above for the years ending December 31, 2022, 2021 and 2020 were approximately ($128) million, $(23) million and $159 million, respectively.
The total net realized (losses) gains from these derivative investments that were included in the actual return on plan assets balance in the table above for the years ending December 31, 2023, 2022 and 2021 were approximately ($1) million, ($128) million and ($23) million, respectively.
The direct operations of Kodak’s Russian subsidiary are not material to the Company’s financial statements (less than 1% of total consolidated revenues and assets for 2021 and 2022), and there were no material impacts to the consolidated results as of and for the year ended December 31, 2022.
The direct operations of Kodak’s Russian subsidiary are not material to the Company’s financial statements (less than 1% of total consolidated revenues and assets for 2021, 2022 and 2023), and there were no material impacts to the consolidated results of operations for the years ended December 31, 2022 and 2023.
As demonstrated in the table below, Operational EBITDA represents the earnings from continuing operations before income taxes excluding non-service cost components of pension and other postemployment benefits income; depreciation and amortization expense; restructuring costs and other; stock-based compensation expense; consulting and other costs; idle costs; other operating income, net; interest expense and other (charges) income, net.
As demonstrated in the table below, Operational EBITDA represents the earnings from continuing operations before income taxes excluding non-service cost components of pension and other postemployment benefits income; depreciation and amortization expense; restructuring costs and other; stock-based compensation expense; consulting and other costs; idle costs; other operating (expense) income, net; loss on early extinguishment of debt; interest expense and other income (charges), net.
The table below shows the discount rates for Kodak’s major U.S. pension plan for the years shown: Year Ended December 31, 2022 2021 2020 Discount Rates - Projected Benefit Obligation: U.S. Plan 5.13 % 2.54 % 2.09 % As discount rates reflect the market rate on the measurement date, the rates can be volatile from year to year.
The table below shows the discount rates for Kodak’s major U.S. pension plan for the years shown: Year Ended December 31, 2023 2022 2021 Discount Rates - Projected Benefit Obligation: U.S. Plan 4.92 % 5.13 % 2.54 % As discount rates reflect the market rate on the measurement date, the rates can be volatile from year to year.
Pension expense from continuing operations before special termination benefits, curtailments and settlements for the major non-U.S. defined benefit pension plans was $8 million for 2022 and is projected to be $3 million in 2023. 53 Table of Contents Derivative Instruments: Kodak’s major U.S. defined benefit plan utilizes derivative investments primarily to hedge liability interest rate risk to U.S. government bonds.
Pension expense from continuing operations before special termination benefits, curtailments and settlements for the major non-U.S. defined benefit pension plans was $3 million for 2023 and is projected to be $2 million in 2024. 52 Table of Contents Derivative Instruments: Kodak’s major U.S. defined benefit plan utilizes derivative investments primarily to hedge liability interest rate risk to U.S. government bonds.
Kodak is experiencing worldwide supply constraints for aluminum and electronic components, and increased energy and transportation costs due in part to the war in Ukraine. The extent to which the military conflict in Ukraine will impact the global economy and Kodak's business and operations remains uncertain.
Kodak is experiencing worldwide supply constraints for aluminum and increased energy and transportation costs due in part to the war in Ukraine. The extent to which the war in Ukraine will impact the global economy and Kodak's business and operations remains uncertain.
Refer to the Derivative Instruments discussion below for additional information. 52 Table of Contents Approximately $2.6 billion and $3.4 billion of the total fair value of Kodak’s major U.S. defined pension plan as of December 31, 2022 and 2021, respectively, represents plan assets where the fair market value is not readily determinable and are measured using the net asset value (“NAV”) per share expedient.
Refer to the Derivative Instruments discussion below for additional information. 51 Table of Contents Approximately $2.7 billion and $2.6 billion of the total fair value of Kodak’s major U.S. defined pension plan as of December 31, 2023 and 2022, respectively, represents plan assets where the fair market value is not readily determinable and are measured using the net asset value (“NAV”) per share expedient.
Based on the legacy nature of the Company’s workers’ compensation obligations, the undiscounted actuarial obligation has been declining and the Company expects it to continue to decline. While it may not be indicative of the rate of future declines, the undiscounted actuarial liability declined by an average of $5.5 million per year between 2014 and 2022.
Based on the legacy nature of the Company’s workers’ compensation obligations, the undiscounted actuarial obligation has been declining and the Company expects this trend to continue. While it may not be indicative of the rate of future declines, the undiscounted actuarial liability declined by an average of $5.3 million per year between 2014 and 2023.
As these futures contracts have short-term maturities, the fair value of these derivative instruments at December 31, 2022 and 2021 was $0 million and $10 million, respectively, which represents the unrealized gains and losses on these contracts. Refer to Note 20, “Retirement Plans” in the Notes to Financial Statements for additional information.
As these futures contracts have short-term maturities, the fair value of these derivative instruments at December 31, 2023 and 2022 was $1 million and $0 million, respectively, which represents the unrealized gains and losses on these contracts. Refer to Note 19, “Retirement Plans” in the Notes to Financial Statements for additional information.
In order to mitigate the impact of higher aluminum, energy and packaging costs, the segment implemented surcharges on purchases of plates largely beginning in the latter part of the second quarter of 2021 that continue to be periodically reviewed and adjusted for accordingly.
Largely beginning in the latter part of the second quarter of 2021, in order to mitigate the impact of higher aluminum, energy and packaging costs within Prepress Solutions, the Print segment implemented surcharges on purchases of plates that continue to be periodically reviewed and adjusted accordingly.
Kodak is installing and commissioning a production-scale coating machine to coat fabrics in Eastman Business Park, located in Rochester, NY. o Transparent Antennas - Kodak plans to leverage its proprietary copper micro‐wire technologies and high‐resolution printing expertise to contract‐manufacture custom transparent antennas for automotive, commercial construction, and other applications requiring excellent radio frequency (“RF”) and optical performance.
Kodak has installed a production-scale machine to coat fabrics in Eastman Business Park, located in Rochester, NY. • Transparent Antennas - Kodak plans to leverage its proprietary copper micro‐wire technologies and high‐resolution printing expertise to contract‐manufacture custom transparent antennas for automotive, commercial construction, and other applications requiring excellent radio frequency (“RF”) and optical performance.
RESTRUCTURING COSTS AND OTHER 2022 Restructuring actions taken in 2022 were initiated to reduce Kodak’s cost structure as part of its commitment to drive sustainable profitability and included ceasing manufacturing of the Electrophotographic Printing Solutions equipment products as well as various targeted reductions in manufacturing, service, sales, research and development and administrative functions.
RESTRUCTURING COSTS AND OTHER 2023 Restructuring actions taken in 2023 were initiated to reduce Kodak’s cost structure as part of its commitment to drive sustainable profitability and included actions to complete the process of ceasing manufacturing of the Electrophotographic Printing Solutions equipment products as well as various targeted reductions in manufacturing, service, sales and administrative functions.
Change in assumption: 25 basis point decrease in discount rate $ 6 $ — $ 46 $ 12 25 basis point increase in discount rate (6 ) — (44 ) (12 ) 25 basis point decrease in EROA 9 1 N/A N/A 25 basis point increase in EROA (9 ) (1 ) N/A N/A Total pension income from continuing operations before special termination benefits, curtailments and settlements for the major U.S. defined benefit pension plan was $88 million for 2022 and is expected to be approximately $148 million in 2023.
Change in assumption: 25 basis point decrease in discount rate $ 6 $ (1 ) $ 44 $ 12 25 basis point increase in discount rate (6 ) 1 (43 ) (12 ) 25 basis point decrease in EROA 9 1 N/A N/A 25 basis point increase in EROA (9 ) (1 ) N/A N/A Total pension income from continuing operations before special termination benefits, curtailments and settlements for the major U.S. defined benefit pension plan was $149 million for 2023 and is expected to be approximately $152 million in 2024.
As described under “Overview” above, the Company is also continuing to explore expanding further into the pharmaceutical space on a smaller scale than contemplated by the DFC Loan using other sources of capital, including a portion of the capital raised by the Company on February 26, 2021.
As described under “Overview” above, the Company is also continuing to explore expanding further into the pharmaceutical space on a smaller scale than contemplated by the DFC Loan using other sources of capital, including a portion of the capital raised by the Company on July 21, 2023.
Consulting and other costs include $10 million of income in the year ended December 31, 2022 representing insurance reimbursement of legal costs previously paid by the Company associated with investigations and litigation matters.
Consulting and other costs include $15 million and $10 million of income in the years ended December 31, 2023 and 2022, respectively, representing insurance reimbursement of legal costs previously paid by the Company associated with investigations and litigation matters.
An increase in interest rates is the primary factor that could precipitate material losses in the U.S. Plan’s existing derivatives portfolio. A 25-basis point increase in interest rates would cause a loss from the government bond derivatives of approximately $7 million.
An increase in interest rates is the primary factor that could precipitate material losses in Kodak’s major U.S. defined benefit plan's existing derivatives portfolio. A 25-basis point increase in interest rates would cause a loss from the government bond derivatives of approximately $8 million.
Kodak has deferred tax liabilities of $17 million and $20 million for potential taxes on undistributed earnings, primarily attributable to foreign withholding taxes, as of December 31, 2022 and 2021, respectively. Kodak operates within multiple taxing jurisdictions worldwide and is subject to audit in these jurisdictions.
As such, it has recorded deferred tax liabilities of $16 million and $17 million for potential taxes on undistributed earnings, primarily attributable to foreign withholding taxes, as of December 31, 2023 and 2022, respectively. Kodak operates within multiple taxing jurisdictions worldwide and is subject to audit in these jurisdictions.
Impact of COVID ‐ 19 and Other Global Events : Kodak's products are sold and serviced in numerous countries across the globe with more than half of sales generated outside the U.S.
Economic Environment and Other Global Events : Kodak's products are sold and serviced in numerous countries across the globe with more than half of sales generated outside the U.S.
Kodak’s major U.S. defined benefit pension plan’s derivative portfolio consists of exchange traded futures contracts. As of December 31, 2022 and 2021 the notional amount of these derivative instruments approximated $389 million and $1.0 billion, respectively.
Kodak’s major U.S. defined benefit pension plan’s derivative portfolio consists of exchange traded futures contracts. As of December 31, 2023 and 2022 the notional amount of these derivative instruments approximated $384 million and $389 million, respectively.
The analysis of inventory carrying values considers several factors including length of time inventory is on hand, historical sales, product shelf life, product life cycle, product category, and product obsolescence. New Accounting Pronouncements A description of new accounting pronouncements is contained in Note 1, “Summary of Significant Accounting Policies”.
The analysis of inventory carrying values considers several factors including length of time inventory is on hand, historical sales, product shelf life, product life cycle, product category, and product obsolescence. New Accounting Pronouncements A description of new accounting pronouncements is contained in Note 1, “Basis of Presentation & Summary of Significant Accounting Policies”. 53 Table of Contents
The ongoing impact of the COVID‐19 pandemic, the war in Ukraine, changes in global economic conditions and other global events on Kodak’s operations and financial performance remains uncertain and will depend on several factors such as the duration of supply chain disruptions and slowdown in customer demand, the ability to secure raw materials and components, the ability to offset higher labor, material and distribution costs through pricing actions and the duration and further evolution of the COVID‐19 pandemic and governmental responses thereto.
The ongoing changes in global economic conditions and the impact of other global events on Kodak’s operations and financial performance remains uncertain and will depend on several factors such as the slowdown in customer demand, the ability to offset higher labor, material and distribution costs through pricing actions, duration of supply chain disruptions and the ability to secure raw materials and components.
As of December 31, 2022 and 2021, outstanding inter-company loans to the U.S. were $399 million and $418 million, respectively, which includes short-term inter-company loans from Kodak’s international finance center of $109 million and $119 million, respectively .
As of December 31, 2023 and 2022, outstanding inter-company loans to the U.S. were $460 million and $399 million, respectively, which includes short-term inter-company loans from Kodak’s international finance center of $173 million and $109 million, respectively .
The segment is experiencing challenges from higher prices and availability of raw materials, digital substitution and competitive pricing pressures. Kodak seeks to mitigate the impact of increases in manufacturing costs, including aluminum prices, through a combination of surcharges and price increases, improved production efficiency and cost reduction initiatives.
The segment's digital plate products are experiencing challenges from higher prices and availability of raw materials, digital substitution and competitive pricing pressures. Kodak seeks to mitigate the impact of increases in manufacturing costs through a combination of surcharges and price increases, improved production efficiency and cost reduction initiatives.
The Company cannot predict the duration and scope of the COVID-19 pandemic, the war in Ukraine, as well as other factors such as the ability to continue to secure raw materials and components, the impact of rising costs of labor, commodity and distribution costs, or how quickly and to what extent normal economic and operating conditions can resume.
The Company cannot predict the duration and scope of such events, including the war in Ukraine and the conflicts involving Israel, and other factors such as the ability to continue to secure raw materials and components, the impact of rising costs of labor, commodity and distribution costs, or how quickly and to what extent normal economic and operating conditions can resume.
The decrease in reserves in 2021 impacted gross profit by approximately $3 million and SG&A by approximately $1 million. 39 Table of Contents 2023 Segments Change in Segments Effective February 2023 Kodak changed its organizational structure. The Traditional Printing segment and the Digital Printing segment were combined into one segment, named the Print segment.
The decrease in reserves in 2022 impacted gross profit by approximately $9 million, R&D by approximately $1 and SG&A by approximately $5 million. 40 Table of Contents 2023 Segments Change in Segments Effective February 2023 Kodak changed its organizational structure. The Traditional Printing segment and the Digital Printing segment were combined into one segment, named the Print segment.
Under the terms of the Amended ABL Credit Agreement, the Company is permitted to invest up to $75 million in Restricted Subsidiaries that are not Loan Parties and in joint ventures or Unrestricted Subsidiaries that are not party to the Amended ABL Credit Agreement.
Under the terms of the Amended and Restated Term Loan Credit Agreement, the Company is permitted to invest up to $60 million (or $75 million after the Deleveraging Milestone Date) in Restricted Subsidiaries that are not Loan Parties and in joint ventures or Unrestricted Subsidiaries that are not party to the Amended and Restated Term Loan Credit Agreement.
As a result of these actions, for the year ended December 31, 2022 Kodak recorded $13 million of charges of which $10 million were reported as Restructuring costs and other and $3 million were reported as Cost of revenues in the accompanying Consolidated Statement of Operations.
As a result of these actions, for the year ended December 31, 2023 Kodak recorded $10 million of charges of which $7 million were reported as Restructuring costs and other in the Consolidated Statement of Operations. The remaining $3 million represented inventory write-downs and were reported as Cost of revenues in the accompanying Consolidated Statement of Operations.
Kodak expects the majority of the annual savings to be in effect by the end of the second quarter of 2023 as actions are completed.
Kodak expects the majority of the annual savings to take effect by the end of the second quarter of 2024 as actions are completed.
At December 31, 2022 and 2021 approximately $152 million and $250 million, respectively, of cash and cash equivalents were held within the U.S. and approximately $65 million and $112 million, respectively, of cash and cash equivalents were held outside the U.S.
At December 31, 2023 and 2022 approximately $167 million and $152 million, respectively, of cash and cash equivalents were held within the U.S. and approximately $88 million and $65 million, respectively, of cash and cash equivalents were held outside the U.S.
The inter-company loan is required to be repaid in the next two years in four equal installments, with the first $20 million installment due by November 16, 2023 and the remaining installments due in 2024.
The inter-company loan terms provide for it to be repaid over two years in four equal installments, with the first $20 million installment due by November 16, 2023 and the remaining installments due in 2024.
Other Sources/Uses of Cash Related to Financing Transactions and Stock Options The holders of Series B Preferred Stock are entitled to cumulative dividends payable quarterly in cash at a rate of 4% per annum. All dividends have been declared and paid when due.
The holders of Series B Preferred Stock are entitled to cumulative dividends payable quarterly in cash at a rate of 4% per annum. All interest and dividends have been paid when due.
Conversely, if these issues are resolved favorably in the future, the related provisions would be reduced, thus having a positive impact on earnings. Pension and Other Postretirement Benefits Kodak’s defined benefit pension and other postretirement benefit costs and obligations are estimated using several key assumptions.
Conversely, if these issues are resolved favorably, the related provisions would be reduced, thus having a positive impact on earnings. Management’s ongoing assessments of the outcomes of these issues and related tax positions requires judgment. Pension and Other Postretirement Benefits Kodak’s defined benefit pension and other postretirement benefit costs and obligations are estimated using several key assumptions.
Research and development activities not directly related to the other segments are reported within the Advanced Materials and Chemicals segment. 38 Table of Contents Segment Operational EBITDA and Consolidated Income from Continuing Operations Before Income Taxes Year Ended December 31, (in millions) 2022 2021 Traditional Printing $ 27 $ 9 Digital Printing (22 ) (5 ) Advanced Materials and Chemicals (1 ) (6 ) Brand 14 13 Other 3 2 Depreciation and amortization (29 ) (31 ) Restructuring costs and other (13 ) (6 ) Stock-based compensation (5 ) (7 ) Consulting and other costs (1) 2 (19 ) Idle costs (2) (3 ) (2 ) Other operating income, net, (3) 1 6 Interest expense (3) (40 ) (33 ) Pension income excluding service cost component (3) 98 102 Other (charges) income, net (3) (1 ) 5 Consolidated earnings from continuing operations before income taxes $ 31 $ 28 (1) Consulting and other costs are primarily professional services and internal costs associated with certain corporate strategic initiatives, investigations and litigation.
Research and development activities not directly related to the other segments are reported within the Advanced Materials and Chemicals segment. 39 Table of Contents Segment Operational EBITDA and Consolidated Earnings from Continuing Operations Before Income Taxes Year Ended December 31, (in millions) 2023 2022 Print $ 20 $ 5 Advanced Materials and Chemicals 10 (1 ) Brand 15 14 All Other 2 3 Depreciation and amortization (30 ) (29 ) Restructuring costs and other (10 ) (13 ) Stock-based compensation (7 ) (5 ) Consulting and other costs (1) 13 2 Idle costs (2) (3 ) (3 ) Other operating (expense) income, net, (3) (6 ) 1 Interest expense (3) (52 ) (40 ) Pension income excluding service cost component (3) 161 98 Loss on early extinguishment of debt (3) (27 ) — Other income (charges), net (3) 1 (1 ) Consolidated earnings from continuing operations before income taxes $ 87 $ 31 (1) Consulting and other costs are primarily professional services and internal costs associated with certain corporate strategic initiatives, investigations and litigation.
Kodak made cash payments related to restructuring of approximately $6 million for the year ended December 31, 2022. The restructuring actions implemented in 2022 are expected to generate future annual cash savings of approximately $12 million. These savings are expected to reduce future annual Cost of revenues, SG&A and R&D expenses by $2 million, $7 million and $3 million, respectively.
Kodak made cash payments related to restructuring of approximately $9 million for the year ended December 31, 2023. The restructuring actions implemented in 2023 are expected to generate future annual cash savings of approximately $9 million. These savings are expected to reduce future annual Cost of revenues and SG&A expenses by $5 million and $4 million, respectively.
However, as illustrated in the above table, a 25-basis point increase in the discount rate used to measure the PBO of the U.S. Plan would cause a $44 million decrease in the PBO. Accordingly, while an increase in interest rates would expose the U.S. Plan’s derivative investments to losses, it would also likely result in an offsetting decrease the U.S.
However, as illustrated in the above table, a 25-basis point increase in the discount rate used to measure the PBO of the U.S. Plan would cause a $43 million decrease in the PBO. Accordingly, while an increase in interest rates would expose the U.S.
In addition, Kodak officially launched the KODAK PROSPER ULTRA 520 Digital Press utilizing Kodak's ULTRASTREAM inkjet technology, which offers offset print quality in a smaller footprint. • Advanced Materials and Chemicals segment is using Kodak's deep expertise in chemistry and strengths in deposition and coating processes that come from decades of experience in film manufacturing to work on new initiatives: o EV/Energy Storage Battery Material Manufacturing - Coating of substrates is a critical aspect of manufacturing materials for batteries and Kodak plans to capitalize on its expertise in coating technology to develop opportunities in this area.
Kodak completed the placement of the first KODAK PROSPER ULTRA 520 Digital Press in the fourth quarter of 2023. • Advanced Materials and Chemicals segment is using Kodak's deep expertise in chemistry and strengths in deposition and coating processes that come from decades of experience in film manufacturing to work on new initiatives: • EV/Energy Storage Battery Material Manufacturing - Coating of substrates is a critical aspect of manufacturing materials for batteries and Kodak plans to capitalize on its expertise in coating technology to develop opportunities in this area.
See Note 19, “Restructuring Costs and Other” for additional information on Kodak’s restructuring actions. 41 Table of Contents LIQUIDITY AND CAPITAL RESOURCES Management ’ s Assessment of Liquidity Kodak ended the year with a cash balance of $217 million, a decrease of $145 million from December 31, 2021.
See Note 18, “Restructuring Costs and Other” for additional information on Kodak’s restructuring actions. 42 Table of Contents LIQUIDITY AND CAPITAL RESOURCES Management ’ s Assessment of Liquidity Kodak ended the year with a cash balance of $255 million, an increase of $38 million from December 31, 2022.
Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company’s Annual Report on Form 10–K for the year ended December 31, 2021. 33 Table of Contents EXECUTIVE OVERVIEW Consolidated revenues in the year ended December 31, 2022 were $1.205 billion, an improvement of $55 million (5%) from 2021.
Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company’s Annual Report on Form 10–K for the year ended December 31, 2022. 34 Table of Contents EXECUTIVE OVERVIEW Consolidated revenues in the year ended December 31, 2023 were $1.117 billion, a decline of $88 million (7%) from 2022.
The following table presents actual and expected return on plan assets, as well as the corresponding percentages for Kodak’s major U.S. defined benefit pension plan: Year Ended December 31, 2022 2021 2020 (in millions) Actual return on plan assets $ (152 ) $ 716 $ 495 Expected return on plan assets 178 167 196 Actual rate of return on plan assets (6.1 %) 17.7 % 14.9 % Expected rate of return on plan assets 5.3 % 5.2 % 6.0 % The actual rate of return on Kodak’s major U.S. defined benefit pension plan for 2022 was (6.1%), lower than the expected rate of return of 5.3%, driven by lower than expected bond performance due to rising interest rates.
The following table presents actual and expected return on plan assets, as well as the corresponding percentages for Kodak’s major U.S. defined benefit pension plan: Year Ended December 31, 2023 2022 2021 (in millions) Actual return on plan assets $ (170 ) $ (152 ) $ 716 Expected return on plan assets (257 ) 178 167 Actual rate of return on plan assets 3.9 % (6.1 %) 17.7 % Expected rate of return on plan assets 7.5 % 5.3 % 5.2 % The actual rate of return on Kodak’s major U.S. defined benefit pension plan for 2023 was 3.9%, lower than the expected rate of return of 7.5%, driven by lower than expected returns in the private equity asset class.
Refer to Note 9, "Debt and Finance Leases" . (2) Includes cash interest payments on the Term Credit Agreement, the RED-Rochester LLC debt and commitment fees for the Amended ABL Credit Agreement and the L/C Facility Agreement.
(2) Includes cash interest payments on the Term Loan Credit Agreement, the RED-Rochester LLC debt and commitment fees for the Amended and Restated L/C Facility Agreement.
The Company had issued approximately $43 million and $44 million letters of credit under the L/C Facility Agreement as of December 31, 2022 and 2021, respectively. The letters of credit under the L/C Facility Agreement are collateralized by cash collateral (L/C Cash Collateral).
Letter of Credit Facility Agreement Approximately $31 million and $43 million of letters of credit were issued under the Amended and Restated L/C Facility Agreement and L/C Facility Agreement as of December 31, 2023 and 2022, respectively. The letters of credit under the Amended and Restated L/C Facility Agreement are collateralized by cash collateral (the “L/C Cash Collateral”).
Kodak believes that its liquidity position is adequate to fund its operating and investing needs for the next twelve months, to maintain compliance with the Minimum Liquidity provisions under the credit agreements and to provide the flexibility to respond as necessary to ordinary changes in the business and economic environment.
Kodak believes that its liquidity position is adequate to fund its operating and investing needs and to provide the flexibility to respond as necessary to ordinary changes in the business and economic environment.
Other Operating Income, Net For details, refer to Note 16, “Other Operating Income, Net.” Pension Income For details, refer to Note 20, “Retirement Plans." Other Charges (Income), Net For details, refer to Note 17, “Other Charges (Income), Net.” Provision for Income Taxes For details, refer to Note 18, “Income Taxes.” DETAILED RESULTS OF OPERATIONS Net Revenues from Continuing Operations by Reportable Segment Year Ended December 31, 2022 2021 (in millions) Traditional Printing $ 711 $ 659 Digital Printing 227 249 Advanced Materials and Chemicals 234 212 Brand 17 15 Total of reportable segments 1,189 1,135 Other 16 15 Consolidated total $ 1,205 $ 1,150 Kodak’s segment measure of profit and loss is an adjusted earnings before interest, taxes, depreciation and amortization (“Operational EBITDA”).
Other Operating Expense (Income), Net For details, refer to Note 15, “Other Operating Expense (Income), Net.” Pension Income For details, refer to Note 19, “Retirement Plans." Loss on Early Extinguishment of Debt For details, refer to Note 8, "Debt and Credit Facilities." Other (Income) Charges, Net For details, refer to Note 16, “Other (Income) Charges, Net.” Provision for Income Taxes For details, refer to Note 17, “Income Taxes.” DETAILED RESULTS OF OPERATIONS Net Revenues from Continuing Operations by Reportable Segment Year Ended December 31, 2023 2022 (in millions) Print $ 828 $ 938 Advanced Materials and Chemicals 255 234 Brand 17 17 Total of reportable segments 1,100 1,189 All Other 17 16 Consolidated total $ 1,117 $ 1,205 Kodak’s segment measure of profit and loss is an adjusted earnings before interest, taxes, depreciation and amortization (“Operational EBITDA”).
The unfavorable impacts were partially offset by improved pricing and product mix in PROSPER annuities and Electrophotographic Printing Solutions equipment ($2 million each).
The unfavorable impacts were partially offset by improved pricing and product mix in Prepress Solutions consumables and equipment ($29 million and $3 million, respectively), improved pricing and product mix in PROSPER annuities and Electrophotographic Printing Solutions consumables and service ($3 million each), improved pricing in Versamark consumables and service ($2 million) and favorable foreign exchange ($1 million).
Expected contributions are excluded from the contractual obligations table because they do not represent contractual cash outflows, as they are dependent on numerous factors which may result in a wide range of outcomes.
Expected contributions are excluded from the contractual obligations table because they do not represent contractual cash outflows, as they are dependent on numerous factors which may result in a wide range of outcomes. 48 Table of Contents (6) Because timing of their future cash outflows are uncertain, the other long-term liabilities presented in Note 7, “Other Long-Term Liabilities,” are excluded from this table.
The financing transactions entered into during the first quarter of 2021 and the full draw down of the Delayed Draw Term Loans in the second quarter of 2022 provided additional liquidity for the Company to fund on‐going operations and obligations, invest in growth opportunities in Kodak’s businesses of print and advanced materials and chemicals and for corporate infrastructure investments expected to contribute to improvements in cash flow.
The financing transactions entered into during the third quarter of 2023 (see “July 21, 2023 Financing Transactions” below for further information) and prior financing transactions provided additional liquidity to the Company to fund on-going operations and obligations, invest in growth opportunities in Kodak’s businesses of Print and Advanced Materials and Chemicals and for corporate infrastructure investments expected to contribute to improvements in operational efficiencies and cash flow.
Investment in the next generation technology, ULTRASTREAM, is focused on the ability to place ULTRASTREAM writing systems in Kodak branded presses and in various original equipment manufacturers in applications ranging from commercial print to packaging. The first flexible packaging printing system utilizing Kodak's ULTRASTREAM inkjet technology was placed during the second quarter of 2022.
Kodak completed the placement of the first PROSPER 7000 Turbo Press in the third quarter of 2023. Investment in the next generation technology, ULTRASTREAM, is focused on the ability to place ULTRASTREAM writing systems in Kodak branded presses and in various original equipment manufacturers in applications ranging from commercial print to packaging.
Contractual Obligations The impact that contractual obligations are expected to have on Kodak's cash flow in future periods is as follows: As of December 31, 2022 (in millions) Total 2023 2024 2025 2026 2027 2028+ Long-term debt (1) $ 379 $ 1 $ 2 $ 1 $ 366 $ 1 $ 8 Interest payments on debt (2) 99 31 29 29 6 1 3 Operating lease obligations 68 20 12 7 6 5 18 Purchase obligations (3) 50 25 19 4 1 1 — Convertible preferred stock cash dividends (7) 13 4 4 4 1 — — Total Note 1 (4) (5) (6) $ 609 $ 81 $ 66 $ 45 $ 380 $ 8 $ 29 (1) Primarily represents the maturity values of Kodak's long-term debt obligations as of December 31, 2022.
Contractual Obligations The impact that contractual obligations are expected to have on Kodak's cash flow in future periods is as follows: As of December 31, 2023 (in millions) Total 2024 2025 2026 2027 2028 2029+ Long-term debt (1) $ 593 $ 1 $ 1 $ 1 $ 1 $ 582 $ 7 Interest payments on debt (2) 195 37 38 40 41 37 2 Operating lease obligations 54 17 8 6 5 5 13 Purchase obligations (3) 25 14 5 2 2 1 1 Convertible preferred stock cash dividends (7) 11 4 4 3 — — — Total (4) (5) (6) $ 878 $ 73 $ 56 $ 52 $ 49 $ 625 $ 23 (1) Primarily represents the maturity values of Kodak's long-term debt obligations as of December 31, 2023.
Kodak does not expect to make any cash contributions to its major U.S. pension plan in 2023, and expects benefit payments (unfunded plans) related to its non-major U.S. plans to be less than $1 million. Capital Expenditures Cash flows from investing activities included $31 million for capital expenditures for the year ended December 31, 2022.
Kodak does not expect to make any cash contributions to the Kodak Retirement Income Plan, Kodak’s U.S. defined benefit pension plan (“KRIP”) in 2024, and expects benefit payments (unfunded plans) related to its non-major U.S. plans to be less than $1 million.
Current global economic conditions remain highly volatile due to the ongoing impacts from the COVID‐19 pandemic, heightened levels of inflation, unfavorable foreign exchange rates, the war in Ukraine, and other global events which impacted Kodak’s operations.
Current global economic conditions remain highly volatile due to the uncertain and unpredictable macroeconomic environment, heightened levels of inflation, the war in Ukraine, the conflicts involving Israel, and other global events which impacted Kodak’s operations.
For 2021 the actual rate of return exceeded the expected rate of return driven by higher returns for the U.S. Plan’s private equity and hedge fund portfolio.
For 2022 the actual rate of return was negative 6.1%, lower than the expected rate of return of 5.3%, driven by lower than expected bond performance due to rising interest rates. For 2021 the actual rate of return exceeded the expected rate of return driven by higher returns for the U.S. Plan’s private equity and hedge fund portfolio.
Refer to Note 9, “Debt and Finance Leases” for further information.
Refer to Note 8, “Debt and Credit Facilities” for further information.
Management’s ongoing assessments of the outcomes of these issues and related tax positions require judgment, and although management believes that adequate provisions have been made for such issues, there is the possibility that the ultimate resolution of such issues could have an adverse effect on the earnings of Kodak.
These audits can involve complex issues, which may require many years to resolve. Management believes that adequate provisions have been made for such issues, however, there is the possibility that the ultimate resolution of such issues could have an adverse effect on the earnings of Kodak.
Due to exercises of stock options primarily by ex-employees, the Company received approximately $33 million, net of tax payments, in 2020. Defined Benefit Pension and Postretirement Plans Kodak made contributions (funded plans) or paid net benefits (unfunded plans) totaling approximately $14 million relating to its non-U.S. defined benefit pension and postretirement benefit plans in 2022.
Defined Benefit Pension and Postretirement Plans Kodak made contributions (funded plans) or paid net benefits (unfunded plans) totaling approximately $13 million relating to its non-U.S. defined benefit pension and postretirement benefit plans in 2023.
Restructuring Costs and Other These costs, as well as restructuring costs reported in Cost of revenues, are discussed under the "Restructuring Costs and Other" section in this MD&A and Note 19, “Restructuring Costs and Other”.
Restructuring Costs and Other These costs, as well as restructuring costs reported in Cost of revenues, are discussed under the "Restructuring Costs and Other" section in this MD&A and Note 18, “Restructuring Costs and Other." Interest Expense The increase in interest expense in 2023 of $12 million primarily reflects the impact of the refinancing transactions that closed in the third quarter of 2023.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAt December 31, 2022 and 2021, a 10% change in market interest rates would change the fair value of the Company’s debt by approximately $1 million in each period. Kodak’s financial instrument counterparties are high-quality investment or commercial banks with significant experience with such instruments.
Biggest changeAt December 31, 2023 and 2022, a 10% change in market interest rates would change the fair value of the Company’s debt by approximately $5 million and $2 million, respectively. Kodak’s financial instrument counterparties are high-quality investment or commercial banks with significant experience with such instruments.
Kodak manages exposure to counterparty credit risk by requiring specific minimum credit standards and diversification of counterparties. Kodak has procedures to monitor the credit exposure amounts. The maximum credit exposure at December 31, 2022 was not significant to Kodak.
Kodak manages exposure to counterparty credit risk by requiring specific minimum credit standards and diversification of counterparties. Kodak has procedures to monitor the credit exposure amounts. The maximum credit exposure at December 31, 2023 was not significant to Kodak.
Using a sensitivity analysis based on estimated fair value of open foreign currency forward contracts using available forward rates, if the U.S. dollar had been 10% stronger at December 31, 2022 and 2021, the fair value of open forward contracts would have decreased $11 million and $14 million, respectively.
Using a sensitivity analysis based on estimated fair value of open foreign currency forward contracts using available forward rates, if the U.S. dollar had been 10% stronger at December 31, 2023 and 2022, the fair value of open forward contracts would have decreased $12 million and $11 million, respectively.

Other KODK 10-K year-over-year comparisons