EASTMAN KODAK CO

NOTE1: BASIS OF PRESENTATION AND RECENT ACCOUNTING PRONOUNCEMENTS

BASIS OF PRESENTATION

The consolidated interim financial statements are unaudited, and certain information and footnote disclosures related thereto normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been omitted in accordance with the instructions to Form10-Q and Rule10-01 of Regulation S-X. In the opinion of management, the accompanying unaudited consolidated interim financial statements reflect all adjustments (consisting of normal recurring adjustments) necessary for a fair statement of the results of operations, financial position and cash flows of Eastman Kodak Company and all companies directly or indirectly controlled, either through majority ownership or otherwise (“Kodak” or the “Company”). The results of operations for the interim periods arenot necessarily indicative of the results for the entire fiscal year. These consolidated interim statements should be read in conjunction with the Company’s Annual Report on Form10-K for the year ended* December 31, 2023* (the “2023 Form10-K”).

RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS

There areno accounting pronouncements recently adopted by Kodak.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In* December 2023,the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU")2023-09, Income Taxes (Topic740*): Improvements to Income Tax Disclosures. ASU2023-09 requires disclosure of additional categories of information about federal, state and foreign income taxes in the rate reconciliation table and more details about the reconciling items in some categories if items meet a quantitative threshold. The ASU requires entities to disclose income taxes paid, net of refunds, disaggregated by federal (national), state and foreign taxes for annual periods and to disaggregate the information by jurisdiction based on a quantitative threshold. The guidance makes several other changes to the disclosure requirements. The ASU is required to be applied prospectively, with the option to apply it retrospectively. The ASU is effective for Kodak for fiscal years beginning after* December 15, 2024 (** January 1, 2025*for Kodak).

In* November 2023,the FASB issued ASU2023*-07, Segment Reporting (Topic280): Improvements to Reportable Segment Disclosures. ASU2023-07 improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. In addition, the ASU enhances interim disclosure requirements, clarifies circumstances in which an entity can disclose multiple segment measures of profit or loss, and contains other disclosure requirements. The ASU doesnot change how an entity identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine its reportable segments. The ASU is required to be applied retrospectively to all periods presented in the financial statements. The ASU is effective for Kodak for fiscal years beginning after* December 15, 2023 (** January 1, 2024for Kodak) and interim periods within fiscal years beginning after December 15, 2024 (** January 1, 2025*for Kodak).

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NOTE2: CASH, CASH EQUIVALENTS AND RESTRICTED CASH

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Statement of Financial Position that sums to the total of such amounts shown in the Consolidated Statement of Cash Flows:

Restricted cash reported in Other current assets on the Consolidated Statement of Financial Position primarily represented amounts that support hedging activities and an escrow of $2 million and $3 million as of* June 30, 2024* and* December 31, 2023*, respectively, in China to secure ongoing obligations under a supply agreement associated with the strategic relationship with Lucky HuaGuang Graphics Co. Ltd. ("HuaGuang"). The agreement with HuaGuang expires in thethird quarter of2024.

Restricted cash included $29 million and $32 million as of* June 30, 2024* and* December 31, 2023*, respectively, representing the cash collateral required to be posted by the Company under the Letter of Credit Facility. In addition, restricted cash as of both* June 30, 2024* and* December 31, 2023* included $63 million representing cash collateral supporting the Company’s undiscounted actuarial workers’ compensation obligations with the New York State Workers’ Compensation Board ("NYS WCB"). Restricted cash as of* June 30, 2024* and* December 31, 2023* also included $7 million and $8 million, respectively, of security posted related to Brazilian legal contingencies. In addition, restricted cash as of* December 31, 2023*included $5 million of cash collateral posted in the United Kingdom for a letter of credit for aluminum purchases.

NOTE3: INVENTORIES, NET

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NOTE4: REDEEMABLE, CONVERTIBLE PREFERRED STOCK

Redeemable convertible preferred stock was as follows:

Series B Preferred Stock

On* February 26, 2021the Company agreed to exchangeone million shares of Series A Preferred Stock held by Southeastern Asset Management, Inc. (“Southeastern”) and Longleaf Partners Small-Cap Fund,C2W Partners Master Fund Limited and Deseret Mutual Pension Trust, which are investment funds managed by Southeastern (such investment funds, collectively, the “Purchasers”), for shares of the Company’s newly created 4.0% Series B Convertible Preferred Stock, no par value (the “Series B Preferred Stock”), on aone*-for-one basis plus accrued and unpaid dividends. The fair value of the Series B Preferred Stock at the time of issuance approximated $95 million. The Company has classified the Series B Preferred Stock as temporary equity in the Consolidated Statement of Financial Position. If any shares of Series B Preferred Stock havenot been converted prior to* May 28, 2026*the Company is required to redeem such shares at $100 per share plus the amount of accrued and unpaid dividends.

Dividend and Other Rights

The Series B Preferred Stock has a liquidation preference of $100 per share, and the holders of Series B Preferred Stock are entitled to cumulative dividends payable quarterly in cash at a rate of 4.0% per annum. Dividends owed on the Series B Preferred Stock have been declared and paid when due. If dividends on any Series B Preferred Stock are in arrears forsix or more consecutive or non-consecutive dividend periods, the holders of the Series B Preferred Stock will be entitled to nominateone director at the next annual shareholder meeting and all subsequent shareholder meetings until all accumulated dividends on such Series B Preferred Stock have been paid or set aside.

Conversion Features

Each share of Series B Preferred Stock is convertible, at the option of each holder at any time, into shares of Common Stock at the initial conversion rate of 9.5238 shares of Common Stock for each share of Series B Preferred Stock (equivalent to an initial conversion price of $10.50 per share of Common Stock). The initial conversion rate and the corresponding conversion price are subject to certain customary anti-dilution adjustments. If a holder elects to convert any shares of Series B Preferred Stock during a specified period in connection with a fundamental change (as defined in the Series B Certificate of Designations), such holder can elect to have the conversion rate adjusted and can elect to receive a cash payment in lieu of shares for a portion of the shares. Such holder will also be entitled to a payment in respect of accumulated dividends. In addition, the Company will have the right to require holders to convert any shares of Series B Preferred Stock in connection with certain reorganization events in which case the conversion rate will be adjusted, subject to certain limitations.

The Company will have the right to cause the mandatory conversion of the Series B Preferred Stock into shares of Common Stock at any time after the initial issuance of the Series B Preferred Stock if the closing price of the Common Stock has equaled or exceeded $14.50 (subject to adjustment in the same manner as the conversion price) for 45 trading days within a period of 60 consecutive trading days.

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Embedded Conversion Features

The Company allocated*$1* million to a derivative liability based on the aggregate fair value of the embedded conversion feature of the Series B Preferred Stock on the date of issuance which reduced the original carrying value of the Series B Preferred Stock. The derivative is being accounted for at fair value with subsequent changes in the fair value being reported as part of Other (expense) income, net in the Consolidated Statement of Operations. The fair value of the Series B Preferred Stock embedded derivative as of both* June 30, 2024* and* December 31, 2023* was a liability of $1 million and is included in Other long-term liabilities in the accompanying Consolidated Statement of Financial Position.

The carrying value of the Series B Preferred Stock is being accreted to the mandatory redemption amount using the effective interest method to Additional paid in capital in the Consolidated Statement of Financial Position as a deemed dividend from the date of issuance through the mandatory redemption date,* May 28, 2026.*

Series C Preferred Stock

On* February 26, 2021,the Company and GO EK Ventures IV, LLC (the “Investor”) entered into a Series C Preferred Stock Purchase Agreement (the “Purchase Agreement”) pursuant to which the Company agreed to sell to the Investor, and the Investor agreed to purchase from the Company, an aggregate of 1,000,000 shares of the Company’s newly created 5.0% Series C Convertible Preferred Stock, no par value per share (the “Series C Preferred Stock”), for a purchase price of $100 per share, representing $100 million of gross proceeds to the Company. The Investor is a fund managed by Grand Oaks Capital. The Company has classified the Series C Preferred Stock as temporary equity in the Consolidated Statement of Financial Position. If any shares of Series C Preferred Stock havenot* been converted prior to* May 28, 2026,the Company is required to redeem such shares at $100 per share plus the amount of accrued and unpaid dividends thereon; provided that the holders of the Series C Preferred Stock have the right to extend such redemption date by up totwo* years.

Dividend and Other Rights

The Series C Preferred Stock has a liquidation preference of $100 per share, and the holders of Series C Preferred Stock are entitled to cumulative dividends payable quarterly “in‐kind” in the form of additional shares of Series C Preferred Stock at a rate of 5.0% per annum. Dividends owed on the Series C Preferred Stock have been declared and additional Series C shares issued when due. Holders of the Series C Preferred Stock are also entitled to participate in any dividends paid on the Common Stock (other than stock dividends) on an as-converted basis, with such dividends on any shares of the Series C Preferred Stock being payable upon conversion of such shares of Series C Preferred Stock to Common Stock.

Conversion Features

Each share of Series C Preferred Stock is convertible, at the option of each holder at any time, into shares of Common Stock at the initial conversion price of $10 per share of Common Stock. The initial conversion price and the corresponding conversion rate are subject to certain customary anti-dilution adjustments and to proportional increase in the event the liquidation preference of the Series C Preferred Stock is automatically increased. If a holder elects to convert any shares of Series C Preferred Stock during a specified period in connection with a fundamental change (as defined in the Series C Certificate of Designations), such holder can elect to have the conversion rate adjusted and can elect to receive a cash payment in lieu of shares for a portion of the shares of Common Stock. Such holder will also be entitled to a payment in respect of accumulated dividends and a payment based on the present value of all required remaining dividend payments through* May 28, 2026,*the mandatory redemption date. Such additional payments will be payable at the Company’s option in cash or in additional shares of Common Stock. In addition, the Company will have the right to require holders to convert any shares of Series C Preferred Stock in connection with certain reorganization events in which case the conversion rate will be adjusted, subject to certain limitations.

The Company has the right to cause the mandatory conversion of the Series C Preferred Stock into shares of Common Stock at any time after* February 26, 2024*if the closing price of the Common Stock has equaled or exceeded 150% of the then-effective conversion price for 45 trading days within a period of 60 consecutive trading days.

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Embedded Conversion Features

The Company allocated $2 million of the net proceeds received to a derivative liability based on the aggregate fair value of the embedded conversion feature of the Series C Preferred Stock on the dates of issuance which reduced the original carrying value of the Series C Preferred Stock. The derivative is being accounted for at fair value with subsequent changes in the fair value being reported as part of Other (expense) income, net in the Consolidated Statement of Operations. The fair value of the Series C Preferred Stock derivative as of both* June 30, 2024* and* December 31, 2023* was a liability of $1 million and is included in Other long-term liabilities in the accompanying Consolidated Statement of Financial Position.

The carrying value of the Series C Preferred Stock is being accreted to the mandatory redemption amount using the effective interest method to Additional paid in capital in the Consolidated Statement of Financial Position as a deemed dividend from the date of issuance through the mandatory redemption date.

NOTE5: LEASES

Income recognized on operating lease arrangements for thethree andsix months ended* June 30, 2024and2023* is presented below. Income recognized for sales-type lease arrangements for thethree andsix months ended* June 30, 2024was $0 million and $1 million, respectively. Income recognized for sales-type lease arrangements for both thethree* andsix months ended* June 2023*was $0 million.

NOTE6: COMMITMENTS AND CONTINGENCIES

As of* June 30, 2024*, the Company had outstanding letters of credit of $27 million issued under the Amended and Restated Letter of Credit Facility Agreement ("L/C Facility Agreement") as well as bank guarantees and letters of credit of $1 million, surety bonds in the amount of $27 million, and restricted cash of $109 million, primarily related to cash collateral supporting the Company’s undiscounted actuarial workers’ compensation obligations with the NYS WCB, cash collateral to ensure payment of possible casualty and workers’ compensation claims, for the outstanding letters of credit under the Letter of Credit Facility Agreement, to ensure payment of possible legal contingencies, hedging activities, environmental liabilities, rental payments and to support various customs, tax and trade activities.

Kodak’s Brazilian operations are involved in various litigation matters in Brazil and have received or been the subject of numerous governmental assessments related to indirect and other taxes in various stages of litigation, as well as civil litigation and disputes associated with former employees and contract labor. The tax matters, which comprise the majority of the litigation matters, are primarily related to federal and state value-added taxes. Kodak’s Brazilian operations are disputing these matters and intend to vigorously defend its position. Kodak routinely assesses all these matters as to the probability of ultimately incurring a liability in its Brazilian operations and records its best estimate of the ultimate loss in situations where it assesses the likelihood of loss as probable. As of* June 30, 2024*, Kodak’s Brazilian operations maintained accruals of approximately $3 million for claims aggregating approximately $85 million inclusive of interest and penalties where appropriate. The unreserved portion of the indirect taxes, civil litigation and disputes associated with former employees and contract labor claims, inclusive of any related interest and penalties, for which there was at least a reasonable possibility that a loss* may*be incurred, amounted to approximately $5 million.

In connection with assessments in Brazil, local regulations* mayrequire Kodak’s Brazilian operations to post security for a portion of the amounts in dispute. As of June 30, 2024*, Kodak’s Brazilian operations have posted security composed of $7 million of pledged cash reported within Restricted cash in the Consolidated Statement of Financial Position and liens on certain Brazilian assets with a net book value of approximately $39 million. Generally, any encumbrances on the Brazilian assets would be removed to the extent the matter is resolved in favor of Kodak’s Brazilian operations. The matter securing the lien on the non-cash assets was resolved in favor of Kodak’s Brazilian operations on* March 12, 2024*and those operations are in the process of having the lien on those assets removed.

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The Company has receivedfive requests under New Jersey law demanding, among other things, that the Company take certain actions in response to alleged breaches of fiduciary duty relating to option grants and securities transactions and alleged proxy statement disclosure deficiencies (each a “Derivative Demand”, and collectively the “Derivative Demands”) in the context of an announcement on* July 28, 2020 (*the “DFC Announcement”) by the U.S. International Development Finance Corporation (the “DFC”) regarding the signing of a non-binding letter of interest to provide a subsidiary of the Company with a potential $765 million loan (the “DFC Loan”) to support the launch of Kodak Pharmaceuticals, an initiative that would manufacture pharmaceutical ingredients for essential generic drugs (the “DFC Pharmaceutical Project”).

On* May 19, 2021Louis Peters,one of the persons making a Derivative Demand (“Peters”), commenced a derivative lawsuit on behalf of the Company against certain officers and current and former directors of the Company and the Company as a nominal defendant in the Supreme Court of the State of New York in Monroe County seeking damages and equitable relief based on alleged breaches of fiduciary duty and unjust enrichment resulting from stock trades, option grants and a charitable contribution in the context of the DFC Announcement of the potential DFC Loan and DFC Pharmaceutical Project (the “State Derivative Lawsuit”). The plaintiff filed an amended complaint in the State Derivative Lawsuit on August 23, 2021,and the Company and individual defendants filed motions to dismiss (or alternatively, in the case of the Company, a motion for summary judgment) in the State Derivative Lawsuit on October 22, 2021.On March 17, 2022,*the court issued an order staying the State Derivative Lawsuit pending the resolution of the Federal Derivative Lawsuit described below.

On* September 2, 2021Herbert Silverberg, another person making a Derivative Demand (“Silverberg”), commenced a derivative lawsuit on behalf of the Company againstone* current andone former director of the Company and the Company as a nominal defendant in the Federal District Court for the Western District of New York seeking damages and equitable relief on a basis overlapping with the State Derivative Lawsuit and alleged proxy statement misrepresentations and omissions. On* October 4, 2021Peters commenced a derivative lawsuit on behalf of the Company against the same parties named in the State Derivative Lawsuit in the Federal District Court for the Western District of New York seeking damages and equitable relief on a basis overlapping with the State Derivative Lawsuit and alleged violations of Section10*(b) of the Exchange Act. The Federal derivative lawsuits filed by Silverberg and Peters were consolidated into a single proceeding (the “Federal Derivative Lawsuit”) on* January 18, 2022,and Peters was appointed as lead plaintiff in the Federal Derivative Lawsuit. An amended consolidated complaint combining the allegations contained in the Federal derivative lawsuits filed by Silverberg and Peters was filed in the Federal Derivative Lawsuit on February 16, 2022,and the Company and individual defendants served motions to dismiss or, in the alternative in the case of the Company, for summary judgment on April 15, 2022.Threshold discovery in the case was completed, and the Company and individual defendants formally filed their motions to dismiss/for summary judgment on September 30, 2022.The plaintiffs filed an opposition to the motions to dismiss/for summary judgment on November 14, 2022,and the Company and the individual defendants filed responses to the plaintiffs’ opposition on December 27, 2022and December 23, 2022,respectively. A hearing with respect to the motions to dismiss/for summary judgment was held on August 9, 2023,and the lawsuit was dismissed in its entirety with prejudice on September 26, 2023.The plaintiffs/appellants filed a notice of appeal of the dismissal on October 25, 2023and filed their brief on appeal on March 21, 2024.The Company filed its response brief on June 20, 2024,and the plaintiffs/appellants filed their reply brief on July 11, 2024.*

Additional shareholder derivative lawsuits* maybe brought based on the other Derivative Demands (any such lawsuits, collectively with the State Derivative Lawsuit, the Federal Derivative Lawsuit and the Fiduciary Class Action, the “Fiduciary Matters”). The Company, acting through a Special Committee of Independent Directors, previously determined that there wasno* merit to the claims alleged by the Derivative Demands made through the time of its determination (except with respect to the charitable contribution, which wasnot fully considered by the Special Committee). See the Company’s Current Report on Form8‐K filed with the SEC on* September 16, 2020.The Company, acting through a separate Special Litigation Committee of Independent Directors, concurred with thefirst* Special Committee’s findings and further concluded that it isnot in the Company’s interest to bring or allow any other shareholder to assert any of the claims alleged by the State Derivative Lawsuit or Federal Derivative Lawsuit (with the exception of the Peters claim purportedly arising under Section10(b) of the Exchange Act, which wasnot addressed asno demand was made with respect to such claim). Thesecond Special Litigation Committee will carefully review any other additional complaints constituting Fiduciary Matters which* may*be filed.

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The DFC Announcement has also prompted investigations by several congressional committees, the SEC and the New York Attorney General’s office. The Company has cooperated in those investigations.

In addition, Kodak is involved in various lawsuits, claims, investigations, remediations and proceedings, including, from time to time, commercial, customs, employment, environmental, tort and health and safety matters, which are being handled and defended in the ordinary course of business. Kodak is also subject, from time to time, to various assertions, claims, proceedings and requests for indemnification concerning intellectual property, including patent infringement suits involving technologies that are incorporated in a broad spectrum of Kodak’s products. These matters are in various stages of investigation and litigation and are being vigorously defended. Based on information currently available, Kodak doesnot believe that it is probable that the outcomes in these various matters, individually or collectively, will have a material adverse effect on its financial condition or results of operations. Litigation is inherently unpredictable, and judgments could be rendered or settlements entered that could adversely affect Kodak’s operating results or cash flows in a particular period. Kodak routinely assesses all of its litigation and threatened litigation as to the probability of ultimately incurring a liability and records its best estimate of the ultimate loss in situations where it assesses the likelihood of loss as probable.

NOTE7: GUARANTEES

In connection with the settlement of certain of the Company’s historical environmental liabilities at Eastman Business Park, a more than 1,200-acre technology center and industrial complex in Rochester, New York, in the event the historical liabilities exceed $99 million, the Company will become liable for 50% of the portion above*$99* million withno limitation to the maximum potential future payments. There isno liability recorded for this guarantee.

Extended Warranty Arrangements

Kodak offers its customers extended warranty arrangements that are generallyone year but* mayrange from three months tosix years after the original warranty period. The change in Kodak’s deferred revenue balance in relation to these extended warranty and maintenance arrangements from December 31, 2023to June 30, 2024,*which is reflected in Other current liabilities in the accompanying Consolidated Statement of Financial Position, was as follows:

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NOTE8: REVENUE

Disaggregation of Revenue

The following tables present revenue disaggregated by major product and geography:

Major Product:

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Geography**(1):**

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Contract Balances

The timing of revenue recognition, billings and cash collections results in billed trade receivables, unbilled receivables (contract assets), and customer advances and deposits (contract liabilities) in the Consolidated Statement of Financial Position. The contract assets are transferred to trade receivables when the rights to consideration become unconditional. The amount recorded for contract assets at both* June 30, 2024* and* December 31, 2023* was $1 million and is reported in Other current assets in the Consolidated Statement of Financial Position. The contract liabilities primarily relate to brand licensing agreements, prepaid service contracts or upfront payments for certain equipment purchases. The amount recorded for contract liabilities in the Consolidated Statement of Financial Position at both* June 30, 2024* and* December 31, 2023* was $100 million, of which $40 million and $37 million, respectively, was reported in Other current liabilities and $60 million and $63 million, respectively, was reported in Other long-term liabilities.

Revenue recognized for both thethree andsix months ended* June 30, 2024and2023* that was included in the contract liability balance at the beginning of the year was $5 million and $25 million, respectively, in2024 and $8 million and $28 million, respectively, in2023 and primarily represented revenue from prepaid service contracts and equipment sales. Contract liabilities as of* June 30, 2024* included $20 million and $25 million of cash payments received during thethree andsix months ended* June 30, 2024*, respectively. Contract liabilities as of* June 30, 2023* included $22 million and $27 million of cash payments received during thethree andsix months ended* June 30, 2023*, respectively.

Kodak doesnot disclose the value of unsatisfied performance obligations for contracts with an original expected length ofone year or less or for which revenue is recognized at the amount to which Kodak has the right to invoice for services performed. Performance obligations with an original expected length of greater thanone year generally consist of deferred service contracts, operating leases and licensing arrangements. As of* June 30, 2024*, there was approximately $92 million of unrecognized revenue from unsatisfied performance obligations. Approximately 10% of the revenue from unsatisfied performance obligations is expected to be recognized in the remainder of 2024, 15% in 2025, 10% in each of 2026 and 2027 and 55% thereafter.

NOTE9: OTHER OPERATING EXPENSE (INCOME), NET

NOTE10: OTHER EXPENSE (INCOME), NET

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NOTE11: INCOME TAXES

Kodak’s income tax provision and effective tax rate were as follows:

For thethree andsix months ended* June 30, 2024,*the difference between Kodak’s effective tax rate and the U.S. statutory rate of 21.0% is primarily attributable to: (1) the impact related to existing valuation allowances associated with changes in net deferred tax assets from current earnings and losses, (2) the results from operations in jurisdictions outside the U.S., (3) a benefit associated with foreign withholding taxes on undistributed earnings and (4) changes in audit reserves.

In* December 2021,the Organisation for Economic Cooperation and Development (“OECD”) introduced Base Erosion and Profit Shifting (“BEPS”) Pillar2* rules that impose a global minimum tax rate of15%. Many participating countries enacted changes which take effect in2024. After considering the applicable tax law changes in the Pillar2 implementation, Kodak determined there wasno material impact to its tax provision for thethree andsix months ended* June 30, 2024.*

For thethree andsix months ended* June 30, 2023,*the difference between Kodak’s effective tax rate and the U.S. statutory rate of 21.0% is primarily attributable to: (1) the impact related to existing valuation allowances associated with changes in net deferred tax assets from current earnings and losses, (2) the results from operations in jurisdictions outside the U.S., (3) a benefit associated with foreign withholding taxes on undistributed earnings and (4) changes in audit reserves, including a settlement with a taxing authority in a location outside the U.S.

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NOTE12: RETIREMENT PLANS AND OTHER POSTRETIREMENT BENEFITS

Components of the net periodic benefit cost for all major U.S. and non-U.S. defined benefit plans are as follows:

(1) The special termination benefits were incurred as a result of Kodak’s restructuring actions and have been included in Restructuring costs and other in the Consolidated Statement of Operations for that period.

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NOTE13: EARNINGS PER SHARE

Basic earnings per share computations are based on the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share computations include any dilutive effect of potential common shares. In periods with a net loss available to common shareholders, diluted earnings per share are calculated using weighted-average basic shares for that period, as utilizing diluted shares would be anti-dilutive to loss per share.

A reconciliation of the amounts used to calculate basic and diluted earnings per share for thethree andsix months ended* June 30, 2024and2023* follows:

The computation of diluted earnings per share for thethree andsix months ended* June 30, 2024* excluded the impact of (1) the assumed conversion of 1.2 million shares of Series C Preferred Stock, (2) the assumed exercise of 3.1 million outstanding employee stock options and (3) for thesix months ended* June 30, 2024*the assumed vesting of 0.2 million unvested restricted stock units because the effects would have been anti-dilutive.

The computation of diluted earnings per share for thethree andsix months ended* June 30, 2023excluded the impact of (1) the assumed conversion of 1.1 million shares of Series C Preferred Stock, (2) the assumed exercise of 4.1 million outstanding employee stock options, and (3) for thesix* months ended* June 30, 2023,*the assumed vesting of 0.7 million unvested restricted stock units because the effects would have been anti‐dilutive.

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NOTE14: SHAREHOLDERS’** EQUITY**

The Company has 560 million shares of authorized stock, consisting of: (i)500 million shares of common stock, par value $0.01 per share and (ii)60 million shares of preferred stock, no par value, issuable inone or more series.

Common Stock

As of* June 30, 2024* and* December 31, 2023*, there were 80.3 million and 79.6 million shares of common stock outstanding, respectively.

Preferred Stock

Series B Preferred stock issued and outstanding as of both* June 30, 2024* and* December 31, 2023* consisted of 1.0 million shares. Series C Preferred stock issued and outstanding as of* June 30, 2024* and* December 31, 2023* consisted of 1.2 million shares and 1.1 million shares, respectively.

Treasury Stock

Treasury stock consisted of approximately 1.2 million and 1.0 million shares as of* June 30, 2024* and* December 31, 2023*, respectively.

NOTE15: OTHER COMPREHENSIVE LOSS

The changes in Other comprehensive loss by component were as follows:

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NOTE16: SEGMENT INFORMATION

Kodak hasthree reportable segments: Print, Advanced Materials and Chemicals and Brand. A description of Kodak’s reportable segments follows.

Print: The Print segment is comprised offive lines of business: the Prepress Solutions business, the PROSPER business, the Software business, the Electrophotographic Printing Solutions business and the VERSAMARK business.

Advanced Materials and Chemicals: The Advanced Materials and Chemicals segment is comprised offour lines of business: the Industrial Film and Chemicals business, the Motion Picture business, the Advanced Materials and Functional Printing business and the IP Licensing and Analytical Services business.

Brand: The Brand segment contains the brand licensing business.

All Other: All Other is comprised of the operations of the Eastman Business Park, a more than 1,200-acre technology center and industrial complex.

Segment financial information is shown below:

Segment Revenues

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Segment Operational EBITDA and Consolidated Earnings from Operations Before Income Taxes

Kodak decreased employee benefit reserves by approximately $1 million in thesix months ended* June 30, 2024due to a decrease in workers' compensation reserves driven by changes in discount rates. The decrease in reserves in thesix* months ended* June 30, 2024impacted gross profit by approximately $1 million. There wasno change to employee benefit reserves in thethree* months ended* June 30, 2024.*

Kodak decreased employee benefit reserves by approximately $1 million in thethree months ended* June 30, 2023,driven by changes in discount rates. The change in employee benefit reserves in thesix* months ended* June 30, 2023was less than$1* million.

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Segment Measure of Profit and Loss

Kodak’s segment measure of profit and loss is an adjusted earnings before interest, taxes, depreciation and amortization (“Operational EBITDA”).

As demonstrated in the above table, Operational EBITDA represents the earnings from operations excluding the provision for income taxes; non-service cost components of pension and other postemployment benefits (“OPEB”) income; depreciation and amortization expense; restructuring costs and other; stock-based compensation expense; consulting and other costs; idle costs; interest expense; other operating (expense) income, net and other (expense) income, net.

Kodak’s segments are measured using Operational EBITDA both before and after allocation of corporate SG&A. The segment earnings measure reported is after allocation of corporate SG&A as this most closely aligns with U.S. GAAP. Research and Development activitiesnot directly related to the other segments are reported within the Advanced Materials and Chemicals segment.

NOTE17: FINANCIAL INSTRUMENTS

Kodak, as a result of its global operating and financing activities, is exposed to changes in foreign currency exchange rates and interest rates, which* mayadversely affect its results of operations and financial position. Kodak manages such exposures, in part, with derivative financial instruments. Foreign currency forward contracts are used to mitigate currency risk related to foreign currency denominated assets and liabilities. Kodak’s exposure to changes in interest rates results from its investing and borrowing activities used to meet its liquidity needs. Kodak doesnot* utilize financial instruments for trading or other speculative purposes.

Kodak’s foreign currency forward contracts arenot designated as hedges and are marked to market through net income at the same time that the exposed assets and liabilities are remeasured through net income (both in Other expense (income), net in the Consolidated Statement of Operations). The notional amount of such contracts open at* June 30, 2024* and* December 31, 2023* was approximately $241 million and $279 million, respectively. The majority of the contracts of this type held by Kodak as of* June 30, 2024* and* December 31, 2023* are denominated in euros, Chinese renminbi and Japanese yen.

The net effect of foreign currency forward contracts in the results of operations is shown in the following table:

Kodak hadno derivatives designated as hedging instruments for thethree andsix months ended* June 30, 2024and2023*.

In the event of a default under any of the Company’s credit agreements, or a default under any derivative contract or similar obligation of Kodak, subject to certain minimum thresholds, the derivative counterparties would have the right, althoughnot the obligation, to require immediate settlement of some or all open derivative contracts at their then-current fair value, but with liability positions netted against asset positions with the same counterparty.

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Fair Value

Fair values of Kodak’s foreign currency forward contracts are determined using observable inputs (Level2 fair value measurements) and are based on the present value of expected future cash flows (an income approach valuation technique) considering the risks involved and using discount rates appropriate for the duration of the contracts. The gross fair value of foreign currency forward contracts in an asset position are reported in Other current assets and the gross fair value of foreign currency forward contracts in a liability position are reported in Other current liabilities in the Consolidated Statement of Financial Position. The gross fair value of forward contracts in an asset position as of* June 30, 2024* and* December 31, 2023* was $0 million and $3 million, respectively. The gross fair value of foreign currency forward contracts in a liability position as of* June 30, 2024* and* December 31, 2023* was $1 million and $0 million, respectively.

Transfers between levels of the fair value hierarchy are recognized based on the actual date of the event or change in circumstances that caused the transfer. There wereno transfers between levels of the fair value hierarchy during thethree andsix months ended* June 30, 2024*.

The fair values of long-term debt (Level2 fair value measurements) are determined by reference to quoted market prices of similar instruments, if available, or by pricing models based on the value of related cash flows discounted at current market interest rates. The fair values of long-term borrowings were $362 million and $396 million at* June 30, 2024* and* December 31, 2023*, respectively. The carrying values of cash and cash equivalents, restricted cash and the current portion of long-term debt approximate their fair values at both* June 30, 2024* and* December 31, 2023*.

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