Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T ~~during~~(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the ~~preceding 12 months.~~ registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.

See definition of “large accelerated filer,” “accelerated filer” “smaller reporting company” and “emerging growth company in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~August~~May 1, ~~2018,~~2019, the registrant had ~~42,671,808~~43,000,688 shares of common stock, $0.01 par value per share, outstanding.

	Three Months Ended						Six Months Ended						Three Months Ended
	June 30,						June 30,						March 31,
(in millions)	2018			2017			2018			2017
													2019			2018
Revenues
Sales	$	300		$	307		$	585		$	590		$	224		$	248
Services		72			74			144			148			67			70
Total revenues		372			381			729			738			291			318
Cost of revenues
Sales		262			257			514			498			205			231
Services		50			54			101			108			46			49
Total cost of revenues		312			311			615			606			251			280
Gross profit		60			70			114			132			40			38
Selling, general and administrative expenses		63			66			126			131			59			58
Research and development costs		14			18			29			38			11			13
Restructuring costs and other		2			11			4			18			2			2
Other operating (income) expense, net		(2	)		2			(2	)		12			—			—
Loss from continuing operations before interest expense, other charges (income), net and income taxes		(17	)		(27	)		(43	)		(67	)
Loss from continuing operations before interest expense, other charges, net and income taxes														(32	)		(35	)
Interest expense		9			8			17			16			3			2
Pension income excluding service cost component		(32	)		(37	)		(64	)		(75	)		(27	)		(32	)
Other charges (income), net		1			(9	)		17			(29	)
Earnings (loss) from continuing operations before income taxes		5			11			(13	)		21
Other charges, net														1			16
Loss from continuing operations before income taxes														(9	)		(21	)
Provision for income taxes		1			4			8			7			3			4
Earnings (loss) from continuing operations		4			7			(21	)		14
Loss from continuing operations														(12	)		(25	)
Loss from discontinued operations, net of income taxes		—			(3	)		—			(3	)		(6	)		—
Net earnings (loss)	$	4		$	4		$	(21	)	$	11
Net loss													$	(18	)	$	(25	)

Basic net (loss) earnings per share attributable to Eastman Kodak Company common shareholders:
Basic and diluted loss per share attributable to Eastman Kodak Company common shareholders:
Continuing operations	$	(0.02	)	$	0.05		$	(0.73	)	$	0.09		$	(0.40	)	$	(0.70	)
Discontinued operations		—			(0.07	)		—			(0.07	)		(0.14	)		—
Basic net (loss) earnings per share attributable to Eastman Kodak Company common shareholders	$	(0.02	)	$	(0.02	)	$	(0.73	)	$	0.02
Total													$	(0.54	)	$	(0.70	)

Diluted net (loss) earnings per share attributable to Eastman Kodak Company common shareholders:
Continuing operations	$	(0.02	)	$	0.05		$	(0.73	)	$	0.09
Discontinued operations		—			(0.07	)		—			(0.07	)
Diluted net (loss) earnings per share attributable to Eastman Kodak Company common shareholders	$	(0.02	)	$	(0.02	)	$	(0.73	)	$	0.02
Number of common shares used in basic and diluted net (loss) earnings per share
Number of common shares used in basic and diluted net loss per share
Basic		42.7			42.5			42.6			42.5			42.9			42.6
Diluted		42.7			42.7			42.6			42.7			42.9			42.6

The accompanying notes are an integral part of these consolidated financial statements.

	June 30,			December 31,			March 31,			December 31,
(in millions)	2018			2017			2019			2018
ASSETS
Cash and cash equivalents	$	275		$	344		$	240		$	246
Trade receivables, net of allowances of $9 in each period		242			282
Trade receivables, net of allowances of $8 and $9, respectively								201			232
Inventories, net		301			276			249			236
Other current assets		56			56			53			51
Current assets held for sale								116			113
Total current assets		874			958			859			878
Property, plant and equipment, net of accumulated depreciation of $418 and $394, respectively		290			314
Property, plant and equipment, net of accumulated depreciation of $431 and $422, respectively								233			246
Goodwill		32			32			12			12
Intangible assets, net		79			86			58			60
Operating lease right-of-use assets								49			—
Restricted cash		11			17			8			11
Deferred income taxes		175			188			155			160
Other long-term assets		112			112			164			144
TOTAL ASSETS	$	1,573		$	1,707		$	1,538		$	1,511

LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND EQUITY
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND EQUITY (DEFICIT)
Accounts payable, trade	$	181		$	198		$	160		$	149
Short-term borrowings and current portion of long-term debt		3			4			396			396
Current portion of operating leases								23			—
Other current liabilities		208			217			191			213
Current liabilities held for sale								25			20
Total current liabilities		392			419			795			778
Long-term debt, net of current portion		398			399			18			5
Pension and other postretirement liabilities		405			466			368			379
Operating leases, net of current portion								35			—
Other long-term liabilities		198			202			163			179
Total Liabilities		1,393			1,486			1,379			1,341

Commitments and Contingencies (Note 7)
Commitments and Contingencies (Note 10)

Redeemable, convertible Series A preferred stock, no par value, $100 per share liquidation preference	168			164			175			173

Equity (Deficit)
Common stock, $0.01 par value		—			—			—			—
Additional paid in capital		624			631			615			617
Treasury stock, at cost		(9	)		(9	)		(9	)		(9	)
Accumulated deficit		(205	)		(174	)		(213	)		(200	)
Accumulated other comprehensive loss		(398	)		(391	)		(409	)		(411	)
Total shareholders’ equity		12			57
TOTAL LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND EQUITY	$	1,573		$	1,707
Total shareholders’ deficit								(16	)		(3	)
TOTAL LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND EQUITY (DEFICIT)							$	1,538		$	1,511

The accompanying notes are an integral part of these consolidated financial statements.

	Six Months Ending						Three Months Ended
	June 30,						March 31,
(in millions)	2018			2017			2019			2018
Cash flows from operating activities:
Net (loss) earnings	$	(21	)	$	11
Net loss							$	(18	)	$	(25	)
Adjustments to reconcile to net cash used in operating activities:
Depreciation and amortization		39			41			15			19
Pension income		(54	)		(59	)		(23	)		(28	)
Change in fair value of embedded conversion features derivative liability		7			(36	)		1			14
Prosper asset remeasurement		—			12
Non-cash restructuring costs and asset impairments		—			10
Net gain on sales of assets/businesses		(2	)		(2	)		—			(1	)
Stock based compensation		3			5			3			2
Provision for deferred income taxes		5			1			1			2
Decrease in trade receivables		31			31			25			30
Increase in inventories		(34	)		(40	)		(11	)		(27	)
Decrease in trade payables		(11	)		(29	)
Increase (decrease) in trade payables								14			(6	)
Decrease in liabilities excluding borrowings and trade payables		(22	)		(21	)		(27	)		(9	)
Other items, net		10			2			8			2
Total adjustments		(28	)		(85	)		6			(2	)
Net cash used in operating activities		(49	)		(74	)		(12	)		(27	)
Cash flows from investing activities:
Additions to properties		(17	)		(17	)		(3	)		(10	)
Proceeds from sales of assets/businesses, net		1			2
Proceeds from sales of marketable securities		—			1
Net cash used in investing activities		(16	)		(14	)		(3	)		(10	)
Cash flows from financing activities:
Proceeds from borrowings							14				—
Repayment of capital leases		(2	)		(2	)		(1	)		(1	)
Preferred stock dividend payments		(6	)		(5	)		—			(3	)
Net cash used in financing activities		(8	)		(7	)
Payment of contingent consideration related to the sale of a business								(10	)		—
Net cash provided by (used in) financing activities								3			(4	)
Effect of exchange rate changes on cash		(2	)		6			2			5
Effect of exchange rate changes on restricted cash		(1	)		—
Net decrease in cash, cash equivalents and restricted cash		(76	)		(89	)		(10	)		(36	)
Cash, cash equivalents and restricted cash, beginning of period		369			478
Cash, cash equivalents and restricted cash, end of period	$	293		$	389
Cash, cash equivalents, restricted cash and cash in assets held for sale, beginning of period								267			369
Cash, cash equivalents, restricted cash and cash in assets held for sale, end of period							$	257		$	333

The accompanying notes are an integral part of these consolidated financial statements.

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 Form 10-Q and Rule 10-01 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 (“EKC” or the “Company”) and all companies directly or indirectly controlled, either through majority ownership or otherwise (collectively, “Kodak”). The results of operations for the interim periods are not 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 Form 10-K for the year ended December 31, ~~2017.~~2018 (the “2018 Form 10-K”).

The consolidated interim financial statements have been prepared on the going concern basis of accounting, which assumes Kodak will continue to operate as a going concern and which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business.

~~The~~As of March 31, 2019, the Company ~~has~~had $395 million of outstanding indebtedness under the Senior Secured First Lien Term Credit Agreement (the ~~“First Lien~~“Term Credit Agreement”). On April 12, 2019, the Company prepaid approximately $312 million of the loans made under the Term Credit ~~Agreement”~~Agreement using proceeds from the sale of Kodak’s Flexographic Packaging business (“FPD”) (Refer to Note 22, “Discontinued Operations”). The loans made under the ~~First Lien~~ Term Credit Agreement become due on the earlier to occur of (i) the maturity date of September 3, 2019 or (ii) the acceleration of such loans following the occurrence of an event of default (as defined in the ~~First Lien~~ Term Credit Agreement). The Company also has issued approximately ~~$79 million and $96~~$85 million of letters of credit under the Amended and Restated Credit Agreement (the ~~“Amended~~“ABL Credit Agreement”) as of ~~June 30, 2018~~both March 31, 2019 and December 31, ~~2017, respectively.~~2018. Should the Company not repay, refinance or extend the maturity of the loans under the ~~existing First Lien~~ Term Credit Agreement prior to June 5, 2019, the termination date will occur under the ~~Amended~~ABL Credit Agreement on such date unless the ~~Amended~~ABL Credit Agreement has been amended in the interim. Upon the occurrence of the termination date under the ~~Amended~~ABL Credit Agreement, the obligations thereunder will become due and the Company will need to provide alternate collateral in place of the letters of credit issued under the ~~Amended~~ABL Credit Agreement.

As of ~~June 30, 2018~~March 31, 2019 and December 31, ~~2017,~~2018, Kodak had approximately ~~$275~~$240 million and ~~$344~~$246 million, respectively, of cash and cash equivalents. ~~$133~~$94 million and ~~$172~~$117 million was held in the U.S. as of ~~June 30, 2018~~March 31, 2019 and December 31, ~~2017,~~2018, respectively, and ~~$77~~$146 million and ~~$108~~$129 million ~~was~~were held ~~in China as of June 30, 2018~~outside the U.S. Cash balances held outside the U.S. are generally required to support local country operations and ~~December 31, 2017, respectively.~~may have high tax costs or other limitations that delay the ability to repatriate, and therefore may not be readily available for transfer to other jurisdictions. Outstanding inter-company loans to the U.S. as of ~~June 30, 2018~~March 31, 2019 and December 31, ~~2017~~2018 were ~~$394~~$386 million and ~~$358~~$390 million, respectively, which includes short-term intercompany loans from Kodak’s international finance center of ~~$95~~$87 million and ~~$59~~$92 million as of ~~June 30, 2018~~March 31, 2019 and December 31, ~~2017,~~2018, respectively. In China, where approximately $88 million and $72 million of cash and cash equivalents was held as of March 31, 2019 and December 31, 2018, respectively, there are limitations related to net asset balances that may impact the ability to make cash available to other jurisdictions in the world. Kodak had a net decrease in cash, cash equivalents, ~~and~~ restricted cash and cash in assets held for sale of ~~$109 million, $122~~$10 million and ~~$158~~$102 million for the ~~years~~three months ended March 31, 2019 and the year ended December 31, ~~2017, 2016, and 2015, respectively, and a decrease in cash, cash equivalents, and restricted cash of $76 million for the six months ended June 30, 2018.~~2018, respectively.

U.S. GAAP requires an evaluation of whether there are conditions or events, considered in the aggregate, that raise substantial doubt about an entity’s ability to continue as a going concern within one year after the date the financial statements are issued. Initially, this evaluation does not consider the potential mitigating effect of management’s plans that have not been fully implemented. When substantial doubt exists, management evaluates the mitigating effect of its plans if it is probable that (1) the plans will be effectively implemented within one year after the date the financial statements are issued, and (2) when implemented, the plans will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date the financial statements are ~~issued.~~issued or prior to the conditions or events that create the going concern risk.

As of the date of issuance of these financial statements, Kodak has debt coming due within ~~thirteen~~twelve months and does not have committed financing or available liquidity to meet such debt obligations if they were to become due in accordance with their current terms.

~~Kodak~~Reporting requirements under the Term Credit Agreement require the Company to provide annual audited financial statements accompanied by an opinion of an independent public accountant without a “going concern” or like qualification or exception and without any qualification or exception as to the scope of such audit or other material qualification or exception, except for any such qualification or exception with respect to any indebtedness maturing within 364 days after the date of such financial statements. Lenders may take the position that the going concern explanatory paragraph contained in the audit report on the Company’s financial statements as of and for the year ended December 31, 2018 does not satisfy the requirements under the Term Credit Agreement. Under the Term Credit Agreement, if notice of a failure to comply with the reporting covenant is given to the Company by the lenders, an event of default would occur thereunder if such failure is not cured within thirty days after such notice is given, unless such event of default is waived by the requisite lenders. In the event of default, the debt could become immediately due.

The ABL Credit Agreement contains an opinion delivery requirement that corresponds to the requirement under the Term Credit Agreement, although under the ABL Credit Agreement there is an additional requirement that the opinion be reasonably acceptable to the agent under the ABL Credit Agreement. On March 31, 2019 the Company obtained a waiver from the agent and lenders under the ABL Credit Agreement with respect to any event of default under the reporting covenant that may be deemed to have occurred in relation to the going concern explanatory paragraph in the audit report. Such waiver does not waive any cross-default that may occur in the event of the occurrence of an event of default under the Term Credit Agreement as described above.

The Company has ~~entered into a non-binding letter of intent with a counterparty which holds a significant principal amount~~been engaged in negotiations to refinance the remaining $83 million of the loans under the ~~First Lien~~ Term Credit Agreement ~~which would provide for a~~not repaid from proceeds from the sale of FPD. The Company intends to complete the refinancing prior to the maturity of the ~~loans under the First Lien~~ Term Credit Agreement ~~with a maturity~~or ABL Credit Agreement and prior to the date on which any event of 18 months from closing. In addition, Kodak has retained an investment banker in connection with, and is actively pursuing, a sale of its Flexographic Packaging segment. All net proceeds from any sale of its Flexographic Packaging segment will first be used to pay down outstanding debt. However, the sale of the Flexographic Packaging segment and refinancing of the loansdefault would occur under the ~~First Lien~~ Term Credit ~~Agreement~~ ~~are not solely within Kodak’s control.~~ Agreement.

Additionally, Kodak is facing liquidity challenges due to operating losses and negative cash flow. Based on forecasted cash flows, there are uncertainties regarding Kodak’s ability to meet commitments in the U.S. as they come due. Kodak’s plans to improve cash flow include reducing interest expense by decreasing the debt balance using proceeds from asset ~~sales;~~sales, including the sale of the FPD; further restructuring Kodak’s cost structure; and paring investment in new technology by eliminating, slowing, and partnering with investors in product development programs. ~~Kodak also~~

The refinancing of the loans under the Term Credit Agreement is ~~exploring options regarding additional liquidity from other sources.~~ not solely within Kodak’s control.Executing agreements for a refinancing of the loans under the Term Credit Agreement and the timing for a closing of a refinancing of the loans under the Term Credit Agreement are dependent upon several external factors outside Kodak’s control, including but not limited to, the ability of the Company to reach acceptable agreements with different counterparties and the time required to meet conditions to closing under the terms of any refinancing.

Kodak makes no assurances regarding the likelihood, certainty or timing of consummating a ~~sale of the Flexographic Packaging segment or~~ refinancing of the Company’s existing debt, or regarding the sufficiency of any such ~~actions~~refinancing to meet Kodak’s debt obligations, including compliance with debt covenants, or other commitments in the U.S. as they come due.

These conditions raise substantial doubt about Kodak’s ability to continue as a going concern.

For more information regarding the ~~First Lien~~ Term Credit Agreement, the ~~Amended~~ABL Credit Agreement and debt covenants see Note 6,7, “Debt and ~~Capital~~Finance Leases”.

In March 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-07, Compensation—Retirements Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. ASU 2017-07 requires entities to report the service cost component in the same line item(s) as other compensation costs arising from services rendered during the period and to report all other components of net benefit costs outside a subtotal of income from operations. In addition, the ASU allows only the service cost component to be eligibleCertain amounts for capitalization when applicable. Kodak adopted ASU 2017-07 effective January 1, 2018, retrospectively for the presentation of the service cost and other cost components and prospectively for the application of the capitalization eligibility. The components of net benefit cost are shown in Note 14, “Retirement Plans and Other Postretirement Benefits”. The guidance impacted presentation in Kodak’s consolidated financial statements and the capitalization of costs to inventory. The presentation of the service cost component was consistent with the requirements of the new standard. The other components (which were presented within Cost of revenues, Selling and general administrative expenses and Research and development costs) are being presented separately on the face of the Consolidated Statement of Operations. The segment measure of profit and loss previously included only the service cost and amortization of prior service credits components of net periodic pension and postretirement benefit costs (refer to Note 20, “Segment Information”). Effective January 1, 2018, the segment measure of profit and loss only includes the service cost component of net periodic pension and postretirement benefit costs and prior periods have been reclassified to conform to ~~this presentation.~~

the current period classification due to Kodak’s new organization structure as of January 2019. In ~~February 2017,~~addition to the ~~FASB issued ASU 2017-05, Other Income—Gains and Losses from~~changes in segment reporting under the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets. ASU 2017-05 defines in-substance nonfinancial assets, provides guidance with respect to accounting for partial sales of nonfinancial assets and conforms the derecognition guidance on nonfinancial assets with the model for transactionsnew organization structure there is a change in the ~~new revenue standard (Topic 606 as described below). Kodak adopted ASU 2017-05 effective January 1, 2018 using~~segment measure of profitability. The segment measure of profitability was changed to exclude the ~~modified retrospective adoption approach. The application~~costs, net of ~~this standard did not have a material impact on Kodak’s consolidated financial statements.~~

~~In January 2016,~~any rental income received, of underutilized portions of certain properties. Additionally, the ~~FASB issued ASU 2016-01, Financial Instruments—Overall (Topic 825): Recognition and Measurement~~allocation of Financial Assets and Financial Liabilities. ASU 2016-01 primarily affects the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. Under the ASU all equity investments in unconsolidated entities (other than those accounted for using the equity method of accounting) will generally be measured at fair value through earnings. In addition, the FASB clarified guidance relatedcosts from Eastman Business Park (“EBP”) to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. Kodak adopted ASU 2016-01 effective January 1, 2018. The adoptionBrand, Film and Imaging segment and Advanced Materials and 3D Printing Technology segment as tenants of ~~this guidance did not have a material impact on Kodak’s consolidated financial statements.~~

~~In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606).” ASU 2014-09 supersedes the revenue recognition requirements in Topic 605, “Revenue Recognition”~~EBP and ~~most industry-specific guidance. The core principle of ASU 2014-09 is that a company will recognize revenue when it transfers promised goods or services~~ to ~~customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In addition, the standard requires disclosure~~each of the ~~nature, amount, timing, and uncertainty~~segments as users of revenue and cash flows arising from contracts with customers. Kodak adopted the provisions of the new standard effective January 1, 2018 using the modified retrospective method which allows companies to record a one-time adjustment to opening retained earnings for the cumulative effect of the standard on open contractsshared corporate space at the ~~time of adoption. Kodak derives revenue from various brand licensing arrangements, which may include upfront payments and/or sales-based royalties subject~~global headquarters changed. Refer to minimum annual guaranteed amounts. Kodak recorded a cumulative effect adjustment of approximately $10 million as a decrease to the opening balance of retained earnings related to these arrangements. With the exception of brand license revenue, Kodak did not identify any changes in the timing of revenue recognition that resulted in a material transition adjustment.

~~The cumulative effect of the changes made to the Consolidated Statement of Financial Position~~Note 21, “Segment Information” for ~~January 1, 2018 for the adoption of ASU 2014-09 were as follows. The net reduction in opening retained earnings primarily reflected the impact related to brand licensing revenues.~~additional information.

~~The impact of the adoption on the Consolidated Statement of Operations and Consolidated Statement of Financial Position were as follows:~~

In February 2018, the ~~FASB~~Financial Accounting Standards Board (“FASB”) issued ~~ASU~~Accounting Standard Update (“ASU”) 2018-02, “Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income”. The ASU addresses certain stranded income tax effects in accumulated other comprehensive income (AOCI) resulting from the Tax Cuts and Jobs Act (the “2017 Tax Act”). The ASU provides an option to reclassify stranded tax effects within AOCI to retained earnings in each period in which the effect of the change in the U.S. federal corporate income tax rate in the 2017 Tax Act (or portion thereof) is recorded and requires additional disclosures. The ASU is effective for fiscal years beginning after December 15, 2018 (January 1, 2019 for Kodak) and interim periods within those fiscal years. ~~Early~~Kodak adopted the new standard on January 1, 2019. The adoption of this ASU did not have an impact on the Consolidated Financial Statements as a result of Kodak’s U.S. valuation allowance.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). Topic 842 (as amended by ASU’s 2018-01, 10, 11 and 20) requires lessees to recognize most leases on their balance sheets as lease liabilities with corresponding right-of-use assets and eliminates certain real estate-specific provisions. The new standard requires lessors to account for leases using an approach that is ~~permitted~~substantially equivalent to existing guidance for sales-type leases and ~~may be applied either~~operating leases. The new leasing standard is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2018 (January 1, 2019 for Kodak). The original guidance required application on a modified retrospective basis to the earliest period presented. ASU 2018-11, Targeted improvements to ASC 842, includes an option to not restate comparative periods in transition and elect to use the ~~period~~effective date of ~~adoption or retrospectively to each period (or periods) in which~~ASC 842 as the ~~effect~~date of ~~the change in the U.S. federal corporate income tax rate in the 2017 Tax Act is recognized.~~initial application of transition. Kodak ~~plans to adopt~~adopted the new standard on the effective date applying the new transition method allowed under ASU 2018-11.Kodak elected the package of practical expedients which permitted Kodak to not reassess (1) whether any expired or existing contracts are or contain leases, (2) the lease classification for any existing leases, and (3) any initial direct costs for any existing leases as of the effective date. Kodak did not elect the hindsight practical expedient which permits entities to use hindsight in determining the lease term and assessing impairment. The adoption of the amended lease guidance increased the assets and liabilities recorded in the Consolidated Statement of Financial Position due to the recognition of right-of-use assets and liabilities. Kodak recognized a cumulative-effect adjustment to increase retained earnings of approximately $5 million due to the derecognition of assets and deferred gain on previous sale-leaseback transactions. As a lessor, recognition of rental revenue remained mainly consistent with previous guidance, apart from the narrower definition of initial direct costs that can be capitalized. The impact of adoption on the Consolidated Statement of Financial Position is presented below:

In September 2018, the FASB issued ASU 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans, which amends the disclosure requirements in ASC 715-20 by adding, clarifying, or removing certain disclosures. ASU 2018-14 requires all entities to disclose (1) the weighted average interest crediting rates for cash balance plans and other plans with promised interest crediting rates, and (2) an explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period. The ASU also clarifies certain disclosure requirements for entities with two or more defined benefit pension plans when aggregate disclosures are presented. The ASU removes other disclosures from the existing guidance, such as the requirement to disclose the effects of a one-percentage-point change in the assumed health care cost trend rates. The ASU is effective retrospectively for fiscal years ending after December 15, 2020 (December 31, 2020 for Kodak). Early adoption is permitted. The standard addresses disclosures only and will not have an impact on Kodak’s consolidated financial statements.

In September 2018 the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement, which amends the disclosure requirements in ASC 820 by adding, changing, or removing certain disclosures. The ASU applies to disclosures about recurring or nonrecurring fair value measurements. The additional and/or modified disclosures relate primarily to Level 3 fair value measurements while removing certain disclosures related to transfers between Level 1 and Level 2 of the fair value hierarchy. The ASU is effective retrospectively, for fiscal years beginning after December 15, 2019 (January 1, 2020 for Kodak) and interim periods within those fiscal years. Entities are permitted to early adopt any removed or modified disclosures but can delay adoption of the new disclosures until their effective date. Kodak retrospectively early adopted the provisions of the ASU that removed or modified disclosures in the fourth quarter of 2018 and expects to prospectively adopt the provisions related to new disclosures January 1, 2020. The standard addresses disclosures only and will not have an impact on Kodak’s consolidated financial statements.

In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which addresses how a customer should account for the costs of implementing a cloud computing service arrangement (also referred to as a “hosting arrangement”). Under ASU 2018-15, entities should account for costs associated with implementing a cloud computing arrangement that is considered a service contract in the same way as implementation costs associated with a software license; implementation costs incurred in the application development stage, such as costs for the cloud computing arrangement’s integration with on-premise software, coding, and configuration or customization, should be capitalized and amortized over the term of the cloud computing arrangement, including periods covered by certain renewal options. The ASU is effective in fiscal years beginning after December 15, 2019 (January 1, 2020 for Kodak) including interim periods within those fiscal years. Early adoption is permitted.

The ASU should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. Kodak is currently evaluating the impact of this ASU.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 (including amendments in ASU 2018-19) requires a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. In addition, the ASU requires credit losses relating to available-for-sale debt securities to be recorded through an allowance for credit losses. The amendments in this ASU broaden the information that an entity must consider in developing its expected credit loss estimate for assets measured either collectively or individually. The new standard is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019 (January 1, 2020 for Kodak). Early adoption is ~~permitted for fiscal years, and interim periods within those years, beginning after December 15, 2018 (January 1, 2019 for Kodak).~~ permitted. Kodak is currently evaluating the impact of this ASU.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 requires lessees to recognize most leases on their balance sheets as lease liabilities with corresponding right-of-use assets and eliminates certain real estate-specific provisions. The new leasing standard is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2018 (January 1, 2019 for Kodak). Early adoption is permitted. Kodak plans to adopt the new standard on the effective date and is currently evaluating the impact of this ASU on its financial statements. Kodak is currently evaluating its existing lease portfolio, including accumulating all the necessary information required to properly account for the leases under the new standard. Additionally, a new lease accounting system is being implemented to support the accounting and disclosure requirements of the new standard. Kodak anticipates that the adoption of the amended lease guidance will materially affect its Consolidated Statement of Financial Position and may require certain changes to its systems and processes.

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

Restricted cash included in Other current assets on the Statement of Financial Position primarily represents amounts which support hedging activities.

Long-term restricted cash includes $5$4 million and $6$5 million of security posted related to Brazilian legal contingencies as of ~~June 30, 2018~~March 31, 2019 and December 31, ~~2017,~~2018, respectively. Long-term restricted cash also includes $0 million and $6$3 million as of ~~June 30, 2018~~March 31, 2019 and December 31, ~~2017,~~2018, respectively, supporting compliance with the Excess Availability threshold under the ~~Amended and Restated~~ABL Credit ~~Agreement (the “Amended Credit Agreement”).~~Agreement.

The customer rebate amounts will potentially be settled through customer deductions applied to outstanding trade receivables in lieu of cash payments.

Debt and ~~capital~~finance leases and related maturities and interest rates were as follows at ~~June 30, 2018~~March 31, 2019 and December 31, ~~2017~~2018 (in millions):

On September 3, 2013, the Company entered into (i) the First Lien Term Credit Agreement (the “Term Credit Agreement”) with the lenders party thereto (the “First Lien Lenders”), JPMorgan Chase Bank, N.A. as administrative agent, and J.P. Morgan Securities LLC, Barclays Bank PLC, and Merrill Lynch, Pierce, Fenner & Smith Inc. as joint lead arrangers and joint bookrunners, and (ii) a Senior Secured Second Lien Term Credit Agreement (the “Second Lien Term Credit Agreement,” ~~and together with the First Lien Term Credit Agreement, the “Term Credit Agreements”~~), with the lenders party thereto (the “Second Lien Lenders,” and together with the First Lien Lenders, the “Term Credit Lenders”), Barclays Bank PLC as administrative agent, and J.P. Morgan Securities LLC, Barclays Bank PLC and Merrill Lynch, Pierce, Fenner & Smith Inc. as joint lead arrangers and joint bookrunners.

Additionally, the Company and its U.S. subsidiaries (the “Subsidiary Guarantors”) entered into an Asset Based Revolving Credit Agreement (the ~~“ABL~~“Original ABL Credit Agreement” and together with the Term Credit ~~Agreements,~~Agreement and the Second Lien Term Credit Agreement, the “Credit Agreements”) with the lenders party thereto (the “ABL Lenders” and together with the First Lien Lenders and the Second Lien Lenders, the “Lenders”) and Bank of America N.A. as administrative agent and collateral agent, Barclays Bank PLC as syndication agent and Merrill Lynch, Pierce, Fenner & Smith Inc., Barclays Bank PLC and J.P. Morgan Securities LLC as joint lead arrangers and joint bookrunners. Pursuant to the terms of the Credit Agreements, the Term Credit Lenders provided the Company with term loan facilities in an aggregate principal amount of $695 million, consisting of $420 million of first-lien term loans (the “First Lien Loans”) and $275 million of second-lien term loans (the “Second Lien Loans”). Net proceeds from the Term Credit ~~Agreements~~Agreement and the Second Lien Term Credit Agreement were $664 million ($695 million aggregate principal less $15 million stated discount and $16 million in debt transaction costs). The loans made under the ~~First Lien~~ Term Credit Agreement become due on the earlier to occur of (i) the maturity date of September 3, 2019 or (ii) the acceleration of such loans following the occurrence of an event of default (as defined in the ~~First Lien~~ Term Credit Agreement). The Second Lien Term Credit Agreement was prepaid and terminated on November 15, ~~2016.~~2016 using proceeds from the sale of Series A Convertible Preferred Stock together with cash on hand.

The Credit Agreements limit, among other things, the Company’s and the Subsidiary Guarantors’ ability to (i) incur indebtedness, (ii) incur or create liens, (iii) dispose of assets, (iv) make restricted payments (including dividend payments, et al.) and (v) make investments. In addition to other customary affirmative covenants, the Credit Agreements provide for a periodic delivery by the Company of its various financial statements as set forth in the Credit Agreements. Events of default under the Credit Agreements include, among others, failure to pay any loan, interest or other amount due under the applicable credit agreement, breach of specific covenants and a change of control of the Company. Upon an event of default, the applicable lenders may declare the outstanding obligations under the applicable credit agreement to be immediately due and payable and exercise other rights and remedies provided for in such credit agreement.

The First Lien Loans bear interest at the rate of LIBOR plus 6.25% per annum, with a LIBOR floor of 1% or Alternate Base Rate (as defined in the ~~First Lien~~ Term Credit Agreement) plus 5.25%. Each existing and future direct or indirect U.S. subsidiary of the Company (other than immaterial subsidiaries, unrestricted subsidiaries and certain other subsidiaries) have agreed to provide unconditional guarantees of the obligations of the Company under the Credit Agreements. Subject to certain exceptions, obligations under the ~~First Lien~~ Term Credit Agreement are secured by: (i) a first lien on all assets of the Company and the Subsidiary Guarantors, other than the ABL Collateral (as defined below), including a first lien on 100% of the stock of material domestic subsidiaries and 65% of the stock of material first-tier foreign subsidiaries (collectively the “Term Collateral”) and (ii) a second lien on the ABL Collateral. Obligations under the ~~Asset Based Revolving~~Original ABL Credit Agreement are secured by: (i) a first lien on cash, accounts receivable, inventory, machinery and equipment (the “ABL Collateral”) and (ii) a second lien on the Term Collateral. The Company may voluntarily prepay the First Lien ~~Loan.~~Loans.

As defined in the ~~First Lien~~ Term Credit Agreement, the Company is required to prepay loans with net proceeds from asset sales, recovery events or issuance of indebtedness, subject to, in the case of net proceeds received from asset sales or recovery events, reinvestment rights by the Company in assets used or usable by the business within certain time limits. During 2016 and 2017, Kodak prepaid $11 million of principal under the ~~First Lien~~ Term Credit Agreement. Under the terms of the ~~First Lien~~ Term Credit Agreement, the prepayments were applied first to the installment principal payments of $4 million due over the next twelve months, then ratably to the remaining scheduled payments. With the prepayments, Kodak does not owe any future scheduled principal payments until the maturity date of the loan.

On an annual basis, the Company will prepay on June 30 of the following fiscal year loans in an amount equal to a percentage of Excess Cash Flow (“ECF”) as defined in the ~~First Lien~~ Term Credit Agreement, provided no such prepayment is required if such prepayment would cause U.S. liquidity (as defined in the ~~First Lien~~ Term Credit Agreement) to be less than $100 million or the Secured Leverage ratio is less than 2.25 to 1.00. For the year ended December 31, ~~2017~~2018 ECF was a negative amount. Therefore, no prepayment of ~~First Lien term debt was~~loans under the Term Credit Agreement will be required. Any mandatory prepayments as described above shall be reduced by any mandatory prepayments of the First Lien ~~Loan.~~Loans.

On April 12, 2019, the Company prepaid approximately $312 million of the loans made under the Term Credit Agreement using proceeds from the sale of FPD.

On May 26, 2016, the Company and certain of its domestic subsidiaries (the “Subsidiary Guarantors”) entered into an Amended and Restated Credit Agreement (the “ABL Credit Agreement”) with the lenders party thereto (the “Lenders”), Bank of America, N.A., as administrative and collateral agent, and Bank of America, N.A. and JPMorgan Chase Bank, N.A., as joint lead arrangers and joint bookrunners, which amended and restated the Original ABL Credit Agreement. Each of the capitalized but undefined terms used in the context of describing the ABL Credit Agreement has the meaning ascribed to such term in the ABL Credit Agreement.

The ABL Credit Agreement decreased the aggregate amount of commitments from $200 million to $150 million and extended the maturity date to the earlier of May 26, 2021 or the date that is 90 days prior to the earliest scheduled maturity date of any of the Company’s outstanding term loans or refinancings thereof, of which the earliest maturity date is currently September 3, 2019. The ABL Credit Agreement, among other things, lowered reserve requirements by eliminating the Availability Block and removed the ability to use Qualified Cash to support Excess Availability.

Each existing direct or indirect U.S. subsidiary of the Company (other than Immaterial Subsidiaries, Unrestricted Subsidiaries and certain other subsidiaries) has reaffirmed its unconditional guarantee (and any such future subsidiaries must provide an unconditional guarantee) of the obligations of the Company under the ABL Credit Agreement.

The Lenders will make available asset-based revolving loans (the “ABL Loans”) and letters of credit in an aggregate amount of up to $150 million, subject to the Borrowing Base. The Company has issued approximately $85 million of letters of credit under the ABL Credit Agreement as of both March 31, 2019 and December 31, 2018. The Company had approximately $21 million and $19 million of Excess Availability under the ABL Credit Agreement as of March 31, 2019 and December 31, 2018, respectively. Availability is subject to the borrowing base calculation, reserves and other limitations.

The ABL Loans bear interest at the rate of LIBOR plus 2.25% - 2.75% per annum or Base Rate plus 1.25% - 1.75% per annum based on Excess Availability.

Excess Availability is equal to the sum of (i) 85% of the amount of the Eligible Receivables less a Dilution Reserve, (ii) the lesser of 85% of Net Orderly Liquidation Value or 75% of the Eligible Inventory (iii) the lesser of 75% of Orderly Liquidation Value of Eligible Equipment or $10 million, as of March 31, 2019 (which $10 million decreases by $1 million per quarter) and (iv) Eligible Cash less (a) Rent and Charges Reserves, (b) Principal Outstanding and (c) Outstanding Letters of Credit.

Under the ~~First Lien~~ABL Credit Agreement, Kodak is required to maintain a minimum Fixed Charge Coverage Ratio of 1.00 to 1.00 when Excess Availability is less than 12.5% of lender commitments. As of March 31, 2019 and December 31, 2018, 12.5% of lender commitments were $18.75 million.

If Excess Availability falls below 12.5% of lender commitments, Kodak may, in addition to the requirement to be in compliance with the minimum Fixed Charge Coverage Ratio, become subject to cash dominion control. Since Excess Availability was greater than 12.5% of lender commitments at March 31, 2019 and December 31, 2018, Kodak is not required to have a minimum Fixed Charges Coverage Ratio of 1.0 to 1.0.

As of March 31, 2019, and December 31, 2018, Kodak had funded $0 million and $3 million respectively, to the Eligible Cash account, held with the ABL Credit Agreement Administrative Agent, which is classified as Restricted Cash in the Consolidated Statement of Financial Position.

Under the Term Credit Agreement, the Company is required to maintain a Secured Leverage Ratio (as defined therein) not to exceed specified levels. The Secured Leverage Ratio under the ~~First Lien~~ Term Credit Agreement is tested at the end of each quarter based on the prior four quarters. The maximum Secured Leverage Ratio permitted under the ~~First Lien~~ Term Credit Agreement is 2.75:1. ~~As of June 30, 2018 and December 31, 2017, Kodak was in compliance with all covenants under the First Lien Term Credit Agreement.~~

Under the terms of the Credit Agreements, the Company may designate Restricted Subsidiaries as Unrestricted Subsidiaries provided the aggregate sales of all Unrestricted Subsidiaries are less than 7.5% of the consolidated sales of Kodak and the aggregate assets of all Unrestricted Subsidiaries are less than 7.5% of Kodak’s consolidated assets. Further, under the ~~Amended~~ABL Credit Agreement, on a pro forma basis at the time of designation and immediately after giving effect thereto, Excess Availability must be at least $30 million and the pro forma Fixed Charge Coverage Ratio must be no less than 1.0 to 1.0. Upon designation of Unrestricted Subsidiaries, the Company ~~will be~~is required to provide to the Lenders reconciling statements to eliminate all financial information pertaining to Unrestricted Subsidiaries which is included in its annual and quarterly financial statements.

In March 2018, the Company designated five subsidiaries as Unrestricted ~~Subsidiaries,~~Subsidiaries: Kodak PE Tech, LLC, Kodak LB Tech, LLC, Kodak Realty, Inc., Kodakit Singapore Pte. Limited and KP Services (Jersey) Ltd. This action allowed the Company to better position assets which may be monetized in the future and address costs related to underutilized properties. Collectively, these subsidiaries had sales of approximately $3$4 million and $5$2 million for the ~~quarter and six~~three months ended ~~June 30,~~March 31, 2019 and 2018, respectively, which represents 1% and 0% of Kodak’s consolidated sales, ~~for both the quarter and six months ended June 30, 2018.~~respectively. These subsidiaries had assets of $23 million and $21 million as of ~~June 30,~~March 31, 2019 and December 31, 2018, respectively, which represents 1% of Kodak’s consolidated assets as of ~~June 30, 2018. Each of the capitalized but undefined terms has the meaning ascribed to such term in the Credit Agreements.~~both periods. EBITDA of the Unrestricted Subsidiaries, as calculated under the ~~Term~~ Credit ~~Agreement and the Amended Credit Agreement,~~Agreements, is a loss and is excluded from the calculation of the Secured Leverage Ratio. Therefore, designating these Subsidiaries as Unrestricted had the impact of improving the Secured Leverage Ratio.

Reporting requirements under the Term Credit Agreement require the Company to provide annual audited financial statements accompanied by an opinion of an independent public accountant without a “going concern” or like qualification or exception and without any qualification or exception as to the scope of such audit or other material qualification or exception, except for any such qualification or exception with respect to any indebtedness maturing within 364 days after the date of such financial statements. Lenders may take the position that the going concern explanatory paragraph contained in the audit report on the Company’s financial statements as of and for the year ended December 31, 2018 does not satisfy the requirements under the Term Credit Agreement. Under the Term Credit Agreement, if notice of a failure to comply with the reporting covenant is given to the Company by the lenders, an event of default would occur thereunder if such failure is not cured within thirty days after such notice is given, unless such event of default is waived by the requisite lenders. In the event of default, the debt could become immediately due.

The Company intends to amend and restate or refinance the Term Credit Agreement prior to the maturity of the Term Credit Agreement or ABL Credit Agreement and prior to the date on which any event of default would occur under the Term Credit Agreement.

Kodak intends to conduct its operations in a manner that will result in ~~continued~~ compliance with the Credit Agreements; however, compliance for future quarters may depend on Kodak undertaking one or more non-operational transactions, such as the repatriation of cash into the U.S., the management of operating cash outflows, the designation of additional subsidiaries as Unrestricted Subsidiaries, a monetization of assets, a debt refinancing, the raising of equity capital, or a similar transaction. If Kodak is unable to remain in compliance and does not make alternate arrangements with its term lenders, an event of default would occur under the Credit Agreements which, among other remedies, would entitle the lenders or their agents to declare the outstanding obligations under the Term Credit Agreement to be immediately due and payable. There is no assurance Kodak will be able to complete any non-operational transaction it may undertake to maintain compliance with covenants under the Credit

Agreements or to refinance, or otherwise pay, the First Lien Loans on or before the maturity date of September 3, 2019 or the obligations under the ABL Credit Agreement on June 6,5, 2019 if the First Lien Loans are not refinanced or paid on or before ~~their maturity~~such date.

See also the Going Concern subsection of Note 1, “Basis of Presentation and Recent Accounting Pronouncements”.

~~On May 26, 2016, the Company and certain of its domestic subsidiaries (the “Subsidiary Guarantors”)~~In January 2019 Kodak entered into ~~an Amended and Restated Credit Agreement (the “Amended Credit Agreement” or “ABL Credit Agreement”)~~a series of agreements with ~~the lenders party thereto (the “Lenders”~~RED-Rochester, LLC (“RED”), ~~Bank of America, N.A., as administrative and collateral agent, and Bank of America, N.A. and JPMorgan Chase Bank, N.A., as joint lead arrangers and joint bookrunners,~~ which amended and restated the existing Asset Based Revolving Credit Agreement, dated as of September 3, 2013 (the “Prior Credit Agreement”). Each of the capitalized but undefined terms used in the context of describing the Amended Credit Agreement has the meaning ascribed to such term in the Amended Credit Agreement.

~~The Amended Credit Agreement decreased the aggregate amount of commitments from $200 million to $150 million and extended the maturity date~~provides utilities to the ~~earlier~~Eastman Business Park. Kodak received a payment of May 26, 2021 or the date that is 90 days prior to the earliest scheduled maturity date of any of the Company’s outstanding term loans or refinancings thereof, of which the earliest maturity date is currently September 3, 2019. The Amended Credit Agreement, among other things, lowered reserve requirements by eliminating the Availability Block and removed the ability to use Qualified Cash to support Excess Availability.

~~The Lenders will make available asset-based revolving loans (the “ABL Loans”) and letters of credit in an aggregate amount of up to $150~~$14 million subject to the Borrowing Base. The Company has issued approximately $79 million and $96 million of letters of credit under the Amended Credit Agreement as of June 30, 2018 and December 31, 2017, respectively. The Company had approximately $29 million and $20 million of Excess Availability under the Amended Credit Agreement as of June 30, 2018 and December 31, 2017, respectively. Availability is subject to the borrowing base calculation, reserves and other limitations.

~~The ABL Loans bear interest at the rate of LIBOR plus 2.25% - 2.75% per annum or Base Rate plus 1.25% - 1.75% per annum based on Excess Availability.~~

Excess Availability is equal to the sum of (i) 85% of the amount of the Eligible Receivables less a Dilution Reserve, (ii) the lesser of 85% of Net Orderly Liquidation Value or 75% of the Eligible Inventory (iii) the lesser of 75% of Orderly Liquidation Value of Eligible Equipment or $13 million, as of June 30, 2018 (which $13 million decreases by $1 million per quarter) and (iv) Eligible Cash less (a) Rent and Charges Reserves, (b) Principal Outstanding and (c) Outstanding Letters of Credit.

~~Under the Amended Credit Agreement,~~from RED. Kodak is required to ~~maintain~~pay a minimum ~~Fixed Charge Coverage Ratio~~annual payment to RED of ~~1.00~~approximately $2 million regardless of utility usage. Kodak is accounting for the $14 million payment from RED as debt. The minimum payments required under the agreement from Kodak to ~~1.00 when Excess Availability is less than 12.5%~~RED will be reported as a reduction of ~~lender commitments. As of June 30, 2018~~the debt and ~~December 31, 2017, 12.5% of lender commitments were $18.75 million.~~ interest expense using the effective interest method.

If Excess Availability falls below 12.5% of lender commitments, Kodak may, in addition to the requirement to be in compliance with the minimum Fixed Charge Coverage Ratio, become subject to cash dominion control. Since Excess Availability was greater than 12.5% of lender commitments at June 30, 2018 and December 31, 2017, Kodak is not required to have a minimum Fixed Charges Coverage Ratio of 1.0 to 1.0. As of June 30, 2018 and December 31, 2017, Kodak was in compliance with all the covenants under the Amended Credit Agreement.

On November 15, 2016, the Company ~~had outstanding letters~~issued 2,000,000 shares of ~~credit~~5.50% Series A Convertible Preferred Stock, no par value per share (the “Series A Preferred Stock”), for an aggregate purchase price of ~~$79~~$200 million, ~~issued under~~or $100 per share pursuant to a Series A Preferred Stock Purchase Agreement with 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 ~~Amended Credit Agreement,~~“Purchasers”), dated November 7, 2016. The Company has classified the Series A Preferred Stock as well as bank guarantees and letters of credit of $3 million, surety bonds in the amount of $42 million, and restricted cash and deposits of $24 million, primarily to ensure the payment of possible casualty and workers’ compensation claims, environmental liabilities, legal contingencies and rental payments and to support various customs, tax and trade activities. The restricted cash and deposits are reflected in Restricted cash, Other current assets and Other long-term assetstemporary equity in the Consolidated Statement of Financial Position.

Kodak allocated $43 million of the ~~litigation matters, are primarily related~~net proceeds received to ~~federal and state value-added taxes. Kodak is disputing these matters and intends to vigorously defend its position. Kodak routinely assesses all these matters as~~a derivative liability based on the aggregate fair value of the embedded conversion features on the date of issuance which reduced the net carrying value of the Series A Preferred Stock (see Note 23, “Financial Instruments”). The carrying value of the Series A Preferred Stock at the time of issuance, $155 million ($200 million aggregate gross proceeds less $43 million allocated to the ~~probability of ultimately incurring a~~derivative liability and $2 million in ~~its Brazilian operations and records its best estimate of~~transaction costs), is being accreted to the ~~ultimate loss~~mandatory redemption amount using the effective interest method to Additional paid in situations where it assesses the likelihood of loss as probable. As of June 30, 2018, the unreserved portion of these contingencies, 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 $20 million.

In connection with assessments in Brazil, local regulations may require Kodak to post security for a portion of the amounts in dispute. As of June 30, 2018, Kodak has posted security composed of $5 million of pledged cash reported within Restricted cashcapital in the Consolidated Statement of Financial Position ~~and liens on certain Brazilian assets with~~as a ~~net book value~~deemed dividend from the date of ~~approximately $61 million. Generally, any encumbrances~~issuance through the mandatory redemption date, November 15, 2021.

The holders of Series A Preferred Stock are entitled to cumulative dividends payable quarterly in cash at a rate of 5.50% per annum. Until the third quarter of 2018 all dividends owed on the ~~Brazilian assets would be removed~~Series A Preferred Stock were declared and paid when due. No quarterly dividend was declared in the third or fourth quarters of 2018 or the first quarter of 2019.

The Purchasers have the right to nominate members to the ~~extent~~Company’s board of directors proportional to their ownership on an as converted basis, which initially allowed the ~~matter is resolved~~Purchasers to nominate two members to the board. If dividends on any Series A Preferred Stock are in ~~Kodak's favor.~~

~~Kodak is involved in various lawsuits, claims, investigations, remediations and proceedings, including, from time~~arrears for six or more consecutive or non-consecutive dividend periods, the holders of Series A Preferred Stock, voting with holders of all other preferred stock of the Company whose voting rights are then exercisable, will be entitled to ~~time, commercial, customs, employment, environmental, tort and health and safety matters, which are being handled and defended~~vote for the election of two additional directors in the ~~ordinary course of business. Kodak is also subject, from time to time, to various assertions, claims, proceedings~~next annual meeting 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 investigationall subsequent meetings until all accumulated dividends on such Series A Preferred Stock and ~~litigation and are being vigorously defended. Based on information currently available, Kodak does not believe that it is probable that the outcomes in any of these matters, individually~~other voting preferred stock have been paid or collectively, will have a material adverse effect on its financial position 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 estimateset aside. The nomination right of the ~~ultimate loss~~Purchasers will be reduced by two nominees at any time the holders of Series A Preferred Stock have the right to elect, or participate in ~~situations where it assesses~~ the ~~likelihood~~election of, ~~loss as probable.~~two additional directors. Two of the directors on the Company’s current board of directors were nominated by the Purchasers.

~~EKC guarantees obligations to third parties for some~~As of ~~its consolidated subsidiaries. The maximum amount guaranteed is $6 million~~March 31, 2019, the Series A Preferred Stock has not been converted and ~~the outstanding amount for those guarantees is $2 million.~~

~~In connection with the settlement of certain~~none of the ~~Company’s historical environmental liabilities at Eastman Business Park, in~~antidilution provisions have been triggered. Any shares of Series A Preferred Stock not converted prior to the ~~event the historical liabilities exceed $99 million, the Company will become liable for 50%~~fifth anniversary of the ~~portion above $99 million with no limitation~~initial issuance of the Series A Preferred Stock are required to be redeemed at $100 per share plus the ~~maximum potential future payments. There is no liability recorded for this guarantee.~~amount of accrued and unpaid dividends.

Kodak determines if an arrangement is a lease at inception. Kodak’s operating lease agreements are ~~generally one year, but may range from three months to six years after~~primarily for real estate space and vehicles and are included within operating lease right-of-use (“ROU”) assets and operating lease liabilities on the original warranty period. The change in Kodak’s deferred revenue balance in relation to these extended warranty and maintenance arrangements from December 31, 2017 to June 30, 2018, which is reflected in Other current liabilities in the accompanying Consolidated Statement of Financial ~~Position,~~Position.

ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. Variable lease payments are excluded from the measurement of ROU assets and lease liabilities and are recognized in the period in which the obligation for those payments is incurred. Rental expense for lease payments related to operating leases is recognized on a straight-line basis over the lease term. Many of the leases include rental escalation clauses, renewal options and/or termination options that are factored into the determination of lease payments if reasonably assured to be exercised. Kodak does not separate lease and non-lease components of contracts for real estate leases. When available, the rate implicit in the lease is used to discount lease payments to present value; however, many leases do not provide a readily determinable implicit rate. Therefore, Kodak must estimate its incremental borrowing rate to discount the lease payments based on information available at lease commencement.

The table below presents the lease-related assets and liabilities on the balance sheet:

The table below presents certain information related to the lease costs for finance and operating leases. Lease costs are presented gross of sublease income. See Kodak as Lessor section below for income from subleases.

The table below reconciles the undiscounted cash flows for the next five years and thereafter to the finance lease liabilities and operating lease liabilities recorded on the balance sheet.

Future minimum contractual lease payments for operating leases having initial or remaining noncancelable lease terms in excess of one year as of December 31, 2018 were as follows:

~~Kodak’s revenue transactions include sales of products (such~~Kodak places its own equipment at customer sites under sales-type and operating lease arrangements. Arrangements classified as ~~components and consumables for use in Kodak and other manufacturers’~~sales-type leases generally transfer title to the equipment and film-based products); equipment; software; services; integrated solutions; and intellectual property and brand licensing. Revenue from services includes extended warranty, customer support and maintenance agreements, consulting, business process services, training and education.

~~Revenues are recognized when control~~by the end of the ~~promised goods~~lease term or ~~services~~have a lease term that is ~~transferred to customers in an amount that reflects~~for a major part of the ~~consideration~~remaining economic life of the equipment; and collectability is considered probable. If the arrangement meets the criteria for a sales-type lease but collectability is not considered probable, Kodak ~~expects to be entitled to in exchange for those goods or services.~~

~~For product sales (such as plates, film, inks~~will not derecognize the asset and other consumables) revenue is recognized when control has transferred from Kodak to the buyer, which may be upon shipment or upon delivery to the customer site, based on contract terms or legal requirements in certain jurisdictions. Service revenue is recognized using the time-based method ratably over the contractual period as it best depicts when the customer receives the benefit from the service. Service revenue for time and materials-based agreements is recognized as services are performed.

Equipment is generally dependent on, and interrelated with, the underlying operating system (firm ware) and cannot function without the operating system. In these cases, the hardware and software license are accounted forwill record all payments received as a ~~single performance obligation.~~liability until the earlier of collectability becoming probable or the lease is terminated. Contracts with customers may include multiple performance obligations including equipment, ~~and~~ optional software licenses and service agreements. ~~Service agreements may be prepaid or paid over-time and range from three months to six years.~~ For such arrangements, revenue is allocated to each performance obligation based on its relative standalone selling price. ~~Standalone selling prices are based on the prices charged to customers or using expected cost-plus margin.~~Kodak has no direct financing leases.

~~For non-complex equipment installations~~The Eastman Business Park segment’s core operations are to lease real estate. Kodak also leases underutilized portions of real estate properties to third parties under both operating lease and ~~software sales (Prepress, Packaging~~sublease agreements. Payments received under operating lease agreements as part of the Eastman Business Park segment are reported in Revenues in the Consolidated Statement of Operations. Payments received under lease agreements for underutilized space are reported as cost reductions in Cost of revenues, SG&A expenses, R&D costs and ~~Prosper Components~~Other charges, net. The lease arrangements are for various periods and Unified Workflow Solutions businesses) revenue is recognized when control of each distinct performance obligation has transferred from Kodak to the buyer, which is generally met when the equipment or software is delivered and installed at the customer site as delivery and installation generally occur within the same period. For complex equipment installations or integrated software solutions (Prosper Presses, Electrophotographic Printing Solutions Printers, Unified Workflow Solutions) revenue is deferred until receipt of customer acceptance and control has transferred to the buyer.

~~Software licenses are sold both in bundled equipment arrangements as discussed above or on a stand-alone basis (Unified Workflow Solutions business). Software licenses~~ are generally ~~perpetual and~~renewable. Renewal options and/or termination options are ~~usually sold with post-contract support services (“PCS”) which are~~factored into the determination of lease payments if considered distinct performance obligations as the customer’s use of the existing software is not dependent upon future upgrades. Kodak recognizes software revenue at the time that the customer obtains control over the software which generally occurs upon installation while revenue allocated to the PCS is recognized over the service period.

In service arrangements such as consulting or business process services (Kodak Technology Solutions business) where final acceptance by the customer is required, revenue is deferred until all acceptance criteria have been met and Kodak has a legal right to payment.

Kodak’s licensing revenue is comprised of software licenses as discussed above, licenses to use functional intellectual property (patents and technical know-how) and licenses to use symbolic intellectual property (brand names and trademarks) (Consumer and Film businesses). The timing and the amount of revenue recognized from the licensing of intellectual property depends upon a variety of factors, including the nature of the performance obligations (functional vs. symbolic licenses) specific terms of each agreement, and the payment terms. Aside from software licenses discussed above, Kodak’s functional licenses generally provide the right to use functional intellectual property; therefore, non-sales/usage-based revenue is recognized when the customer has the right to use the intellectual property while sales and usage-based royalties are recognized in the period the related sales and usage occurs. Revenue for symbolic licenses such as brand licenses are recognized over time.

Deferred revenue is recorded when cash payments are received in advance of satisfying performance obligations such as deposits required in advance on equipment orders, prepaid service contracts or prepaid royalties on intellectual property arrangements. Interest expense is imputed for payments received greater than one year in advance of performance.

Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 to 60 days. Kodak applies the practical expedient with respect to implied financial components and only imputes interest for payment terms greater than one year.

Sales and usage-based taxes are excluded from revenues. Certain customers may receive cash-based incentives or credits, which are accounted for as variable consideration. Kodak estimates these amounts based on the expected amount to be provided to customers.

Kodak expenses sales commissions when incurred if the amortization period would be one year or less. These costs are recorded in Selling, general and administrative expenses. Kodak accrues the estimated cost of post-sale obligations, including basic product warranties, at the time of revenue recognition. Shipping and handling costs are accounted for as fulfillment costs and are included in cost of sales.

probable. Kodak does not ~~disclose the value~~separate lease and non-lease components of ~~unsatisfied performance obligations~~contracts for ~~contracts with an original expected length~~real estate leases.

Kodak’s net investment in sales-type leases as of one 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 than one year generally consist of deferred service contracts, operating leasesMarch 31, 2019 and ~~licensing arrangements. As of June 30,~~December 31, 2018 ~~there was approximately $75~~were $4 million ~~of unrecognized revenue from unsatisfied performance obligations. Approximately 20%~~and $3 million, respectively. The current portion of the ~~revenue from unsatisfied performance obligations~~net investment in sales-type leases is ~~expected to be recognized~~included in ~~2018, 30% in 2019, 25% in 2020 and 25% thereafter.~~

~~The following tables present revenue disaggregated by major product, portfolio summary and geography.~~

Three Months Ended

June 30, 2018

Print Systems

Enterprise Inkjet Solutions

Flexographic Packaging Printing

Software & Solutions

Consumer & Film

Advanced Materials and 3D Technology Solutions

Eastman Business Park

Total

Plates, inks and other
consumables

$
176

$
7

$
34

$
—

$
4

$
—

$
—

$
221

Ongoing service
arrangements ⁽¹⁾

33

20

2

12

1

—

—

68

Total Annuities

209

27

36

12

5

—

—

289

Equipment & Software

18

6

2

4

—

—

—

30

Film and chemicals

—

—

—

—

41

—

—

41

Other ₍₂₎

—

—

—

4

2

1

5

12

Total

$
227

$
33

$
38

$
20

$
48

$
1

$
5

$
372

Six Months Ended

June 30, 2018

Print Systems

Enterprise Inkjet Solutions

Flexographic Packaging Printing

Software & Solutions

Consumer & Film

Advanced Materials and 3D Technology Solutions

Eastman Business Park

Total

Plates, inks and other consumables

$
343

$
15

$
66

$
—

$
9

$
—

$
—

$
433

Ongoing service arrangements ⁽¹⁾

67

40

4

24

1

—

—

136

Total Annuities

410

55

70

24

10

—

—

569

Equipment & Software

33

9

5

8

—

—

—

55

Film and chemicals

—

—

—

—

81

—

—

81

Other⁽²⁾

—

—

—

8

5

2

9

24

Total

$
443

$
64

$
75

$
40

$
96

$
2

$
9

$
729

~~The timing of revenue recognition, billings and cash collections results in billed trade~~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~~portion of the ~~rights to consideration become unconditional. The amounts recorded for contract assets at June 30, 2018 and December 31, 2017 were both $3 million and are reported~~net investment in sales-type leases due after one year is included in Other ~~current assets~~long-term assets.

The table below reconciles the undiscounted cash flows to be received for the next five years and ~~Trade receivables, respectively,~~thereafter to the net investment in sales-type leases recorded on the balance sheet:

Undiscounted cash flows to be received for the next five years and thereafter for operating leases and subleases are:

Equipment subject to operating leases and the related accumulated depreciation were as follows:

Equipment subject to operating leases, net is included in Property, plant and equipment, net in the Consolidated Statement of Financial Position. The contract liabilities primarily relate to prepaid service contracts, upfront payments for certain equipment purchases or prepaid royalties on intellectual property arrangements. The amounts recorded for contract liabilities at June 30, 2018 and December 31, 2017 were $47 million and $37 million, respectively, of which $41 million and $37 million, respectively, are reported in Other current liabilities and $6 million and $0 million, respectively, are reported in Other long-term liabilities in the Consolidated Statement of Financial Position.

~~Revenue~~Income recognized for the three and six months ended June 30, 2018 that was included in the contract liability balance at the beginning of the year was $4 million and $29 million, respectively, and primarily represented revenue from prepaid service contracts and equipment revenue recognition. Contract liabilities as of June 30, 2018 include $24 million and $30 million of cash payments received during the three and six months ended June 30, 2018, respectively.

On December 22, 2017, President Trump signed into law tax legislation known as the 2017 Tax Act. The 2017 Tax Act changed many aspects of U.S. corporate income taxation and included a reduction of the corporate income tax rate from 35% to 21%, the implementation of a territorial tax system and the imposition of a tax on ~~deemed repatriated earnings of foreign subsidiaries.~~

Effective January 1, 2018, the 2017 Tax Act also includes a provision to tax global intangible low-taxed income (“GILTI”) of foreign subsidiaries, a base erosion anti-abuse tax (“BEAT”) measure that taxes certain payments between a U.S. corporation and its subsidiaries and a foreign derived intangible income (“FDII”) deduction which would reduce U.S. taxable income. Kodak provided the applicable provisional tax impacts in its consolidated financial statementsoperating lease arrangements for ~~the six months ended June 30, 2018 which were fully offset by Kodak’s U.S. valuation allowance resulting in no net tax provision.~~

Given the complexity of the GILTI provisions, Kodak is still evaluating the effects and has not yet determined its accounting policy. For the six months ended June 30, 2018, Kodak is still evaluating the GILTI provisions and the analysis of future taxable income that is subject to GILTI. Therefore, Kodak has included GILTI related to current year operations only in its estimated annual effective tax rate and has not provided additional GILTI on deferred items. The impact was fully offset by Kodak’s U.S. valuation allowance, resulting in no net tax provision.

Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act, (“SAB 118”) addresses the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the 2017 Tax Act. Kodak has recognized the provisional tax impacts to the extent needed and included these amounts in its consolidated financial statements for the six months ended June 30, 2018. The ultimate impact may materially differ from these provisional amounts as a result of additional analysis, changes in interpretations and assumptions Kodak has made, additional regulatory guidance that may be issued, actions Kodak may take as a result of the 2017 Tax Act and other factors. The accounting is expected to be complete when the 2017 U.S. corporate income tax return is filed in 2018.

~~Kodak’s income tax provision (benefit) and effective tax rate were as follows:~~

~~For~~ the three months ended ~~June 30, 2018, the difference between Kodak’s effective tax rate and the U.S. statutory rate of 21.0%~~March 31, 2019 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 and (2) the results from operations in jurisdictions outside the U.S.presented below (income recognized for sales-type lease arrangements is $0 million):

For the six months ended June 30, 2018, 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. and (3) a provision associated with foreign withholding taxes on undistributed earnings.

~~For the three months ended June 30, 2017, the difference between Kodak’s effective tax rate and~~the U.S. statutory rate of 35.0% 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.

For the six months ended June 30, 2017, the difference between Kodak’s effective tax rate and the U.S. statutory rate of 35.0% 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 provision 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..

As of March 31, 2019, the Company had outstanding letters of credit of $85 million issued under the ABL Credit Agreement, as well as bank guarantees and letters of credit of $3 million, surety bonds in the amount of $40 million, and restricted cash and deposits of $21 million, primarily to ensure the payment of possible casualty and workers’ compensation claims, environmental liabilities, legal contingencies and rental payments and to support various customs, tax and trade activities. The restricted cash and deposits are reflected in Restricted cash, Other current assets and Other long-term assets in the Consolidated Statement of Financial Position.

Kodak’s Brazilian operations are involved in various litigation matters 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 is disputing these matters and intends 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 March 31, 2019, the unreserved portion of these contingencies, 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 $10 million.

In connection with assessments in Brazil, local regulations may require Kodak to post security for a portion of the amounts in dispute. As of March 31, 2019, Kodak has posted security composed of $4 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 $58 million. Generally, any encumbrances on the Brazilian assets would be removed to the extent the matter is resolved in Kodak's favor.

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 does not believe that it is probable that the outcomes in any of these matters, individually or collectively, will have a material adverse effect on its financial position 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.

EKC guarantees obligations to third parties for some of its consolidated subsidiaries. The maximum amount guaranteed is $2 million and the outstanding amount for those guarantees is $1 million.

In connection with the settlement of certain of the Company’s historical environmental liabilities at Eastman Business Park, in the event the historical liabilities exceed $99 million, the Company will become liable for 50% of the portion above $99 million with no limitation to the maximum potential future payments. There is no liability recorded for this guarantee.

Kodak offers its customers extended warranty arrangements that are generally one year, but may range from three months to six 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, 2018 to March 31, 2019, which is reflected in Other current liabilities in the accompanying Consolidated Statement of Financial Position, was as follows:

The following tables present revenue disaggregated by major product, portfolio summary and geography.

	Three Months Ended
	March 31, 2019
	Print Systems		Enterprise Inkjet Systems		Kodak Software		Brand, Film and Imaging		Advanced Materials and 3D Printing Technology		Eastman Business Park		Total
Plates, inks and other consumables	$	149	$	8	$	—	$	3	$	—	$	—	$	160
Ongoing service arrangements ⁽¹⁾		31		19		11		1		—		—		62
Total Annuities		180		27		11		4		—		—		222
Equipment & Software		12		5		3		—		—		—		20
Film and chemicals		—		—		—		37		—		—		37
Other ₍₂₎		—		—		-		8		2		2		12
Total	$	192	$	32	$	14	$	49	$	2	$	2	$	291


	Three Months Ended
	March 31, 2018
	Print Systems		Enterprise Inkjet Systems		Kodak Software		Brand, Film and Imaging		Advanced Materials and 3D Printing Technology		Eastman Business Park		Total
Plates, inks and other consumables	$	167	$	8	$	—	$	5	$	—	$	—	$	180
Ongoing service arrangements ⁽¹⁾		34		20		12		—		—		—		66
Total Annuities		201		28		12		5		—		—		246
Equipment & Software		15		3		4		—		—		—		22
Film and chemicals		—		—		—		40		—		—		40
Other⁽²⁾		—		—		—		7		1		2		10
Total	$	216	$	31	$	16	$	52	$	1	$	2	$	318

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 amounts recorded for contract assets at both March 31, 2019 and December 31, 2018 were $3 million and are reported in Other current assets in the Consolidated Statement of Financial Position. The contract liabilities primarily relate to prepaid service contracts, upfront payments for certain equipment purchases or prepaid royalties on intellectual property arrangements. The amounts recorded for contract liabilities at March 31, 2019 and December 31, 2018 were $45 million and $48 million, respectively, of which $37 million and $42 million, respectively, are reported in Other current liabilities and $8 million and $6 million, respectively, are reported in Other long-term liabilities in the Consolidated Statement of Financial Position.

Revenue recognized for the three months ended March 31, 2019 and 2018 that was included in the contract liability balance at the beginning of the year was $24 million and $25 million, respectively, and primarily represented revenue from prepaid service contracts and equipment revenue recognition. Contract liabilities as of March 31, 2019 and 2018 include $20 million and $23 million of cash payments received during the three months ended March 31, 2019 and 2018, respectively.

Kodak does not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one 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 than one year generally consist of deferred service contracts, operating leases and licensing arrangements. As of March 31, 2019, there was approximately $70 million of unrecognized revenue from unsatisfied performance obligations. Approximately 30% of the revenue from unsatisfied performance obligations is expected to be recognized in both the rest of 2019 and in 2020, 20% in 2021 and 20% thereafter.

For the three months ended March 31, 2019, the difference between Kodak’s recorded provision and the benefit that would result from applying 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 and (2) the results from operations in jurisdictions outside the U.S.

For the three months ended March 31, 2018, the difference between Kodak’s recorded provision and the benefit that would result from applying 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. and (3) a provision associated with foreign withholding taxes on undistributed earnings.

Charges for restructuring activities are recorded in the period in which Kodak commits to a formalized restructuring plan, or executes the specific actions contemplated by the plan, and all criteria for liability recognition under the applicable accounting guidance have been met. Restructuring actions taken in the first ~~six~~three months of ~~2018~~2019 were initiated to reduce Kodak’s cost structure as part of its commitment to drive sustainable profitability and included various targeted reductions in manufacturing, service, sales ~~research and development,~~ and other administrative functions.

The activity in the accrued balances and the non-cash charges and credits incurred in relation to restructuring activities for the ~~six~~three months ended ~~June 30, 2018~~March 31, 2019 were as follows:

⁽²⁾Represents severance charges funded from pension plan assets, which were reclassified to Pension and other postretirement liabilities.

For the three months ended ~~June 30, 2018~~March 31, 2019 the $2 million of charges were reported as Restructuring costs and other.

The severance costs for the three months ended ~~June 30, 2018~~March 31, 2019 related to the elimination of approximately 40 positions including approximately 3015 manufacturing/service positions, ~~5 research~~ and ~~development positions, and 5~~25 administrative and sales positions. The geographic composition of these positions includes approximately 3520 in the United States and Canada and ~~5 throughout the rest of the world.~~

~~For the six months ended June 30, 2018 the $4 million of charges were reported as Restructuring costs and other.~~

The severance costs for the six months ended June 30, 2018 related to the elimination of approximately 75 positions including approximately 40 manufacturing/service positions, 5 research and development positions, and 30 administrative and sales positions. The geographic composition of these positions includes approximately 35 in the United States and Canada and 4020 throughout the rest of the world.

As a result of these initiatives, the majority of the severance will be paid during periods through the end of ~~2018.~~2019.

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

For the three and six months ended June 30, 2017 the special termination benefits charges were incurred as a result of Kodak’s restructuring actions and, therefore, have been included in Restructuring costs and other in the Consolidated Statement of Operations for those periods.

NOTE ~~15: REDEEMABLE, CONVERTIBLE SERIES A PREFERRED STOCK~~16: RETIREMENT PLANS AND OTHER POSTRETIREMENT BENEFITS

~~On November 15, 2016,~~Components of the ~~Company issued 2,000,000 shares~~net periodic benefit cost for all major U.S. and Non-U.S. defined benefit plans are as follows:

For the three months ended March 31, 2019 the special termination benefits charges were incurred as a result of 5.50% Series A Convertible Preferred Stock, no par value per share (the “Series A Preferred Stock”), for an aggregate purchase price of $200 million, or $100 per share. The Company has classified the Series A Preferred Stock as temporary equityKodak’s restructuring actions and have been included in Restructuring costs and other in the Consolidated Statement of Financial Position. Kodak allocated $43 million of the net proceeds received to a derivative liability based on the aggregate fair value of the embedded conversion features on the date of issuance which reduced the net carrying value of the Series A Preferred Stock (see Note 21, “Financial Instruments”). The carrying value of the Series A Preferred Stock at the time of issuance, $155 million ($200 million aggregate gross proceeds less $43 million allocated to the derivative liability and $2 million in transaction costs), 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, November 15, 2021. The holders of Series A Preferred Stock are entitled to cumulative dividends payable quarterly in cash at a rate of 5.50% per annum. All dividends owed on the Series A Preferred Stock have been declared and paid when due. As of June 30, 2018, the Series A Preferred Stock has not been converted and none of the antidilution provisions have been triggered. Any shares of Series A Preferred Stock not converted prior to the fifth anniversary of the initial issuance of the Series A Preferred Stock are required to be redeemed at $100 per share plus the amount of accrued and unpaid dividends.Operations for those periods.

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 include any dilutive effect of potential common shares. In periods with a net loss from continuing operations 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 three ~~and six~~ months ended ~~June 30, 2018 and 2017~~March 31, 2019 follows (in millions):

As a result of the net loss from continuing operations available to common shareholders for the three ~~and six~~ months ended ~~June 30,~~March 31, 2019 and 2018, Kodak calculated diluted earnings per share using weighted-average basic shares outstanding for those periods. If Kodak reported earnings from continuing operations available to common shareholders for ~~both~~ the three ~~and six~~ months ended ~~June 30,~~March 31, 2019 and 2018, the calculation of diluted earnings per share would have included the assumed conversion of 0.4 million and 0.3 million of unvested restricted stock ~~units.~~units, respectively.

The computation of diluted earnings per share for the three ~~and six~~ months ended ~~June 30,~~March 31, 2019 and 2018 ~~and 2017~~ excluded the impact of (1) the assumed conversion of 2.0 million shares of Series A convertible preferred shares and (2) the assumed conversion of outstanding employee stock options of 7.0 million and 5.0 million, respectively, because the effects would have been anti-dilutive. In addition, the computation of diluted earnings per share for the three months ended March 31, 2018 excluded the impact of (1) the assumed conversion of net share settled warrants to purchase 1.8 million shares of common stock at an exercise price of $14.93 and (2) the assumed conversion of net share settled warrants to purchase 1.8 million shares of common stock at an exercise price of ~~$14.93, (3) the assumed conversion of net share settled warrants to purchase 1.8 million shares of common stock at an exercise price of~~ $16.12 and (4) the assumed conversion of outstanding employee stock options of 4.9 million and 4.8 million for the three and six months ended June 30, 2018, respectively, and 2.6 million for both the three and six months ended June 30, 2017, because the effects would have been anti-dilutive. The net share settled warrants terminated at the close of business on September 3, 2018.

Kodak 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 in one or more series. As of ~~June 30, 2018~~March 31, 2019 and December 31, ~~2017,~~2018, there were ~~42.7~~43.0 million and ~~42.6~~42.8 million shares of common stock outstanding, respectively, and 2.0 million shares of Series A preferred stock issued and outstanding. Treasury stock consisted of approximately 0.6 million shares at both ~~June 30, 2018~~March 31, 2019 and December 31, ~~2017.~~2018.

The changes in Other comprehensive ~~income (loss),~~loss, by component, were as follows:

Effective in January 2019 Kodak ~~has seven~~changed its organizational structure. Kodak Technology Solutions, formerly part of the Software and Solutions segment, was moved into the Consumer and Film segment. The Consumer and Film segment was renamed the Brand, Film & Imaging segment. The Unified Workflow Solutions business, formerly part of the Software and Solutions segment, will operate as a dedicated segment named Kodak Software segment.

Financial information is reported for six reportable segments: Print Systems, Enterprise Inkjet Systems, ~~Flexographic Packaging,~~Kodak Software, Brand, Film and ~~Solutions, Consumer and Film,~~Imaging, Advanced Materials and 3D Printing Technology and Eastman Business Park. A description of the reportable segments follows.

Print Systems: The Print Systems segment is comprised of two lines of business: Prepress Solutions and Electrophotographic Printing Solutions.

Enterprise Inkjet Systems: The Enterprise Inkjet Systems segment is comprised of two lines of business: the Prosper business and the Versamark business.

~~Flexographic Packaging~~Kodak Software: The ~~Flexographic Packaging~~Kodak Software segment is comprised of the ~~Packaging line of~~Software business.

~~Software~~Brand, Film and ~~Solutions~~Imaging: The ~~Software~~Brand, Film and ~~Solutions~~Imaging segment is comprised of ~~two~~five lines of business: ~~Unified Workflow Solutions and Kodak Technology Solutions.~~

Consumer ~~and Film: The Consumer and Film segment is comprised of three lines of business:~~Products, Industrial Film and Chemicals, Motion Picture, Kodak Services for Business (“KSB”) and ~~Consumer Products (which includes Consumer Inkjet Solutions).~~Kodakit.

Advanced Materials and 3D Printing Technology: The Advanced Materials and 3D Printing Technology segment includes the Kodak Research Laboratories and associated new business opportunities and intellectual property licensing not directly related to other business segments.

Eastman Business Park: The Eastman Business Park segment includes the operations of the Eastman Business Park, a more than 1,200-acre technology center and industrial complex.

Segment Operational EBITDA and Consolidated ~~Earnings (Loss)~~Loss from Continuing Operations Before Income Taxes

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 (loss) from continuing operations excluding the provision for income taxes; non-service cost components of pension and OPEB income; depreciation and amortization expense; restructuring costs; stock-based compensation expense; consulting and other costs; idle costs; ~~manufacturing capacity expansion non-recurring costs;~~separation agreement compensation paid to former CEO; other operating income (expense), net (unless otherwise indicated); goodwill impairment losses; interest expense; and other ~~(charges) income,~~charges, net.

Kodak’s segments are measured using Operational EBITDA both before and after allocation of corporate selling, general and administrative expenses (“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 activities not directly related to the other segments are reported within the Advanced Materials and 3D Printing Technology segment.

During the first quarter of ~~2018~~2019 the segment measure was changed to exclude ~~amortization~~the costs, net of ~~prior service~~any rental income received, of underutilized portions of certain properties. Additionally, the allocation of costs ~~and credits which, due~~from EBP to the ~~adoption~~Brand, Film and Imaging segment and Advanced Materials and 3D Printing Technology segment as tenants of ~~ASU 2017-17, are no longer reported in~~EBP and to each of the ~~same line item~~segments as ~~other compensation costs arising from services rendered during~~users of shared corporate space at the ~~period. Refer~~global headquarters changed. Prior year results have been revised to ~~the Recently Adopted Accounting Pronouncements section of Note 1, “Basis of Presentation and Recent Accounting Pronouncements.”~~reflect these changes.

Discontinued operations of Kodak include the ~~second quarter~~former Flexographic Packaging segment comprised of Kodak’s Flexographic Packaging Business (the “Business”).

Kodak consummated the sale of certain assets of the Business to MIR Bidco, SA (the “Purchaser”) on April 8, 2019 for net cash consideration at closing, in addition to the assumption by Purchaser of certain liabilities of the Business, of $320 million, pursuant to the Stock and Asset Purchase Agreement (“SAPA”) signed in November 2018 and amended in March 2019. Assets and liabilities of the ~~segment measure was changed to exclude manufacturing capacity expansion non-recurring costs for the expansion~~Business in China were not transferred at the ~~Flexographic Packaging segment’s Weatherford, Oklahoma manufacturing facility. These costs~~initial closing but will be transferred at a deferred closing in accordance with the SAPA. The portion of the purchase price to be paid at the deferred closing is $7.5 million.

Kodak will operate the Business in China, subject to certain covenants, until the deferred closing occurs and will deliver to (or receive from) the Purchaser a true-up payment reflecting the actual economic benefit (or detriment) attributable to the operation of the Business in China from the time of the initial closing through the time of the deferred closing.

Simultaneously with entering into the SAPA, the Company and the Purchaser entered into an Earn-out Agreement, pursuant to which the Company will be entitled to an aggregate of up to $35 million in additional cash consideration if the Business achieves agreed EBITDA targets for 2018 ($10 million earn-out), 2019 ($10 million earn-out) and 2020 ($15 million earn-out). The EBITDA target for 2018 was not achieved.

On April 16, 2019 the Purchaser paid Kodak $15 million as a prepayment for services and products to be provided by Kodak to the Purchaser.

The results of operations of the Business are classified as discontinued operations in the ~~prior~~Consolidated Statement of Operations for all periods presented. Direct operating expenses of the discontinued operations are included in the results of discontinued operations. Indirect expenses that were ~~de minimis~~historically allocated to the discontinued operations have been included in the results of continuing operations. Prior period results have been reclassified to conform to the current period presentation. Additionally, the assets and ~~therefore no prior period reclassification is necessary.~~liabilities associated with the Business are classified as held for sale in the Consolidated Statement of Financial Position as of March 31, 2019 and December 31, 2018.

After the initial closing, Kodak was required to use a portion of the proceeds from the sale of the Business to repay $312 million of the loans under the Term Credit Agreement. Interest expense on debt that was required to be repaid as a result of the sale was allocated to discontinued operations.

Approximately $4 million of transaction costs are included in Selling, general and administrative expenses in the current year period.

The following table presents the aggregate carrying amount of major assets and liabilities of the Business:

A dedicated entity of the Business had intercompany receivables with Kodak of approximately $5 million as of March 31, 2019 and December 31, 2018 that are part of the proposed transaction but are not reflected in the table above as these amounts have been eliminated in deriving the consolidated financial statements.

The following table presents cash flow information associated with the Business:

Depreciation and amortization of long-lived assets of the Business included in discontinued operations ceased as of December 1, 2018.

Kodak, as a result of its global operating and financing activities, is exposed to changes in foreign currency exchange rates and interest rates, which may adversely 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 does not utilize financial instruments for trading or other speculative purposes.

Kodak’s foreign currency forward contracts are not designated as hedges and are marked to market through net (loss) earnings at the same time that the exposed assets and liabilities are remeasured through net (loss) earnings (both in Other (income) charges, ~~(income),~~ net in the Consolidated Statement of Operations). The notional amount of such contracts open at ~~June 30, 2018~~March 31, 2019 and December 31, ~~2017~~2018 was approximately ~~$657~~$411 million and ~~$534~~$415 million, respectively. The majority of the contracts of this type held by Kodak as of ~~June 30, 2018~~March 31, 2019 and December 31, ~~2017~~2018 are denominated in euros, Japanese yen, Chinese renminbi and Swiss ~~francs and euros.~~francs.

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

Kodak had no derivatives designated as hedging instruments for the three ~~and six~~ months ended ~~June 30, 2018 and 2017.~~March 31, 2019.

In the event of a default under the ~~Company’s Senior Secured First Lien~~ Term Credit Agreement, the ~~Amended~~ABL Credit Agreement, or a default under any derivative contract or similar obligation of Kodak, subject to certain minimum thresholds, the derivative counterparties would have the right, although not 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.

As discussed in Note ~~15,~~8, “Redeemable, Convertible, Series A Preferred Stock”, the Company concluded that the Series A Preferred Stock is considered more akin to a debt-type instrument and that the economic characteristics and risks of the embedded conversion features, except where the conversion price was increased to the liquidation preference, were not considered clearly and closely related to the Series A Preferred Stock. The embedded conversion features not considered clearly and closely related are the conversion at the option of the holder (“Optional Conversion”); the ability of Kodak to automatically convert the stock after the second anniversary of issuance (“Mandatory Conversion”) and the conversion in the event of a fundamental change or reorganization (“Fundamental Change or Reorganization Conversion”). Accordingly, these embedded conversion features were bifurcated from the Series A Preferred Stock and separately accounted for on a combined basis as a single derivative asset or liability. The derivative is in ~~a liability position at June 30, 2018 and in~~ an asset position at both March 31, 2019 and December 31, ~~2017,~~2018, and is reported in Other long-term ~~liabilities and Other long-term~~ assets ~~respectively,~~ in the Consolidated Statement of Financial Position. The derivative is being accounted for at fair value with changes in fair value being reported in Other charges, ~~(income),~~ net in the Consolidated Statement of Operations.

Fair values of Kodak’s foreign currency forward contracts are determined using observable inputs (Level 2 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 Receivables, net 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 both ~~June 30, 2018~~March 31, 2019 and December 31, ~~2017~~2018 was $7$3 million. The gross fair value of foreign currency forward contracts in a liability position as of ~~June 30, 2018~~March 31, 2019 and December 31, ~~2017~~2018 was ~~not material.~~$0 million and $1 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 were no transfers between levels of the fair value hierarchy during the three ~~and six~~ months ended ~~June 30, 2018.~~March 31, 2019.

The fair value of the embedded conversion features derivative is calculated using unobservable inputs (Level 3 fair measurements). The value of the Optional Conversion and Mandatory Conversion is calculated using a binomial lattice model. The following table presents the key inputs in the determination of the fair value of the Optional Conversion and Mandatory Conversion at ~~June 30, 2018~~March 31, 2019 and December 31, ~~2017:~~2018:

The Fundamental Change and Reorganization Conversion value at issuance was calculated as the difference between the total value of the Series A Preferred Stock and the sum of the net present value of the cash flows if the Series A Preferred Stock is redeemed on its fifth anniversary and the values of the other embedded derivatives. The Fundamental Change and Reorganization Conversion value reduces the value of the embedded conversion features derivative liability. ~~Unless~~Other than events ~~occur~~ which ~~would~~ alter the likelihood of a fundamental change or reorganization event, the value of the Fundamental Change and Reorganization Conversion reflects the value as of the issuance date, amortized for the passage of time. The Fundamental Change and Reorganization Conversion value exceeded the value of the Optional Conversion and Mandatory Conversion values at both March 31, 2019 and December 31, ~~2017~~2018 resulting in the derivative being reported as an asset.

The fair values of long-term debt (Level 2 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 ~~$376~~$18 million and ~~$348~~$5 million at ~~June 30, 2018~~March 31, 2019 and December 31, ~~2017,~~2018, respectively. At March 31, 2019 and December 31, 2018, the fair value of current portion of long-term debt was also 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 value of current portion of long-term debt was $391 million and $378 million at March 31, 2019 and December 31, 2018, respectively.

The carrying values of cash and cash equivalents, restricted cash and short-term borrowings ~~and current portion of long-term debt~~ approximate their fair values.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

CAUTIONARY STATEMENT PURSUANT TO SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This report on Form 10-Q includes “forward–looking statements” as that term is defined under the Private Securities Litigation Reform Act of 1995.

Forward–looking statements include statements concerning Kodak’s plans, objectives, goals, strategies, future events, future revenue or performance, capital expenditures, liquidity, investments, financing needs and business trends and other information that is not historical information. When used in this document, the words “estimates,” “expects,” “anticipates,” “projects,” “plans,” “intends,” “believes,” “predicts,” “forecasts,” “strategy,” “continues,” “goals,” “targets” or future or conditional verbs, such as “will,” “should,” “could,” or “may,” and similar expressions, as well as statements that do not relate strictly to historical or current facts, are intended to identify forward–looking statements. All forward–looking statements, including management’s examination of historical operating trends and data, are based upon Kodak’s expectations and various assumptions. Future events or results may differ from those anticipated or expressed in the forward-looking statements. 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 the Company’s Annual Report on Form 10–K for the year ended December 31, ~~2017~~2018 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,” in the corresponding sections of this report on Form 10-Q, ~~and in the Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2018,~~ and in other filings the Company makes with the SEC from time to time, as well as the following:

There may be other factors that may cause Kodak’s actual results to differ materially from the forward–looking statements. All forward–looking statements attributable to Kodak or persons acting on its behalf apply only as of the date of this report on Form 10-Q and are expressly qualified in their entirety by the cautionary statements included or referenced in this document. Kodak undertakes no obligation to update or revise forward–looking statements to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated ~~events.~~events, except as required by law.

Kodak is a global commercial printing and imaging company with proprietary technologies in materials science, digital imaging science and software, and deposition processes (methods whereby one or more layers of various materials in gaseous, liquid or small particle form are deposited on a substrate in precise quantities and positions). Kodak leverages its core technology products and services to develop solutions for the ~~product goods packaging and~~ graphic communications ~~markets,~~market and is developing products for the functional printing markets. Kodak also offers brand licensing and intellectual property opportunities and provides products and services for motion pictures and other commercial ~~films, and sells ink to its existing installed consumer inkjet printer base.~~films.

Revenue decreased $9$27 million compared to the prior year quarter ~~and first six months (2% and 1%, respectively)~~(8%), including the ~~favorable~~unfavorable impact of currency ($11 million) ~~and ($31 million)~~ in the current year ~~quarter and first six months, respectively.~~ .

A discussion of opportunities and challenges related to Kodak’s strategy follows:

~~[30]~~Kodak plans to continue to pursue monetization of its asset base, selling and licensing intellectual property, and selling and leasing excess capacity in its properties.

•

Kodak plans to continue to pursue monetization of its asset base, selling and licensing intellectual property, selling and leasing excess capacity in its properties, and pursuing rights to an earn-out from a previous divestiture.

CURRENT KODAK OPERATING MODEL AND REPORTING STRUCTURE

Kodak has ~~seven~~six reportable segments: Print ~~Systems,~~Systems; Enterprise Inkjet ~~Systems, Flexographic Packaging, Software~~Systems; Kodak Software; Brand, Film and ~~Solutions, Consumer and Film,~~Imaging; Advanced Materials and 3D Printing Technology and Eastman Business Park.

Print Systems

The Print Systems segment is comprised of Prepress Solutions, which includes Kodak’s digital offset plate offerings and computer-to-plate imaging solutions, and Electrophotographic Printing Solutions, which offers high-quality digital printing solutions using electrically charged ~~toner based~~toner-based technology. The Print Systems segment provides digital and traditional product and service offerings to a variety of commercial industries, including commercial print, direct mail, book publishing, newspapers and magazines and packaging.

[33]

Prepress Solutions capitalizes on a contract-based, stable and recurring cash flow-generative business model. The average duration of customer contracts is two years. These contracts offer stability and generate recurring revenue. The core of the business is the manufacturing of aluminum digital printing plates of varying sizes. 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 Computer to Plate (“CTP”) equipment, which images the plates with a laser. The plates are used in the offset printing process, which transfers ink from the plate onto a rubber blanket and then onto the substrate to be printed. Due to the nature of the imaging and printing process, a new plate must be used for each printing run. As a result, there is a recurring revenue stream from the sale of these plates.

The Print Systems products and services are sold globally to customers through both a direct sales team as well as indirectly through dealers.

Prepress Solutions:

Digital offset plates include KODAK SONORA Process Free Plates. KODAK SONORA Process Free Plates are prepared directly with a CTP thermal output device and do not require subsequent processing chemistry, processing equipment or chemical disposal. As a result, the plates deliver cost savings and efficiency for customers and promote environmental sustainability practices.

CTP output devices are used by customers to transfer images onto aluminum offset printing plates and provide consistent and high-quality imaging for offset press applications. CTP products provide high resolution, consistency and stability in thermal imaging. Kodak also offers a lower cost CTP system using TH5 imaging technology, which provides a highly efficient and cost-effective imaging solution at a lower price point.

Electrophotographic Printing Solutions:

NEXPRESS printers produce high-quality, differentiated printing of short-run, personalized print applications, such as direct mail, books, marketing collateral and photo products.

DIGIMASTER printers use monochrome electrophotographic printing technology for transactional printing, short-run books, corporate documentation, manuals and direct mail.

The Print Systems segment also provides service and support related to these products.

Enterprise Inkjet Systems

The Enterprise Inkjet Systems segment contains the Prosper business and the Versamark business. The Enterprise Inkjet Systems products include production press systems, consumables (primarily ink), inkjet components and services.

Prosper:

The Prosper business product offerings, including the PROSPER Press systems and PROSPER Components, feature ultrafast inkjet droplet generation. This includes the PROSPER 6000 Press, which delivers a continuous flow of ink that enables constant and consistent operation, with uniform ink droplet size and accurate placement, even at very high print speeds. Applications of the PROSPER Press include publishing, commercial print, direct mail and packaging. PROSPER System Components are integrated into original equipment manufacturer (“OEM”) partner products and systems. Sales of equipment that incorporate the PROSPER Writing Systems result in recurring revenue from sales of ink and other consumables and equipment service. The level of recurring revenue depends on the application for which the equipment is used, which drives the total number of pages printed and, therefore, the amount of ink usage. The business model is further supplemented by consumption of other consumables including refurbished jetting modules and service.

~~[31]~~The focus of the Prosper business is on developing the next generation platform, Ultrastream, with solutions that place writing systems in OEMs as well as direct sale press products that widens its reach into applications for packaging and décor and expands the substrate range to include plastics. The Prosper business secured its first agreement in the fourth quarter of 2018 with an industry OEM, who will integrate Ultrastream in a packaging press solution.

•

The focus of the Prosper business is on developing the next generation platform, Ultrastream, with solutions that place writing systems in original equipment manufacturers as well as direct sale press products that widens its reach into applications for packaging and décor and expands the substrate range to include plastics. Product development is currently in the stage of shipping evaluation kits to potential partners with commercialization expected in 2019.

The Prosper business includes Kodak Print Services. Kodak Print Services prints the Jersey Evening Post as well as the majority of U.K. national newspapers for distribution in both Jersey and Guernsey islands. The business is used to demonstrate the value of the Kodak Prosper presses to customers around the world.

Versamark:

The KODAK VERSAMARK Products are the predecessor products to the PROSPER business. Kodak has ceased manufacturing VERSAMARK Press Systems. Users of KODAK VERSAMARK Products continue to purchase ink and other consumables as well as service from Kodak. Applications of the VERSAMARK products include publishing, transactional, commercial print and direct mail.

~~Flexographic Packaging~~[34]

Kodak Software

The Flexographic Packaging segment consists of flexographic imaging equipment, printing plates, consumables and related services, which enable graphic customization of a wide variety of packaging materials.

~~FLEXCEL NX~~:

The FLEXCEL NX System, a fully-integrated digital flexographic plate imaging solution, enables prepress service providers and printers to create printing plates that provide high quality flexographic printing and enhance the efficiency of customers’ printing processes.

~~Other Packaging Business:~~

~~The FLEXCEL SR Plates portfolio comprises a full range of analog flexographic plates designed for trade shops and packaging printers that have not yet transitioned to digital technology.~~ Kodak also manufactures and sells DITR Film, a no-process alternative to conventional graphic arts film and a wide range of analog and digital letterpress plates. Also included under this category are equipment service and the legacy APPROVAL proofing business.

Software ~~and Solutions~~

~~The Software and Solutions~~ segment is comprised of Unified Workflow Solutions and Kodak Technology Solutions, which includes enterprise services and solutions. Unified Workflow Solutions is an established product line whereas Kodak Technology Solutions includes Kodak Services for Business (“KSB”) and Kodakit.

~~Unified Workflow Solutions:~~

~~Unified Workflow Solutions~~the Software business. The Software business offers a leading suite of solutions for print production workflow, including the PRINERGY workflow production software, by providing customer value through automation, web integration and integration with other Kodak ~~systems~~products and third-party offerings. 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 with over 15,000 systems installed in some of the largest printing and packaging establishments around the world. The ~~Unified Workflow Solutions~~Software business includes digital front-end controllers which manage the delivery of personalized content to digital presses while controlling color and print consistency.

Brand, Film and Imaging

The Brand, Film and Imaging segment is comprised of five lines of business: Consumer Products, Industrial Film and Chemicals, Motion Picture, Kodak Services for Business (“KSB”) and Kodakit. Sales in KSB are project-based and can vary from year to year depending on the nature and number of projects in existence that year.

Consumer Products:

Includes licensing of the Kodak brand to third parties. Kodak currently licenses its brand for use with a range of products including batteries, digital and instant print cameras and camera accessories, printers and LED lighting. Kodak intends to continue efforts to grow its portfolio of brand licenses to generate both ongoing royalty streams and upfront payments.

Consumer Inkjet Solutions, which involves the sale of ink to an existing installed base of consumer inkjet printers.

•

3^rd party sales of Specialty Inks and Dispersions.

Industrial Film and Chemicals:

Offers industrial film, including films used by the electronics industry to produce printed circuit boards, as well as professional and consumer still photographic film.

Includes related component businesses: Polyester Film; Solvent Recovery; and Specialty Chemicals.

Motion Picture:

Includes the motion picture film business serving the entertainment industry. Motion picture products are sold directly to studios, external laboratories and independent filmmakers.

Kodak motion picture film processing laboratories offering onsite processing services at strategic locations in the U.S. and Europe.

Kodak ~~Technology Solutions:~~Services for Business:

KSB assists organizations with challenges and opportunities created by the worldwide digital transformation. It provides business process outsourcing services, scan and capture solutions, records conversion services, workflow solutions, content management, print and managed media services that assist customers with solutions that meet their business requirements. KSB has expertise in the capture, archiving, retrieval and delivery of documents including in depth knowledge of handling legacy media. KSB serves enterprise customers primarily in the banking, insurance and government sectors.

Kodakit:

Kodakit is a platform that connects businesses with professional photographers to cater to their photography needs. Customers include global hotels and online travel agencies, real estate companies, marketplaces, advertising agencies and global brands.

~~[32]~~

~~Consumer and Film~~

~~The Consumer and Film segment is comprised of three lines of business: Consumer Products, Industrial Film and Chemicals, and Motion Picture.~~

~~Consumer Products:~~

~~Consumer Inkjet Solutions, which involves the sale of ink to an existing installed base of consumer inkjet printers.~~

~~Kodak developed consumer products, including the Super 8 camera.~~

~~Industrial Film and Chemicals:~~

~~Offers industrial film, including films used by the electronics industry to produce printed circuit boards, as well as professional and consumer still photographic film.~~

~~Includes related component businesses: Polyester Film; Solvent Recovery; and Specialty Chemicals, Inks and Dispersions.~~

~~Motion Picture:~~

~~Includes the motion picture film business serving the entertainment industry. Motion picture products are sold directly to studios, external laboratories and independent filmmakers.~~

~~Kodak motion picture film processing laboratories offering onsite processing services at strategic locations in the U.S. and Europe.~~

Advanced Materials and 3D Printing Technology

The Advanced Materials and 3D Printing Technology segment contains the Kodak Research Laboratories and associated new business opportunities and intellectual property licensing not directly related to other business divisions. Kodak conducts research and files patent applications with fundamental inventions from the Kodak Research Laboratories. Additionally, Kodak continues to file new patent applications in areas aligned with its core businesses. Via these core business patent applications along with the research inventions, Kodak maintains a large worldwide portfolio of pending applications and issued patents. ~~Because product~~Product solutions in Advanced Materials and 3D Printing are in the process of being commercialized, orand there are new business opportunities a higher level of investment has been required. Advanced Materials and 3D Printing Technology significantly reduced the level of this investment in the fourth quarter of 2017, concentrating on opportunities that are commercialized or nearly commercialized with identified markets and customers.

Advanced Materials and 3D Printing Technology segment will also pursue partnership opportunities to commercialize functional materials and printed electronics technologies. These partnerships may include non-recurring engineering payments for Kodak efforts to further develop such technologies into products. ~~Further,~~ Advanced Materials and 3D Printing Technology segment also provides a wide range of analytical services ~~and non-recurring engineering services~~ to external clients at market ~~rates for such services.~~rates.

[35]

Advanced Materials:

Advanced Materials is developing solutions for component smart materials based on the materials science inventions and innovations from the research laboratories. There are multiple applications that Kodak contemplates addressing in this category, but the singular focus now is light blocking particles for the textile market.

3D Printing:

3D Printing concentrates on partnerships and/or licensing opportunities in micro 3D printing solutions such as printed ~~electronics (micro 3D printing) and materials production~~electronics. In addition, for macro 3D printing, ~~companies.~~ AM3D manufactures and sells a specialty material to a 3D printing customer.

IP Licensing:

Kodak actively seeks opportunities to leverage its patents and associated technology in licensing and/or cross-licensing deals to support both revenue growth and its ongoing businesses. While revenues from these licensing activities tend to be unpredictable in nature, this segment carries the potential for revenue generation from intellectual property licensing and new materials businesses.

Eastman Business Park

The Eastman Business Park segment includes the operations of Eastman Business Park, a more than 1,200-acre technology center and industrial complex in Rochester, New York and the leasing activities related to that space. A large portion of this facility is used in Kodak’s own manufacturing and other operations, while the remaining portion is occupied by external tenants or available for rent to external tenants.

~~[33]~~

Segment Revenues

	Three Months Ended				Six Months Ended				Three Months Ended
	June 30,				June 30,				March 31,
(in millions)	2018		2017		2018		2017		2019		2018
Print Systems	$	227	$	236	$	443	$	449	$	192	$	216
Enterprise Inkjet Systems		33		35		64		72		32		31
Flexographic Packaging		38		37		75		70
Software and Solutions		20		22		40		43
Consumer and Film		48		47		96		96
Kodak Software										14		16
Brand, Film and Imaging										49		52
Advanced Materials and 3D Printing Technology		1		—		2		—		2		1
Eastman Business Park		5		4		9		8		2		2
Consolidated total	$	372	$	381	$	729	$	738	$	291	$	318

Segment Operational EBITDA and Consolidated ~~(Loss) Earnings~~Loss from Continuing Operations Before Income Taxes

	Three Months Ended						Six Months Ended						Three Months Ended
	June 30,						June 30,						March 31,
(in millions)	2018			2017			2018			2017			2019			2018
Print Systems	$	8		$	15		$	12		$	27		$	5		$	3
Enterprise Inkjet Systems		1			1			1			1			—			—
Flexographic Packaging		9			8			16			14
Software and Solutions		(1	)		(1	)		(1	)		(1	)
Consumer and Film		(4	)		(5	)		(10	)		(9	)
Kodak Software														(1	)		1
Brand, Film and Imaging														(7	)		(7	)
Advanced Materials and 3D Printing Technology		(5	)		(7	)		(9	)		(15	)		(2	)		(4	)
Eastman Business Park		1			1			1			1			(1	)		(2	)
Depreciation and amortization		(20	)		(22	)		(39	)		(41	)		(15	)		(18	)
Restructuring costs and other		(2	)		(11	)		(4	)		(24	)		(2	)		(2	)
Stock based compensation		(1	)		(3	)		(3	)		(5	)		(3	)		(2	)
Consulting and other costs ⁽¹⁾		(3	)		—			(6	)		(1	)		(3	)		(3	)
Idle costs ⁽²⁾		(1	)		(1	)		(2	)		(2	)		(1	)		(1	)
Manufacturing capacity expansion non-recurring costs⁽³⁾		(1	)		—			(1	)		—
Other operating income (expense), net ⁽⁴⁾		2			(2	)		2			(12	)
Interest expense ⁽⁴⁾		(9	)		(8	)		(17	)		(16	)
Pension income excluding service cost component ⁽⁴⁾		32			37			64			75
Other (charges) income, net ⁽⁴⁾		(1	)		9			(17	)		29
Consolidated earnings (loss) from continuing operations before income taxes	$	5		$	11		$	(13	)	$	21
Former CEO separation agreement compensation														(2	)		—
Interest expense ⁽³⁾														(3	)		(2	)
Pension income excluding service cost component ⁽³⁾														27			32
Other charges, net ⁽³⁾														(1	)		(16	)
Consolidated loss from continuing operations before income taxes													$	(9	)	$	(21	)

[36]

⁽¹⁾	Consulting and other costs are primarily professional services and internal costs associated with certain corporate strategic initiatives.

⁽²⁾	Consists of ~~third party~~third-party costs such as security, maintenance and utilities required to maintain land and buildings in certain locations not used in any Kodak ~~operations.~~operations and the costs, net of any rental income received, of underutilized portions of certain properties.

⁽³⁾	~~Consists of noncapitalizable costs incurred as a result of the Flexographic Packaging segment’s expansion at the manufacturing facility in Weatherford, Oklahoma.~~

⁽⁴⁾	As reported in the Consolidated Statement of Operations.

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”). Operational EBITDA represents the earnings (loss) ~~earnings~~ from continuing operations excluding the provision for income taxes; non-service cost components of pension and OPEB income; depreciation and amortization expense; restructuring costs; stock-based compensation expense; consulting and other costs; idle costs; manufacturing capacity expansion non-recurring costs; other operating ~~expense,~~income (expense), net (unless otherwise indicated); goodwill impairment losses; interest expense; and other ~~(charges) income,~~charges, net.

~~[34]~~

Kodak’s segments are measured using Operational EBITDA both before and after allocation of corporate selling, general and administrative ~~expenses (“SG&A”).~~expenses. The segment earnings measure reported is after allocation of corporate SG&A as this most closely aligns with U.S. GAAP. Research and development activities not directly related to the other segments are reported within the Advanced Materials and 3D Printing Technology segment.

Change in Segment Measure of Profitability

During the first quarter of ~~2018~~2019 the segment measure was changed to exclude ~~amortization~~the costs, net of ~~prior service~~any rental income received, of underutilized portions of certain properties. Additionally, the allocation of costs ~~and credits, which, due~~from EBP to the ~~adoption~~Brand, Film and Imaging segment and Advanced Materials and 3D Printing Technology segment as tenants of ~~ASU 2017-17 are no longer reported in~~EBP and to each of the ~~same line items~~segments as ~~other compensation costs arising from services rendered during~~users of shared corporate space at the ~~period. Refer~~global headquarters changed. Prior year results have been revised to ~~the Recently Adopted Accounting Pronouncements section of Note 1, “Basis of Presentation and Recent Accounting Pronouncements.”~~reflect these changes.

During the second quarter of 2018 the segment measure was changed to exclude manufacturing capacity expansion non-recurring costs for the Flexographic Packaging segment’s expansion at the Weatherford, Oklahoma manufacturing facility. These costs in the prior periods were de minimis and therefore no prior period reclassification is necessary.

~~2018~~2019 COMPARED WITH ~~2017~~2018

~~SECOND~~FIRST QUARTER RESULTS OF OPERATIONS

	Three Months Ended June 30,															Six Months Ended June 30,															Three Months Ended March 31,
(in millions)	2018			% of Sales			2017			% of Sales			$ Change			2018			% of Sales			2017			% of Sales			$ Change			2019			% of Sales			2018			% of Sales			$ Change
Revenues	$	372					$	381					$	(9	)	$	729					$	738					$	(9	)	$	291					$	318					$	(27	)
Cost of revenues		312						311						1			615						606						9			251						280						(29	)
Gross profit		60			16	%		70			18	%		(10	)		114			16	%		132			18	%		(18	)		40			14	%		38			12	%		2
Selling, general and administrative expenses		63			17	%		66			17	%		(3	)		126			17	%		131			18	%		(5	)		59			20	%		58			18	%		1
Research and development costs		14			4	%		18			5	%		(4	)		29			4	%		38			5	%		(9	)		11			4	%		13			4	%		(2	)
Restructuring costs and other		2			1	%		11			3	%		(9	)		4			1	%		18			2	%		(14	)		2			1	%		2			1	%		—
Other operating (income) expense, net		(2	)		(1	)%		2			1	%		(4	)		(2	)		(0	)%		12			2	%		(14	)		—			—			—			—			—
(Loss) earnings from continuing operations before interest expense, other (income) charges, net and income taxes		(17	)		(5	)%		(27	)		(7	)%		10			(43	)		(6	)%		(67	)		(9	)%		24
Loss from continuing operations before interest expense, other charges, net and income taxes																																(32	)		(11	)%		(35	)		(11	)%		3
Interest expense		9			2	%		8			2	%		1			17			2	%		16			2	%		1			3			1	%		2			1	%		1
Pension income excluding service cost component		(32	)		(9	)%		(37	)		(10	)%		5			(64	)		(9	)%		(75	)		(10	)%		11			(27	)		(9	)%		(32	)		(10	)%		5
Other charges (income), net		1			0	%		(9	)		(2	)%		10			17			2	%		(29	)		(4	)%		46
Earnings (loss) from continuing operations before income taxes		5			1	%		11			3	%		(6	)		(13	)		(2	)%		21			3	%		(34	)
Other charges, net																																1			0	%		16			5	%		(15	)
Loss from continuing operations before income taxes																																(9	)		(3	)%		(21	)		(7	)%		12
Provision for income taxes		1			0	%		4			1	%		(3	)		8			1	%		7			1	%		1			3			1	%		4			1	%		(1	)
Earnings (loss) from continuing operations		4			1	%		7			2	%		(3	)		(21	)		(3	)%		14			2	%		(35	)
Loss from continuing operations																																(12	)		(4	)%		(25	)		(8	)%		13
Loss from discontinued operations, net of income taxes		—			—			(3	)		1	%		3			—			—			(3	)		0	%		3			(6	)		(2	)%		—			—			(6	)
Net income (loss)	$	4			1	%	$	4			1	%	$	—		$	(21	)		(3	)%	$	11			1	%	$	(32	)
Net loss																															$	(18	)		(6	)%	$	(25	)		(8	)%	$	7

[~~35]~~37]

Revenue

~~Current Quarter~~

For the three months ended ~~June 30, 2018~~March 31, 2019 revenues declined $9$27 million compared with the same period in ~~2017. Volume~~2018, driven by volume and pricing declines within Print Systems ($~~16 million) were offset by favorable~~10 million and $6 million, respectively) and unfavorable foreign currency ($11 million). See segment discussions for additional details.

~~Year to Date~~Gross Profit

~~For~~The increase in gross profit for the ~~six~~three months ended ~~June 30, 2018 revenues declined $9~~March 31, 2019 of approximately $2 million compared with the same period in ~~2017. Volume~~2018 reflected aluminum tariff refunds and ~~pricing declines within~~cost improvements in Print Systems ($274 million) ~~and Enterprise Inkjet Systems ($11 million) were~~partially offset by ~~favorable~~unfavorable foreign currency ($312 million). See segment discussions for additional details.

~~Gross Profit~~

~~Current Quarter~~

The decrease in gross profit for the three months ended June 30, 2018 of approximately $10 million compared with the same period in 2017 reflected volume and pricing declines within Print Systems ($6 million) and higher aluminum costs within Print Systems ($7 million), partially offset by other favorable costs in Print Systems ($4 million). See segment discussions for additional details.

~~Year to Date~~

The decrease in gross profit for the six months ended June 30, 2018 of approximately $18 million compared with the same period in 2017 reflected volume and pricing declines within Print Systems ($10 million) and Enterprise Inkjet Systems ($6 million), higher aluminum costs within Print Systems ($15 million), partially offset by reduced inventory write-offs due to restructuring ($6 million), favorable costs in Print Systems ($6 million) and favorable foreign currency ($4 million). See segment discussions for additional details.

Selling, General and Administrative Expenses

Consolidated SG&A ~~decreased $3 million and $5~~increased $1 million for the quarter ~~and six months~~ ended ~~June 30, 2018~~March 31, 2019 primarily due to $2 million of compensation included in the former CEO separation agreement offset by lower investment in segment selling and marketing activities ($3 million and $6 million, respectively), driven by a lower investment in Print Systems during the quarter and Print Systems and Enterprise Inkjet Systems in the six month period, in addition to lower stock compensation expense ($1 ~~million and $2 million, respectively), partially offset by higher costs associated with strategic initiatives such as asset sales and debt restructuring ($3 million and $4 million, respectively)~~million).

Research and Development Costs

Consolidated R&D expenses decreased ~~$4 million and $9~~$2 million for the quarter ~~and first six months~~ ended ~~June 30, 2018~~March 31, 2019 primarily due to the reduced level of investment ~~in Advanced Materials and 3D Printing ($3 million and $7 million, respectively).~~across the segments.

PRINT SYSTEMS SEGMENT

	Three Months Ended June 30,									Six Months Ended June 30,									Three Months Ended March 31,
(in millions)	2018			2017			$ Change			2018			2017			$ Change			2019			2018			$ Change
Revenues	$	227		$	236		$	(9	)	$	443		$	449		$	(6	)	$	192		$	216		$	(24	)

Operational EBITDA	$	8		$	15		$	(7	)	$	12		$	27		$	(15	)	$	5		$	3		$	2
Operational EBITDA as a % of revenues		4	%		6	%					3	%		6	%					3	%		1	%

The decrease in Print Systems revenues for the three months ended ~~June 30, 2018~~March 31, 2019 of approximately $9$24 million primarily reflected ~~lower~~volume and pricing ~~($2 million) driven by competitive pressures in the industry combined with volume~~ declines ($~~11 million)~~7 million and $3 million, respectively) in Prepress Solutions ~~and~~consumables, volume declines ~~($2 million)~~and unfavorable product mix in Electrophotographic Printing Solutions consumables and ~~service. Partially offsetting the declines was favorable~~service ($1 million and $2 million, respectively) and unfavorable product mix in Electrophotographic Printing Solutions equipment ($1 million) as well as unfavorable foreign currency ($89 million).

The decrease in Print Systems revenues for the six months ended June 30, 2018 of approximately $6 million reflected lower pricing ($6 million) driven by competitive pressures in the industry combined with volume declines ($15 million) in Prepress Solutions, and volume declines ($5 million) in Electrophotographic Printing Solutions consumables and service. Partially offsetting the declines was favorable foreign currency ($22 million).

~~The decrease in~~ Print Systems Operational EBITDA for the three months ended ~~June 30, 2018~~March 31, 2019 improved $2 million compared to the prior year reflecting refunds of ~~approximately $7 million reflected lower pricing ($2~~aluminum tariffs which were paid by Kodak over the prior two quarters and manufacturing cost improvements (each $2 million) in Prepress Solutions ~~volume declines~~consumables and lower investment in ~~Electrophotographic Printing Solutions~~sales and marketing activities ($2 ~~million) and higher aluminum costs ($7~~ million) partially offset by ~~manufacturing cost improvements in Prepress consumables ($4 million)~~volume and ~~lower SG&A costs ($2 million).~~

~~The decrease in Print Systems Operational EBITDA for the six months ended June 30, 2018 of approximately $15 million reflected lower~~ pricing ~~($6 million) and volume~~ declines ($~~2 million)~~1 million and $2 million, respectively) in Prepress Solutions ~~higher~~consumables and service.

During 2018 U.S. tariffs imposed on aluminum ~~costs ($15 million) and~~purchases were included as part of the ~~unfavorable impact~~cost of ~~currency ($3 million) partially offset~~printing plates sold. In January 2019, Kodak received retroactive exemptions on U.S. tariffs for aluminum. Due to the exemptions, all aluminum tariffs paid by ~~manufacturing~~Kodak in prior periods have been recognized as a cost ~~improvements~~reduction in ~~Prepress consumables ($6 million) and lower SG&A costs ($5 million).~~the current period.

The ~~decrease~~improvement in Enterprise Inkjet Systems revenues for the three months ended ~~June 30, 2018~~March 31, 2019 of approximately $2$1 million primarily reflected higher volume of PROSPER systems ($3 million) and service and consumables ($2 million) partially offset by lower volume of VERSAMARK service and consumables ($~~3 million) due to declines in the installed base of VERSAMARK systems.~~

~~The decrease in Enterprise Inkjet Systems revenues for the six months ended June 30, 2018 of approximately $8 million primarily reflected lower volume of VERSAMARK service and consumables ($6~~2 million) due to declines in the installed base of VERSAMARK systems, lower volume of ~~VERSAMARK system placements ($4 million) primarily due to the placement of used equipment in the prior year and unfavorable product mix and pricing for Prosper~~PROSPER components ($1 million)~~. The~~ and the unfavorable ~~impacts were partially offset by the favorable~~ impact of currency ($~~3 million) and volume improvements in PROSPER annuities ($~~1 million).

Enterprise Inkjet Systems Operational EBITDA for the three months ended ~~June 30, 2018~~March 31, 2019 was ~~flat~~unchanged.

Kodak Software revenues for the three months ended March 31, 2019 declined $2 million primarily due lower volume ($2 million).

Kodak Software Operational EBITDA declined $2 million for the three months ended March 31, 2019 compared to the prior year quarter primarily ~~reflecting service and manufacturing cost improvements and~~due to lower volume ($1 million) combined with a ~~lower level of~~larger investment in selling and marketing ~~advertising and sales~~ activities ~~(each $1 million) partially offset by the lower volume of VERSAMARK service and consumables and unfavorable product mix and pricing for Prosper components (each $1 million).~~

Enterprise Inkjet Systems Operational EBITDA for the six months ended June 30, 2018 was flat compared to the prior year first six months primarily due to service and manufacturing cost improvements ($1 million) and a lower level of investment in marketing, advertising and sales activities ($3 million) and R&D activities ($2 million) partially offset by the lower volume of VERSAMARK service, consumables and equipment ($4 million) and unfavorable product mix and pricing for Prosper components ($1 million).

The ~~increase~~decrease in ~~Flexographic Packaging~~Brand, Film and Imaging revenues for the three months ended June 30, 2018 of approximately $1 million primarily reflected volume improvements in FLEXCEL NX consumables ($2 million) due to a larger installed base of FLEXCEL NX systems and the favorable impact of currency ($1 million) partially offset by lower volumes of FLEXCEL NX equipment ($1 million) and declining revenues from other packaging products ($1 million).

The increase in Flexographic Packaging revenues for the six months ended June 30, 2018 of approximately $5 million primarily reflected volume improvements in FLEXCEL NX consumables ($5 million) due to a larger installed base of FLEXCEL NX systems and the favorable impact of currency ($3 million) partially offset by declining revenues from other packaging products ($2 million).

Flexographic Packaging Operational EBITDA improved $1 million for the quarter ended June 30, 2018 primarily reflecting volume improvements in FLEXCEL NX consumables ($1 million) offset by increased investment in product development, marketing and sales activities ($1 million).

The improvement in Flexographic Packaging Operational EBITDA of approximately $2 million in the six months ended June 30, 2018 was primarily driven by volume improvements in FLEXCEL NX consumables ($3 million) and the favorable impact of currency ($1 million) partially offset by increased investment in product development, marketing and sales activities ($2 million).

~~The decline in Software and Solutions revenues for the three months ended June 30, 2018 of approximately $2 million was primarily due to lower volume in United Workflow Solutions ($2 million).~~

~~The decline in Software and Solutions revenues for the six months ended June 30, 2018~~March 31, 2019 of approximately $3 million was primarily due to ~~lower volume in United Workflow Solutions ($4 million) partially offset by the favorable impact of currency ($1 million).~~

Software and Solutions Operational EBITDA was flat for the three and six months ended June 30, 2018 primarily reflecting lower costs ($2 million and $3 million, respectively) offsetting volume declines in United Workflow Solutions ($1 million and $3 million, respectively).

The increase in Consumer and Film revenues for the three months ended June 30, 2018 of approximately $1 million was primarily due to higher volume in Industrial Film and Chemicals ($3 million) primarily due to timing of customer orders, higher brand licensing revenue (due to the modified retrospective adoption approach of ASU 2014-09) and the favorable impact of currency (each $1 million) partially offset by volume declines in Consumer Inkjet Systems ($2 million) driven by lower sales of ink to the existing installed base of printers, ~~and~~ lower ~~volume in Motion Picture ($2 million).~~

~~Consumer and Film revenues for the six months ended June 30, 2018 were unchanged from the prior year, primarily reflecting higher~~ volume in Industrial Film and Chemicals ~~($2 million) primarily due to timing of customer orders, higher brand licensing revenue (due to the modified retrospective adoption approach of ASU 2014-09)~~ and the ~~favorable~~unfavorable impact of currency (each $2$1 million) partially offset by favorable volume ~~declines~~ in ~~Consumer Inkjet Systems~~Kodakit ($61 million) ~~driven by lower sales of ink to the existing installed base of printers.~~.

~~The improvement in Consumer~~Brand, Film and ~~Film~~Imaging Operational EBITDA for the three months ended ~~June 30, 2018 of approximately $1 million~~March 31, 2019 was unchanged compared with the prior year quarter primarily ~~reflected higher brand licensing revenue (due to the modified retrospective adoption approach of ASU 2014-09), the favorable impact of currency and lower SG&A (each $1 million) partially~~reflecting cost improvements in Motion Picture offset by volume declines in Consumer Inkjet Systems driven by lower sales of ink to the existing installed base of printers ~~($1 million)~~ and ~~higher costs~~volume declines in Industrial Film and Chemicals ~~($2~~(each $1 million).

The decrease in Consumer and Film Operational EBITDA for the six months ended June 30, 2018 of approximately $1 million primarily reflected volume declines in Consumer Inkjet Systems ($4 million) driven by lower sales of ink to the existing installed base of printers and unfavorable cost in Industrial Film and Chemicals ($4 million) partially offset by higher brand licensing revenue, the favorable impact of currency and lower SG&A (each $2 million).

Advanced Materials and 3D Printing Technology Operational EBITDA for the ~~quarter and six~~three months ended ~~June 30, 2018~~March 31, 2019 improved by approximately $2 million ~~and $6 million, respectively,~~primarily due to ~~the reduced~~a lower level of ~~investment.~~investment in selling, marketing and R&D activities ($1 million).

Eastman Business Park revenue and Operational EBITDA for the ~~quarter and six~~three months ended ~~June 30, 2018~~March 31, 2019 did not change significantly compared to the prior year periods.

A tenant that represented approximately thirty percent of segment revenues, for both the six months ended June 30, 2018 and the year ended December 31, 2017 notified Kodak that it does not plan to renew its lease upon expiration in the third quarter of 2018.

Kodak recorded $2 million ~~and $4 million~~ of charges for the ~~quarter and six~~three months ended ~~June 30, 2018,~~March 31, 2019, which were reported as Restructuring costs and other in the Consolidated Statement of Operations.

Kodak made cash payments related to restructuring of approximately ~~$5 million and $9~~$2 million during the ~~quarter and six~~three months ended ~~June 30, 2018.~~March 31, 2019.

The restructuring actions implemented in the first ~~six~~three months of ~~2018~~2019 are expected to generate future annual cash savings of approximately $6$3 million. These savings are expected to reduce future annual Cost of revenues, and SG&A, expenses by $2$1 million, and $4$2 million, respectively. Kodak began realizing a portion of these savings in the first ~~six~~three months and expects the majority of the annual savings to be in effect by the end of ~~2018~~the third quarter of 2019 as actions are completed.

Kodak has debt due in 2019 and is facing liquidity challenges due to negative cash flow. Based on forecasted cash flows, there are uncertainties regarding Kodak’s ability to meet commitments in the U.S. as they come due. Kodak’s plans to improve cash flow include reducing interest expense by decreasing the debt balance using proceeds from asset sales, including the completed sale of FPD; further restructuring Kodak’s cost structure; and paring investment in new technology by eliminating, slowing, and partnering with investors in product development programs. The divestiture of FPD will negatively impact segment earnings and cash flow. The Company has been engaged in negotiations to refinance the remaining $83 million of the loans under the Term Credit Agreement not repaid with proceeds from the sale of FPD. The Company intends to complete the refinancing prior to the maturity of the Term Credit Agreement or the ABL Credit Agreement and prior to the date on which any event of default would occur under the Term Credit Agreement.

The loans made under the Term Credit Agreement become due on the earlier to occur of (i) the maturity date of September 3, 2019 or (ii) an acceleration of such loans following the occurrence of an event of default (as defined in the Term Credit Agreement). The Company also has issued approximately $85 million of letters of credit under the ABL Credit Agreement as of both March 31, 2019 and December 31, 2018. Should the Company not repay, refinance or extend the maturity of the loans under the Term Credit Agreement prior to June 5, 2019, the Termination Date will occur under the ABL Credit Agreement on such date unless the ABL Credit Agreement has been amended in the interim. Upon the occurrence of the Termination Date under the ABL Credit Agreement, the obligations thereunder will become due and the Company will need to either cash collateralize the letters of credit or provide alternate collateral in place of the letters of credit issued under the ABL Credit Agreement.

Kodak does not have committed financing or sufficient available liquidity to pay the $83 million of remaining loans under the Term Credit Agreement on or before June 5, 2019. The Company has been engaged in negotiations to refinance such loans and expects to refinance the Term Credit Agreement prior to June 5, 2019. If a refinancing is not completed by such date, the Company would seek an extension of the Termination Date under the ABL Credit Agreement to allow the completion of such refinancing without resulting in a termination under the ABL Credit Agreement.

The refinancing of the loans under the Term Credit Agreement is not solely within Kodak’s control. Executing agreements for a refinancing of the loans under the Term Credit Agreement and the timing for a closing of a refinancing of the loans under the Term Credit Agreement are dependent upon several external factors outside Kodak’s control, including but not limited to, the ability of the Company to reach acceptable agreements with different counterparties and the time required to meet conditions to closing under the terms of any refinancing.

Kodak makes no assurances regarding the likelihood, certainty or timing of consummating a refinancing of the Company’s existing debt, regarding the sufficiency of any such refinancing to meet Kodak’s debt obligations, including compliance with debt covenants, or other commitments in the U.S. as they come due, or obtaining an extension of the termination date under the ABL Credit Agreement.

These conditions raise substantial doubt about Kodak’s ability to continue as a going concern.

Refer to the Going Concern section of Note 1, “Summary of Significant Accounting Policies”; Note 7, "Debt and Finance Leases," and Note 8, “Redeemable, Convertible Series A Preferred Stock” in the Notes to Financial Statements for further discussion of long-term debt and convertible preferred shares.

Net cash used in operating activities improved ~~$25~~$15 million for the ~~six~~three months ended ~~June 30, 2018~~March 31, 2019 as compared with the corresponding period in ~~2017 driven~~2018 primarily due to lower cash spend on inventory and accounts payable, partially offset by ~~less~~higher levels of cash used ~~in the~~to settle other current ~~year period to satisfy accounts payable and other~~ liabilities.

Net cash used in investing activities ~~increased $2~~improved $7 million for the ~~six~~three months ended ~~June 30, 2018~~March 31, 2019 as compared with the corresponding period in ~~2017.~~2018 due to a lower level of capital improvements.

Net cash used in financing activities ~~increased $1~~improved $7 million in the ~~six~~three months ended ~~June 30, 2018~~March 31, 2019 as compared with the corresponding period in ~~2017~~2018 due to ~~a lower dividend payment made to~~proceeds from the ~~holders of~~RED borrowing and no Series A Preferred Stock dividend payment in the ~~prior~~current year aspartially offset by the ~~dividend reflected~~payment in the ~~partial quarter~~current year of contingent consideration related to the ~~Series A Preferred Stock was outstanding.~~2013 sale of a business.

Available liquidity includes cash balances and the unused portion of the ~~Amended~~ABL Credit Agreement. The ~~Amended~~ABL Credit Agreement had ~~$29~~$21 million of net availability (“Excess Availability”) as of ~~June 30, 2018.~~March 31, 2019. The amount of available liquidity is subject to fluctuations and includes cash balances held by various entities worldwide. At ~~June 30, 2018~~March 31, 2019 and December 31, ~~2017~~2018 approximately ~~$133~~$94 million and ~~$172~~$117 million, respectively, of cash and cash equivalents were held within the U.S. and approximately ~~$142~~$147 million and ~~$172~~$131 million, respectively, of cash and cash equivalents were held outside the U.S. Cash balances held outside the U.S. are generally required to support local country operations and may have high tax costs or other limitations that delay the ability to repatriate, and therefore may not be readily available for transfer to other jurisdictions. Kodak utilizes cash balances outside the U.S. to fund needs in the U.S. through the use of inter-company loans. As of ~~June 30,~~March 31, 2019 and December 31, 2018, outstanding inter-company loans to the U.S. were ~~$394~~$386 million and $390 million, respectively, which includes short-term inter-company loans from Kodak’s international finance center of ~~$95~~$87 million and $92 million. In China, where approximately ~~$77~~$88 million and $72 million of cash and cash equivalents was held as of ~~June 30,~~March 31, 2019 and December 31, 2018, respectively, there are limitations related to net asset balances that may impact the ability to make cash available to other jurisdictions in the world. Under the terms of the ~~Senior Secured First Lien~~ Term Credit Agreement ~~(the “Term Credit Agreement”)~~ and the ~~Amended~~ABL Credit Agreement, the Company is permitted to invest up to $100 million in subsidiaries and joint ventures that are not party to these loan agreements.

As of June 30, 2018 and December 31, 2017, Kodak had funded $0 million and $6 million, respectively, to the Eligible Cash account held with the Amended and Restated Credit Agreement Administrative Agent which was classified as Restricted cash in the Consolidated Statement of Financial Position, supporting the Excess Availability amount.

During the second quarter of 2017, the Company reduced the amount of outstanding letters of credit issued under the Amended Credit Agreement by $20 million, which increased the amount of Excess Availability by a corresponding amount, enabling the Company to release Eligible Cash. The reduction of outstanding letters of credit was primarily attributable to the substitution of partially collateralized surety bonds in place of outstanding letters of credit. As a result of the Company’s current credit ratings, the Company could be required to provide up to $19 million of letters of credit to the issuers of the surety bonds to fully collateralize the bonds.

Under the ~~Amended~~ABL Credit Agreement, if Excess Availability ($2921 million at ~~June 30, 2018)~~March 31, 2019) falls below 12.5% of lender commitments ($18.75 million at ~~June 30, 2018)~~March 31, 2019), Kodak would be required to be in compliance with the minimum Fixed Charge Coverage Ratio (the only financial covenant in the ~~Amended~~ABL Credit Agreement) and could become subject to cash dominion control. In addition to Eligible Cash, the borrowing base is supported by Eligible Receivables, Eligible Inventory and Eligible Equipment. To the extent the assets supporting the borrowing base decline and/or letters of credit issued under the Amended Credit Agreement increase, if the remaining assets included in the borrowing base are not sufficient to support the required Excess Availability amount, funding of Eligible Cash may be required. Kodak intends to maintain Excess Availability above the minimum threshold. Since Excess Availability was greater than 12.5% of lender commitments as of ~~June 30, 2018,~~March 31, 2019, Kodak is not required to have a minimum Fixed Charge Coverage Ratio of 1.0 to 1.0. As of ~~June 30, 2018, Kodak is in compliance with all covenants under the Amended Credit Agreement. As of June 30, 2018~~March 31, 2019 Fixed Charges exceeded EBITDA (as defined in the ~~Amended~~ABL Credit ~~agreement)~~Agreement) by approximately $8$9 million.

During the second quarter of 2017, the Company reduced the amount of outstanding letters of credit issued under the ABL Credit Agreement by $20 million, which increased the amount of Excess Availability by a corresponding amount, enabling the Company to release Eligible Cash. The reduction of outstanding letters of credit was primarily attributable to the substitution of partially collateralized surety bonds in place of outstanding letters of credit. As a result of the Company’s credit ratings, the Company was required to provide $6 million in letters of credit to the issuers of the surety bonds during the third quarter of 2018. The Company could be required to provide up to an additional $13 million of letters of credit to the issuers of the surety bonds in the future to fully collateralize the bonds.

As of March 31, 2019 and December 31, 2018, Kodak had funded $0 million and $3 million, respectively, to the Eligible Cash account held with the ABL Credit Agreement Administrative Agent which was classified as Restricted cash in the Consolidated Statement of Financial Position, supporting the Excess Availability amount. Kodak added $12 million to the Eligible Cash account in April 2019 primarily to offset the reduction in assets supporting the borrowing base caused by the divestiture of FPD.

Under the terms of the Term Credit Agreement, Kodak is required to maintain a Secured Leverage Ratio (the only financial covenant in the Term Credit Agreement) not to exceed 2.75 to 1. The Secured Leverage Ratio is tested at the end of each quarter based on the prior four quarters and is generally determined by dividing secured debt, net of U.S. cash and cash equivalents, by consolidated EBITDA, as calculated under the Term Credit Agreement. As of ~~June 30, 2018,~~March 31, 2019, Kodak’s EBITDA, as calculated under the Term Credit Agreement, exceeded the EBITDA necessary to satisfy the covenant ratio by approximately ~~$19~~$65 million.

Under the terms of the ~~Amended Credit and Term~~ Credit Agreements, ~~(the “Credit Agreements”),~~ the Company may designate Restricted Subsidiaries as Unrestricted Subsidiaries provided the aggregate sales of all Unrestricted Subsidiaries are less than 7.5% of the consolidated sales of Kodak and the aggregate assets of all Unrestricted Subsidiaries are less than 7.5% of Kodak’s consolidated assets. Further, under the ~~Amended~~ABL Credit Agreement, on a pro forma basis at the time of designation and immediately after giving effect thereto, Excess Availability must be at least $30 million and the pro forma Fixed Charge Coverage Ratio must be no less than 1.0 to 1.0. Upon designation of Unrestricted Subsidiaries, the Company ~~will be~~is required to provide to the Lenders reconciling statements to eliminate all financial information pertaining to Unrestricted Subsidiaries which is included in its annual and quarterly financial statements.

In March 2018, the Company designated five subsidiaries as Unrestricted ~~Subsidiaries,~~Subsidiaries: Kodak PE Tech, LLC, Kodak LB Tech, LLC, Kodak Realty, Inc., Kodakit Singapore Pte. Limited and KP Services (Jersey) Ltd. This action allowed the Company to better position assets which may be monetized in the future and address costs related to underutilized properties. Collectively, these subsidiaries had sales of approximately $3$4 million and $5$2 million for the ~~quarter and six~~three months ended ~~June 30,~~March 31, 2019 and 2018 , respectively, which represents 1% and 0% of Kodak’s consolidated sales, ~~for both periods. Collectively, these~~respectively. These subsidiaries had assets of $23 million and $21 million as of ~~June 30,~~March 31, 2019 and December 31, 2018, respectively, which represents 1% of Kodak’s consolidated assets as of ~~June 30, 2018.~~ both periods. EBITDA of the Unrestricted Subsidiaries, as calculated under the Term Credit Agreement and the ABL Credit Agreement, is a loss and is excluded from the calculation of the Secured Leverage Ratio. Therefore, designating these Subsidiaries as Unrestricted had the impact of improving the Secured Leverage Ratio.

The designation of these subsidiaries as Unrestricted Subsidiaries increased the amount by which the Company’s EBITDA, as calculated under the ~~Term~~ Credit ~~Agreement and the Amended Credit Agreement,~~Agreements, exceeded the amount of EBITDA needed to satisfy the Net Secured Leverage Ratio covenant of 2.75 to 1.0 by ~~$22~~$20 million and the Fixed Charge Coverage Ratio of 1.0 to 1.0 by ~~$23~~$21 million in ~~June 2018.~~March 2019. Each of the capitalized but undefined terms has the meaning ascribed to such term in the Credit Agreements.

Kodak intends to conduct its operations in a manner that will result in continued compliance with the Secured Leverage Ratio covenant; however, compliance for future quarters may depend on Kodak undertaking one or more non-operational transactions, such as the repatriation of cash into the U.S., the management of operating cash outflows, the designation of additional subsidiaries as Unrestricted Subsidiaries, a monetization of assets, a debt refinancing, the raising of equity capital, or a similar transaction. If Kodak is unable to remain in compliance and does not make alternate arrangements with its term lenders, an event of default would occur under Kodak’s credit agreements which, among other remedies, would entitle the lenders or their agents to declare the outstanding obligations under the ~~Term~~ Credit ~~Agreement~~Agreements to be immediately due and payable.

Kodak made net contributions (funded plans) or paid benefits (unfunded plans) totaling approximately $6$7 million to its defined benefit pension and postretirement benefit plans in the first ~~six~~three months of ~~2018.~~2019. For the balance of ~~2018,~~2019, the forecasted contribution (funded plans) and benefit payment (unfunded plans) requirements for its pension and postretirement plans are approximately ~~$15~~$14 million.

Cash flow from investing activities included ~~$17~~$3 million of capital expenditures for the ~~six~~three months ended ~~June 30, 2018.~~March 31, 2019. Kodak expects approximately ~~$25~~$15 million to ~~$35~~$25 million of total capital expenditures for ~~2018.~~

Kodak is expanding its manufacturing facility in Weatherford, Oklahoma to provide additional production capacity for FLEXCEL NX Plates. The additional capacity will supplement Kodak’s existing plate manufacturing facility in Yamanashi, Japan and is designed to meet increasing demand. The new production line is expected to be in full production by mid-2019 and will initially focus on supplying FLEXCEL NX Plates to customers in the United States, Canada and Latin America. Kodak invested approximately $7 million in 2017 and approximately $5 million in the first six months of 2018. The investment for the full year 2018 is expected to be approximately $7 million and the total investment for the project is expected to be approximately $14 million.

The loans made under the First Lien Term Credit Agreement become due on the earlier to occur of (i) the maturity date of September 3, 2019 or (ii) an acceleration of such loans following the occurrence of an event of default (as defined in the First Lien Term Credit Agreement). The Company also has issued approximately $79 million and $96 million of letters of credit under the Amended Credit Agreement as of June 30, 2018 and December 31, 2017, respectively. Should the Company not repay, refinance or extend the maturity of the loans under the existing First Lien Term Credit Agreement prior to June 5, 2019, the termination date will occur under the Amended Credit Agreement on such date unless the Amended Credit Agreement has been amended in the interim. Upon the occurrence of the termination date under the Amended Credit Agreement, the obligations thereunder will become due and the Company will need to provide alternate collateral in place of the letters of credit issued under the Amended Credit Agreement. Kodak has entered into a non-binding letter of intent with a counterparty which holds a significant principal amount of the loans under the First Lien Term Credit Agreement, which would provide for a complete refinancing of the loans under the First Lien Term Credit Agreement with a maturity date of 18 months from closing. In addition, Kodak has retained an investment banker in connection with, and is actively pursuing, a sale of its Flexographic Packaging segment. All net proceeds from any sale of its Flexographic Packaging segment will first be used to pay down outstanding debt under the First Lien Term Credit Agreement. However, the sale of the Flexographic Packaging segment and refinancing of the loans under the First Lien Term Credit Agreement ~~are not solely within Kodak’s control. Additionally, Kodak~~ ~~is facing liquidity challenges due to negative cash flow. Based on forecasted cash flows, there are uncertainties regarding Kodak’s ability to meet commitments in the U.S. as they come due~~. Kodak’s plans to improve cash flow include reducing interest expense by decreasing the debt balance using proceeds from asset sales; further restructuring Kodak’s cost structure and paring investment in new technology by eliminating, slowing, and partnering with investors in product development programs. Kodak is also exploring options regarding additional liquidity from other sources. Kodak makes no assurances regarding the likelihood, certainty or timing of consummating a sale of the Flexographic Packaging segment or refinancing of the Company’s debt or regarding the sufficiency of any such actions to meet Kodak’s debt obligations, including compliance with debt covenants, or other commitments in the U.S. as they come due.2019.

Item ~~3. Quantitative~~4. Controls and ~~Qualitative Disclosures About Market Risk~~

Kodak, as a result of its global operating and financing activities, is exposed to changes in foreign currency exchange rates, commodity prices, and interest rates, which may adversely affect its results of operations and financial position. In seeking to minimize the risks associated with such activities, Kodak may enter into derivative contracts. Kodak does not utilize financial instruments for trading or other speculative purposes. Foreign currency forward contracts are used to hedge existing foreign currency denominated assets and liabilities, especially those of Kodak’s International Treasury Center, as well as forecasted foreign currency denominated inter-company sales. Kodak’s exposure to changes in interest rates results from its investing and borrowing activities used to meet its liquidity needs. Long-term debt is generally used to finance long-term investments, while short-term debt is used to meet working capital requirements.

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 June 30, 2018 and December 31, 2017, the fair value of open forward contracts would have decreased by $13 million and $21 million, respectively. Such changes in fair value would be substantially offset by the revaluation or settlement of the underlying positions hedged.

Kodak is exposed to interest rate risk primarily through its borrowing activities. Kodak may utilize borrowings to fund its working capital and investment needs. The majority of short-term and long-term borrowings are in variable rate instruments. There is inherent roll-over risk for borrowings and marketable securities as they mature and are renewed at current market rates. The extent of this risk is not predictable because of the variability of future interest rates and business financing requirements.

Kodak’s Senior Secured First Lien Term Credit Agreement and Amended Credit Agreement are in variable-rate instruments, the Senior Secured First Lien Term Credit Agreement with an interest rate floor. At June 30, 2018 the three-month LIBOR rate was approximately 2.34%. At December 31, 2017 the one-month LIBOR rate was approximately 1.56%. When LIBOR rates rise above the 1% floor, interest expense increases approximately $4 million per annum for each 1% of LIBOR above the floor ($395 million face amount of debt times 1% at June 30, 2018).

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 June 30, 2018 was not significant to Kodak.

Kodak maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in Kodak’s reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including Kodak’s ~~Chief~~ Executive ~~Officer~~Chairman and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Kodak’s management, with participation of Kodak’s ~~Chief~~ Executive ~~Officer~~Chairman and Chief Financial Officer, has evaluated the effectiveness of Kodak’s disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q. Kodak’s ~~Chief~~ Executive ~~Officer~~Chairman and Chief Financial Officer have concluded that, as of the end of the period covered by this Quarterly Report on Form 10-Q, Kodak’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective.

During the quarter ended March 31, 2019, Kodak implemented certain internal controls in connection with the adoption of ASC 842. There have been no other changes in Kodak’s internal control over financial reporting during the most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, Kodak’s internal control over financial reporting.

Kodak’s Brazilian operations are involved in various litigation matters 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 and income taxes. Kodak’s Brazilian operations are disputing these matters and intend to vigorously defend their position. Kodak routinely assesses 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, 2018,~~March 31, 2019, Kodak maintained accruals of approximately ~~$10~~$4 million for claims aggregating approximately ~~$180~~$152 million inclusive of interest and penalties where appropriate. In connection with assessments and litigation in Brazil, local regulations may require Kodak to post security for a portion of the amounts in dispute. Generally, any encumbrances ofon the Brazilian assets would be removed to the extent the matter is resolved in Kodak’s favor.

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 does not believe that it is probable that the outcomes in any of these 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.

~~Kodak operates~~Reference is made to the Risk Factors set forth in rapidly changing economic and technological environments which present numerous risks, many of which are driven by factors it cannot control or predict. Certain factors may have a material adverse effect on its business, financial condition, and results of operations. You should consider carefully the risks and uncertainties described below in addition to other information contained in this Quarterly Report on Form 10-Q, including the Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) section and the consolidated financial statements and related notes, and the information in the Company’s Annual Report on Form 10–K for the year ended December 31, 2017 and the Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2018. The following discussion of “risk factors” identifies Kodak’s assessmentPart I, Item 1A. of the ~~most significant factors which may adversely affect its business, operations, financial position or future financial performance. Additional risks and uncertainties~~2018 Form 10-K. The Risk Factors remain applicable from the 2018 Form 10-K; however, Kodak ~~is unaware of, or currently believes are not material, may also become important factors which could adversely affect its business, operations, financial position or future financial performance.~~

If Kodak is not able to successfully implement its business plans, or experiences implementation delays in cost structure reduction, Kodak’s consolidated results of operations, financial position and liquidity could be negatively affected.

Kodak’s business plans are subject to a number of assumptions, projections, and analysis. If these assumptions prove to be incorrect, Kodak may be unsuccessful in executing its business plans or achieving the projected results, which could adversely impact its financial results and liquidity. In addition, Kodak continues to rationalize its workforce and streamline operations to a leaner and more focused organization aligned with its business initiatives. There are no assurances such measures will prove to be successful or the cost savings or other results it achieves through these plans will be consistent with its expectations. As a result, its results of operations, financial position and liquidity could be negatively impacted. If restructuring plans are not effectively managed, it may experience lost customer sales, product delays, additional costs and other unanticipated effects, causing harm to its business and customer relationships. Finally, the timing and implementation of these plans require compliance with numerous laws and regulations, including local labor laws, and the failure to comply with such requirements may result in damages, fines and penalties which could adversely affect Kodak’s business.

~~The ability to generate positive operating cash flows will be necessary for Kodak to continue to operate its business.~~

Kodak has not generated positive operating cash flows over the past four years and, based on forecasted cash flows, there are uncertainties regarding its ability to meet commitments in the U.S. as they come due. The Print Systems segment is its largest segment and has had declining revenues and segment earnings which are expected to continue to decline. Kodak’s stable and growth businesses may not grow or continue to generate the same or enough cash flow to offset businesses with declining cash flows. Kodak may be unable to generate positive cash flow from operations in the future, which would have a material adverse effect on its liquidity and financial position. If Kodak is unable to generate positive cash flow from operations or to adequately supplement such cash flow from operations with proceeds fromnotes that the sale of ~~businesses or assets or other monetization transactions,~~ ~~its ability to continue as a going concern could be impaired.~~

Continued investment, capital needs, restructuring payments, dividends and servicing the Company’s debt require a significant amount of cash and it may not be able to generate sufficient cash to fund these activities, which could adversely affect its business, operating results and financial condition.

~~Kodak’s business may not generate cash flow in an amount sufficient to enable it to pay the principal or mandatory redemption price of, or interest and dividends~~FPD was completed on its indebtedness and Series A Preferred Stock, or to fund Kodak’s other liquidity needs, including working capital, capital expenditures, product development efforts, strategic acquisitions, investments and alliances, restructuring actions and other general corporate requirements.

~~Kodak’s ability to generate cash is subject to general economic, financial, competitive, litigation, regulatory and other factors beyond its control. There are no assurances:~~

If Kodak cannot fund its liquidity needs, it 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. Such actions could increase the Company’s debt, negatively impact customer confidence in its ability to provide products and services, reduce its ability to raise additional capital and delay sustained profitability. There are no assurances any of these actions could, if necessary, be taken on commercially reasonable terms, or at all, or they would satisfy Kodak’s liquidity needs. In addition, if it were to incur additional debt, the risks associated with the Company’s substantial leverage, including the risk it will be unable to service its debt, generate cash flow sufficient to fund its liquidity needs, or maintain compliance with the covenants in the Credit Agreements, could significantly increase.

~~Kodak’s inability to effectively complete and manage strategic transactions could adversely impact its business performance, including its financial results.~~

As part of Kodak’s strategy, it may be engaged in discussions with third parties regarding possible divestitures, asset sales, spin-offs, investments, acquisitions, strategic alliances, joint ventures, and outsourcing transactions and may enter into agreements relating to such transactions in order to further its business objectives. In order to successfully pursue its strategic transaction strategy, it must identify suitable buyers, sellers and partners and successfully complete transactions, some of which may be large and complex, and manage post-closing issues such as the elimination of any remaining post-sale costs related to divested businesses. Transaction risk can be more pronounced for larger and more complicated transactions or when multiple transactions are pursued simultaneously. There are no assurances Kodak will be able to consummate any strategic transactions which it undertakes or, if consummated, Kodak will achieve the benefits sought to be achieved from such strategic transactions. If Kodak fails to identify and successfully complete transactions that further its strategic objectives, it may be required to expend resources to develop products and technology internally, it may be at a competitive disadvantage or it may be adversely affected by negative market perceptions. Any of these factors could have an adverse effect on its revenue, gross margins and profitability. In addition, unpredictability surrounding the timing of such transactions could adversely affect its financial results.

~~If Kodak is unable to successfully develop, fund and commercialize products in certain businesses upon which it is focused, its financial performance could be adversely affected.~~

Kodak has focused its investments on imaging and printing for business, specifically, commercial inkjet, packaging, advanced materials and 3D printing, and software and services. Each of these businesses requires additional investment and may not be successful. The introduction of successful innovative products at market competitive prices and the achievement of scale are necessary for it to grow these businesses, improve margins and achieve its financial objectives. Additionally, its strategy is based on a number of factors and assumptions, some of which are not within its control, such as the actions of third parties. There can be no assurance that it will be able to successfully execute all or any elements of its strategy, or that its ability to successfully execute its strategy will be unaffected by external factors. If it is unsuccessful in growing Kodak’s investment businesses as planned, or perceiving the needs of its target customers, its financial performance could be adversely affected.

Kodak may pursue acquisitions or combinations which could fail or present unanticipated problems for its business in the future, which would adversely affect its ability to realize the anticipated benefits of those transactions or increase the price it would be required to pay.

Kodak may seek to enter into transactions which may include acquiring or combining with other businesses. It may not be able to identify suitable acquisition or combination opportunities or finance and complete any particular acquisition or combination successfully. Furthermore, acquisitions and combinations involve a number of risks and challenges, including:

Any of these factors could adversely affect its ability to achieve anticipated levels of cash flows or realize synergies or other anticipated benefits from a strategic transaction. Furthermore, the market for transactions is highly competitive, which may adversely affect its ability to find transactions which fit its strategic objectives or increase the price it would be required to pay (which could decrease the benefit of the transaction or hinder its desire or ability to consummate the transaction). Strategic transactions may occur at any time and may be significant in size relative to its assets and operations.

Due to the nature of the products it sells and Kodak’s worldwide distribution, it is subject to changes in currency exchange rates, interest rates and commodity costs which may adversely impact its results of operations and financial position.

As a result of Kodak’s global operating and financing activities, it is exposed to changes in currency exchange rates and interest rates, which may adversely affect its results of operations and financial position. Exchange rates and interest rates in markets in which it does business tend to be volatile and, at times, its sales and profitability can be negatively impacted across all its segments depending upon the value of the U.S. dollar and other major currencies such as the euro, the Japanese yen, the British pound and the Chinese yuan. In addition, Kodak’s products contain aluminum, silver, petroleum based or other commodity based raw materials, the prices of which have been, and may continue to be, volatile. In the case of aluminum, recently imposed tariffs may give rise to future cost increases. If the global economic situation remains uncertain or worsens, there could be further volatility in changes in currency exchange rates, interest rates and commodity prices, which could have negative effects on its revenue and earnings.

~~Weakness or worsening of global economic conditions could adversely affect Kodak’s financial performance and liquidity.~~

The global economic environment may adversely affect sales of Kodak’s products, profitability and liquidity. Global financial markets have been experiencing volatility. Economic conditions could accelerate any decline in demand for products, which could also place pressure on its results of operations and liquidity. There is no guarantee that anticipated economic growth levels in markets which have experienced some economic strength will continue in the future, or Kodak will succeed in expanding sales in these markets. In addition, accounts receivable and past due accounts could increase due to a decline in its customers’ ability to pay as a result of an economic downturn, and its liquidity, including its ability to use credit lines, could be negatively impacted by failures of financial instrument counterparties, including banks and other financial institutions. If global economic weakness and tightness in the credit markets exist, worsen or are attenuated, Kodak’s profitability and related cash generation capability could be adversely affected and, therefore, affect its ability to meet its anticipated cash needs, impair its liquidity or increase its costs of borrowing.

~~If Kodak is unable to successfully develop or commercialize new products, its business, financial position and operating results may suffer.~~

Kodak generally sells its products in industries which are characterized by rapid technological changes, frequent new product and service introductions and changing industry standards. Without the timely introduction of new products, services and enhancements, its products and services will become technologically obsolete over time, in which case its revenue and operating results would suffer. Therefore, its future results of operations will depend to a significant extent upon its ability to successfully commercialize new products in a timely manner. The success of its new products and services will depend on several factors, including its ability to:

As a result of these and other factors, products currently in development by Kodak (for example, UltraStream technology, small particle technology and Ultra NX) may or may not be successfully commercialized in a timely manner, or at all. If any of its key products cannot be successfully or timely commercialized, its operating results could be adversely affected. Moreover, it cannot guarantee any investment made in developing products will be recouped, even if it is successful in commercializing those products, which could have a material adverse effect on its business, financial position and operating results.

If Kodak’s commercialization and manufacturing processes fail to prevent issues with product reliability, yield and quality, its product launch plans may be delayed, its financial results may be adversely impacted, and its reputation may be harmed.

In developing, commercializing and manufacturing Kodak’s products and services it must adequately address reliability and prevent yield and other quality issues, including defects in its engineering, design and manufacturing processes, as well as defects in third-party components included in its products. Because Kodak’s products are sophisticated and complicated to develop and commercialize with rapid advances in technologies, the occurrence of defects may increase, particularly with the introduction of new product lines. Unanticipated issues with product performance may delay product launch plans which could result in additional expenses, lost revenue and earnings. Although it has established internal procedures to minimize risks which may arise from product quality issues, there can be no assurance it will be able to eliminate or mitigate occurrences of these issues and associated liabilities. Product reliability, yield and quality issues can impair its relationships with new or existing customers and adversely affect its brand image; product quality issues can result in recalls, warranty, or other service obligations and litigation, and its reputation as a producer of high quality products could suffer, which could adversely affect its business as well as its financial results.

~~If the reputation of Kodak or its brand erodes significantly, it could have a material impact on its financial results.~~

Kodak’s reputation, and the reputation of its brand, form the foundation of its relationships with key stakeholders and other constituencies, including customers, suppliers and consumers. The quality and safety of Kodak’s products are critical to its business. Kodak’s products have worldwide recognition, and its financial success is directly dependent on the success of its product offering. One aspect of Kodak’s business is licensing others to use Kodak’s brand in connection with the sale of such licensees’ products and services, and activities by such licensees may be perceived by the market as being activities of Kodak. The success of Kodak’s brand can suffer if it’s or its licensees’ marketing plans, product initiatives or activities do not have the desired impact on the brand’s image or ability to attract customers. Kodak’s results could also be negatively impacted if its brand suffers substantial harm to its reputation due to significant product reliability and quality issues, and product-related litigation. Additionally, negative or inaccurate postings or comments on social media or networking websites about Kodak, its licensees or its brand could generate adverse publicity which could damage the reputation of the brand. Kodak also devotes significant time and resources to programs consistent with its corporate values and commitments that are designed to protect and preserve its reputation, such as social responsibility and environmental sustainability. If these programs are not executed as planned or suffer negative publicity, Kodak’s reputation and financial results could be adversely impacted.

~~The competitive pressures it faces could harm Kodak’s revenue, gross margins, cash flow and market share.~~

The markets in which Kodak does business are highly competitive with large, entrenched, and well financed industry participants, many of which are larger than Kodak. In addition, it encounters aggressive price competition for many of its products and services from numerous companies globally. Any of its competitors may:

As a result, Kodak may not be able to compete successfully with its competitors. Finally, it may not be able to maintain its operating costs or prices at levels which would allow it to compete effectively. Kodak’s results of operations and financial condition may be adversely affected by these and other industry-wide pricing pressures. If its products, services and pricing are not sufficiently competitive with current and future competitors, it could also lose market share, adversely affecting its revenue, gross margins and cash flow.

An inability to provide competitive financing arrangements to Kodak’s customers or extension of credit to customers whose creditworthiness deteriorates could adversely impact its revenue, profitability and financial position.

The competitive environment in which Kodak operates may require it to facilitate or provide financing to its customers. Customer financing arrangements may cover all or a portion of the purchase price for its products and services. It may also assist customers in obtaining financing from banks and other sources. Its success may be dependent, in part, upon its ability to provide customer financing on competitive terms and on its customers’ creditworthiness. Tightening of credit in the global financial markets can adversely affect the ability of Kodak’s customers to obtain financing for significant purchases, which may result in a decrease in, or cancellation of, orders for its products and services. If Kodak is unable to provide competitive financing solutions to its customers or if it extends credit to customers whose creditworthiness deteriorates, its revenues, profitability and financial position could be adversely impacted.

~~If Kodak cannot attract, retain and motivate key management and other key employees, its revenue and earnings could be harmed.~~

In order for it to be successful, Kodak must continue to attract, retain and motivate executives and other key employees, including technical, managerial, marketing, sales, research and support positions. Hiring and retaining qualified executives, research and engineering professionals, and qualified sales representatives, particularly in Kodak’s targeted growth markets, are critical to its future. It may be unable to attract and retain highly qualified management and employees, particularly if it does not offer employment terms competitive with the rest of the market. Failure to attract and retain qualified individuals, key leaders, executives and employees, or failure to develop and implement a viable succession plan, could result in inadequate depth of institutional knowledge or skill sets, which could adversely affect its business.

If Kodak cannot effectively anticipate technology trends and develop and market new products to respond to changing customer preferences, its revenue, earnings and cash flow could be adversely affected.

Kodak serves imaging needs for business markets, including packaging, graphic communications, enterprise services, and printed electronics. Its success in these markets depends on its ability to offer differentiated solutions and technologies to capture market share and grow scale. To enable this, it must continually develop and introduce new products and services in a timely manner to keep pace with technological developments and achieve customer acceptance. In addition, the services and products it provides to customers may not or may no longer meet the needs of its customers as the business models of its customers evolve. Its customers may decide to outsource their imaging needs or may purchase imaging services and needs from other suppliers. In addition, it is difficult to predict successfully the products and services its customers will demand. The success of Kodak’s business depends in part on its ability to identify and respond promptly to changes in customer preferences, expectations and needs. If it does not timely assess and respond to changing customer expectations, preferences and needs, its financial condition, results of operations or cash flows could be adversely affected.

If Kodak is unable to timely anticipate new technology trends, develop improvements to its current technology to address changing customer preferences, and effectively communicate its businesses, products, and the markets it serves, its revenue, earnings and cash flow could be adversely affected. The success of Kodak’s technology development efforts may be affected by the development efforts of its competitors, which may have more financial and other resources to better ascertain technology trends, changing customer preferences, and changing business expectations or models. Kodak’s assessment and response may as a result be incomplete or inferior when compared to its competitors, which could adversely affect its product roadmaps and associated revenue streams.

Kodak has reduced the scope of its corporate-focused research and development activities. If its investment in research and product development is inadequate, its response to changing customer needs and changing market dynamics may be too slow and this may adversely affect revenue streams from new products and services.

~~Kodak makes sizeable investments in new products and services that may not achieve expected returns.~~

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 revenue. 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. It can require long development and testing periods. Significant delays in new releases or significant problems in creating new products or services could adversely affect Kodak’s revenue.

~~Kodak relies on third-party suppliers and service providers to support its 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 its manufacturing, logistics, and business operations. To the extent it relies on third-parties, it faces the risks that those third parties may not be able to:

Further, even if Kodak honors its payment and other obligations to its key suppliers of products, components and services, such suppliers may choose to unilaterally withhold products, components or services, or demand changes in payment terms. In addition, it may experience shortages in supply and disruptions in service as a result of unexpected demand, transportation and logistical limitations, and/or disruptions or production difficulties at its suppliers, such as disruptions due to fires, other natural disasters or events outside of a supplier’s control. In addition, disruptions could result from a reduction in the number of its suppliers due to their own financial difficulties or a reduction in the products offered by such suppliers. As a result of the loss of any supplier, or a substantial decrease in the availability of products from its suppliers, Kodak may be unable to meet its customer commitments, its costs could be higher than planned, and its cash flows and the reliability of its products could be negatively impacted. Kodak will vigorously enforce its contractual rights under such circumstances, but there is no guarantee it will be successful in preventing or mitigating the effects of unilateral actions by its suppliers. Other supplier problems that Kodak could encounter include electronic component shortages, excess supply, risks related to the duration and termination of its contracts with suppliers for components and materialsApril 8, 2019 and risks related to the ability to obtain products, components or services from single source suppliers on favorable terms or at all. The realization of any of these risks, should alternative third-party relationships not be established, could cause interruptions in supply or increases in costs which might result in Kodak’s inability to meet customer demand for its products, damage to its relationships with its customers, and reduced market share, all of which could adversely affect its results of operations and financial condition.

~~Business disruptions could seriously harm Kodak’s future revenue and financial condition and increase its costs and expenses.~~

Worldwide operations could be subject to earthquakes, power shortages, telecommunications failures, cyber-attacks, terrorism and other physical security threats, water shortages, tsunamis, floods, hurricanes, typhoons, fires, extreme weather conditions, medical epidemics, political or economic instability, and other natural or manmade disasters or business interruptions, for which Kodak is predominantly self-insured. The occurrence of any of these business disruptions could seriously harm its revenue and financial condition and increase its costs and expenses. In addition, some areas, including partsclosing of the ~~east and west coasts~~sale of ~~the United States, have previously experienced, and may experience in the future, major power shortages and blackouts. These blackouts could cause disruptions to its operations~~FPD either not occurring or the operations of its suppliers, distributors and resellers, or customers. It has operations including research and development facilities in geographically disparate locations, such as Israel, Japan, China, Canada and Germany. The impact of these risks is greater in areas where products are manufactured at a sole or limited number of location(s), and where the sourcing of materials is limited to a sole or limited base of suppliers, since any material interruption in operations in such locations or suppliers could impact Kodak’s ability to provide a particular product or service for a period of time.

~~Cyber-attacks or disruptions to our information technology (IT) environment could impact revenue, operations, cost, and competitiveness.~~

To effectively manage our global business, we depend on secure and reliable information technology systems with accurate data. These systems and their underlying infrastructure are provided by a combination of Kodak and third-parties, and if unavailable or unreliable, could disrupt our operations, causing delays or cancellation of customer orders, impeding the manufacturing or delivery of products, delaying the reporting of financial results, or impacting other business processes critical to running our business.

Our IT systems contain critical information about our business, including intellectual property and confidential information of our customers, business partners, and employees. Cyber-attacks or defects in our systems could result in this proprietary information being disclosed or modified, which could cause significant damage to our business or our reputation. We have system controls and security measures in place that are designed to protect our IT systems against intentional or unintentional disruptions of our operations or disclosure of confidential information, but we may not be able to implement solutions that result in stopping or detecting all of these threats to our internal information systems or those of our third-party providers. A breach of our security measures could result in unauthorized access to and misuse of our information, corruption of data, or disruption of operations, any of which could have a material adverse impact on our business.

We also provide IT-based products and services to our customers, both businesses and consumers, and a breach of our security or reliability measures, or those of our third-party service providers, could negatively impact our customers’ operations or data privacy.

~~Improper disclosure of personal data could result in liability and harm Kodak’s reputation.~~

Kodak receives, processes, transmits and stores information relating to identifiable individuals (personal information), both in its role as a technology provider and as an employer. As a result, Kodak is subject to numerous U.S. federal and state and foreign laws and regulations relating to personal information. These lawsdelayed have been ~~subject~~addressed. Kodak continues to frequent changes, and new legislation in this area may be enacted at any time. In Europe, the General Data Protection Regulation (“GDPR”) will become effective on May 25, 2018 for all European Union (“EU”) member states. The GDPR will include operational requirements for companies receiving or processing personal data of EU residents that are partially different from those currently in place and will include significant penalties for non-compliance. This change, as well as any other change to existing laws, the introduction of new laws 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 its business practices, liability for monetary damages, fines and/or criminal prosecution, unfavorable publicity, restrictions on its ability to obtain and process information and allegations by its customers and clients that it has not performed its contractual obligations. At the same time, the risk of cyber-attacks is relevant to the requirements regarding storage, transfer, sharing and handling of personal information. This environment demands Kodak continuously improve its design and coordination of security controls and contractual arrangements across its businesses and

geographies. Despite these efforts, it is possible its security controls over personal data, its training of employees and vendors on data privacy and data security, and other practices it follows may not prevent the improper disclosure of personal information. Improper disclosure of this information could harm its reputation or subject it to liability under laws which protect personal data, resulting in increased costs or loss of revenue.

If Kodak cannot protect the intellectual property rights on which its business depends, or if third parties assert it violates their intellectual property rights, its revenue, earnings, expenses and liquidity may be adversely impacted.

A key differentiator for Kodak in many of its businesses is its technological advantage over competitors’ products and solutions. Its technological advantage is supported by Kodak’s intellectual property rights. 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. 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 it 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. Further, the laws of certain countries do not protect proprietary rights to the same degree as the laws of the United States. Therefore, in certain jurisdictions, Kodak may be unable to protect its proprietary technology adequately against unauthorized third party copying, infringement or use, which could adversely affect its competitive position. Also, much of Kodak’s business and many of its products rely on key technologies developed or licensed by third parties and, because of the rapid pace of technological change in the information technology industry, it may not be able to obtain or continue to obtain licenses and technologies from relevant third parties on reasonable terms, or at all.

Kodak also licenses third parties to use its trademarks. In an effort to preserve its trademark rights, Kodak enters into license agreements with these third parties which govern the use of its trademarks and require its licensees to abide by quality control standards with respect to the goods and services they provide under the trademarks. Although Kodak makes efforts to police the use of its trademarks by its licensees, there can be no assurance these efforts will be sufficient to ensure the licensees abide by the terms of their licenses. In the event Kodak’s licensees fail to do so, its trademark rights could be diluted and its reputation harmed by its licensees’ activities. Also, failure by Kodak and its licensees to sufficiently exploit any of Kodak’s trademarks in any markets could erode Kodak’s trademark rights with respect to the relevant trademarks. Because the laws and enforcement regimes of certain countries do not protect proprietary rights to the same degree as those in the United States, in certain jurisdictions Kodak may be unable to adequately prevent such unauthorized uses, which could result in impairment of its trademark rights.

Kodak has made substantial investments in new, proprietary technologies and has filed patent applications and obtained patents to protect its intellectual property rights in these technologies as well as the interests of its licensees. There can be no assurance Kodak’s patent applications will be approved, any patents issued will be of sufficient scope or strength to provide it with meaningful protection, or such patents will not be challenged by third parties. Furthermore, Kodak may fail to accurately predict all of the countries where patent protection will ultimately be desirable, and if it fails to timely file a patent application in any such country, it may be precluded from doing so at a later date. The patents issuing may vary in scope of coverage depending on the country in which such patents issue.

In addition, the intellectual property rights of others could inhibit Kodak’s ability to conduct its business. Other companies may hold patents on technologies used in Kodak’s industries and some of these companies are aggressively seeking to expand, enforce or license their patent portfolios. Third parties may claim Kodak and its customers, licensees or other parties indemnified by it are infringing upon their intellectual property rights. Such claims may be made by competitors seeking to block or limit Kodak’s access to certain markets. Additionally, in recent years, individuals and groups have begun purchasing intellectual property assets for the sole purpose of making claims of infringement and attempting to extract settlements from large companies like Kodak. Even if it believes the claims are without merit, these claims may have the following negative impacts on its business:

Finally, Kodak uses open source software in connection with its products and services. 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 it believes to be open source software or noncompliance with open source licensing terms. Some open source software licenses require users who distribute open source software as part of their software to publicly disclose all or part of the source code to such software and/or make available any derivative works of the open source code on unfavorable terms or at no cost. Any requirement to disclose Kodak’s source code or pay damages for breach of contract could be harmful to its business results of operations and financial condition.

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 its financial position, results of operations, and cash flow.

Kodak has significant defined benefit pension and other postretirement benefit obligations. The funded status of its U.S. and non-U.S. defined benefit pension plans (and other postretirement benefit plans), and the related cost reflected in its financial statements, are affected by various factors subject to an inherent degree of uncertainty. Key assumptions used to value these benefit obligations, funded status and expense recognition include the discount rate for future payment obligations, the long term expected rate of return on plan assets, salary growth, healthcare cost trend rates, mortality trends, and other economic and demographic factors. Significant differences in actual experience, or significant changes in future assumptions or obligations imposed by legislation or pension authorities, could lead to a potential future need to contribute cash or assets to Kodak’s plans in excess of currently estimated contributions and benefit payments and could have an adverse effect on Kodak’s consolidated results of operations, financial position or liquidity.

In past years, Kodak has experienced increases in the costs of these defined benefit pension and postretirement benefit obligations as a result of macro-economic factors beyond its control, including increases in health care costs, declines in investment returns on pension plan assets, and changes in discount rates and mortality rates used to calculate pension and related liabilities. At least some of these macro-economic factors may again put pressure on the cost of providing pension and medical benefits. There can be no assurance it will succeed in limiting cost increases. In addition, continued upward pressure, including any as a result of new legislation, could reduce the profitability of its businesses.

~~Kodak may be required to recognize impairments in the value of its goodwill and/or other long-lived assets which could adversely affect its results of operations.~~

Upon emergence from bankruptcy, Kodak applied fresh start accounting pursuant to which the reorganization value was allocated to the individual assets and liabilities based on their estimated fair values. The excess reorganization value over the fair value of identified tangible and intangible assets is reported as goodwill. In connection with fresh start, Kodak also fair valued its other long-lived assets, including intangible assets. The determination of reorganization value, equity value of the Company’s common stock and fair value of assets and liabilities is dependent on various estimates and assumptions, including financial projections and the realization of certain events. 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. Impairments could occur in the future if Kodak’s expected future cash flows decline, market or interest rate environments deteriorate, or if carrying values change materially compared with changes in their respective fair values.

Kodak’s businesses experience seasonality of sales. Therefore, lower demand for Kodak’s products or increases in costs during periods which are expected to be at peak in seasonality may have a pronounced negative effect on its results of operations.

Equipment and consumables sales generally exhibit higher levels in the fourth quarter due to the seasonal nature of placements, resulting from customer or industry budgeting practices. As a result, a sequential quarter-to-quarter comparison is not a good indication of Kodak’s performance or how it will perform in the future. In addition, adverse developments during what are expected to be peak periods in seasonality, such as lower-than-anticipated demand for its products, an internal systems failure, increases in materials costs, or failure of or performance problems with one of its key logistics, components supply, or manufacturing partners, could have a material adverse impact on its financial condition and operating results. Tight credit markets which limit capital investments or a weak economy which decreases print demand could negatively impact equipment or consumable sales. These external developments are often unpredictable and may have an adverse impact on its business and results of operations.

~~If Kodak fails to manage distribution of its products and services properly, its revenue, gross margins and earnings could be adversely impacted.~~

Kodak uses a variety of different distribution methods to sell and deliver its products and services, including third-party resellers and distributors and direct and indirect sales to both enterprise accounts and customers. Successfully managing the interaction of direct and indirect channels with various potential customer segments for its products and services is a complex process. Moreover, since each distribution method has distinct risks and costs, Kodak’s failure to achieve the most advantageous balance in the delivery model for its products and services could adversely affect its revenue, gross margins and earnings. This has concentrated Kodak’s credit and operational risk and could result in an adverse impact on its financial performance.

~~Kodak’s future results could be harmed if it is unsuccessful in its sales in emerging markets.~~

Because Kodak is seeking to expand its sales and number of customer relationships outside the United States, including in emerging markets in Asia, Latin America and Eastern Europe, Kodak’s business is subject toface post-closing risks associated with ~~doing business internationally, such as:~~

~~There can be no assurance Kodak will be able to market and sell its products in all~~the sale of ~~its targeted markets. If its efforts are not successful, its business growth and results~~FPD, including risks associated with the deferred sale of ~~operations could be harmed. As a global company, Kodak is subject to regulatory requirements and laws in~~ the ~~jurisdictions in which it operates, and any alleged non-compliance with these requirements or laws could result in an adverse financial or reputational impact.~~

Kodak is subject to environmental laws and regulations and failure to comply with such laws and regulations or liabilities imposed as a result of such laws and regulations could have an adverse effect on its business, results of operations and financial condition.

~~Kodak is subject to environmental laws and regulations world-wide that govern, for example, the discharge of pollutants, the management of hazardous materials, the cleanup of contaminated sites,~~China assets and the composition and end-of-life management of its products. Non-compliance with applicable laws or liability incurred without regard to fault could have a material adverse effect on its business, results of operations and financial condition. The cost of complying with such laws could have a material adverse effect on its business, results of operations and financial condition.

In addition, the Company, the New York State Department of Environmental Conservation and the New York Empire State Development Corporation have entered into a settlement agreement concerning certain of the Company’s historical environmental liabilities at Eastman Business Park or from discharges to the Genesee River through the establishment of a $49 million environmental remediation trust. Should historical liabilities exceed $49 million, New York State is responsible for payments of cost up to an additional $50 million. In the event the historical liabilities exceed $99 million, the Company will become liable for 50% of the portion above $99 million, which could have a material adverse effect on its financial condition. The settlement agreement was implemented on May 20, 2014. The settlement agreement includes a covenant not to sue from the U.S. Environmental Protection Agency. Any uncertainties related to the Company’s environmental obligations may impact its ability to further develop and transform Eastman Business Park.

Kodak is subject to income taxes in the U.S. and in many foreign jurisdictions. Significant judgment is required in determining Kodak’s worldwide provision for income taxes. In the course of its business, there are transactions and calculations where the ultimate tax determination is uncertain. For example, compliance with the Tax Cuts and Jobs Act (“2017 Tax Act”) may require the collection of information not regularly produced within Kodak, the use of provisional estimates in its financial statements, and the exercise of significant judgment in accounting for its provisions. Many aspects of the 2017 Tax Act are unclear and may not be clarified for some time. As regulations and guidance evolve with respect to the 2017 Tax Act, and as Kodak gathers more information and performs more analysis, Kodak’s results may differ from previous estimates and may materially affect our financial position.

Kodak operates within multiple taxing jurisdictions worldwide and is subject to audit in these jurisdictions. These audits can involve complex issues, which may require an extended period of time for resolution. 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 possibilityrisk that the ~~ultimate resolution of such issues could have an adverse effect on the earnings~~FPD business will not perform during 2019 and ~~cash flow of Kodak.~~

~~Kodak’s business, financial position, results of operations, cash flows and reputation may be negatively impacted by legal matters.~~

Kodak has various contingencies which are not reflected on its balance sheet, including those arising as a result of being involved from time to time in a variety of claims, lawsuits, investigations, remediations and proceedings concerning: commercial, tax, tort, customs, employment, health and safety and intellectual property matters, licensee activities, and compliance with various domestic and international laws and regulations. Should developments in any of these matters cause a change in its determination as to an unfavorable outcome and result in the need to recognize a material accrual or should any of these matters result in a final adverse judgment or be settled for significant amounts, they could have a material adverse effect on its business, financial position, results of operations, and cash flows.

~~Regulations related to “conflict minerals” may require~~2020 at levels that will entitle Kodak to ~~incur additional expenses and could limit the supply and increase the cost of certain metals used in manufacturing Kodak’s products.~~earn-out payments.

The Dodd-Frank Wall Street Reform and Consumer Protection Act contains provisions to improve transparency and accountability concerning the supply of minerals originating from the conflict zones of the Democratic Republic of Congo (“DRC”) and adjoining countries. As a result, in August 2012, the SEC adopted rules requiring disclosure related to sourcing of specified minerals, known as “conflict minerals,” which are necessary to the functionality or production of products manufactured or contracted to be manufactured by public companies. Kodak has designed its overall conflict minerals policies and procedures to be consistent with the guidance issued by the Organization for Economic Co-operation and Development (“OECD”), and continues to perform due diligence on its supply chain. Kodak filed its most recent Conflict Minerals Disclosure report for the reporting period from January 1, 2016 to December 31, 2016 on May 31, 2017. As of the date of the report, Kodak determined certain of its products contain such specified minerals, but was unable to determine whether or not such minerals originate from the DRC or an adjoining country. Kodak may incur additional costs to comply with these disclosure requirements, including costs related to determining the sources of the specified minerals used in its products, in addition to the cost of any changes to products, processes, or sources of supply as a consequence of such verification activities, which may adversely affect its business. In addition, the number of suppliers who provide “conflict-free” minerals may be limited, which may make it difficult to satisfy customers who require all of the components of its products be certified as conflict-free, which could place it at a competitive disadvantage if it is unable to do so. Because Kodak’s supply chain is complex, it may also not be able to sufficiently verify the origins of the relevant minerals used in its products through its due diligence procedures, which may harm its reputation.

~~There can be no assurance the Company will be able to comply with the terms of its various credit facilities.~~

A breach of any of the financial or other covenants contained in the Senior Secured First Lien Term Credit Agreement (the “First Lien Term Credit Agreement”) or the Asset Based Revolving Credit Agreement (the “ABL Credit Agreement” and, together with the First Lien Term Credit Agreement, the “Credit Agreements”) could result in an event of default under these facilities. If any event of default occurs and the Company is not able to either cure it or obtain a waiver from the requisite lenders under each of these facilities, the administrative agent of each credit facility may, and at the request of the requisite lenders for that facility must, declare all of the Company’s outstanding obligations under the applicable credit facility, together with accrued interest and fees, to be immediately due and payable and the agent under the 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, and if applicable, each respective agent could institute foreclosure proceedings against the pledged assets. Any of these outcomes could adversely affect the Company’s operations and its ability to satisfy its obligations as they come due.

The combination of covenant requirements in the First Lien Term Credit Agreement and Kodak’s on-going investment in growth businesses, and continuing softness and volatility of global economic conditions and foreign currency exchange rates, could make it difficult for the Company to satisfy the leverage covenants under the First Lien Term Credit Agreement on an on-going basis.

The Company is obligated to comply with a number of financial and other covenants contained in the Credit Agreements. Kodak intends to conduct its operations in a manner which will result in continued compliance with the secured leverage ratio covenants under the First Lien Term Credit Agreement; however, compliance for future quarters may depend on Kodak undertaking one or more non-operational transactions, such as a monetization of assets, a debt refinancing, the raising of equity capital, or a similar transaction. If the Company is unable to remain in compliance and does not make alternate arrangements with its term lenders, an event of default would occur under the Credit Agreements which, among other remedies, would entitle the lenders or their agents to declare the outstanding obligations under the Credit Agreements to be immediately due and payable.

Because of Kodak’s current non-investment grade credit ratings, and/or general conditions in the financial and credit markets, its access to the capital markets may be limited. Moreover, the urgency of a capital-raising transaction may require it to pursue additional capital at an inopportune time or unattractive cost. The loans made under the First Lien Term Credit Agreement become due on the earlier to occur of (i) the maturity date of September 3, 2019 or (ii) the acceleration of such loans following the occurrence of an event of default (as defined in the First Lien Term Credit Agreement). The Company has issued approximately $79 million and $96 million of letters of credit under the Amended Credit Agreement as of June 30, 2018 and December 31, 2017, respectively. Should the Company not repay, refinance or extend the maturity of the loans under the existing First Lien Term Credit Agreement prior to June 5, 2019, the termination date will occur under the Amended Credit Agreement on such date unless the Amended Credit Agreement has been previously amended. Upon the occurrence of the termination date under the Amended Credit Agreement, the obligations thereunder will become due and the Company will need to provide alternate collateral in place of the letters of credit issued under the Amended Credit Agreement.

~~Kodak’s ability to obtain capital and the costs of such capital are dependent on numerous factors, including:~~

Kodak may not be successful in obtaining additional capital for these or other reasons. An inability to access capital may limit its ability to meet its operating needs and, as a result, may have a material adverse effect on its financial condition, results of operations and cash flows. In particular, Kodak does not have committed refinancing or the liquidity to meet the debt obligations under the First Lien Credit Agreement and Amended Credit Agreement if they were to become due in accordance with their current terms and there are no assurances Kodak will be able to amend, extend, refinance or repay the First Lien Credit Agreement or, as necessary, the Amended Credit Agreement before they become due. If Kodak is unable to amend, extend or refinance the First Lien Credit Agreement or Amended Credit Agreement before they become due, its ability to continue as a going concern could be impaired.

The current non-investment grade status and Kodak’s financial condition may adversely impact Kodak’s commercial operations, increase its liquidity requirements and increase the cost of refinancing opportunities. It 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 its credit ratings will improve, or they will not decline, in the future. Its credit ratings and financial condition may affect the evaluation of its creditworthiness by trading counterparties and lenders, which could put it at a disadvantage to competitors with higher or investment grade ratings.

In carrying out its 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 its business. Additionally, the current non-investment grade credit ratings may limit its ability to obtain additional sources of liquidity, refinance its debt obligations, including any mandatory redemption of its Series A Preferred Stock, or access the capital markets at the lower borrowing costs which would presumably be available to competitors with higher or investment grade ratings. Should its ratings continue at their current levels, or should its ratings be further downgraded, it would expect these negative effects to continue and, in the case of a downgrade, become more pronounced. In particular, if the Company’s credit ratings were to decline it would be required to provide up to $19 million of letters of credit to the issuers of certain surety bonds to fully collateralize such bonds.

The availability of borrowings and letters of credit under the ABL 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.

Availability under the Company’s ABL Credit Agreement is based on the amount of Eligible Receivables, Eligible Inventory, Eligible Machinery and Equipment and Eligible Cash less specified reserves as described in Note 6, “Debt and Capital Leases” to the consolidated financial statements. Kodak’s U.S. Accounts Receivable and Inventory levels have declined over the past four years, and Machinery and Equipment for purposes of the ABL Credit Agreement amortizes down by $1 million per quarter. If Eligible Receivables, Eligible Inventory and Eligible Machinery and Equipment continue to decline and an asset base cannot be maintained to support the $96 million of outstanding letters of credit and the $19 million of Excess Availability required under the ABL Credit Agreement, the Company would be required to increase restricted cash deposited in the Eligible Cash account or remain in compliance with the ABL Credit Agreement’s Fixed Charge Coverage Ratio and operate under cash dominion by the administrative agent under the ABL Credit Agreement. Additional cash deposited in the Eligible Cash account would be classified as restricted cash, would not be available to support ongoing working capital and investment needs and could not be used in determining the Net Secured Leverage Ratio under the First Lien Term Credit Agreement. If the administrative agent under the ABL Credit Agreement executed cash dominion, it would increase operational complexities for the Company. An event of default would occur under these circumstances if neither of these alternatives were achieved.

The Company’s substantial monetary obligations require a portion of its cash flow be used to pay interest, dividends and fund other obligations rather than be invested in the business and could adversely affect its ability to fund its operations.

The Company’s indebtedness under the Credit Agreements and its other obligations including the potential mandatory redemption of the Series A Preferred Stock could have important negative consequences to the Company and investors in its securities. These include the following:

The Company cannot be sure cash generated from its business will be as high as it expects or its expenses will not be higher than it expects. Because a portion of its expenses are fixed in any given year, its operating cash flow margins are highly dependent on revenues, which are largely driven by customer demand. A lower amount of cash generated from its business or higher expenses than expected, when coupled with its debt obligations, could adversely affect its ability to fund its operations.

~~The conversion of the Company’s Series A 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 2,000,000 outstanding shares of the Company’s Series A Preferred Stock are convertible into shares of the Company’s common stock at a conversion rate of 5.7471 shares of common stock per share of Series A Preferred Stock. As a result of the conversion of any issued and outstanding Series A Preferred Stock, the Company’s existing shareholders will own a smaller percentage of its outstanding common stock. Based on the capitalization of the Company as of March 1, 2018, the conversion of all shares of the Series A Preferred Stock would result in the issuance to holders thereof of approximately 21% of the outstanding common stock after giving effect to such conversion. Further, additional shares of common stock may be issuable pursuant to certain other features of the Series A Preferred Stock, with such issuances being further dilutive to existing holders of common stock.

If Series A Preferred Stock is converted into common stock, holders of such converted common stock will be entitled to the same dividend and distribution rights as holders of the common stock currently authorized and outstanding. As such, another dilutive effect resulting from the conversion of any issued and outstanding shares of Series A Preferred Stock will be a dilution to dividends and distributions.

Holders of the Company’s common stock will not realize any dilution in their ownership, dividend or distribution rights solely as a result of the reservation of any shares of common stock for issuance upon conversion of the Series A Preferred Stock or for issuance of additional shares of common stock pursuant to certain other features of the Series A Preferred Stock, but will experience such dilution to the extent additional shares of common stock are issued in the future as described above.

The holders of the Company’s Series A Preferred Stock own a large portion of the voting power of the Company’s outstanding securities and have the right to nominate two members to the Company’s Board. As a result, these holders may influence the composition of the Board and future actions taken by the Board.

The holders of the Company’s Series A Preferred Stock are entitled to vote upon all matters upon which holders of the Company’s common stock have the right to vote and are entitled to the number of votes equal to the number of full shares of common stock into which such shares of Series A Preferred Stock could be converted at the then applicable conversion rate. These holders currently hold approximately 30% of the voting power of the Company on an as-converted basis. As a result, these holders may have the ability to influence future actions by the Company requiring shareholder approval. The Company and these holders are parties to a Shareholder Agreement that contains certain restrictions on disposition or acquisition of Company securities and other actions by these holders, some of which restrictions will expire on April 17, 2020.

Further, for as long as they hold any shares of Series A Preferred Stock, the current holders of the Series A Preferred Stock are entitled to nominate for election (collectively and not individually) at the Company’s annual meeting of shareholders a number of directors to the board of directors of the Company (the “Board”) commensurate with their ownership percentage of common stock on an as-converted basis. Two of the Company’s current Board members were nominated by these current holders, who also have the right to fill vacancies on the Board created by one of their nominees ceasing to serve on the Board. The nomination and other rights regarding the Board granted to the current holders of Series A Preferred Stock are not transferrable to any other person. Also, whenever dividends on the Series A Preferred Stock are in arrears for six or more dividend periods, the holders of Series A Preferred Stock (voting with holders of all other classes of preferred stock of the Company whose voting rights are then exercisable) are entitled to vote for the election of two additional directors at the Company’s next annual meeting and all subsequent meetings until all accumulated dividends on such Series A Preferred Stock and other voting preferred stock have been paid or set aside (during which time the number of directors the current holders of Series A Preferred Stock are entitled to nominate under the Purchase Agreement will be reduced by two). As a result, the presence of directors on the Board nominated by the current holders of Series A Preferred Stock or elected by the holders of Series A Preferred Stock would enable such current holders or the holders of Series A Preferred Stock to influence the composition of the Board and, in turn, potentially influence and impact future actions taken by the Board.

The Company has registered the resale of a large portion of its outstanding securities. The resale of the Company’s common stock, or the perception that such resale may occur, may adversely affect the price of its common stock.

In compliance with two Registration Rights Agreements to which the Company is a party, it has registered the resale of an aggregate of 20,723,050 shares of outstanding common stock, 2,000,000 shares of outstanding Series A Preferred Stock, 11,494,200 shares of common stock, subject to anti-dilution adjustments, issuable upon the conversion of outstanding Series A Preferred Stock, and 863,804 shares of common stock issuable upon the exercise of outstanding warrants. The resale of a substantial number of shares of common stock in the public market, or the perception that such resale might occur, could cause the market price of the Company’s common stock to decline. Under the terms of the Registration Rights Agreements to which the Company is subject, the counterparties to such Registration Rights Agreements can, in certain circumstances, require the Company to participate in an underwritten public offering of the registered securities. Any shares sold in a registered resale will be freely tradable without restriction under the Securities Act. While the Company cannot predict the size of future resales or distributions of its common stock, if there is a perception that such resales or distributions could occur, or if the holders of the Company’s securities registered for resale sell a large number of the registered securities, the market price for the Company’s common stock could be adversely affected.

~~The resale of a significant portion of the Company’s securities registered for resale could result in a change of control of the Company and the loss of favorable tax attributes.~~

The Company has registered the resale of securities representing approximately 60% of its outstanding shares of common stock assuming the issuance of all common stock issuable upon the conversion of the Series A Preferred Stock or the exercise of the warrants corresponding to shares of common stock registered for resale. Although the holders of the subject securities consist of several unaffiliated groups, these holders collectively have a controlling influence over all matters presented to the Company’s shareholders for approval, including election of members to the Board and change of control transactions. In addition, the holders of subject securities collectively would be able to cause a change of control of the Company by selling a sufficient portion of the Company’s securities held by them. If such a transaction, in combination with other transactions including the issuance of the Series A Preferred Stock, were to result in an “ownership change” as determined under Section 382 of the Internal Revenue Code of 1986, as amended, then the Company’s ability to offset taxable income with tax attributes generated prior to the ownership change date could be limited, possibly substantially. For more information on the Company’s tax attributes refer to Note 12, “Income Taxes”. The interests of the holders of the securities registered for resale may not always coincide with the interests of the other holders of our common stock.

~~The market price of the Company’s common stock may be volatile and such volatility may be affected by the volatility of blockchain and cryptocurrency markets.~~

The trading price of the Company’s common stock may be highly volatile and could be subject to wide fluctuations in response to various factors, including the risk factors described above and other factors which are beyond Kodak’s control. The trading price of the Company’s common stock has been dramatically affected by the announcement of the license granted by Kodak to WENN Digital, Inc. (“WENN”) to use Kodak’s brand in connection with WENN’s KODAKOne blockchain-based image rights management platform and Kodak-branded cryptocurrency. Kodak may, in the future, have other involvement relating to blockchain technology or cryptocurrency, either directly or as a licensor. Kodak cannot predict whether, or the extent to which, the trading price of the Company’s common stock will continue to be affected by blockchain or cryptocurrency markets and any volatility in such markets.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

NEW JERSEY		16-0417150
(State of incorporation)		(IRS Employer Identification No.)

343 STATE STREET, ROCHESTER, NEW YORK		14650
(Address of principal executive offices)		(Zip Code)

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐ ~~(Do not check if a smaller reporting company)~~	Smaller reporting company	☐☒
Emerging growth company	☐

		Page
Part I.—Financial Information

Item 1.	Financial Statements	3
	Consolidated Statement of Operations (Unaudited)	3
	Consolidated Statement of Comprehensive (Loss) Income (Unaudited)	4
	Consolidated Statement of Financial Position (Unaudited)	5
	Consolidated Statement of Cash Flows (Unaudited)	6
	Notes to Financial Statements (Unaudited)	78
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2932
	Liquidity and Capital Resources	40
~~Item 3.~~	~~Quantitative and Qualitative Disclosures About Market Risk~~	42
Item 4.	Controls and Procedures	43

Part II. —Other Information

Item 1.	Legal Proceedings	44
Item 1A.	Risk Factors	44
Item 2.	Unregistered Sales of Securities and Use of Proceeds	5644
Item 5.	Other Information	5744
Item 6.	Exhibits	5744

	Index to Exhibits	5845
	Signatures	5946

				June 30,		December 31,					March 31,		December 31,
(in millions)				2018		2017					2019		2018
	Type	Maturity	Weighted-Average Effective Interest Rate	Carrying Value		Carrying Value		Type	Maturity	Weighted-Average Effective Interest Rate	Carrying Value		Carrying Value
Current portion:
								Term note	2019	9.00%	$	394	$	394
	Capital leases	Various	Various	$	3	$	3	Finance leases	Various	Various		2		2
	Other debt	Various	Various		—		1	Other debt	Various	Various		—		—
					3		4					396		396
Non-current portion:
	Term note	2019	7.34%		393		393	Finance leases	Various	Various		2		3
	Capital leases	Various	Various		3		4	RED-Rochester, LLC	2033	11.40%		14		—
	Other debt	Various	Various		2		2	Other debt	Various	Various		2		2
					398		399					18		5
				$	401	$	403				$	414	$	401

	Three Months Ended
	March 31,
(in millions)	2019
Finance lease cost
Amortization of leased assets	$	1
Interest of lease liabilities		—
Operating lease cost		7
Variable lease cost		1
Total lease cost	$	9

	Three-Month Period Ending March 31, 2019
	Eastman Kodak Company Common Shareholders
	Common Stock		Additional Paid in Capital			Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Total			Series A Redeemable Convertible Preferred Stock
Equity (deficit) as of December 31, 2018	$	—	$	617		$	(200	)	$	(411	)	$	(9	)	$	(3	)	$	173
Net loss		—		—			(18	)		—			—			(18	)		—
Other comprehensive loss (net of tax):
Currency translation adjustments		—		—			—			3			—			3			—
Pension and other postretirement liability adjustments		—		—			—			(1	)		—			(1	)		—
Series A preferred stock cash dividends		—		(3	)		—			—			—			(3	)		—
Series A preferred stock deemed dividends		—		(2	)		—			—			—			(2	)		2
Stock-based compensation		—		3			—			—			—			3			—
Prior period adjustment due to adoption of ASU 2016-02		—		—			5			—			—			5			—
Equity (deficit) as of March 31, 2019	$	—	$	615		$	(213	)	$	(409	)	$	(9	)	$	(16	)	$	175

	Three-Month Period Ending March 31, 2018
	Eastman Kodak Company Common Shareholders
	Common Stock		Additional Paid in Capital			Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Total			Series A Redeemable Convertible Preferred Stock
Equity (deficit) as of December 31, 2017	$	—	$	631		$	(174	)	$	(391	)	$	(9	)	$	57		$	164
Net loss		—		—			(25	)		—			—			(25	)
Other comprehensive loss (net of tax):
Currency translation adjustments		—		—			—			13			—			13			—
Pension and other postretirement liability adjustments		—		—			—			—			—			—			—
Series A preferred stock cash dividends		—		(3	)		—			—			—			(3	)		—
Series A preferred stock deemed dividends		—		(2	)		—			—			—			(2	)		2
Stock-based compensation		—		2			—			—			—			2			—
Prior period adjustment due to adoption of ASU 2014-09		—		—			(10	)		—			—			(10	)		—
Equity (deficit) as of March 31, 2018	$	—	$	628		$	(209	)	$	(378	)	$	(9	)	$	32		$	166

(in millions)	Balance at December 31, 2017			Adjustments Due to ASU 2014-09			Balance at January 1, 2018
Liabilities
Other current liabilities	$	217		$	2		$	219
Other long-term liabilities		202			8			210

Deficit
Accumulated Deficit		(174	)		(10	)		(184	)

	Three Months Ended June 30, 2018
(in millions)	As Reported			Amounts without Adoption of ASU 2014-09			Effect of Change Higher (Lower)
Revenues
Sales	$	300		$	299		$	1
Services		72			72			—
Total revenues		372			371			1

Net income	$	4		$	3		$	1

	Six Months Ended June 30, 2018
(in millions)	As Reported			Amounts without Adoption of ASU 2014-09			Effect of Change Higher (Lower)
Revenues
Sales	$	585		$	583		$	2
Services		144			144			—
Total revenues		729			727			2

Net loss	$	(21	)	$	(23	)	$	2

	June 30, 2018
(in millions)	As Reported			Balances without Adoption of ASU 2014-09			Effect of Change Higher (Lower)
Liabilities
Other current liabilities	$	208		$	206		$	2
Other long-term liabilities		198			192			6

Deficit
Accumulated Deficit		(205	)		(197	)		(8	)

(in millions)	Balance at December 31, 2018		Adjustments Due to ASU 2016-02			Balance at January 1, 2019
Operating lease right-of-use assets	$	—	$	53		$	53
Operating lease liabilities		—		62			62
Deferred rent payable ⁽¹⁾		9		(9	)		—
Deferred gain on previous sale leaseback transaction ⁽¹⁾		6		(6	)		—
Net fixed assets from previous sale leaseback transaction		1		(1	)		—
Accumulated deficit		200		(5	)		195

	Classification in the	March 31,
(in millions)	Consolidated Statement of Financial Position	2019
Assets
Operating lease assets	Operating lease right-of-use assets	$	49
Finance lease assets	Property, plant and equipment, net		5
Total lease assets		$	54

Liabilities
Current
Operating	Current portion of operating leases	$	23
Finance	Short-term borrowings and current portion of long-term debt		2
Noncurrent
Operating	Operating leases, net of current portion		35
Finance	Long-term debt, net of current portion		2
Total lease liabilities		$	62

Weighted-average remaining lease term
Operating		5 years
Finance⁽¹⁾		360 years
Weighted-average discount rate
Operating ⁽²⁾			16.50	%
Finance			6.68	%

(in millions)	Operating Leases			Finance Leases
Q2 - Q4 2019	$	19		$	1
2020		25			1
2021		9			1
2022		6			—
2023		6			—
Thereafter		24			116
Total minimum lease payments		89			119
Less: amount of lease payments representing interest		(31	)		(115	)
Present value of future minimum lease payments		58			4
Less: current obligations under leases		(23	)		(2	)
Long-term lease obligations	$	35		$	2

(in millions)
Deferred revenue on extended warranties as of December 31, 2017	$	23
New extended warranty and maintenance arrangements in 2018		56
Recognition of extended warranty and maintenance arrangement revenue in 2018		(56	)
Deferred revenue on extended warranties as of June 30, 2018	$	23

(in millions)	At December 31, 2018
2019	$	20
2020		21
2021		13
2022		3
2023		3
Thereafter		7
	$	67

(in millions)	Severance Reserve ⁽¹⁾			Exit Costs Reserve ⁽¹⁾			Long-lived Asset Impairments and Inventory Write-downs ⁽¹⁾		Total
Balance as of December 31, 2017	$	6		$	4		$	—	$	10
Q1 charges		2			—			—		2
Q1 utilization/cash payments		(4	)		—			—		(4	)
Balance as of March 31, 2018	$	4		$	4		$	—	$	8
Q2 charges	$	2		$	—		$	—	$	2
Q2 utilization/cash payments		(3	)		(2	)		—		(5	)
Q2 other adjustments and reclasses ⁽²⁾		(1	)		—			—		(1	)
Balance as of June 30, 2018	$	2		$	2		$	—	$	4

(in millions of shares)
Weighted average shares - basic	42.7	42.5		42.6	42.5
Effect of dilutive securities
Unvested restricted stock units	0.3	0.2	0.3		0.2
Weighted average shares - diluted	43.0	42.7		42.9		42.7

(in millions of shares)
Weighted average shares - basic and diluted			42.9				42.6

	Valuation Date						Valuation Date
	June 30,			December 31,			March 31,			December 31,
	2018			2017			2019			2018
Total value of embedded derivative liability (asset) ($ millions)	$	3		$	(4	)
Total value of embedded derivative asset ($ millions)							$	3		$	4
Kodak's closing stock price		3.80			3.10			2.96			2.55
Expected stock price volatility		87.32	%		58.22	%		93.84	%		95.55	%
Risk free rate		2.65	%		2.08	%		2.23	%		2.46	%
Yield on the preferred stock		19.85	%		22.31	%		24.14	%		23.77	%


	•	~~Kodak’s businesses will generate sufficient cash flow from operations;~~
	•	~~Kodak will be able to generate expected levels of operational EBITDA;~~
	•	~~Kodak will be able to repatriate or move cash to locations where and when it is needed;~~
	•	~~the Company will meet all the conditions associated with making borrowings or issuing letters of credit under the ABL Credit Agreement;~~
	•	~~Kodak will realize cost savings, earnings growth and operating improvements resulting from the execution of its 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 its liquidity needs.~~


	•	~~the ability to obtain required regulatory and other approvals;~~
	•	~~the need to integrate acquired or combined operations with its business;~~
	•	~~potential loss of key employees;~~
	•	~~difficulty in evaluating operating costs, infrastructure requirements, environmental and other liabilities and other factors beyond its control;~~
	•	~~potential lack of operating experience in new business or geographic areas;~~
	•	~~an increase in its expenses and working capital requirements;~~
	•	~~management’s attention may be temporarily diverted; and~~
	•	~~the possibility it may be required to issue a substantial amount of additional equity or debt securities or assume additional debt in connection with any such transactions.~~


	•	~~identify customer needs;~~
	•	~~innovate and develop new technologies, services, and applications;~~
	•	~~commercialize new technologies in a timely manner;~~
	•	~~manufacture and deliver its products in sufficient volumes and on time;~~
	•	~~differentiate its offerings from its competitors’ offerings;~~
	•	~~price its products and services competitively;~~
	•	~~anticipate its competitors’ development of new products, services or technological innovations;~~
	•	~~work successfully alongside its partners; and~~
	•	~~control product quality in its manufacturing processes.~~


	•	~~foresee the course of market developments more accurately than it does;~~
	•	~~sell superior products and provide superior services or offer a broader variety of products and services;~~
	•	~~have the ability to produce or supply similar products and services at a lower cost;~~
	•	~~have better access to supplies and the ability to acquire supplies at a lower cost;~~
	•	~~develop stronger relationships with its suppliers or customers;~~
	•	~~adapt more quickly to new technologies or evolving customer requirements than it does; or~~
	•	~~have access to capital markets or other financing sources on more favorable terms than it can obtain.~~


	•	~~develop manufacturing methods appropriate to Kodak’s products;~~
	•	~~maintain an adequate control environment;~~


	•	~~quickly respond to changes in customer demand for Kodak’s products;~~
	•	~~obtain supplies and materials necessary for the manufacturing process; or~~
	•	~~mitigate the impact of labor shortages and/or other disruptions.~~


	•	~~claims can be time consuming and costly to defend and may distract management’s attention and resources;~~
	•	claims of intellectual property infringement may require it to redesign affected products, enter into costly settlement or license agreements or pay costly damage awards, or face a temporary or permanent injunction prohibiting it from marketing or selling certain of its products;
	•	~~even if it has an agreement with a third party to indemnify it against such costs, the indemnifying party may be unable to uphold such party’s contractual obligations; and~~
	•	if it cannot or does not license the infringed technology at all, license the technology on reasonable terms or substitute similar technology from another source, its revenue and earnings could be adversely impacted.


	•	~~support of multiple languages;~~
	•	~~recruitment of sales and technical support personnel with the skills to design, manufacture, sell and supply products;~~
	•	~~compliance with governmental regulation of imports and exports, including obtaining required import or export approval for its products;~~
	•	~~complexity of managing international operations;~~
	•	~~exposure to foreign currency exchange rate fluctuations;~~


	•	~~commercial laws and business practices which may favor local competition and the imposition of tariffs on its products or raw materials;~~
	•	multiple, potentially conflicting, and changing governmental laws, regulations and practices, including differing export, import, tax, anti-corruption, anti-dumping, economic sanction, labor, and employment laws;
	•	~~difficulties in collecting accounts receivable;~~
	•	~~limitations or restrictions on the repatriation of cash;~~
	•	~~limitations or reductions in protection of intellectual property rights;~~
	•	~~complications in logistics and distribution arrangements; and~~
	•	~~political or economic instability.~~


	•	~~covenants in the Credit Agreements;~~
	•	~~obtaining a consent from the holders of Series A Preferred Stock for the issuance of additional preferred shares which rank senior or~~ ~~pari passu~~ ~~to the Series A Preferred Stock;~~


	•	~~investor confidence in Kodak and the markets in which it operates;~~
	•	~~its financial performance and the financial performance of its subsidiaries;~~
	•	~~its levels of debt and redemption obligations, including the mandatory redemption of the Series A Preferred Stock on November 15, 2021;~~
	•	~~its ability to enter into a definitive agreement for the sale of its Flexographic Packaging segment or other business units or assets or to consummate any such monetization transaction;~~
	•	~~its ability to generate positive cash flow;~~
	•	~~its requirements for posting collateral under various commercial agreements;~~
	•	~~its credit ratings;~~
	•	~~its cash flow;~~
	•	~~its long-term business prospects; and~~
	•	~~general economic and capital market conditions.~~


	•	it could have difficulties obtaining necessary financing in the future for working capital, capital expenditures, debt service requirements, mandatory redemption of the Series A Preferred Stock, refinancing or other purposes;
	•	it will have to use a significant part of its cash flow or cash balances to make payments on its debt or Series A Preferred Stock and to satisfy the other obligations set forth above, which may reduce the capital available for operations and expansion; and
	•	~~adverse economic or industry conditions may have more of a negative impact on it.~~

	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum That May Be Purchased under the Plans or Programs	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum That May Be Purchased under the Plans or Programs
June 1 through 30		9,840	$	4.74	n/a	n/a
February 1 through 28								9,921	$	2.74	n/a	n/a
March 1 through 31								3,730	$	4.00	n/a	n/a
Total		9,840						13,651	$	3.08

(2.1)	First Amendment to Stock and Asset Purchase Agreement, dated as of March 29, 2019, by and between Eastman Kodak Company and MIR Bidco SA (Incorporated by reference to Exhibit (2.3) of the Company’s Current Report on Form 8-K as filed April 9, 2019).

(3.1)	Second Amended and Restated Certificate of Incorporation of Eastman Kodak Company (Incorporated by reference to Exhibit (4.1) of the Company’s Registration Statement on Form S-8 as filed on September 3, 2013).

(3.2)	Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of Eastman Kodak Company (Incorporated by reference to Exhibit (3.1) of the Company’s Current Report on Form 8-K as filed November 16, 2016).

(3.3)	Fourth Amended and Restated By-Laws of Eastman Kodak Company (Incorporated by reference to Exhibit (3.1) of the Company’s Current Report on Form 8-K as filed on May 25, 2017).

(10.1)*~~(10.1)~~	Separation Agreement and Release between Eastman Kodak Company ~~Administrative Guide for Supplemental Awards~~and Jeffrey J. Clarke dated February 20, 2019 (Incorporated by reference to Exhibit (10.22) of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018 ~~Performance Period under the Executive Compensation for Excellence and Leadership Plan and Form of Individual Plan Overview,~~as filed ~~herewith~~on April 1, 2019).

(10.2)*~~(10.2)~~	Executive Chairman Agreement between Eastman Kodak Company ~~2013 Omnibus Incentive Plan~~and James V. Continenza, dated February 20, 2019 (Incorporated by reference to Exhibit (10.23) of the Company’s Annual Report on Form ~~of Award Agreement~~10-K for the fiscal year ended December 31, 2018 ~~Performance Incentive Program,~~as filed ~~herewith.~~on April 1, 2019).

(10.3)*~~(10.3)~~	~~Employment Agreement between Eastman Kodak Company and Eric Mahe,~~James V. Continenza Consolidated Award Agreements, Tranches 1-4, dated February 20, 2019 (Incorporated by reference to Exhibit (10.24) of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018 as filed on April ~~23, 2014, filed herewith.~~1, 2019).

(31.1)	Certification signed by ~~Jeffrey J. Clarke,~~James V. Continenza, filed ~~herewith.~~herewith.

(31.2)	Certification signed by David E. Bullwinkle, filed herewith.

(32.1)	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, signed by ~~Jeffrey J. Clarke,~~James V. Continenza, filed ~~herewith.~~herewith.

(32.2)	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 signed by David E. Bullwinkle, filed ~~herewith.~~herewith.

(101.CAL)	XBRL Taxonomy Extension Calculation Linkbase.

(101.INS)	XBRL Instance Document.

(101.LAB)	XBRL Taxonomy Extension Label Linkbase.

(101.PRE)	XBRL Taxonomy Extension Presentation Linkbase.

(101.SCH)	XBRL Taxonomy Extension Schema Linkbase.

(101.DEF)	XBRL Taxonomy Extension Definition Linkbase

Date ~~August~~May 9, ~~2018~~2019		/s/ Eric Samuels
		Eric Samuels
		Chief Accounting Officer and Corporate Controller
		(Chief Accounting Officer and Authorized Signatory)