EASTMAN KODAK COMPANY

CONSOLIDATED STATEMENT OF OPERATIONS

Particulars Year Ended December 31,

2019 2018
Revenues
Sales ($ 979) ($ 1,039)
Services 263 281
Total net revenues 1,242 1,320
Cost of revenues
Sales 877 946
Services 183 194
Total cost of revenues 1,060 1,140
Gross profit 182 180
Selling, general and administrative expenses 211 224
Research and development costs 42 48
Restructuring costs and other 16 17
Other operating expense, net 15 9
Loss from continuing operations before interest expense, pension income excluding service cost component, other
(102)
charges, net and income taxes (118)
Interest expense 16 9
Pension income excluding service cost component (104) (131)
Other charges, net 46 17
Loss from continuing operations before income taxes (60) (13)
Provision (benefit) from income taxes 31 (4)
Loss from continuing operations (91) (9)
Earnings (loss) from discontinued operations, net of income taxes 207 (7)
NET EARNINGS (LOSS) ($ 116) ($16)

Basic and diluted (loss) earnings per share attributable to

Continuing operations
Eastman Kodak Company common shareholders: ($2.58) ($0.68)
Discontinued operations 4.81 (0.16)
Total ($ 2.23) ($0.84)

Number of common shares used in basic and diluted (loss) earnings per share 43.00 42.70

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS)

Particulars Year Ended December 31,

2019 2018
NET (LOSS) EARNINGS ($ 116) ($16)

Other comprehensive loss, net:

Currency translation adjustments and other 6 (11)
Pension and other postretirement benefit plan obligation activity, net of tax (12) (9)
Other comprehensive income (loss), net attributable to Eastman Kodak Company (6) (20)
COMPREHENSIVE INCOME (LOSS), NET ($ 110) ($36)

Three Months Ended

March 31,
2012 2011
Net sales
Products $ 841 $ 1,115
Services 182 192
Licensing & royalties (Note 8) (58 ) 15
Total net sales $ 965 $ 1,322
Cost of sales
Products $ 777 $ 1,043
Services 150 154
Total cost of sales $ 927 $ 1,197
Gross profit $ 38 $ 125
Selling, general and administrative expenses 227 311
Research and development costs 66 78
Restructuring costs and other 94 33
Other operating expenses (income), net (1 ) (70 )
Loss from continuing operations before interest expense, other income
(charges), net, reorganization items, net and income taxes (348 ) (227 )
Interest expense (contractual interest of $46) 36 38
Loss on early extinguishment of debt, net 7 -
Other income (charges), net 3 (8 )
Reorganization items, net 88 -
Loss from continuing operations before income taxes -476 -273
Benefit for income taxes (110 ) (24 )
Loss from continuing operations (366 ) (249 )
Earnings from discontinued operations, net of income taxes - 3
NET LOSS ATTRIBUTABLE TO EASTMAN KODAK COMPANY $ (366 ) $ (246 )
Basic and diluted net (loss) earnings per share attributable to Eastman
Kodak Company common shareholders:
Continuing operations $ (1.35 ) $ (0.92 )
Discontinued operations - 0.01
Total $ (1.35 ) $ (0.91 )
Number of common shares used in basic and diluted net (loss) earnings per share 271.1 268.9
CONSOLIDATED STATEMENT OF FINANCIAL POSITION

Particulars As of December 31,

2019 2018
ASSETS
Cash and cash equivalents ($ 233) ($ 233)
Trade receivables, net of allowances of $8 and $9 208 232
Inventories, net 215 231
Restricted cash - current portion 12 8
Other current assets 36 39
Current assets held for sale 2 167
Total current assets 706 910
Property, plant and equipment, net of accumulated depreciation of $423 and $395, respectively 181 216
Goodwill 12 12
Intangible assets, net 47 58
Operating lease right-of-use assets 49 —
Restricted cash 45 11
Deferred income taxes 147 160
Other long-term assets 228 143
TOTAL ASSETS ($ 1,415) ($ 1,510)

LIABILITIES, REDEEMABLE, CONVERTIBLE PREFERRED STOCK AND EQUITY (DEFICIT)

Accounts payable, trade ($ 153) ($ 130)
Short-term borrowings and current portion of long-term debt 2 396
Current portion of operating leases 12 —
Other current liabilities 201 209
Current liabilities held for sale — 43
Total current liabilities 368 778
Long-term debt, net of current portion 109 5
Pension and other postretirement liabilities 378 379
Operating leases, net of current portion 48 —
Other long-term liabilities 231 178
Total liabilities 1,134 1,340

Commitments and contingencies (Note 12)

Redeemable, convertible Series A preferred stock, no par value, $100 per share liquidation preference 182 173

Equity (Deficit)
Common stock, $0.01 par value — —
Additional paid in capital 604 617
Treasury stock, at cost (9) (9)
Accumulated deficit (79) (200)
Accumulated other comprehensive loss (417) (411)
Total equity (deficit) 99 (3)
TOTAL LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND EQUITY (DEFICIT) ($ 1,415) ($ 1,510)

(in millions) March 31, December 31,

2012 2011
ASSETS
Current Assets
Cash and cash equivalents $ 1,361 $ 861
Receivables, net 968 1,103
Inventories, net 676 607
Deferred income taxes 66 58
Other current assets 82 74
Total current assets 3,153 2,703
Property, plant and equipment, net of accumulated depreciation
of $4,644 and $4,590, respectively 844 895
Goodwill 278 277
Other long-term assets 778 803
TOTAL ASSETS $ 5,053 $ 4,678
LIABILITIES AND EQUITY (DEFICIT)
Current Liabilities
Accounts payable, trade $ 484 $ 706
Short-term borrowings and current portion of long-term debt 42 152
Accrued income and other taxes 45 40
Other current liabilities 1,043 1,252
Total current liabilities 1,614 2,150
Long-term debt, net of current portion 1,446 1,363
Pension and other postretirement liabilities 1,457 3,053
Other long-term liabilities 408 462
Liabilities subject to compromise 2,831 -

Total Liabilities 7,756 7,028

Commitments and Contingencies (Note 9)

Equity (Deficit)
Common stock, $2.50 par value 978 978
Additional paid in capital 1,104 1,108
Retained earnings 3,645 4,071
Accumulated other comprehensive loss (2,650 ) (2,666 )
3,077 3,491
Less: Treasury stock, at cost (5,782 ) (5,843 )
Total Eastman Kodak Company shareholders’ deficit (2,705 ) (2,352 )
Noncontrolling interests 2 2
Total deficit -2,703 -2,350

TOTAL LIABILITIES AND DEFICIT $ 5,053 $ 4,678

CONSOLIDATED STATEMENT OF CASH FLOW

Year Ended December 31,

Particulars 2019 2018
Cash flows from operating activities:
Net (loss) earnings $ 116.0 $ -16.0
Adjustments to reconcile to net cash used in operating activities:
Depreciation and amortization 55.0 73.0
Pension and other postretirement income -91.0 -106.0
Change in fair value of embedded conversion features derivative liability 42.0 —
Asset impairments 6.0 13.0
Stock based compensation 7.0 6.0
Non-cash changes in workers' compensation and legal reserves 3.0 -11.0
Net gains on sales of businesses/assets -201.0 -13.0
Provision for deferred income taxes 21.0 18.0
Decrease in trade receivables 21.0 12.0
Decrease (increase) in inventories 11.0 -9.0
Increase (decrease) in trade accounts payable 25.0 -31.0
Decrease in liabilities excluding borrowings -10.0 -31.0
Other items, net 7.0 33.0
Total adjustments -104.0 -46.0
Net cash provided by (used in) operating activities 12.0 -62.0

Cash flows from investing activities:

Additions to properties -15.0 -33.0
Net proceeds from sales of businesses/assets, net 326.0 11.0
Net cash provided by (used in) investing activities 311.0 -22.0

Cash flows from financing activities:

Repayment of emergence credit facilities -395.0 —
Proceeds from issuance of convertible notes 98.0 —
Proceeds from other borrowings 14.0 —
Payment of contingent consideration related to the sale of a business -10.0 —
Preferred stock dividend payments -3.0 -8.0
Finance lease payments -2.0 -3.0
Net cash used in financing activities -298.0 -11.0
Effect of exchange rate changes on cash, cash equivalents and
restricted cash -2.0 -7.0
Net increase (decrease) in cash, cash equivalents, restricted cash and
assets
cash in held for sale 23.0 -102.0
Cash, cash equivalents, restricted cash and cash in assets held for sale,
period (1)of
beginning 267.0 369.0
Cash, cash equivalents, restricted cash and cash in assets held for sale, $ 290.0 $ 267.0
end of period (1)
Three Months Ended
March 31,
(in millions) 2012 2011

Cash flows from operating activities:

Net loss $ (366 ) $ (246 )
Adjustments to reconcile to net cash used in operating activities:
Earnings from discontinued operations, net of income taxes - (3 )
Depreciation and amortization 66 75
Gain on sales of businesses/assets - (71 )
Loss on early extinguishment of debt 7 -
Non-cash restructuring costs, asset impairments and other charges - 2
Provision for deferred income taxes 15 2
Decrease in receivables 156 177
Increase in inventories (61 ) (52 )
Increase (decrease) in liabilities excluding borrowings 129 (383 )
Other items, net (14 ) (16 )
Total adjustments 298 (269 )
Net cash used in continuing operations (68 ) (515 )
Net cash used in discontinued operations - (10 )
Net cash used in operating activities (68 ) (525 )
Cash flows from investing activities:
Additions to properties (10 ) (23 )
Proceeds from sales of businesses/assets - 72
Business acquisitions, net of cash acquired - (27 )
Funding of restricted cash and investment accounts - (22 )
Marketable securities - sales 28 20
Marketable securities - purchases (28 ) (20 )
Net cash used in investing activities -10 -
Cash flows from financing activities:
Proceeds from DIP credit agreement 686 -
Proceeds from other borrowings - 247
Repayment of other borrowings (119 ) (50 )
Debt issuance costs (33 ) (6 )
Proceeds from sale and leaseback transaction 41 -
Net cash provided by financing activities 575 191
Effect of exchange rate changes on cash 3 10
Net increase (decrease) in cash and cash equivalents 500 (324 )
Cash and cash equivalents, beginning of period 861 1,624
Cash and cash equivalents, end of period $ 1,361 $ 1,300
Ratio analysis Summary

Particulars Formula Mar '19 Mar '18 Mar'12 Mar'11

Profitability ratios
Gross profit margin =Gross Profit/Revenue 14.7% 13.6% 10.77% 13.66%
EBIT margin =EBIT/Revenue -8.21% -8.94% -23.61% -17.81%
EBITDA margin =EBITDA/Revenue -3.78% -3.41% -14.60% -8.98%
Net profit margin =Net Profit/Revenue 9.3% -1.2% -50.71% -21.31%

Return on investment
Return on Assets (RoA) =Net Income/Average Assets 7.93% -1.06% -30.94% -15.79%
Return on Equity (RoE) =Net Income/Shareholder's Equity 117.2% 533.3% 36.66% 31.44%

Liquidity ratios
Current ratio =Current Assets/Current Liability ( 1.92) ( 1.17) 0.77 1.26
Quick ratio OR Acid Test ratio =Quick Assets/Current Liability ( 1.33) ( 0.87) 0.66 0.99
Cash ratio =Cash/Current Liability ( 0.63) ( 0.30) 0.31 0.40

Activity Turnover ratios

Turnover ratios
Receivables turnover =Sales/Avg. Accounts Receivables ( 5.65) ( 5.69) 4.45 3.25
Inventory turnover =COGS/Avg. Inventory 4.753 ( 4.935) 5.77 5.09
Payables turnover =Credit Purchase/Avg. Accounts Payable ( 7.49) ( 8.77) 4.08 4.38
Asset turnover =Sales/Avg. Total Assets ( 0.878) ( 0.874) 0.62 0.76

Working capital days

- Receivables days =365/Receivables Turnover ( 64.7) ( 64.2) ( 82.0) ( 112.3)
- Inventory days =365/Inventory Turnover ( 76.8) ( 74.0) ( 63.3) ( 71.7)
- Payables days =365/Payables Turnover ( 48.7) ( 41.6) ( 89.5) ( 83.3)

Solvency ratios
Debt to asset ratio =Total Debt/Total Assets ( 0.541) ( 0.372) -2.27 -2.08
Debt to equity ratio =Total Debt/Total Equity ( 7.737) ( (187.333) -0.39 -0.64
Interest coverage ratios =EBIT/Interest Expense ( (2.75) ( (0.44) -12.22 -6.18
DISTRESS ANALYSIS
S.NO. Particulars Formula Mar'19 Mar'18

1) Liquidity Measure X1=Working Capital/Total Assets 0.2389 0.0874

2) Profitability Measure X2=Retained Earnings/Total Assets -0.0558 -0.1325

3) Reinvestment Measure X3=EBIT/Total Assets -0.0311 -0.0146

4) Financial Leverage Conditions X4=MV of Equity/TV of Total Debt 0.0770 0.1404

5) Sales Generating Ability of Fixed Assets X5=Revenue/Total Assets 0.8777 0.8742

2019
Z1 =1.2*X1+1.4*X2+3.3*X3+0.6*X4+1.0*X5
= 1.02982

2018
Z1 =1.2*X1+1.4*X2+3.3*X3+0.6*X4+1.0*X5
0.82979