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 the preceding 12 months. 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, ~~2017,~~2018, the registrant had ~~42,489,231~~42,654,527 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)	2017			2016			2017			2016			2018			2017
Revenues
Sales	$	306		$	342		$	586		$	639		$	285		$	283
Services		75			81			152			161			72			74
Total revenues		381			423			738			800			357			357
Cost of revenues
Sales		240			261			462			497			252			241
Services		50			55			102			108			51			54
Total cost of revenues		290			316			564			605			303			295
Gross profit		91			107			174			195			54			62
Selling, general and administrative expenses		53			58			106			103			63			65
Research and development costs		15			16			30			31			15			20
Restructuring costs and other		11			7			18			11			2			7
Other operating expense (income), net		2			(6	)		12			8
Earnings from continuing operations before interest expense, other (income) charges, net and income taxes		10			32			8			42
Other operating expense, net														—			10
Loss from continuing operations before interest expense, other charges (income), net and income taxes														(26	)		(40	)
Interest expense		8			16			16			32			8			8
Other (income) charges, net		(9	)		1			(29	)		2
Earnings from continuing operations before income taxes		11			15			21			8
Pension income excluding service cost component														(32	)		(38	)
Other charges (income), net														16			(20	)
(Loss) earnings from continuing operations before income taxes														(18	)		10
Provision for income taxes		4			6			7			13			7			3
Earnings (loss) from continuing operations		7			9			14			(5	)
Loss from discontinued operations, net of income taxes		(3	)		(1	)		(3	)		(2	)
Net earnings (loss)		4			8			11			(7	)
Less: Net income attributable to noncontrolling interests		—			1			—			4
NET EARNINGS (LOSS) ATTRIBUTABLE TO EASTMAN KODAK COMPANY	$	4		$	7		$	11		$	(11	)
Basic net (loss) earnings per share attributable to Eastman Kodak Company common shareholders:
Continuing operations	$	0.05		$	0.19		$	0.09		$	(0.21	)
Discontinued operations		(0.07	)		(0.02	)		(0.07	)		(0.05	)
Total	$	(0.02	)	$	0.17		$	0.02		$	(0.26	)
Diluted net (loss) earnings per share attributable to Eastman Kodak Company common shareholders:
Continuing operations	$	0.05		$	0.18		$	0.09		$	(0.21	)
Discontinued operations		(0.07	)		(0.02	)		(0.07	)		(0.05	)
Total	$	(0.02	)	$	0.16		$	0.02		$	(0.26	)
Net (loss) earnings														(25	)		7
Basic net (loss) earnings per share attributable to Eastman Kodak Company common shareholders													$	(0.70	)	$	0.05
Diluted net (loss) earnings per share attributable to Eastman Kodak Company common shareholders													$	(0.70	)	$	0.05
Number of common shares used in basic and diluted net (loss) earnings per share
Basic		42.5			42.2			42.5			42.2			42.6			42.4
Diluted		42.7			42.6			42.7			42.2			42.6			42.7

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

Three Months Ended

Six Months Ended

June 30,

June 30,

(in millions)

2017

2016

2017

2016

NET INCOME (LOSS)

$
4

$
8

$
11

$
(7
)
Less: Net income attributable to noncontrolling interests

—

1

—

4

Net income (loss) attributable to Eastman Kodak Company

4

7

11

(11
)
Other comprehensive loss, net of tax:

Currency translation adjustments

—

1

14

9

Pension and other postretirement benefit plan obligation activity,
   net of tax

(3
)

(2
)

(6
)

(148
)
Other comprehensive (loss) income, net of tax attributable to Eastman
   Kodak Company

(3
)

(1
)

8

(139
)
COMPREHENSIVE INCOME (LOSS), NET OF TAX ATTRIBUTABLE
  TO EASTMAN KODAK COMPANY

$
1

$
6

$
19

$
(150
)

	Three Months Ended
	March 31,
(in millions)	2018			2017
NET (LOSS) INCOME	$	(25	)	$	7
Other comprehensive income, net of tax:
Currency translation adjustments		13			14
Pension and other postretirement benefit plan obligation activity, net of tax		—			(3	)
Other comprehensive income, net of tax attributable to Eastman Kodak Company		13			11
COMPREHENSIVE (LOSS) INCOME, NET OF TAX ATTRIBUTABLE TO EASTMAN KODAK COMPANY	$	(12	)	$	18

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

	June 30,			December 31,			March 31,			December 31,
(in millions)	2017			2016			2018			2017
ASSETS
Cash and cash equivalents	$	370		$	434		$	313		$	344
Receivables, net		298			311
Trade receivables, net of allowances of $9 in each period								256			282
Inventories, net		313			271			305			276
Other current assets		23			23			62			56
Total current assets		1,004			1,039			936			958
Property, plant and equipment, net of accumulated depreciation of $376 and $343, respectively		320			342
Property, plant and equipment, net of accumulated depreciation of $411 and $394, respectively								311			314
Goodwill		88			88			32			32
Intangible assets, net		108			121			83			86
Restricted cash		11			36			12			17
Deferred income taxes		42			35			186			188
Other long-term assets		120			115			112			112
TOTAL ASSETS	$	1,693		$	1,776		$	1,672		$	1,707

LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND EQUITY (DEFICIT)
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND EQUITY
Accounts payable, trade	$	177		$	200		$	191		$	198
Short-term borrowings and current portion of long-term debt		7			6			4			4
Other current liabilities		212			211			224			217
Total current liabilities		396			417			419			419
Long-term debt, net of current portion		404			405			399			399
Pension and other postretirement liabilities		568			603			449			466
Other long-term liabilities		224			268			207			202
Total Liabilities		1,592			1,693			1,474			1,486

Commitments and Contingencies (Note 8)
Commitments and Contingencies (Note 7)

Redeemable, convertible Series A preferred stock, no par value, $100 per share liquidation preference	160			156			166			164

Equity (Deficit)
Common stock, $0.01 par value		—			—			—			—
Additional paid in capital		636			641			628			631
Treasury stock, at cost		(8	)		(8	)		(9	)		(9	)
Accumulated deficit		(257	)		(268	)		(209	)		(174	)
Accumulated other comprehensive loss		(430	)		(438	)		(378	)		(391	)
Total shareholders’ deficit		(59	)		(73	)
TOTAL LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND DEFICIT	$	1,693		$	1,776
Total shareholders’ equity								32			57
TOTAL LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND EQUITY							$	1,672		$	1,707

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

	Six Months Ended						Three Months Ending
	June 30,						March 31,
(in millions)	2017			2016			2018			2017
Cash flows from operating activities:
Net earnings (loss)	$	11		$	(7	)
Net (loss) earnings							$	(25	)	$	7
Adjustments to reconcile to net cash used in operating activities:
Depreciation and amortization		41			57			19			19
Pension income		(59	)		(72	)		(28	)		(32	)
Change in fair value of embedded conversion features derivative liability		(36	)		—			14			(22	)
Prosper asset remeasurement		12			—			—			12
Non-cash restructuring costs, asset impairments and other charges, net		10			26
Non-cash restructuring costs and asset impairments								—			8
Net gain on sales of assets/businesses		(2	)		(7	)		(1	)		(2	)
Stock based compensation		5			3			2			2
Provision for deferred income taxes		1			5			2			1
Decrease in receivables		26			35
Decrease in trade receivables								30			33
Increase in inventories		(40	)		(22	)		(27	)		(40	)
Decrease in trade payables		(29	)		(9	)		(6	)		(24	)
Decrease in liabilities excluding borrowings and trade payables		(21	)		(37	)		(9	)		(20	)
Other items, net		7			(2	)		2			5
Total adjustments		(85	)		(23	)		(2	)		(60	)
Net cash used in operating activities		(74	)		(30	)		(27	)		(53	)
Cash flows from investing activities:
Additions to properties		(17	)		(12	)		(10	)		(7	)
Proceeds from sales of assets/businesses, net		2			10			—			2
Proceeds from sales of marketable securities		1			—			—			1
Net cash used in investing activities		(14	)		(2	)		(10	)		(4	)
Cash flows from financing activities:
Repayment of emergence credit facilities		—			(2	)
Repayment of capital leases		(2	)		—			(1	)		(1	)
Payment of contingent consideration related to the sale of a business		—			(4	)
Equity transactions of noncontrolling interests		—			(1	)
Preferred stock dividend payments		(5	)		—			(3	)		(2	)
Treasury stock purchases		—			(1	)
Net cash used in financing activities		(7	)		(8	)		(4	)		(3	)
Effect of exchange rate changes on cash		6			2			5			4
Net decrease in cash, cash equivalents and restricted cash		(89	)		(38	)		(36	)		(56	)
Cash, cash equivalents and restricted cash, beginning of period		478			600			369			478
Cash, cash equivalents and restricted cash, end of period	$	389		$	562		$	333		$	422

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, ~~2016.~~

Certain amounts for prior periods have been reclassified to conform to the current period classification due to changes to Kodak’s organization structure effective January 1, 2017 and April 1, 2017 and a change in the presentation of discontinued operations and assets held for sale. In addition to the changes in segment reporting under the new organization structure, solvent recovery income for the Consumer and Film segment previously reported in Cost of Revenues is reported in Revenues and there is a change in the segment measure of profitability. Refer to Note 20, “Segment Information” and Note 21, “Discontinued Operations” for additional information.2017.

In ~~May~~March 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No 2017-09, Compensation—Stock Compensation (Topic 718) — Scope of Modification Accounting, to clarify when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new standard, modification is required only if the fair value, the vesting conditions, or the classification of an award as equity or liability changes as a result of the change in terms or conditions. The ASU is effective prospectively for annual and interim periods beginning after December 15, 2017 (January 1, 2018 for Kodak). Early adoption is permitted, including adoption in any interim period, for reporting periods for which financial statements have not yet been issued. Kodak early adopted ASU 2017-09 effective April 1, 2017. The adoption of this guidance had no impact on Kodak’s Consolidated Financial Statements.

In January 2017, the FASB issued ASU No: 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment. The ASU simplifies the accounting for goodwill impairment by removing Step 2 of the goodwill impairment test, which required a hypothetical purchase price allocation. The ASU requires entities to calculate a goodwill impairment as the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The same one-step impairment test applies to goodwill at all reporting units, even those with zero or negative carrying amounts. The ASU requires entities to disclose the amount of goodwill at reporting units with zero or negative carrying amounts. The ASU is effective prospectively for annual periods beginning after December 15, 2019, (January 1, 2020 for Kodak) with early adoption permitted for goodwill impairment tests performed after January 1, 2017. Kodak early adopted ASU 2017-04 effective January 1, 2017. The adoption of this guidance had no impact on Kodak’s Consolidated Financial Statements. As of the last goodwill assessment date, December 31, 2016, the Unified Workflow Solutions reporting unit had a negative carrying value. Total goodwill assigned to the Unified Workflow Solutions reporting unit is $6 million.

In November 2016, the FASB issued ASU 2016-18 Statement of Cash Flows (Topic 230): Restricted Cash. ASU 2016-18 requires entities to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. As a result, entities will no longer present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. The ASU requires changes in the Company’s restricted cash to be classified as either operating activities, investing activities or financing activities in the Consolidated Statement of Cash Flows, depending on the nature of the activities that gave rise to the restriction. The new standard is effective for annual reporting periods beginning after December 15, 2017, (January 1, 2018 for Kodak) including interim reporting periods within those annual reporting periods. Early adoption in an interim period is permitted, but any adjustments must be reflected as of the beginning of the fiscal year that includes that interim period. Kodak early adopted ASU 2016-18 effective January 1, 2017 which resulted in a decrease of $6 million in net cash flows provided by investing activities from what was previously reported for the six-month period ended June 30, 2016.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. ASU 2016-15 provides clarification with respect to classification of several cash flow issues on the Statement of Cash Flows including debt prepayment or extinguishment costs, proceeds from the settlement of insurance claims, and distributions received from equity method investees. The new standard is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017 (January 1, 2018 for Kodak). Kodak early adopted ASU 2016-15 retrospectively effective January 1, 2017. The adoption of this guidance had no ~~impact on Kodak’s Consolidated Financial Statements.~~

In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other than Inventory. ASU 2016-16 requires the recognition of the income tax consequences of intra-entity transfers of assets other than inventory when the transfer occurs. The new standard is effective on a modified retrospective basis for annual reporting periods beginning after December 15, 2017, (January 1, 2018 for Kodak) including interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period for which financial statements (interim or annual) have not been issued or made available for issuance (January 1, 2017 for Kodak). Kodak early adopted ASU 2016-16 on a modified retrospective basis during the first quarter of 2017. The adoption of this guidance had no impact on Kodak’s Consolidated Financial Statements.

~~In March 2017, the FASB issued ASU~~ 2017-07, Compensation—~~Retirement~~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 eligible for capitalization when applicable. ASU 2017-07 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017 (January 1, 2018 for Kodak)~~; retrospective application is required~~. Kodak adopted ASU 2017-07 effective January 1, 2018, retrospectively for the presentation of the service cost and other cost components ~~however~~and prospectively for the ~~restrictions on~~application of the capitalization ~~eligibility will be applied prospectively from the date of adoption.~~eligibility. The components of net benefit cost are shown in Note 14, “Retirement Plans and Other Postretirement ~~benefits”~~Benefits”. The guidance ~~will impact~~impacted presentation in ~~the Consolidated Financial Statements~~Kodak’s consolidated financial statements and the capitalization of costs to inventory. The ~~current~~ presentation of the service cost component iswas consistent with the requirements of the new standard. ~~Upon adoption, the~~The other components (which ~~are currently being~~were presented within Cost of revenues, Selling and general administrative expenses and Research and development costs) are ~~expected to be~~being presented ~~within Other (income) charges, net.~~separately on the face of the Consolidated Statement of Operations. The segment measure of profit ~~measure currently includes~~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.

In February 2017, the FASB issued ASU 2017-05, Other Income—Gains and Losses from 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 transactions in the new revenue standard (Topic 606 as described below). ASU 2017-05 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017 (January 1, 2018 for Kodak) and allows either a full retrospective adoption to all periods presented or a modified retrospective adoption approach with the cumulative effect of initial application recognized at the date of initial application. Kodak ~~expects to apply~~adopted ASU 2017-05 effective January 1, 2018 using the modified retrospective adoption ~~approach and expects that~~approach. The application of this standard ~~will~~did not have a significant impact on ~~its~~Kodak’s consolidated financial statements.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments—Overall (Topic 825): Recognition and Measurement 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 related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The classification and measurement guidance is effective for Kodak beginning January 1, 2018, including interim periods within those fiscal years. Kodak adopted ASU 2016-01 effective January 1, 2018. The adoption 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” 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 of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The new revenue standard is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017 (January 1, 2018 for Kodak) and allows either a full retrospective adoption to all periods presented or a modified retrospective adoption approach with the cumulative effect of initial application recognized at the date of initial application. 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 the standard will have on open contracts at the time of adoption. Kodak derives revenue from various brand licensing arrangements, which may include upfront payments and/or sales based royalties subject 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 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.

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 issued 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 adoption is permitted and may be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the 2017 Tax Act is recognized. 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 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). 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.~~

~~In January 2016, the FASB issued~~ ASU ~~2016-01, Financial Instruments—Overall (Topic 825): Recognition and Measurement of Financial Assets and Financial Liabilities. ASU 2016-01 primarily affects the accounting for equity investments,~~on its 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 related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The classification and measurement guidance will be effective forstatements. Kodak ~~beginning January 1, 2018, including interim periods within those fiscal years. Kodak does not expect~~anticipates that the adoption of ~~this~~the amended lease guidance ~~to have a material impact on~~will materially affect its Consolidated Statement of 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”Position 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 of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. In July 2015, the FASB deferred the effective date of ASU 2014-09. In 2016 the FASB issued ASU 2016-08, ASUs 2016-10 through 12 and ASU 2016-20 clarifying guidance regarding principle vs agent considerations, identification of performance obligations, analysis of licensing transactions, impairment considerations and disclosures. The new revenue standards are collectively effective for fiscal years, and interim periods within those years, beginning after December 15, 2017 (January 1, 2018 for Kodak) and allow either a full retrospective adoption to all periods presented or a modified retrospective adoption approach with the cumulative effect of initial application recognized at the date of initial application. Kodak currently anticipates applying the modified retrospective adoption approach. To date, the Company has not yet identified any material changes in the timing of revenue recognition when considering the amended accounting guidance, however, the Company’s implementation efforts are ongoing and such assessments may change prior to the January 1, 2018 implementation date. Kodak is in the process of implementing appropriaterequire certain changes to ~~the business processes,~~its systems and controls to support recognition and disclosure under the new standard. Training of employees on the impacts of the standard and changes to processes, systems and controls will continue throughout 2017.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:

	June 30,		December 31,		March 31,		December 31,
(in millions)	2017		2016		2018		2017
Cash and cash equivalents	$	370	$	434	$	313	$	344
Restricted cash included in Other current assets		8		8		8		8
Long-term restricted cash		11		36		12		17
Total cash, cash equivalents and restricted cash shown in the Statement of Cash Flows	$	389	$	478	$	333	$	369

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

Long-term restricted cash ~~as of June 30, 2017 and December 31, 2016~~ includes $6 million ~~and $7 million, respectively,~~ of security posted related to Brazilian legal ~~contingencies. Long-term restricted cash~~contingencies and also includes $0 million and $6 million as of March 31, 2018 and December 31, ~~2016 also included $25 million~~2017, respectively, supporting compliance with the Excess Availability threshold under the Amended and Restated Credit Agreement ~~(“Amended~~(the “Amended Credit Agreement”). During the second quarter of 2017, the amount of outstanding letters of credit issued under the Amended Credit Agreement was reduced by $20 million, which had a corresponding reduction in the amount of long-term restricted cash necessary to support compliance with the Excess Availability threshold. See Note 8, “Commitments and Contingencies” and “Sources of Liquidity” in Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations for additional information.

Approximately $23 million and $26 million of the total trade receivable amounts as of June 30, 2017 and December 31, 2016, respectively, will potentially be settled through customer deductions in lieu of cash payments. Such deductions represent rebates owed to customers and are included in Other current liabilities in the accompanying Consolidated Statement of Financial Position.

	June 30,		December 31,		March 31,		December 31,
(in millions)	2017		2016		2018		2017
Finished goods	$	177	$	149	$	170	$	159
Work in process		68		57		64		57
Raw materials		68		65		71		60
Total	$	313	$	271	$	305	$	276

~~The gross carrying amount and accumulated amortization by major asset category as of June 30, 2017 and December 31, 2016 were as follows:~~

Amortization expense related to intangible assets was $5 million for both the three months ended June 30, 2017 and 2016 and $9 million and $10 million for the six months ended June 30, 2017 and 2016, respectively.

During the first quarter of 2017, Kodak recorded $4 million to adjust the Prosper intangible asset carrying value to the amount that would have been recorded had the Prosper intangible assets been continuously classified as held and used. Refer to Note 10, “Other Operating Expense (Income), net and Note 21, “Discontinued Operations”.

~~Estimated future amortization expense related to intangible assets that are currently being amortized as of June 30, 2017, is as follows:~~

	June 30,		December 31,		March 31,		December 31,
(in millions)	2017		2016		2018		2017
Employee related liabilities	$	48	$	49	$	50	$	47
Deferred revenue		30		32		32		30
Deferred consideration on disposed businesses						24		10
Customer rebates		23		27		23		29
Deferred consideration on disposed businesses		17		7
Workers compensation						10		10
Restructuring liabilities		12		8		8		10
Workers compensation		9		8
Other		73		80		77		81
Total	$	212	$	211	$	224	$	217

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

	June 30,		December 31,		March 31,		December 31,
(in millions)	2017		2016		2018		2017
Workers compensation	$	103	$	105	$	96	$	96
Asset retirement obligations		43		43		46		43
Deferred taxes		16		16		16		16
Deferred consideration on disposed businesses						—		14
Environmental liabilities		12		12		12		12
Deferred consideration on disposed businesses		14		24
Embedded conversion features derivative liability(1)		7		43		9		—
Other		29		25		28		21
Total	$	224	$	268	$	207	$	202

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

On September 3, 2013, the Company entered into (i) a Senior Secured First Lien Term Credit Agreement (the “First Lien 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 Credit Agreement” and together with the Term Credit Agreements, 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 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.

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 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.

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 ECF was a negative amount. Therefore, no prepayment of First Lien term debt was required. Any mandatory prepayments as described above shall be reduced by any mandatory prepayments of the First Lien Loan.

Under the First Lien 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 March 31, 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 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 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.

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 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 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, 2019 if the First Lien Loans are not refinanced or paid on or before such date.

On May 26, 2016, the Company and certain of its domestic subsidiaries (the “Subsidiary Guarantors”) entered into an Amended and Restated Credit Agreement (the “Amended Credit Agreement” or “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 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 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 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.

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 Amended 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 $79 million and $96 million of letters of credit under the Amended Credit Agreement as of March 31, 2018 and December 31, 2017, respectively. The Company had approximately $36 million and $20 million of Excess

Availability under the Amended Credit Agreement as of March 31, 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 $14 million, as of March 31, 2018 (which $14 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, 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, 2018 and December 31, 2017, 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, 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 March 31, 2018 and December 31, 2017, Kodak was in compliance with all the covenants under the Amended Credit Agreement.

As of ~~June 30, 2017,~~March 31, 2018, the Company had outstanding letters of credit of ~~$96~~$79 million issued under the Amended Credit Agreement, as well as bank guarantees and letters of credit of $4 million, surety bonds in the amount of $53 million, and restricted cash and deposits of ~~$25~~$26 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 ~~June 30, 2017,~~March 31, 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 ~~$52~~$24 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, 2017,~~March 31, 2018, Kodak has posted security composed of $6 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 ~~$72~~$71 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 ~~$11~~$7 million and the outstanding amount for those guarantees is $4$3 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. Kodak provides repair services and routine maintenance under these arrangements. Kodak has not separated the extended warranty revenues and costs from the routine maintenance service revenues and costs, as it is not practicable to do so. Therefore, these revenues and costs have been aggregated in the discussion that follows. The change in Kodak’s deferred revenue balance in relation to these extended warranty and maintenance arrangements from December 31, ~~2016~~2017 to ~~June 30, 2017,~~March 31, 2018, which is reflected in Other current liabilities in the accompanying Consolidated Statement of Financial Position, was as follows:

Kodak’s revenue transactions include sales of products (such as components and consumables for use in Kodak and other manufacturers’ 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 of the promised goods or services is transferred to customers in an amount that reflects the consideration Kodak expects to be entitled to in exchange for those goods or services.

For product sales (such as plates, film, inks 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 for as a single performance obligation. 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.

For non-complex equipment installations and software sales (Prepress, Packaging and Prosper Components 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 are usually sold with post-contract support services (“PCS”) which are 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.

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, 2018, there was approximately $75 million of remaining performance obligations. Approximately 30% of the remaining performance obligations are expected to be recognized in 2018, and 2019, 20% in 2020 and 20% thereafter.

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

	Three Months Ended
	March 31, 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	$	167	$	8	$	32	$	—	$	5	$	—	$	—	$	212
Ongoing service arrangements ⁽¹⁾		34		20		2		12		—		—		—		68
Total Annuities		201		28		34		12		5		—		—		280
Equipment & Software		15		3		3		4		—		—		—		25
Film and chemicals		—		—		—		—		40		—		—		40
Other ₍₂₎		—		—		—		4		3		1		4		12
Total	$	216	$	31	$	37	$	20	$	48	$	1	$	4	$	357

	Three Months Ended
	March 31, 2018
	Print Systems		Enterprise Inkjet Solutions		Flexographic Packaging Printing		Software & Solutions		Consumer & Film		Advanced Materials and 3D Technology Solutions		Eastman Business Park		Total
United States	$	57	$	11	$	6	$	7	$	32	$	1	$	4	$	118
Canada		3		—		1		1		1		—		—		6
North America		60		11		7		8		33		1		4		124
Europe, Middle East and Africa		93		12		16		6		5		—		—		132
Asia Pacific		49		7		7		5		10		—		—		78
Latin America		14		1		7		1		—		—		—		23
Total Sales	$	216	$	31	$	37	$	20	$	48	$	1	$	4	$	357

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 March 31, 2018 and December 31, 2017 were $2 million and $3 million, respectively, and are reported in Other current assets and Trade receivables, respectively, 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, 2018 and December 31, 2017 were $46 million and $37 million, respectively, of which $38 million and $37 million, respectively, are reported in Other current liabilities and $8 million and $0 million, respectively, are reported in Other long-term liabilities in the Consolidated Statement of Financial Position.

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

	Three Months Ended					Six Months Ended					Three Months Ended
	June 30,					June 30,					March 31,
(in millions)	2017			2016		2017			2016		2018		2017
Change in fair value of embedded conversion features derivative liability ⁽¹⁾	$	(14	)	$	—	$	(36	)	$	—	$	14	$	(22	)
Loss on foreign exchange transactions		3			1		4			2		2		1
Other		2			—		3			—		—		1
Total	$	(9	)	$	1	$	(29	)	$	2	$	16	$	(20	)

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 statements for the quarter ended March 31, 2018 which were fully offset by Kodak’s U.S. valuation allowance resulting in no net tax provision for the quarter.

Given the complexity of the GILTI provisions, Kodak is still evaluating the effects and has not yet determined its accounting policy. For the quarter ended March 31, 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 for the quarter.

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 quarter ended March 31, 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:

	Three Months Ended						Six Months Ended						Three Months Ended
	June 30,						June 30,						March 31,
(in millions)	2017			2016			2017			2016			2018			2017
Earnings from continuing operations before income taxes	$	11		$	15		$	21		$	8
(Loss) earnings from continuing operations before income taxes													$	(18	)	$	10
Effective tax rate		36.4	%		40.0	%		33.3	%		162.5	%		(38.9	)%		30.0	%
Provision for income taxes		4			6			7			13			7			3
Provision for income taxes @ 35%		4			5			7			3
(Benefit) provision for income taxes @ U.S. statutory tax rate														(4	)		4
Difference between tax at effective vs. statutory rate	$	-		$	1		$	-		$	10		$	11		$	(1	)

For the three months ended ~~June 30,~~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.

For the three months ended March 31, 2017, the difference between Kodak’s recorded provision and the provision that would result from applying 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 recorded provision and the provision that would result from applying 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.~~

For the three and six months ended June 30, 2016, the difference between Kodak’s recorded provision and the provision that would result from applying 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., and~~ (3) changes in audit reserves.

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 ~~half~~three months of ~~2017~~2018 were initiated to reduce Kodak’s cost structure as part of its commitment to drive sustainable profitability and included ~~actions associated with the Prosper business cost reduction, voluntary workforce transition plans in the U.S., an office closure in Switzerland, as well as~~ 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, 2017~~March 31, 2018 were as follows:

(in millions)

Severance
Reserve ⁽¹⁾

Exit
Costs
Reserve ⁽¹⁾

Long-lived Asset
Impairments and
Inventory
Write-downs ⁽¹⁾

Total

Balance as of December 31, 2016

$
5

$
3

$
—

$
8

Q1 charges

5

—

8

13

Q1 utilization/cash payments

(3
)

—

(8
)

(11
)
Q1 other adjustments and reclasses ⁽²⁾

(1
)

—

—

(1
)
Balance as of March 31, 2017

$
6

$
3

$
—

$
9

Q2 charges

$
8

$
3

$
—

$
11

Q2 utilization/cash payments

(3
)

(1
)

—

(4
)
Q2 other adjustments and reclasses ⁽³⁾

(4
)

—

—

(4
)
Balance as of June 30, 2017

$
7

$
5

$
—

$
12

(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

For the three months ended ~~June 30, 2017~~March 31, 2018 the ~~$11~~$2 million of charges were reported as Restructuring costs and ~~other in the Consolidated Statement of Operations.~~other.

The severance costs for the three months ended ~~June 30, 2017~~March 31, 2018 related to the elimination of approximately ~~100~~35 positions including approximately 5010 manufacturing/service positions and 5025 administrative and sales positions. ~~The geographic composition~~These positions were located primarily outside of ~~these positions includes approximately 75 in~~ the United States and ~~Canada and 25 throughout the rest of the world.~~

For the six months ended June 30, 2017 the $24 million of charges includes $6 million of charges for inventory write-downs which were reported in Cost of revenues in the Consolidated Statement of Operations. The remaining $18 million was reported as Restructuring costs and other.

The severance costs for the six months ended June 30, 2017 related to the elimination of approximately 200 positions including approximately 75 manufacturing/service positions, 25 research and development positions and 100 administrative positions. The geographic composition of these positions includes approximately 125 in the United States and Canada and 75 throughout the rest of the world.Canada.

As a result of these initiatives, the majority of the severance will be paid during periods through the ~~first quarter~~end of 2018. However, in some instances, the employees whose positions were eliminated can elect or are required to receive their payments over an extended period of time. In addition, certain exit costs, such as long-term lease payments, will be paid over periods throughout the remainder of 2017 and beyond.

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

	Three Months Ended												Six Months Ended												Three Months Ended
	June 30,												June 30,												March 31,
	2017						2016						2017						2016						2018						2017
(in millions)	U.S.			Non-U.S.			U.S.			Non-U.S.			U.S.			Non-U.S.			U.S.			Non-U.S.			U.S.			Non-U.S.			U.S.			Non-U.S.
Major defined benefit plans:
Service cost	$	3		$	1		$	3		$	—		$	6		$	2		$	6		$	1		$	3		$	1		$	3		$	1
Interest cost		28			3			28			4			57			6			58			7			28			3			29			3
Expected return on plan assets		(61	)		(6	)		(66	)		(7	)		(122	)		(13	)		(131	)		(14	)		(56	)		(7	)		(61	)		(7	)
Amortization of:
Prior service credit		(1	)		—			(1	)		—			(3	)		—			(3	)		—			(2	)		—			(2	)		—
Actuarial loss		—			—			2			—			—			1			2			—			1			1			—			1
Net pension income before special termination benefits		(31	)		(2	)		(34	)		(3	)		(62	)		(4	)		(68	)		(6	)		(26	)		(2	)		(31	)		(2	)
Special termination benefits		5			—			2			—			6			—			3			—			—			—			1			—
Net pension income		(26	)		(2	)		(32	)		(3	)		(56	)		(4	)		(65	)		(6	)		(26	)		(2	)		(30	)		(2	)
Other plans		—			1			—			—			—			1			—			(1	)		—			—			—			—
Total net pension income	$	(26	)	$	(1	)	$	(32	)	$	(3	)	$	(56	)	$	(3	)	$	(65	)	$	(7	)	$	(26	)	$	(2	)	$	(30	)	$	(2	)

For ~~both~~ the ~~three-and six~~three months ended ~~June 30,~~March 31, 2017 ~~and 2016~~ the special termination benefits charges were incurred as a result of Kodak’s restructuring actions.

On November 15, 2016, the Company issued 2,000,000 shares 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 equity 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 ~~22,~~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. ~~The Company~~All dividends owed on the Series A Preferred Stock have been declared ~~a cash dividend of approximately $3 million in June 2017, which was~~and paid ~~on July 17, 2017. The accrual for the cash dividend declared is included in Other current liabilities in the accompanying Consolidated Statement of Financial Position as of June 30, 2017.~~when due. As of ~~June 30, 2017,~~March 31, 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.

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 the three ~~and six~~ months ended ~~June 30,~~March 31, 2018 and 2017 follows: (in millions):

	Three Months Ended			Six Months Ended			Three Months Ended
	June 30, 2017			June 30, 2017			March 31,
Earnings from continuing operations attributable to Eastman Kodak Company	$	7		$	14
(in millions)							2018			2017
Net (loss) earnings attributable to Eastman Kodak Company							$	(25	)	$	7
Less: Series A convertible preferred stock cash dividend		(3	)		(6	)		(3	)		(3	)
Less: Series A convertible preferred stock deemed dividend		(2	)		(4	)		(2	)		(2	)
Earnings from continuing operations available to common shareholders - basic and diluted	$	2		$	4

Earnings from net earnings attributable to Eastman Kodak Company	$	4		$	11
Less: Series A convertible preferred stock cash dividend		(3	)		(6	)
Less: Series A convertible preferred stock deemed dividend		(2	)		(4	)
(Loss) earnings from net earnings available to common shareholders - basic and diluted	$	(1	)	$	1
Net (loss) earnings available to common shareholders - basic and diluted							$	(30	)	$	2

As a result of the net loss from continuing operations available to common shareholders for the three months ending March 31, 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 the three months ending March 31, 2018, the calculation of diluted earnings per share would have included the assumed conversion of 0.3 million of unvested restricted stock units.

The computation of diluted earnings per share for the three ~~and six~~ months ended ~~June 30,~~March 31, 2018 and March 31, 2017 also excluded the impact of (1) the assumed conversion of 2.0 million shares of Series A convertible preferred shares, (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 ~~2.6~~5.0 million and 1.8 million, respectively, outstanding employee stock options because ~~they~~the effects would have been anti-dilutive.

~~Weighted-average basic shares outstanding were 42.2 million for the three and six month periods ended June 30, 2016.~~

~~Weighted average diluted shares were 42.6 million for the three-month period ended June 30, 2016 and included the dilutive effect of 0.4 million unvested restricted stock units~~.

As a result of the net loss from continuing operations for the six months ended June 30, 2016, Kodak calculated earnings per share using weighted-average basic shares outstanding for the period. If Kodak had reported earnings from continuing operations for the six months ended June 30, 2016, Kodak would have included the dilutive effect of 0.2 million unvested restricted stock units.

The computation of diluted earnings per share for the three and six months ended June 30, 2016 excluded the impact of the assumed conversion of net share settled warrants to purchase (a) 1.8 million shares of common shares at an exercise price of $14.93 and (b) 1.8 million shares of common shares at an exercise price of $16.12 because they would have been anti-dilutive. Outstanding stock options of 1.7 million for the three and six months ended June 30, 2016 were not included in the computation of diluted earnings per share as they would also have been anti-dilutive.

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, 2017~~March 31, 2018 and December 31, ~~2016,~~2017, there were ~~42.5 million and 42.4~~42.6 million shares of common stock outstanding and 2.0 million shares of Series A preferred stock issued and ~~outstanding, respectively.~~outstanding. Treasury stock consisted of approximately ~~0.5~~0.6 million shares at both ~~June 30, 2017~~March 31, 2018 and December 31, ~~2016.~~2017.

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

Three Months Ended

Six Months Ended

June 30,

June 30,

(in millions)

2017

2016

2017

2016

Currency translation adjustments

$
—

$
1

$
14

$
9

Pension and other postretirement benefit plan changes

Newly established net actuarial loss

(1
)

(2
)

(1
)

(144
)
Tax benefit

—

1

—

1

Newly established net actuarial loss, net of tax

(1
)

(1
)

(1
)

(143
)
Reclassification adjustments:

Amortization of prior service credit
^(a)

(2
)

(2
)

(4
)

(4
)
Amortization of actuarial gains
^(a)

—

—

(1
)

(1
)
Recognition of gains due to settlements

—

—

—

(1
)
Total reclassification adjustments

(2
)

(2
)

(5
)

(6
)
Tax provision

—

1

—

1

Reclassification adjustments, net of tax

(2
)

(1
)

(5
)

(5
)
Pension and other postretirement benefit plan changes,
net of tax

(3
)

(2
)

(6
)

(148
)
Other comprehensive (loss) income

$
(3
)

$
(1
)

$
8

$
(139
)

		Three Months Ended
		March 31,
(in millions)		2018			2017
Currency translation adjustments		$	13		$	14
Pension and other postretirement benefit plan changes
Reclassification adjustments:
Amortization of prior service credit	^(a)		(2	)		(2	)
Amortization of actuarial (gains) losses	^(a)		1			(1	)
Recognition of losses due to settlements			1			—
Total reclassification adjustments			—			(3	)
Pension and other postretirement benefit plan changes, net of tax			—			(3	)
Other comprehensive income		$	13		$	11

	June 30,			December 31,			March 31,			December 31,
(in millions)	2017			2016			2018			2017
Currency translation adjustments	$	(82	)	$	(96	)	$	(72	)	$	(85	)
Pension and other postretirement benefit plan changes		(348	)		(342	)		(306	)		(306	)
Ending balance	$	(430	)	$	(438	)	$	(378	)	$	(391	)

~~Effective January 1, 2017,~~ Kodak ~~changed its organizational structure. Micro 3D Printing, within the Micro 3D Printing and Packaging segment, was moved into the Intellectual Property Solutions segment, which~~ has been renamed the Advanced Materials and 3D Printing Technology segment. The Flexographic Packaging business, formerly part of the Micro 3D Printing and Packaging segment, is now being reported as a dedicated segment.

Effective April 1, 2017, Kodak made another change to its organizational structure. Digital front-end controllers within the Prosper business in the Enterprise Inkjet Systems segment was moved to the Unified Workflow Solutions business within the Software and Solutions segment.

~~Prior period segment results have been revised to conform to the current period segment reporting structure.~~

~~Financial information is reported for~~ seven reportable segments: Print Systems, Enterprise Inkjet Systems, Flexographic Packaging, Software and Solutions, Consumer and Film, 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: The Flexographic Packaging segment is comprised of the Packaging line of business.

Software and Solutions: The Software and Solutions segment is comprised of two 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: Industrial Film and Chemicals, Motion Picture and Consumer Products (which includes Consumer Inkjet Solutions).

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, and Micro 3D Printing.~~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.

	Three Months Ended				Six Months Ended				Three Months Ended
	June 30,				June 30,				March 31,
(in millions)	2017		2016		2017		2016		2018		2017
Print Systems	$	236	$	258	$	449	$	489	$	216	$	213
Enterprise Inkjet Systems		35		44		72		76		31		37
Flexographic Packaging		37		35		70		64		37		33
Software and Solutions		22		21		43		45		20		21
Consumer and Film		47		62		96		119		48		49
Advanced Materials and 3D Printing Technology		—		—		—		—		1		—
Eastman Business Park		4		3		8		7		4		4
Consolidated total	$	381	$	423	$	738	$	800	$	357	$	357

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)	2017			2016			2017			2016			2018			2017
Print Systems	$	16		$	22		$	29		$	40		$	4		$	12
Enterprise Inkjet Systems		1			(6	)		1			(10	)		—			—
Flexographic Packaging		8			6			14			10			7			6
Software and Solutions		(1	)		(2	)		(1	)		(1	)		—			—
Consumer and Film		(5	)		10			(8	)		17			(6	)		(4	)
Advanced Materials and 3D Printing Technology		(7	)		(8	)		(15	)		(15	)		(4	)		(8	)
Eastman Business Park		2			1			2			1			—			—
Total of reportable segments		14			23			22			42			1			6
All Other ⁽¹⁾		—			2			—			5
Corporate components of pension and OPEB income ⁽²⁾		35			40			71			81
Depreciation and amortization		(22	)		(27	)		(41	)		(57	)		(19	)		(19	)
Restructuring costs and other		(11	)		(7	)		(24	)		(12	)		(2	)		(13	)
Stock based compensation		(3	)		(1	)		(5	)		(3	)		(2	)		(2	)
Consulting and other costs ⁽³⁾		—			(2	)		(1	)		(3	)
Idle costs ⁽⁴⁾		(1	)		(1	)		(2	)		(2	)
Manufacturing costs originally planned to be absorbed by silver metal mesh touch screen production ⁽⁵⁾		—			(1	)		—			(1	)
Other operating (expense) income, net ⁽⁶⁾		(2	)		6			(12	)		(8	)
Interest expense ⁽⁶⁾		(8	)		(16	)		(16	)		(32	)
Other income (charges), net ⁽⁶⁾		9			(1	)		29			(2	)
Consolidated earnings from continuing operations before income taxes	$	11		$	15		$	21		$	8
Consulting and other costs ⁽¹⁾														(3	)		(1	)
Idle costs ⁽²⁾														(1	)		(1	)
Other operating (expense) income, net ⁽³⁾														—			(10	)
Interest expense ⁽³⁾														(8	)		(8	)
Pension income excluding service cost component ⁽³⁾														32			38
Other (charges) income, net ⁽³⁾														(16	)		20
Consolidated (loss) earnings from continuing operations before income taxes													$	(18	)	$	10

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 (loss) earnings ~~(loss)~~ from continuing operations excluding the provision for income taxes; ~~corporate~~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 costs originally planned to be absorbed by silver metal mesh touch screen production;~~ other operating expense, net (unless otherwise indicated); goodwill impairment losses; interest expense; and other ~~(income) charges,~~(charges) income, net. Overhead costs no longer absorbed by the Prosper discontinued operations of $4 million and $8 million in the three and six months ended June 30, 2016, respectively, were also excluded from segment earnings while the business was reported in discontinued operations. As the Prosper business is no longer reported in discontinued operations, overhead allocations are included in the Enterprise Inkjet Solutions segment measure for all periods presented.

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 ~~2017~~2018 the segment measure was changed to exclude ~~internal~~amortization of prior service costs associated with corporate strategic initiatives. The segment measure already excluded external costs associated with those initiatives. Additionally, third party costs associated with incremental idle building space has been addedand credits which, due to ~~idle costs.~~

~~The results~~the adoption of ~~the Prosper business were previously presented as discontinued operations. However, the held for sale criteria were~~ASU 2017-17, are no longer met as of March 31, 2017. In April 2017, Kodak decided to retain the Prosper business. The assets and liabilities of the Prosper business, previously presented as held for sale, have been reclassified to held and usedreported in the ~~Consolidated Statement of Financial Position~~same line item as ~~of December 31, 2016, and~~other compensation costs arising from services rendered during the results of the Prosper business have been reclassified from discontinued operations to continuing operations for all periods presented. The Prosper business’ assets and liabilities as of March 31, 2017 were measured at the carrying amount before the assets were classified as held for sale, reduced by $12 million representing the depreciation and amortization expense that would have been recognized had the assets been continuously classified as held for use. The $12 million reductionperiod. Refer to the ~~carrying value~~Recently Adopted Accounting Pronouncements section of ~~the Prosper assets was reported in Other operating expense, net in the first quarter~~Note 1, “Basis of ~~2017.~~Presentation and Recent Accounting Pronouncements.

~~The reclassification of the results of the Prosper Business to continuing operations had the following impacts on the Consolidated Statement of Operations:~~

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 ~~(loss)~~ at the same time that the exposed assets and liabilities are remeasured through net (loss) earnings ~~(loss)~~ (both in Other charges (income) ~~charges,~~, net in the Consolidated Statement of Operations). The notional amount of such contracts open at ~~June 30, 2017~~March 31, 2018 and December 31, ~~2016~~2017 was approximately ~~$704~~$647 million and ~~$340~~$534 million, respectively. The majority of the contracts of this type held by Kodak as of ~~June 30,~~March 31, 2018 and December 31, 2017 are denominated in Swiss francs and euros. ~~The majority of the contracts of this type held by Kodak as of December 31, 2016 were denominated in euros, British pounds, and Chinese renminbi.~~

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

	Three Months Ended						Six Months Ended					Three Months Ended
	June 30,						June 30,					March 31,
(in millions)	2017			2016			2017		2016			2018		2017
Net loss from derivatives not designated as hedging instruments	$	(4	)	$	(2	)	$	—	$	(1	)	$	—	$	4

Kodak had no derivatives designated as hedging instruments for the three ~~and six~~ months ended ~~June 30, 2017 and 2016.~~March 31, 2018.

In the event of a default under the Company’s Senior Secured First Lien Term Credit Agreement, the Amended 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, “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 ~~which~~position at March 31, 2018 and in an asset position at December 31, 2017, and is reported in Other long-term liabilities and Other long-term assets, respectively, in the Consolidated Statement of Financial Position. The derivative ~~liability~~ is being accounted for at fair value with changes in fair value being reported in Other charges (income) ~~charges,~~, net in the Consolidated Statement of Operations.

~~Fair values of marketable securities are determined using quoted prices in active markets for identical assets (Level 1 fair value measurements).~~ 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. ~~Neither the~~The gross fair value of ~~marketable securities nor the gross fair values of the foreign currency~~ forward contracts ~~was material~~in an asset position as of ~~June 30, 2017~~March 31, 2018 and December 31, ~~2016.~~2017 was $10 million and $7 million, respectively. The gross fair value of forward contracts in a liability position as of March 31, 2018 and December 31, 2017 was not material.

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, 2017.~~March��31, 2018.

The fair value of the embedded conversion features derivative ~~liability~~ 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, 2017~~March 31, 2018 and December 31, ~~2016:~~2017:

	Valuation Date						Valuation Date
	June 30, 2017			December 31, 2016			March 31,			December 31,
Total value of embedded derivative liability ($ millions)	$	7		$	43
							2018			2017
Total value of embedded derivative liability (asset) ($ millions)							$	9		$	(4	)
Kodak's closing stock price		9.10			15.50			5.35			3.10
Expected stock price volatility		43.76	%		42.85	%		88.37	%		58.22	%
Risk free rate		1.78	%		1.93	%		2.44	%		2.08	%
Yield on the preferred stock		11.79	%		11.38	%		17.21	%		22.31	%

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 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 December 31, 2017 resulting in the derivative being reported as an asset.

The fair values of long-term ~~borrowings~~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 ~~$414~~$377 million and ~~$406~~$348 million at ~~June 30, 2017~~March 31, 2018 and December 31, ~~2016,~~2017, respectively.

The carrying values of cash and cash equivalents and restricted cash 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 ~~Kodak’s~~the Company’s Annual Report on Form 10–K for the year ended December 31, ~~2016~~2017 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 ~~Kodak’s quarterly report on Form 10-Q for the quarter ended March 31, 2017, and in~~ other filings ~~Kodak~~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.

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, and is ~~commercializing~~developing products infor the functional printing markets. Kodak also offers brand licensing and intellectual property opportunities, provides products and services for motion pictures and other commercial films, and sells ink to its existing installed consumer inkjet printer base.

Revenue ~~declined $42 million (10%) and $62 million (8%)~~was flat compared to the prior year quarter, ~~and first six months, respectively.~~including the favorable impact of currency ($20 million) in the current year quarter.

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

~~Effective January 1, 2017,~~ Kodak ~~changed its organizational structure. Micro 3D Printing within the Micro 3D Printing and Packaging segment was moved into the Intellectual Property Solutions segment which~~ has been renamed the Advanced Materials and 3D Printing Technology segment. The Flexographic Packaging business, formerly part of the Micro 3D Printing and Packaging segment, is now being reported as a dedicated segment.

Additionally, effective April 1, 2017, digital front-end controllers within the Prosper business in the Enterprise Inkjet Systems segment was moved to the Unified Workflow Solutions business within the Software and Solutions segment.

~~Prior period segment results have been revised to conform to the current period segment reporting structure.~~

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 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.

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.

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

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.

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.

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 document management and managed print services businesses ~~as well as businesses that leverage existing Kodak technologies~~ and ~~intellectual property in new applications.~~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.

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

The Advanced Materials and 3D Printing Technology segment contains the Kodak Research Laboratories and associated new business opportunities ~~touch sensor films with copper mesh technology~~ 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 solutions in Advanced Materials and 3D Printing are in the process of being commercialized or are new business opportunities, a ~~higher degree~~higher-level of investment ishas 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 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 provides a wide range of analytical services and non-recurring engineering services to external clients at market rates for such services.

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.

	Three Months Ended				Six Months Ended				Three Months Ended
	June 30,				June 30,				March 31,
(in millions)	2017		2016		2017		2016		2018		2017
Print Systems		236	$	258		449	$	489	$	216	$	213
Enterprise Inkjet Systems		35		44		72		76		31		37
Flexographic Packaging		37		35		70		64		37		33
Software and Solutions		22		21		43		45		20		21
Consumer and Film		47		62		96		119		48		49
Advanced Materials and 3D Printing Technology		—		—		—		—		1		—
Eastman Business Park		4		3		8		7		4		4
Consolidated total	$	381	$	423	$	738	$	800	$	357	$	357

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)	2017			2016			2017			2016			2018			2017
Print Systems	$	16		$	22		$	29		$	40		$	4		$	12
Enterprise Inkjet Systems		1			(6	)		1			(10	)		—			—
Flexographic Packaging		8			6			14			10			7			6
Software and Solutions		(1	)		(2	)		(1	)		(1	)		—			—
Consumer and Film		(5	)		10			(8	)		17			(6	)		(4	)
Advanced Materials and 3D Printing Technology		(7	)		(8	)		(15	)		(15	)		(4	)		(8	)
Eastman Business Park		2			1			2			1			—			—
All Other ⁽¹⁾		—			2			—			5
Corporate components of pension and OPEB income ⁽²⁾		35			40			71			81
Depreciation and amortization		(22	)		(27	)		(41	)		(57	)		(19	)		(19	)
Restructuring costs and other		(11	)		(7	)		(24	)		(12	)		(2	)		(13	)
Stock based compensation		(3	)		(1	)		(5	)		(3	)		(2	)		(2	)
Consulting and other costs ⁽³⁾		—			(2	)		(1	)		(3	)
Idle costs ⁽⁴⁾		(1	)		(1	)		(2	)		(2	)
Manufacturing costs originally planned to be absorbed by silver metal mesh touch screen production ⁽⁵⁾		—			(1	)		—			(1	)
Other operating (expense) income, net ⁽⁶⁾		(2	)		6			(12	)		(8	)
Interest expense ⁽⁶⁾		(8	)		(16	)		(16	)		(32	)
Other income (charges), net ⁽⁶⁾		9			(1	)		29			(2	)
Consolidated earnings from continuing operations before income taxes	$	11		$	15		$	21		$	8
Consulting and other costs ⁽¹⁾														(3	)		(1	)
Idle costs ⁽²⁾														(1	)		(1	)
Other operating (expense) income, net ⁽³⁾														—			(10	)
Interest expense ⁽³⁾														(8	)		(8	)
Pension income excluding service cost component ⁽³⁾														32			38
Other (charges) income, net ⁽³⁾														(16	)		20
Consolidated (loss) earnings from continuing operations before income taxes													$	(18	)	$	10

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 (loss) earnings ~~(loss)~~ from continuing operations excluding the provision for income taxes; ~~corporate~~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 costs originally planned to be absorbed by silver metal mesh touch screen production;~~ other operating expense, net (unless otherwise indicated); goodwill impairment losses; interest expense; and other ~~(income) charges,~~(charges) income, net. Overhead costs no longer absorbed by the Prosper discontinued operations of $4 million and $8 million in the three and six months ended June 30, 2016, respectively, were also excluded from segment earnings while the business was reported in discontinued operations. As the Prosper business is no longer reported in discontinued operations, overhead allocations are included in the Enterprise Inkjet Solutions segment measure for all periods presented.

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 ~~2017~~2018 the segment measure was changed to exclude ~~internal~~amortization of prior service costs ~~associated with corporate strategic initiatives. The segment measure already excluded external~~and credits, which, due to the adoption of ASU 2017-17 are no longer reported in the same line items as other compensation costs ~~associated with those initiatives. Additionally, third party costs associated with incremental idle building space has been added~~arising from services rendered during the period. Refer to ~~idle costs.~~the Recently Adopted Accounting Pronouncements section of Note 1, “Basis of Presentation and Recent Accounting Pronouncements.”

	Three Months Ended June 30,															Six Months Ended June 30,															Three Months Ended March 31,
(in millions)	2017			% of Sales			2016			% of Sales			$ Change			2017			% of Sales			2016			% of Sales			$ Change			2018			% of Sales			2017			% of Sales			$ Change
Revenues	$	381					$	423					$	(42	)	$	738					$	800					$	(62	)	$	357					$	357					$	—
Cost of revenues		290						316						(26	)		564						605						(41	)		303						295						8
Gross profit		91			24	%		107			25	%		(16	)		174			24	%		195			24	%		(21	)		54			15	%		62			17	%		(8	)
Selling, general and administrative expenses		53			14	%		58			14	%		(5	)		106			14	%		103			13	%		3			63			18	%		65			18	%		(2	)
Research and development costs		15			4	%		16			4	%		(1	)		30			4	%		31			4	%		(1	)		15			4	%		20			6	%		(5	)
Restructuring costs and other		11			3	%		7			2	%		4			18			2	%		11			1	%		7			2			1	%		7			2	%		(5	)
Other operating expense (income), net		2						(6	)					8			12						8						4			—			0	%		10			3	%		(10	)
Earnings (loss) from continuing operations before interest expense, other (income) charges, net and income taxes		10			3	%		32			8	%		(22	)		8			1	%		42			5	%		(34	)
(Loss) earnings from continuing operations before interest expense, other (income) charges, net and income taxes																																(26	)		(7	)%		(40	)		(11	)%		14
Interest expense		8			2	%		16			4	%		(8	)		16			2	%		32			4	%		(16	)		8			2	%		8			2	%		0
Pension income excluding service cost component																																(32	)		(9	)%		(38	)		(11	)%		6
Other (income) charges, net		(9	)		(2	)%		1			0	%		(10	)		(29	)		(4	)%		2			0	%		(31	)		16			4	%		(20	)		(6	)%		36
Earnings from continuing operations before income taxes		11			3	%		15			4	%		(4	)		21			3	%		8			1	%		13
(Loss) earnings from continuing operations before income taxes																																(18	)		(5	)%		10			3	%		(28	)
Provision for income taxes		4			1	%		6			1	%		(2	)		7			1	%		13			2	%		(6	)		7			2	%		3			1	%		4
Earnings (loss) from continuing operations		7			2	%		9			2	%		(2	)		14			2	%		(5	)		-1	%		19
(Loss) earnings from continuing operations																																(25	)		(7	)%		7			2	%		(32	)
Loss from discontinued operations, net of income taxes		(3	)		-1	%		(1	)		0	%		(2	)		(3	)		0	%		(2	)		-0	%		(1	)		—			—			—			—			—
Net income (loss)		4			1	%		8			2	%		(4	)		11			1	%		(7	)		-1	%		18
Less: Net earnings attributable to noncontrolling interests		—			—			1			0	%		(1	)		—			—			4			1	%		(4	)
NET EARNINGS (LOSS) ATTRIBUTABLE TO EASTMAN KODAK COMPANY	$	4			1	%	$	7			2	%	$	(3	)	$	11			1	%	$	(11	)		-1	%	$	22
Net (loss) income																															$	(25	)		(7	)%	$	7			2	%	$	(32	)

For the three months ended ~~June 30, 2017,~~March 31, 2018 revenues ~~decreased approximately $42 million~~were unchanged compared with the same period in ~~2016. The decline was primarily driven by volume~~2017. Volume and pricing declines within Print Systems ($1711 million), and volume declines within ~~Consumer and Film ($15 million) and~~ Enterprise Inkjet Systems ($7 million). Also contributing to the decrease was the unfavorable impact of foreign currency ($6 million). Partially offsetting these impacts were volume improvements within Flexographic Packaging ($5 million). See segment discussions for additional details.

For the six months ended June 30, 2017 revenues decreased approximately $62 million compared with the same period in 2016. The decline was primarily driven by volume and pricing declines within Print Systems ($32 million) and volume declines within, Consumer and Film ($233 million)~~. Also contributing to the decrease was the unfavorable impact of~~ and Software and Solutions ($2 million) were offset by favorable foreign currency ~~($12 million). Partially offsetting these impacts were~~of $20 million and volume improvements ~~within~~in Flexographic Packaging ($82 million). See segment discussions for additional details.

The decrease in gross profit for the three months ended ~~June 30, 2017~~March 31, 2018 of approximately ~~$16~~$8 million compared with the same period in ~~2016~~2017 reflected volume declines within Enterprise Inkjet Systems ($4 million) and Consumer and Film ($2 million), higher aluminum costs and pricing declines within Print Systems ($~~10 million)~~8 million and volume declines within Consumer and Film ($9 million). Partially offsetting these decreases were volume improvements within Flexographic Packaging ($3 million). See segment discussions for additional details.

~~The decrease in gross profit for the six months ended June 30, 2017 of approximately $21~~$3 million, ~~compared with the same period in 2016 reflected volume and pricing declines within Print Systems ($18 million)~~respectively), ~~volume declines within Consumer and Film ($14 million) and increased~~partially offset by reduced inventory write-offs due to restructuring ($6 million)~~. Partially offsetting these decreases were manufacturing cost improvements within Print Systems ($6 million), volume improvements within Flexographic Packaging ($5 million)~~ and ~~reduced costs with the deconsolidation~~favorable foreign currency of ~~the RED utilities variable interest entity ($3 million).~~$4 million. See segment discussions for additional details.

Consolidated SG&A decreased $5$2 million for the three months ended ~~June 30, 2017~~March 31, 2018 primarily due to lower investment in segment selling and marketing activities ($73 million) driven by ~~participation~~a lower investment in drupa 2016 in the prior year, partially offset by lower pension income ($3 million). For the six months ended June 30, 2017, consolidated SG&A increased $3 million due to lower pension income ($7 million) partially offset by higher costs in 2016 from participation in drupa 2016.

~~Included in both the three and six months ended June 30, 2016 was $6 million related to participation in drupa 2016, a print industry trade show which occurs every four years.~~Enterprise Inkjet Systems.

Consolidated R&D expenses ~~did not materially change~~decreased $5 million for the three ~~and six~~ months ended ~~June 30, 2017 as compared with~~March 31, 2018 primarily due to the ~~prior year quarter~~reduced level of investment in Advanced Materials and ~~first six months.~~3D Printing ($4 million).

	Three Months Ended June 30,									Six Months Ended June 30,									Three Months Ended March 31,
(in millions)	2017			2016			$ Change			2017			2016			$ Change			2018			2017			$ Change
Revenues	$	236		$	258		$	(22	)	$	449		$	489		$	(40	)	$	216		$	213		$	3

Operational EBITDA	$	16		$	22		$	(6	)	$	29		$	40		$	(11	)	$	4		$	12		$	(8	)
Operational EBITDA as a % of revenues		7	%		9	%					6	%		8	%					2	%		6	%

The ~~decrease~~increase in Print Systems revenues for the three months ended ~~June 30, 2017~~March 31, 2018 of approximately ~~$22~~$3 million ~~primarily~~ reflected favorable foreign currency of $14 million. The favorable impact of currency was partially offset by lower pricing ~~($7~~and volume declines in Prepress Solutions (each $4 million) ~~due to~~driven by competitive pressures in the industry and ~~lower volumes ($6 million) driven by~~ declines in ~~consumables and service in Prepress Solutions.~~plates, respectively. Also ~~contributing to~~offsetting the ~~decline~~positive impact of foreign currency was lower volume in Electrophotographic Printing Solutions ($4 million) due to declines in consumables and ~~service. Unfavorable foreign currency ($4 million) also negatively impacted revenues.~~

~~The decrease in Print Systems revenues for the six months ended June 30, 2017 of approximately $40 million primarily reflected lower pricing ($14 million) due to competitive pressures in the industry~~service and lower volumes ($9 million) driven by declines in consumables and service in Prepress Solutions. Also contributing to the decline was lower volume in Electrophotographic Printing Solutions ($9 million) due to declines in consumables and service. Unfavorable foreign currency ($7 million) also negatively impacted revenues.equipment placements.

The decrease in Print Systems Operational EBITDA for the three months ended ~~June 30, 2017~~March 31, 2018 of approximately $6$8 million reflected lower pricing in Prepress Solutions ($74 million) ~~as well as lower volume in Electrophotographic Printing Solutions~~and higher aluminum costs ($38 million)~~. Partially offsetting these declines were lower investment in marketing, advertising~~ and ~~sales activities~~the unfavorable impact of currency ($32 million) ~~driven~~partially offset by ~~the prior year participation in drupa 2016 and favorable product mix in Electrophotographic Printing Solutions ($1 million). In addition,~~ manufacturing cost improvements in Prepress ~~consumables~~plates ($32 million) ~~were offset by higher aluminum~~and lower SG&A costs ($3 million).

The decrease in Print Systems Operational EBITDA for the six months ended June 30, 2017 of approximately $11 million reflected pricing and volume declines in Prepress Solutions ($14 million and $2 million, respectively) as well as lower volume in Electrophotographic Printing Solutions ($4 million). Partially offsetting these declines were manufacturing costs improvements in Prepress consumables due to improved manufacturing efficiency ($8 million) partially offset by higher aluminum costs ($2 million).

	Three Months Ended June 30,									Six Months Ended June 30,									Three Months Ended March 31,
(in millions)	2017			2016			$ Change			2017			2016			$ Change			2018			2017			$ Change
Revenues	$	35		$	44		$	(9	)	$	72		$	76		$	(4	)	$	31		$	37		$	(6	)

Operational EBITDA	$	1		$	(6	)	$	7		$	1		$	(10	)	$	11		$	—		$	—		$	—
Operational EBITDA as a % of revenues		3	%		(14	)%					1	%		(13	)%					0	%		0	%

The decrease in Enterprise Inkjet Systems revenues for the three months ended ~~June 30, 2017~~March 31, 2018 of approximately $9$6 million primarily reflected lower volume of ~~Prosper systems and component sales ($6 million), due to focusing on high volume applications, and reduced volume of~~ VERSAMARK service and consumables ($3 million) due to declines in the installed base of VERSAMARK systems partially offset by increased volume of Prosper service and consumable sales ($2 million) driven by a larger installed base of Prosper systems. Unfavorable foreign currency ($1 million) also negatively impacted revenues.

~~The decrease in Enterprise Inkjet Systems revenues for the six months ended June 30, 2017 of approximately $4 million primarily reflected reduced volume of VERSAMARK service and consumables ($5~~4 million) due to declines in the installed base of VERSAMARK systems and lower volume of ~~Prosper systems and component sales~~VERSAMARK system placements ($~~4 million) due to focusing on high volume applications. These unfavorable drivers were partially offset by increased volume of Prosper service and consumable sales ($5~~3 million) primarily ~~driven by a larger installed base of Prosper systems and higher volume of VERSAMARK equipment sales ($2 million)~~ due to the ~~sale~~placement of used equipment in the ~~first quarter~~prior year quarter. The unfavorable impacts were partially offset by the favorable impact of ~~2017. Unfavorable foreign~~ currency ($2 million) ~~also negatively impacted revenues~~. Volume improvements in PROSPER annuities ($1 million) were offset by lower volume of PROSPER components ($1 million).

~~The increase in~~ Enterprise Inkjet Systems Operational EBITDA for the three months ended ~~June 30, 2017~~March 31, 2018 was unchanged compared to the prior year quarter primarily reflecting the lower volume of ~~approximately $7 million was primarily due to~~VERSAMARK service, consumables and equipment placements ($3 million) and PROSPER components ($1 million) offset by a lower level of investment in marketing, advertising and sales activities ($5 million), due in part to the $3 million for participation in drupa 2016 in the prior year quarter and reduced investment in R&D activities ($2 million). A portion of the lower investment in marketing, advertising and sales activities and R&D activities represent savings from the Prosper restructuring actions announced in January 2017 (refer to the “Restructuring Costs and Other – Prosper Business Cost Reduction” section in this Management’s Discussion and Analysis).

The increase in Enterprise Inkjet Systems Operational EBITDA for the six months ended June 30, 2017 of approximately $11 million was primarily due to a lower level of investment in marketing, advertising and sales activities ($6(each $2 million) and R&D activities ($3 million). A portion of the lower investment in marketing, advertising and sales activities and R&D activities represent savings from the Prosper restructuring actions announced in January 2017 (refer to the “Restructuring Costs and Other – Prosper Business Cost Reduction” section in this Management’s Discussion and Analysis).

	Three Months Ended June 30,								Six Months Ended June 30,								Three Months Ended March 31,
(in millions)	2017			2016			$ Change		2017			2016			$ Change		2018			2017			$ Change
Revenues	$	37		$	35		$	2	$	70		$	64		$	6	$	37		$	33		$	4

Operational EBITDA	$	8		$	6		$	2	$	14		$	10		$	4	$	7		$	6		$	1
Operational EBITDA as a % of revenues		22	%		17	%				20	%		16	%				19	%		18	%

The increase in ~~the~~ Flexographic Packaging revenues for the three months ended ~~June 30, 2017~~March 31, 2018 of approximately $2$4 million primarily reflected volume improvements in FLEXCEL NX consumables ($53 million) due to a larger installed base of FLEXCEL NX systems and ~~higher FLEXCEL NX unit placements ($1 million). These~~the favorable ~~impacts were partially offset by unfavorable FLEXCEL NX price mix ($2 million), declining revenues from other packaging products ($1 million) and the unfavorable~~ impact of currency ($12 million).

The ~~increase~~improvement in ~~the~~ Flexographic Packaging ~~revenues for the six months ended June 30, 2017~~Operational EBITDA of approximately $6$1 million was primarily ~~reflected~~driven by volume improvements in FLEXCEL NX consumables ($~~8 million) due to a larger installed base of FLEXCEL NX systems partially offset by declining revenues from other packaging products ($1 million) and the unfavorable impact of currency ($1 million).~~

Flexographic Packaging Operational EBITDA increased for the three months ended June 30, 2017 by approximately $2 million from volume improvements in FLEXCEL NX consumables ($4 million) partially offset by unfavorable price mix in FLEXCEL NX consumables ($2 million).

Flexographic Packaging Operational EBITDA increased for the six months ended June 30, 2017 by approximately $4 million from volume improvements in FLEXCEL NX consumables ($6 million) and cost improvements in other packaging products ($2 million) partially offset by ~~declining revenues from other packaging products ($1 million),~~ increased investment in product development, marketing and sales activities ~~($1 million) and the unfavorable impact of currency~~ ($1 million).

	Three Months Ended June 30,								Six Months Ended June 30,									Three Months Ended March 31,
(in millions)	2017			2016			$ Change		2017			2016			$ Change			2018			2017			$ Change
Revenues	$	22		$	21		$	1	$	43		$	45		$	(2	)	$	20		$	21		$	(1	)

Operational EBITDA	$	(1	)	$	(2	)	$	1	$	(1	)	$	(1	)	$	—		$	—		$	—		$	—
Operational EBITDA as a % of revenues		(5	)%		(10	)%				(2	)%		(2	)%					0	%		0	%

The ~~increase~~decline in Software and Solutions revenues for the three months ended ~~June 30, 2017~~March 31, 2018 of approximately $1 million was primarily ~~reflected~~due to lower volume ~~improvements~~ in ~~Unified~~United Workflow Solutions ($12 million).

~~The decrease in Software and Solutions revenues for~~ partially offset by the ~~six months ended June 30, 2017~~ of ~~approximately $2 million primarily reflected volume declines in Kodak Technology Solutions due to the divestitures~~favorable impact of ~~the Design2Launch and brand protection businesses in the second quarter of 2016~~currency ($21 million).

~~The improvement in~~ Software and Solutions Operational EBITDA for the three months ended ~~June 30, 2017 of approximately $1 million was primarily due to lower R&D costs ($1 million).~~

~~Software and Solutions Operational EBITDA for the six months ended June 30, 2017~~March 31, 2018 was unchanged compared to the prior year ~~primarily reflecting lower R&D costs ($2 million) offset by increased sales and marketing initiatives ($1 million).~~period.

	Three Months Ended June 30,									Six Months Ended June 30,									Three Months Ended March 31,
(in millions)	2017			2016			$ Change			2017			2016			$ Change			2018			2017			$ Change
Revenues	$	47		$	62		$	(15	)	$	96		$	119		$	(23	)	$	48		$	49		$	(1	)

Operational EBITDA	$	(5	)	$	10		$	(15	)	$	(8	)	$	17		$	(25	)	$	(6	)	$	(4	)	$	(2	)
Operational EBITDA as a % of revenues		(11	)%		16	%					(8	)%		14	%					(13	)%		(8	)%

The ~~decrease~~decline in Consumer and Film revenues for the three months ended ~~June 30, 2017~~March 31, 2018 of approximately ~~$15~~$1 million ~~reflected~~was primarily due to volume declines in Consumer Inkjet Systems ($54 million) driven by lower sales of ink to the existing installed base of printers and lower volume ~~declines~~ in Industrial Film and Chemicals ($41 million) ~~driven~~partially offset by ~~lower demand for photo paper chemicals. Additionally,~~higher volume in Entertainment Films, higher brand licensing revenue (due to the ~~prior year included $5 million from~~modified retrospective adoption approach of ASU 2014-09) and the ~~fulfillment~~favorable impact of ~~a significant industrial film order.~~currency (each $1 million).

The decrease in Consumer and Film ~~revenues~~Operational EBITDA for the ~~six~~three months ended ~~June 30, 2017~~March 31, 2018 of approximately ~~$23~~$2 million reflected volume declines in Consumer Inkjet Systems ($93 million) driven by lower sales of ink to the existing installed base of printers and in Industrial Film and Chemicals ($3 million) driven by lower demand for photo paper chemicals. Additionally, the prior year included $5 million fulfillment of a significant industrial film order and $3 million related to the fulfillment of motion picture film volume commitments.

~~The decrease in Consumer and Film Operational EBITDA for the three months ended June 30, 2017 of approximately $15 million was driven by lower sales of ink ($4 million),~~ unfavorable manufacturing costs in Motion Picture ($2 million), due to higher material costs, and increased investment in sales and marketing initiatives ($1 million). The prior year included the impact of a significant industrial film order ($4 million).

The decrease in Consumer and Film Operational EBITDA for the six months ended June 30, 2017 of approximately $25 million was driven by lower sales of ink ($7 million), unfavorable manufacturing costs in Motion Picture ($3 million) due to higher material costs, unfavorable cost absorption in Industrial Film and Chemicals ($2 million)~~, and increased investment in sales and marketing initiatives ($2 million). The prior year included~~ partially offset by higher brand licensing revenue, the favorable impact of ~~a significant industrial film order ($4~~currency and lower SG&A (each $1 million) ~~and the fulfillment of motion picture film volume commitments ($3 million)~~.

	Three Months Ended June 30,								Six Months Ended June 30,								Three Months Ended March 31,
(in millions)	2017			2016			$ Change		2017			2016			$ Change		2018			2017			$ Change
Revenues	$	-		$	-		$	-	$	-		$	-		$	-	$	1		$	—		$	1

Operational EBITDA	$	(7	)	$	(8	)	$	1	$	(15	)	$	(15	)	$	-	$	(4	)	$	(8	)	$	4
Operational EBITDA as a % of revenues	N/A			N/A					N/A			N/A					N/A			N/A

Advanced Materials and 3D Printing Technology Operational EBITDA ~~did not change significantly. R&D not directly related~~improved by approximately $4 million, primarily due to ~~other segments is included in~~ the ~~Advanced Materials and 3D Printing Technology segment.~~reduced level of investment.

Eastman Business Park revenue and Operational EBITDA did not change ~~significantly.~~compared to the prior year quarter.

A tenant that represented approximately thirty percent of segment revenues, for both the ~~six~~three months ended ~~June 30, 2017~~March 31, 2018 and the year ended December 31, ~~2016~~2017 notified Kodak that it does not plan to renew its lease upon expiration in the third quarter of 2018.

Kodak recorded ~~$11 million and $24~~$2 million of charges for the three ~~and six~~ months ended ~~June 30, 2017, respectively, of~~March 31, 2018, which ~~$11 million and $18 million, respectively, was~~were reported as Restructuring costs and ~~other and $0 million and $6 million, respectively, was reported as Cost of revenues in the accompanying Consolidated Statement of Operations.~~other.

Kodak made cash payments related to restructuring of approximately $4 million ~~and $7 million~~ during the three ~~and six~~ months ended ~~June 30, 2017.~~March 31, 2018.

The restructuring actions implemented in the first ~~half~~three months of ~~2017~~2018 are expected to generate future annual cash savings of approximately ~~$16~~$3 million. These savings are expected to reduce future annual ~~Cost of revenues,~~ SG&A ~~and R&D expenses by $5 million, $9 million, and $2 million, respectively.~~expenses. Kodak began realizing a portion of these savings in the first ~~half,~~three months, and expects the majority of the annual savings to be in effect by the ~~second half~~end of ~~2017~~2018 as actions are completed.

On January 12, 2017, Kodak announced an action to streamline costs in its Prosper business. This action is pursuant to Kodak’s initiative to focus the Prosper business on developing next generation Ultrastream technology with solutions that place writing systems in original equipment manufacturer and hybrid applications and the continued placement of Prosper 6000 presses and components in suitable high volume applications~~. Kodak expects the action to be substantially completed by the end of the third quarter of 2017.~~

As a result of this decision, Kodak currently expects to incur total restructuring and related charges of $13 to $17 million, including $5 to $7 million of charges related to separation benefits, $6 million of non-cash related charges for inventory write-downs, $2 to $3 million of non-cash related charges for asset write-offs and up to $1 million in other cash related charges associated with this action.

During the three and six months ended June 30, 2017 under this program, Kodak incurred severance charges of $2 million and $5 million, inventory write-downs of $0 million and $6 million, and asset write-offs of $0 million and $2 million, respectively.

Updates to critical accounting policies and estimates in Kodak’s 2016 Annual Report on Form 10-K are presented in this section. Refer to Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the 2016 Annual Report on Form 10-K for a complete discussion of all Kodak’s critical accounting policies.

As of June 30, 2017, Kodak’s deferred tax asset valuation allowance is $1,151 million. Of this amount, $248 million was attributable to the Company’s net deferred tax assets outside the U.S. of $331 million, and $903 million related to the Company’s net deferred tax assets in the U.S. of $846 million, for which Kodak believes it is more likely than not that the assets will not be realized.

Kodak establishes valuation allowances for deferred income tax assets in accordance with U.S. GAAP, which provides that such valuation allowances shall be established unless realization of the income tax benefits is more likely than not. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. At each reporting period, Kodak considers the scheduled reversal of deferred tax liabilities and assets, available taxes in carryback periods, tax planning strategies and projected future taxable income in making this assessment.

Kodak continues to improve profitability in its businesses, particularly outside the U.S. Accordingly, Kodak may be able to make the determination that the realization of those deferred tax assets in certain foreign jurisdictions are more likely than not in the near future. If Kodak was to make a determination that it is more likely than not that deferred tax assets, for which there is currently a valuation allowance, would be realized, the related valuation allowance would be reduced and a benefit to earnings would be recorded. Kodak will continue to evaluate whether valuation allowances are needed, at a jurisdictional level, in future reporting periods. It is possible that sufficient positive evidence, including sustained profitability, may become available in future periods with respect to one or more jurisdictions to reach a conclusion that all or part of the valuation allowance with respect to such jurisdictions could be reversed.

Utilization of post-emergence net operating losses (“NOL”) and tax credits may be subject to limitations in the event of significant changes in stock ownership of the Company in the future. Section 382 of the Internal Revenue Code of 1986, as amended, imposes annual limitations on the utilization of NOL carryforwards, other tax carryforwards, and certain built-in losses as defined under that Section, upon an ownership change. In general terms, an ownership change may result from transactions that increase the aggregate ownership of five percent stockholders in Kodak’s stock by more than 50 percentage points over a testing period (generally three years). The Company has a relatively high concentration of five percent stockholders. There have been several recently reported transactions with those five percent stockholders that, combined with future transactions, could aggregate an ownership change during the testing period in excess of 50 percentage points. A Section 382 ownership change would significantly impair Kodak’s ability to utilize NOLs and tax credits in the U.S. As of December 31, 2016, Kodak had available U.S. NOL carry-forwards for income tax purposes of approximately $801 million and unused foreign tax credits of $335 million. Any impairment of these tax attributes would be fully offset by a corresponding decrease in Kodak’s U.S. valuation allowance, which would result in no net tax provision.

~~Valuation and Useful Lives of Long-Lived Assets, Including Goodwill and Intangible Assets~~

In the third quarter of 2017, Kodak decided to cancel the copper mesh touch screen program. As of June 30, 2017, the estimated undiscounted cash flows were greater than the carrying value of the long-lived assets associated with this operation. Therefore no impairment was reported as of June 30, 2017. There were approximately $11 million of tangible and $16 million of intangible long-lived assets associated with the touch screen technology operation as of June 30, 2017. Kodak expects an impairment of the long-lived assets of the copper mesh touch screen program of $9 million to $27 million to occur during the quarter ended September 30, 2017. The value of the impairment will depend on alternative uses for the intangible and tangible assets in other 3D printing technology programs utilizing Kodak’s copper manufacturing process and/or the estimated ability to otherwise recover value from the tangible assets.

	June 30,		December 31,		March 31,		December 31,
(in millions)	2017		2016		2018		2017
Cash, cash equivalents and restricted cash	$	389	$	478	$	333	$	369

	Six Months Ended
	June 30,									March 31,
(in millions)	2017			2016			Change			2018			2017			Change
Cash flows from operating activities:
Net cash used in operating activities	$	(74	)	$	(30	)	$	(44	)	$	(27	)	$	(53	)	$	26
Cash flows from investing activities:
Net cash used in investing activities		(14	)		(2	)		(12	)		(10	)		(4	)		(6	)
Cash flows from financing activities:
Net cash used in financing activities		(7	)		(8	)		1			(4	)		(3	)		(1	)
Effect of exchange rate changes on cash		6			2			4			5			4			1
Net decrease in cash, cash equivalents and restricted cash	$	(89	)	$	(38	)	$	(51	)	$	(36	)	$	(56	)	$	20

Net cash used in operating activities ~~increased $44~~improved $26 million for the ~~six~~three months ended ~~June 30, 2017~~March 31, 2018 as compared with the corresponding period in ~~2016 due to increased~~2017 driven by lower inventory builds and less cash usage ~~for working capital driven by inventory increases in anticipation of sequential quarter sales growth at higher rates relative~~ to ~~prior year sequential quarter sales growth~~satisfy accounts payable and ~~lower cash earnings.~~

Cash earnings included lower interest expense ($16 million) in the current year period primarily due to the prepayment of the Senior Secured Second Lien Term Credit Agreement and $10 million in net litigation proceeds from DuPont received in the prior year period.other liabilities.

Net cash used in investing activities increased ~~$12~~$6 million for the ~~six~~three months ended ~~June 30, 2017~~March 31, 2018 as compared with the corresponding period in ~~2016~~2017 primarily due to higher payments for capital additions and a ~~decrease in~~lack of proceeds ~~received~~ from sales of assets ~~and an increase~~ in ~~additions to properties.~~the current year period.

Net cash used in financing activities ~~decreased~~increased $1 million in the ~~six~~three months ended ~~June 30, 2017~~March 31, 2018 as compared with the corresponding period in ~~2016~~2017 due to ~~payment of contingent consideration related to the sale of business and scheduled debt service payments in the prior year period, partially offset by the~~a lower dividend ~~payments~~payment made to the holders of Series A Preferred Stock ~~made~~ in the ~~current~~prior year ~~period.~~as the dividend reflected the partial quarter the Series A Preferred Stock was outstanding.

Available liquidity includes cash balances and the unused portion of the Amended Credit Agreement. The Amended Credit Agreement had ~~$22~~$36 million of net availability as of ~~June 30, 2017.~~March 31, 2018. The amount of available liquidity is subject to fluctuations and includes cash balances held by various entities worldwide. At ~~June 30, 2017~~March 31, 2018 and December 31, ~~2016~~2017 approximately ~~$170~~$142 million and ~~$205~~$172 million, respectively, of cash and cash equivalents were held within the U.S. and approximately ~~$200~~$171 million and ~~$229~~$172 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. ~~Additionally,~~Kodak utilizes cash balances outside the U.S. to fund needs in the U.S. through the use of intercompany loans. As of March 31, 2018, outstanding inter-company loans to the U.S. were $357 million which includes short-term intercompany loans of $59 million. In China, where approximately ~~$117~~$106 million of cash and cash equivalents was held as of ~~June 30, 2017,~~March 31, 2018, 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 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, 2017~~March 31, 2018 and December 31, ~~2016,~~2017, Kodak had funded $0 million and ~~$25~~$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 the 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. If the Company’s credit ratings were to decline, the Company would 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 Credit Agreement, if Excess Availability ($2236 million at ~~June 30, 2017)~~March 31, 2018) falls below 12.5% of lender commitments ($18.75 million at ~~June 30, 2017)~~March 31, 2018), Kodak would be required to be in compliance with the minimum Fixed Charge Coverage Ratio (the only financial covenant in the Amended 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, 2017,~~March 31, 2018, Kodak is not required to have a minimum Fixed Charge Coverage Ratio of 1.0 to 1.0. As of ~~June 30, 2017,~~March 31, 2018, Kodak is in compliance with all covenants under the Amended Credit ~~Agreement and, had~~Agreement. If Kodak ~~been~~was required to have a Fixed Charge Coverage Ratio of 1.0 to 1.0 ~~EBITDA~~ (as defined in the Amended Credit agreement) ~~exceeded~~ Fixed Charges exceeded EBITDA by approximately $1$7 million.

Under the terms of the ~~Senior Secured First Lien~~ Term Credit Agreement, ~~(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, 2017,~~March 31, 2018, Kodak’s EBITDA, as calculated under the Term Credit Agreement, exceeded the EBITDA necessary to satisfy the covenant ratio by approximately ~~$26~~$25 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 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 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, 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 $2 million for the quarter ended March 31, 2018 and assets of $23 million as of March 31, 2018, which represent 0% and 1%, respectively, of Kodak’s consolidated sales for the quarter ended March 31, 2018 and consolidated assets as of March 31, 2018. 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, exceeds the amount of EBITDA needed to satisfy the Net Secured Leverage Ratio covenant of 2.75 to 1.0 by $22 and the Fixed Charge Coverage Ratio of 1.0 to 1.0 by $16. 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 to be immediately due and payable.

The holders of the 5.50% Series A Convertible Preferred Stock are entitled to cumulative dividends payable quarterly in cash at a rate of 5.50% per annum. The Company declared a cash dividend of approximately $3 million in June 2017, which was paid on July 17, 2017.

Kodak made net contributions (funded plans) or paid benefits (unfunded plans) totaling approximately $6$3 million to its defined benefit pension and postretirement benefit plans in the first ~~six~~three months of ~~2017.~~2018. For the balance of ~~2017,~~2018, the forecasted contribution (funded plans) and benefit payment (unfunded plans) requirements for its pension and postretirement plans are approximately ~~$12~~$19 million.

Cash flow from investing activities included ~~$17~~$10 million of capital expenditures for the ~~six~~three months ended ~~June 30, 2017.~~March 31, 2018. Kodak expects approximately ~~$35~~$30 million to $40 million of total capital expenditures for ~~2017.~~ 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 ~~early 2019~~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 $3 million in the first ~~half~~three months of ~~2017, expects to invest approximately $12 million~~2018. The investment for the full year ~~2017~~2018 is expected to be approximately $7 million and ~~expects~~ the total investment for the project is expected to be approximately ~~$16~~$15 million.

Kodak believes that its liquidity position is adequate to fund its operating and investing needs for the next year and to provide the flexibility to respond as necessary to any changes in the business environment. 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). Kodak intends to refinance the loans under the Term Credit Agreement before their maturity date.

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 intercompany 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, 2017~~March 31, 2018 and December 31, ~~2016,~~2017, the fair value of open forward contracts would have decreased ~~$19~~by $12 million and ~~$20~~$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, 2017~~March 31, 2018 the three-month LIBOR rate was approximately ~~1.30%~~2.31%. At December 31, ~~2016~~2017 the one-month LIBOR rate was approximately ~~0.77%~~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.~~floor ($395 million face amount of debt times 1% at March 31, 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, 2017~~March 31, 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 and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Kodak’s management, with participation of Kodak’s Chief Executive Officer 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 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.

There have been no 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, 2017,~~March 31, 2018, Kodak maintained accruals of approximately ~~$13~~$11 million for claims aggregating approximately ~~$213~~$207 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 of 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.

Reference is made to the Risk Factors set forth in Part I, Item 1A. of the ~~2016~~2017 Form 10-K. The Risk Factors remain applicable from the ~~2016~~2017 Form 10-K.

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

9,344

9.74

March 1 through 31

2,216

5.30

n/a

Total

9,344

2,216

~~Pursuant~~Index 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.~~Exhibits

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)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2223
	Liquidity and Capital Resources	3432
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3634
Item 4.	Controls and Procedures	3634

Part II. —Other Information

Item 1.	Legal Proceedings	3735
Item 2.	Unregistered Sales of Securities and Use of Proceeds	3735
Item 5.	Other Information	3735
Item 6.	Exhibits	3735

	~~Signature~~Index to Exhibits	3836
	~~Index to Exhibits~~Signatures	3937

(in millions)				March 31, 2018		December 31, 2017
	Type	Maturity	Weighted-Average Effective Interest Rate	Carrying Value		Carrying Value
Current portion:
	Capital leases	Various	Various		3		3
	Other debt	Various	Various		1		1
					4		4
Non-current portion:
	Term note	2019	7.34%		393		393
	Capital leases	Various	Various		4		4
	Other debt	Various	Various		2		2
					399		399
				$	403	$	403

(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 March 31, 2018
(in millions)	As Reported			Balances without Adoption of ASU 2014-09			Effect of Change Higher (Lower)
Revenues
Sales	$	285		$	284		$	1
Services		72			72			—
Total revenues		357			356			1

Net income	$	(25	)	$	(26	)	$	1

	June 30, 2017
(in millions)	Gross Carrying Amount		Accumulated Amortization		Net		Weighted-Average Amortization Period
Technology-based	$	122	$	70	$	52	6 years
Kodak trade name		40		-		40	Indefinite life
Customer-related		26		12		14	6 years
Other		2		-		2	21 years
Total	$	190	$	82	$	108

	December 31, 2016
(in millions)	Gross Carrying Amount		Accumulated Amortization		Net		Weighted-Average Amortization Period
Technology-based	$	122	$	57	$	65	6 years
Kodak trade name		40		-		40	Indefinite life
Customer-related		26		12		14	6 years
Other		2		-		2	21 years
Total	$	190	$	69	$	121

(in millions)
Q3-Q4 2017	$	10
2018		16
2019		9
2020		8
2021		7
2022 and thereafter		18
Total	$	68

(in millions)
Deferred revenue on extended warranties as of December 31, 2016	$	24
New extended warranty and maintenance arrangements in 2017		67
Recognition of extended warranty and maintenance arrangement revenue in 2017		(68	)
Deferred revenue on extended warranties as of June 30, 2017	$	23

Weighted-average common shares outstanding - basic	42.5	42.5
Effect of dilutive securities:
Unvested restricted stock units	0.2	0.2
Weighted-average common shares outstanding - diluted	42.7	42.7

(in millions of shares)
Weighted average shares - basic	42.6	42.4
Effect of dilutive securities
Unvested restricted stock units	—	0.2
Employee stock options	—	0.1
Weighted average shares - diluted	42.6	42.7

~~Date August 9, 2017~~		~~/s/ Eric Samuels~~

~~Eric Samuels~~(3.2)	Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of Eastman Kodak Company (Incorporated by refer reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K as filed November 16, 2016).
		~~Chief Accounting Officer and Corporate Controller~~
(3.3)		~~(Chief Accounting Officer and Authorized Signatory)~~

~~(3.1)~~	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).
~~(4.1)~~	Shareholder Agreement, dated as of April 17, 2017, by and among Eastman Kodak Company, Longleaf Partners Small-Cap Fund, C2W Partners Master Fund Limited, Deseret Mutual Pension Trust and Southeastern Asset Management, Inc. (Incorporated by reference to Exhibit 4.6 of the Company’s Amendment No. 2 to Registration Statement on Form S-3 as filed on May 5, 2017).
*(10.1)	~~Separation and General Release Agreement between~~ Eastman Kodak ~~Sàrl~~Company Administrative Guide for the 2018 Performance Period under the Executive Compensation for Excellence and ~~Philip Cullimore, dated April 24, 2017,~~Leadership Plan, filed ~~herewith.~~ herewith.
*(10.2)	~~Eastman Kodak Company 2013 Omnibus Incentive Plan Form of Executive Restricted Stock Unit and Nonqualified Stock Option Award Agreement (with Forfeiture upon Termination), filed herewith.~~
*(10.3)	~~Eastman Kodak Company 2013 Omnibus Incentive Plan Form of Director Restricted Stock Unit Award Agreement (One Year Vesting), filed herewith.~~
(31.1)	Certification signed by Jeffrey J. Clarke, filed herewith.
(31.2)	Certification signed by David E. Bullwinkle, filed ~~herewith.~~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, filed 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.
(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 May 10, 2018		/s/ Eric Samuels
		Eric Samuels
		Chief Accounting Officer and Corporate Controller
		(Chief Accounting Officer and Authorized Signatory)