Note 7 - Income Taxes

9 Months Ended

Sep. 30, 2015

NOTE 7: INCOME TAXES

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

	Three Months Ended September 30,						Nine Months Ended September 30,
(in millions)	2015			2014			2015			2014
Earnings (loss) from continuing operations before income taxes	$	2		$	41		$	(62	)	$	(71	)
Effective tax rate		750.0	%		24.4	%		(45.2	)%		(15.5	)%
Provision for income taxes		15			10			28			11
Provision (benefit) for income taxes @ 35%		1			14			(22	)		(25	)
Difference between tax at effective vs. statutory rate	$	14		$	(4	)	$	50		$	36

The difference between the Company’s recorded provision and the provision that would result from applying the U.S. statutory rate of 35.0% for the three month period ended September 30, 2015 is primarily attributable to: (1) losses generated within the U.S. and certain jurisdictions outside the U.S. for which no benefit was recognized due to management’s conclusion that it was more likely than not that the tax benefits would not be realized and (2) a provision associated with foreign withholding taxes on undistributed earnings.

The difference between the Company’s recorded provision and the benefit that would result from applying the U.S. statutory rate of 35.0% for the nine month period ended September 30, 2015 is primarily attributable to: (1) losses generated within the U.S. and certain jurisdictions outside the U.S. for which no benefit was recognized due to management’s conclusion that it was more likely than not that the tax benefits would not be realized and (2) a provision associated with foreign withholding taxes on undistributed earnings.

For the three months ended September 30, 2014, the difference between the Company’s recorded provision and the provision that would result from applying the U.S. statutory rate of 35.0% is primarily attributable to: (1) income generated within the U.S. for which no provision was recognized, offset by losses in certain jurisdictions outside the U.S. for which no benefit was recognized due to management’s conclusion that it was more likely than not that the tax benefits would not be realized, (2) a benefit associated with foreign withholding taxes on undistributed earnings, and (3) changes in audit reserves.

For the nine months ended September 30, 2014, the difference between the Company’s recorded provision and the benefit that would result from applying the U.S. statutory rate of 35.0% is primarily attributable to: (1) losses generated within the U.S. and certain jurisdictions outside the U.S. for which no benefit was recognized due to management’s conclusion that it was more likely than not that the tax benefits would not be realized, (2) a benefit as a result of Kodak reaching a settlement with a taxing authority in a location outside the U.S. related to withholding taxes, (3) a benefit associated with foreign withholding taxes on undistributed earnings, and (4) changes in audit reserves.