FINANCIAL STATEMENTS EASTMAN KODAK COMPANYCONSOLIDATED STATEMENT OF OPERATIONS(Unaudited) (in millions, except per share data)Three Months Ended September 30, 2024 2023 Revenues Sales$221 $220 Services 40 49 Total revenues 261 269 Cost of revenues Sales 185 183 Services 31 36 Total cost of revenues 216 219 Gross profit 45 50 Selling, general and administrative expenses 44 40 Research and development costs 8 7 Restructuring costs and other 1 1 (Loss) earnings from operations before interest expense, pension income excluding service cost component, loss on extinguishment of debt, other (income) charges, net and income taxes (8) 2 Interest expense 14 14 Pension income excluding service cost component (42) (41)Loss on extinguishment of debt - 27 Other (income) charges, net (1) 2 Earnings from operations before income taxes 21 - Provision (benefit) for income taxes 3 (2)NET EARNINGS$18 $2 Basic earnings per share attributable to Eastman Kodak Company common shareholders$0.16 $- Diluted earnings per share attributable to Eastman Kodak Company common shareholders$0.15 $- The notes accompanying the financial statements contained in the Company’s third quarter 2024 Form 10-Q are an integral part of these consolidated financial statements. EASTMAN KODAK COMPANYCONSOLIDATED STATEMENT OF FINANCIAL POSITION (Unaudited) September 30, December 31,(in millions) 2024 2023 ASSETS Cash and cash equivalents$214 $255 Trade receivables, net of allowances of $7 and $8, respectively 143 195 Inventories, net 241 217 Other current assets 44 45 Total current assets 642 712 Property, plant and equipment, net of accumulated depreciation of $481 and $470, respectively 190 169 Goodwill 12 12 Intangible assets, net 21 24 Operating lease right-of-use assets 28 30 Restricted cash 100 110 Pension and other postretirement assets 1,313 1,216 Other long-term assets 82 82 TOTAL ASSETS$ 2,388 $ 2,355 LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND EQUITY Accounts payable, trade$128 $125 Short-term borrowings and current portion of long-term debt 1 1 Current portion of operating leases 9 13 Other current liabilities 128 144 Total current liabilities 266 283 Long-term debt, net of current portion 460 457 Pension and other postretirement liabilities 232 237 Operating leases, net of current portion 24 24 Other long-term liabilities 208 213 Total liabilities 1,190 1,214 Commitments and Contingencies (Note 6) Redeemable, convertible preferred stock, no par value, $100 per share liquidation preference 216 210 Equity Common stock, $0.01 par value — — Additional paid in capital 1,152 1,156 Treasury stock, at cost (12) (11)Accumulated deficit (419) (495)Accumulated other comprehensive income 261 281 Total shareholders’ equity 982 931 TOTAL LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND EQUITY$ 2,388 $ 2,355 The notes accompanying the financial statements contained in the Company’s third quarter 2024 Form 10-Q are an integral part of these consolidated financial statements. EASTMAN KODAK COMPANYCONSOLIDATED STATEMENT OF CASH FLOW (Unaudited) Nine Months Ended September 30, (in millions) 2024 2023 Cash flows from operating activities: Net earnings$76 $70 Adjustments to reconcile to net cash (used in) provided by operating activities: Depreciation and amortization 21 23 Pension and other postretirement income (111) (109)Change in fair value of the Preferred Stock and Convertible Notes embedded derivatives — 2 Non-cash changes in workers' compensation and other employee benefit reserves 1 (3)Stock based compensation 5 6 Net gain on sale of assets (17) (1)Loss on extinguishment of debt — 27 Decrease (increase) in trade receivables 52 (16)(Increase) decrease in miscellaneous receivables (6) 10 Increase in inventories (25) (4)Decrease in trade payables (1) (15)(Decrease) increase in liabilities excluding borrowings and trade payables (39) 23 Other items, net 33 8 Total adjustments (87) (49)Net cash (used in) provided by operating activities (11) 21 Cash flows from investing activities: Additions to properties (39) (15)Proceeds from sale of assets 17 — Net cash used in investing activities (22) (15) Cash flows from financing activities: Net proceeds from Amended and Restated Term Loan Credit Agreement — 435 Repayment of Original Term Loan Credit Agreement — (316)Repayment of Convertible Notes — (28)Other debt acquisition costs — (1)Repayment of Amended and Restated Term Loan Agreement (17) — Preferred stock cash dividend payments (3) (3)Treasury stock purchases (1) — Net cash (used in) provided by financing activities (21) 87 Effect of exchange rate changes on cash, cash equivalents and restricted cash (1) (5)Net (decrease) increase in cash, cash equivalents and restricted cash (55) 88 Cash, cash equivalents and restricted cash, beginning of period 377 286 Cash, cash equivalents and restricted cash, end of period$322 $374 The notes accompanying the financial statements contained in the Company’s third quarter 2024 Form 10-Q are an integral part of these consolidated financial statements.
Securities and Exchange Commission 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; 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 and collateral requirements 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 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.
The following table reconciles the most directly comparable GAAP measure of Net Income to Operational EBITDA for the three months ended September 30, 2024 and 2023, respectively: (in millions) Q3 2024 Q3 2023 $ Change % ChangeNet Income$ 18 $ 2 $ 16 800%All other (1) (2) 1 Depreciation and amortization 8 7 1 Restructuring costs and other (1) 1 3 (2) Stock based compensation 1 1 - Consulting and other costs (2) - 1 (1) Interest expense (3) 14 14 - Pension income excluding service cost component (3) (42) (41) (1) Loss on extinguishment of debt (3) - 27 (27) Other (income) charges, net (3) (1) 2 (3) Provision (benefit) for income taxes (3) 3 (2) 5 Operational EBITDA$ 1 $ 12 $ (11) -92% Footnote Explanations: (1) Restructuring costs and other for the three months ended September 30, 2023 included $1 million which was reported as Restructuring costs and other and $2 million representing inventory write-downs which was reported as Cost of revenues.(2) Consulting and other costs are primarily professional services and internal costs associated with certain corporate strategic initiatives, investigations and litigation.
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