v3.26.1
Note 14 - Income Taxes
 6 Months Ended
Jun. 30, 2026
Income Tax Disclosure [Abstract]  
Income Taxes

NOTE 14: INCOME TAXES

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

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

(dollars in millions)

 

2026

 

 

2025

 

 

2026

 

 

2025

 

Earnings (loss) from operations before income taxes

 

$

21

 

 

$

(24

)

 

$

8

 

 

$

(29

)

Effective tax rate

 

 

19.0

%

 

 

(8.3

)%

 

 

87.5

%

 

 

(13.8

)%

Provision for income taxes

 

 

4

 

 

 

2

 

 

 

7

 

 

 

4

 

Provision (benefit) for income taxes at U.S. statutory tax rate

 

 

4

 

 

 

(5

)

 

 

2

 

 

 

(6

)

Difference between tax at effective vs. statutory rate

 

$

—

 

 

$

7

 

 

$

5

 

 

$

10

 

 

For the three and six months ended June 30, 2026, the difference between Kodak’s effective tax rate and the U.S. statutory rate of 21.0% was primarily attributable to: (1) the movement of valuation allowances associated with changes in net deferred tax assets from current losses and earnings, (2) the jurisdictional mix of earnings (including US state), (3) a provision associated with foreign withholding taxes on undistributed earnings and (4) the recognition of an uncertain tax provision related to German fiscal unity.

For the three and six months ended June 30, 2025, the difference between Kodak’s effective tax rate and the U.S. statutory rate of 21.0% was primarily attributable to: (1) the movement of valuation allowances associated with changes in net deferred tax assets from current losses and earnings, (2) the results from operations in jurisdictions outside the U.S. and (3) a provision associated with foreign withholding taxes on undistributed earnings.

In December 2021, the Organisation for Economic Cooperation and Development (“OECD”) introduced Base Erosion and Profit Shifting (“BEPS”) Pillar 2 rules that impose a global minimum tax rate of 15%. Many participating countries enacted changes which took effect in 2024. After considering the applicable tax law changes in the Pillar 2 implementation, Kodak determined there was no material impact to its tax provision for the three and six months ended June 30, 2026 and 2025.

In March 2026, the German Federal Fiscal Court (BFH) ruling (I R 37/22) confirmed that profit and loss transfer agreements ("PLTAs") must be actually and timely implemented to maintain a valid tax group in Germany, including the timely settlement of profit or loss compensation among entities within the group. Kodak evaluated the impact of this ruling on the tax positions of the entities in the Company's German tax group for the 2021–2025 periods and recorded an uncertain tax position of approximately $1 million related to the potential exposures arising from the ruling. The Company will continue to monitor developments and refine its assessment as additional information becomes available.