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Note 17 - Retirement Plans | 12 Months Ended
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Dec. 31, 2017
Compensation And Retirement Disclosure [Abstract] |
Pension and Other Postretirement Benefits Disclosure [Text Block] | NOTE 17: RETIREMENT PLANS Substantially all U.S. employees are covered by a noncontributory defined benefit plan, the Kodak Retirement Income Plan (“KRIP”), which is funded by Company contributions to an irrevocable trust fund. The funding policy for KRIP is to contribute amounts sufficient to meet minimum funding requirements as determined by employee benefit and tax laws plus any additional amounts the Company determines to be appropriate. Assets in the trust fund are held for the sole benefit of participating employees and retirees. They are composed of corporate equity and debt securities, U.S. government securities, partnership investments, interests in pooled funds, commodities, real estate, and various types of interest rate, foreign currency, debt, and equity market financial instruments. For U.S. employees hired prior to March 1999 KRIP’s benefits were generally based on a formula recognizing length of service and final average earnings. KRIP included a separate cash balance formula for all U.S. employees hired after February 1999, as well as employees hired prior to that date who opted in to the cash balance formula during a special election period. Effective January 1, 2015 the KRIP was amended to provide that all participants accrue benefits under a single, revised cash balance formula (the “Cash Balance Plan”). The Cash Balance Plan credits employees' hypothetical accounts with an amount equal to either 7% or 8% of their pay, plus interest based on the 30-year Treasury bond rate. Many subsidiaries and branches operating outside the U.S. have defined benefit retirement plans covering substantially all employees. Contributions by Kodak for these plans are typically deposited under government or other fiduciary-type arrangements. Retirement benefits are generally based on contractual agreements that provide for benefit formulas using years of service and/or compensation prior to retirement. The actuarial assumptions used for these plans reflect the diverse economic environments within the various countries in which Kodak operates. Information on the major funded and unfunded U.S. and Non-U.S. defined benefit pension plans is presented below. The composition of the major plans may vary from year to year. If the major plan composition changes, prior year data is conformed to ensure comparability. The measurement date used to determine the pension obligation for all funded and unfunded U.S. and Non-U.S. defined benefit plans is December 31.
|  | Year Ended December 31, 2017 |  |  | Year Ended December 31, 2016 |
(in millions) |  | U.S. |  |  | Non-U.S. |  |  | U.S. |  |  | Non-U.S. |
Change in Benefit Obligation |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Projected benefit obligation at beginning of period |  | $ | 3,908 |  |  | $ | 816 |  |  | $ | 4,099 |  |  | $ | 800 |
Service cost |  |  | 12 |  |  |  | 3 |  |  |  | 12 |  |  |  | 3 |
Interest cost |  |  | 115 |  |  |  | 12 |  |  |  | 113 |  |  |  | 14 |
Benefit payments |  |  | (352 | ) |  |  | (48 | ) |  |  | (395 | ) |  |  | (48 | )
Actuarial loss |  |  | 170 |  |  |  | 37 |  |  |  | 76 |  |  |  | 61 |
Special termination benefits |  |  | 13 |  |  |  | — |  |  |  | 3 |  |  |  | — |
Currency adjustments |  |  | — |  |  |  | 65 |  |  |  | — |  |  |  | (14 | )
Projected benefit obligation at end of period |  | $ | 3,866 |  |  | $ | 885 |  |  | $ | 3,908 |  |  | $ | 816 |
Change in Plan Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fair value of plan assets at beginning of period |  | $ | 3,653 |  |  | $ | 693 |  |  | $ | 3,793 |  |  | $ | 728 |
Gain on plan assets |  |  | 503 |  |  |  | 27 |  |  |  | 255 |  |  |  | 19 |
Employer contributions |  |  | — |  |  |  | 5 |  |  |  | — |  |  |  | 4 |
Benefit payments |  |  | (352 | ) |  |  | (48 | ) |  |  | (395 | ) |  |  | (48 | )
Currency adjustments |  |  | — |  |  |  | 45 |  |  |  | — |  |  |  | (10 | )
Fair value of plan assets at end of period |  | $ | 3,804 |  |  | $ | 722 |  |  | $ | 3,653 |  |  | $ | 693 |
Under Funded Status at end of period |  | $ | (62 | ) |  | $ | (163 | ) |  | $ | (255 | ) |  | $ | (123 | )
Accumulated benefit obligation at end of period |  | $ | 3,864 |  |  | $ | 874 |  |  | $ | 3,907 |  |  | $ | 806 |
Amounts recognized in the Consolidated Statement of Financial Position for all major funded and unfunded U.S. and Non-U.S. defined benefit plans are as follows (in millions):
|  | As of December 31, |
|  | 2017 |  |  | 2016 |
|  | U.S. |  |  | Non-U.S. |  |  | U.S. |  |  | Non-U.S. |
Other long-term assets |  | $ | — |  |  | $ | 35 |  |  | $ | — |  |  | $ | 34 |
Pension and other postretirement liabilities |  |  | (62 | ) |  |  | (198 | ) |  |  | (255 | ) |  |  | (157 | )
Net amount recognized |  | $ | (62 | ) |  | $ | (163 | ) |  | $ | (255 | ) |  | $ | (123 | )
Information with respect to the major funded and unfunded U.S. and Non-U.S. defined benefit plans with an accumulated benefit obligation in excess of plan assets is as follows (in millions):
|  | As of December 31, |
|  | 2017 |  |  | 2016 |
|  | U.S. |  |  | Non-U.S. |  |  | U.S. |  |  | Non-U.S. |
Projected benefit obligation |  | $ | 3,866 |  |  | $ | 617 |  |  | $ | 3,908 |  |  | $ | 541 |
Accumulated benefit obligation |  |  | 3,864 |  |  |  | 606 |  |  |  | 3,907 |  |  |  | 532 |
Fair value of plan assets |  |  | 3,804 |  |  |  | 419 |  |  |  | 3,653 |  |  |  | 384 |
Amounts recognized in accumulated other comprehensive (loss) income for all major funded and unfunded U.S. and Non-U.S. defined benefit plans consist of (in millions):
|  | As of December 31, |
|  | 2017 |  |  | 2016 |
|  | U.S. |  |  | Non-U.S. |  |  | U.S. |  |  | Non-U.S. |
Prior service credit |  | $ | 36 |  |  | $ | 3 |  |  | $ | 39 |  |  | $ | 4 |
Net actuarial loss |  |  | (271 | ) |  |  | (110 | ) |  |  | (356 | ) |  |  | (76 | )
Total |  | $ | (235 | ) |  | $ | (107 | ) |  | $ | (317 | ) |  | $ | (72 | )
Other changes in major plan assets and benefit obligations recognized in Other comprehensive income (expense) are as follows (in millions):
|  | Year Ended December 31, |
|  | 2017 |  |  | 2016 |  |  | 2015 |
|  | U.S. |  |  | Non-U.S. |  |  | U.S. |  |  | Non-U.S. |  |  | U.S. |  |  | Non-U.S. |
Newly established (loss) gain |  | $ | 90 |  |  | $ | (37 | ) |  | $ | (83 | ) |  | $ | (70 | ) |  | $ | (126 | ) |  | $ | 25 |
Amortization of: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Prior service credit |  |  | (7 | ) |  |  | — |  |  |  | (7 | ) |  |  | — |  |  |  | (8 | ) |  |  | — |
Net actuarial loss |  |  | — |  |  |  | 3 |  |  |  | 7 |  |  |  | — |  |  |  | — |  |  |  | 2 |
Total (loss) income recognized in Other comprehensive income |  | $ | 83 |  |  | $ | (34 | ) |  | $ | (83 | ) |  | $ | (70 | ) |  | $ | (134 | ) |  | $ | 27 |
The Company expects to recognize $8 million of prior service credits and $10 million of net actuarial losses as components of net periodic benefit cost over the next year. Pension income for all defined benefit plans included (in millions):
|  | Year Ended December 31, |
|  | 2017 |  |  | 2016 |  |  | 2015 |
|  | U.S. |  |  | Non-U.S. |  |  | U.S. |  |  | Non-U.S. |  |  | U.S. |  |  | Non-U.S. |
Major defined benefit plans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Service cost |  | $ | 12 |  |  | $ | 3 |  |  | $ | 12 |  |  | $ | 3 |  |  | $ | 17 |  |  | $ | 3 |
Interest cost |  |  | 115 |  |  |  | 12 |  |  |  | 113 |  |  |  | 14 |  |  |  | 148 |  |  |  | 17 |
Expected return on plan assets |  |  | (243 | ) |  |  | (27 | ) |  |  | (262 | ) |  |  | (28 | ) |  |  | (272 | ) |  |  | (30 | )
Amortization of: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Prior service credit |  |  | (7 | ) |  |  | — |  |  |  | (7 | ) |  |  | — |  |  |  | (8 | ) |  |  | — |
Actuarial loss |  |  | — |  |  |  | 3 |  |  |  | 7 |  |  |  | — |  |  |  | — |  |  |  | 2 |
Pension income before special termination benefits |  |  | (123 | ) |  |  | (9 | ) |  |  | (137 | ) |  |  | (11 | ) |  |  | (115 | ) |  |  | (8 | )
Special termination benefits |  |  | 13 |  |  |  | — |  |  |  | 3 |  |  |  | — |  |  |  | 9 |  |  |  | — |
Net pension income for major defined benefit plans |  |  | (110 | ) |  |  | (9 | ) |  |  | (134 | ) |  |  | (11 | ) |  |  | (106 | ) |  |  | (8 | )
Other plans including unfunded plans |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (2 | ) |  |  | — |  |  |  | 4 |
Net pension income |  | $ | (110 | ) |  | $ | (9 | ) |  | $ | (134 | ) |  | $ | (13 | ) |  | $ | (106 | ) |  | $ | (4 | )
Beginning in 2016, Kodak changed the method used to estimate the service and interest cost components of the net periodic pension costs. The new method uses the spot yield curve approach to estimate the service and interest costs by applying the specific spot rates along the yield curve used to determine the benefit obligations to relevant projected cash outflows. Prior to 2016, the service and interest costs were determined using a single weighted-average discount rate based on the AA yield curves used to measure the benefit obligation at the measurement date. Kodak changed to the new method to provide a more precise measure of interest and service costs by improving the correlation between the projected benefit cash flows and the discrete spot yield curve rates. Kodak accounted for this change prospectively as a change in estimate beginning in the first quarter of 2016. As a result of the methodology change, the 2016 interest cost for the major U.S. and non-U.S. defined benefit pension plans decreased by approximately $31 million and $4 million, respectively. The methodology change did not have a material impact on service cost for Kodak’s major defined benefit plans. The special termination benefits of $13 million, $3 million and $9 million for the years ended December 31, 2017, 2016 and 2015, respectively, were incurred as a result of Kodak's restructuring actions and, therefore, have been included in Restructuring costs and other in the Consolidated Statement of Operations for those periods. The weighted-average assumptions used to determine the benefit obligation amounts for all major funded and unfunded U.S. and Non-U.S. defined benefit plans were as follows:
|  | Year Ended December 31, |
|  | 2017 |  |  | 2016 |  |  | 2015 |
|  | U.S. |  |  | Non-U.S. |  |  | U.S. |  |  | Non-U.S. |  |  | U.S. |  |  | Non-U.S. |
Discount rate |  |  | 3.34 | % |  |  | 1.90 | % |  |  | 3.74 | % |  |  | 2.04 | % |  |  | 3.89 | % |  |  | 2.50 | %
Salary increase rate |  |  | 3.50 | % |  |  | 2.17 | % |  |  | 3.43 | % |  |  | 1.99 | % |  |  | 3.37 | % |  |  | 1.91 | %
The weighted-average assumptions used to determine net pension (income) expense for all the major funded and unfunded U.S. and Non-U.S. defined benefit plans were as follows:
|  | Year Ended December 31, |
|  | 2017 |  |  | 2016 |  |  | 2015 |
|  | U.S. |  |  | Non-U.S. |  |  | U.S. |  |  | Non-U.S. |  |  | U.S. |  |  | Non-U.S. |
Effective rate for service cost |  |  | 3.68 | % |  |  | 2.66 | % |  |  | 3.49 | % |  |  | 2.81 | % |  |  | 3.50 | % |  |  | 2.09 | %
Effective rate for interest cost |  |  | 3.06 | % |  |  | 1.56 | % |  |  | 2.82 | % |  |  | 1.90 | % |  |  | 3.50 | % |  |  | 2.09 | %
Salary increase rate |  |  | 3.43 | % |  |  | 2.09 | % |  |  | 3.37 | % |  |  | 1.91 | % |  |  | 3.34 | % |  |  | 1.95 | %
Expected long-term rate of return on plan assets |  |  | 7.00 | % |  |  | 4.21 | % |  |  | 7.40 | % |  |  | 4.65 | % |  |  | 7.40 | % |  |  | 4.69 | %
Plan Asset Investment Strategy The investment strategy underlying the asset allocation for the pension assets is to achieve an optimal return on assets with an acceptable level of risk while providing for the long-term liabilities, and maintaining sufficient liquidity to pay current benefits and other cash obligations of the plans. This is primarily achieved by investing in a broad portfolio constructed of various asset classes including equity and equity-like investments, debt and debt-like investments, real estate, private equity and other assets and instruments. Long duration bonds and Treasury bond futures are used to partially match the long-term nature of plan liabilities. Other investment objectives include maintaining broad diversification between and within asset classes and fund managers, and managing asset volatility relative to plan liabilities. Every three years, or when market conditions have changed materially, each of Kodak’s major pension plans will undertake an asset allocation or asset and liability modeling study. The asset allocation and expected return on the plans’ assets are individually set to provide for benefits and other cash obligations within each country’s legal investment constraints. Actual allocations may vary from the target asset allocations due to market value fluctuations, the length of time it takes to implement changes in strategy, and the timing of cash contributions and cash requirements of the plans. The asset allocations are monitored, and are rebalanced in accordance with the policy set forth for each plan. The total plan assets attributable to the major U.S. defined benefit plans at December 31, 2017 relate to KRIP. The expected long-term rate of return on plan assets assumption (“EROA”) is based on a combination of formal asset and liability studies that include forward-looking return expectations given the current asset allocation. A review of the EROA as of December 31, 2017, based upon the current asset allocation and forward-looking expected returns for the various asset classes in which KRIP invests, resulted in an EROA of 6.4%. As with KRIP, the EROA assumptions for certain of Kodak’s other pension plans were reassessed as of December 31, 2017. The annual expected return on plan assets for the major non-U.S. pension plans range from 2.6% to 5.3% based on the plans’ respective asset allocations as of December 31, 2017. Plan Asset Risk Management Kodak evaluates its defined benefit plans’ asset portfolios for the existence of significant concentrations of risk. Types of concentrations that are evaluated include, but are not limited to, investment concentrations in a single entity, type of industry, foreign country, and individual fund. Foreign currency contracts and swaps are used to partially hedge foreign currency risk. Additionally, Kodak’s major defined benefit pension plans invest in government bond futures and long duration investment grade bonds to partially hedge the liability risk of the plans. As of December 31, 2017 and 2016, there were no significant concentrations (defined as greater than 10% of plan assets) of risk in Kodak’s defined benefit plan assets. The Company's weighted-average asset allocations for its major U.S. defined benefit pension plans by asset category, are as follows:
|  | As of December 31, |  |  |
|  | 2017 |  |  | 2016 |  |  | 2017 Target
Asset Category |  |  |  |  |  |  |  |  |  |
Equity securities |  |  | 10 | % |  |  | 16 | % |  | 7-13%
Debt securities |  |  | 42 | % |  |  | 33 | % |  | 35-45%
Real estate |  |  | 2 | % |  |  | 3 | % |  | 0-6%
Cash and cash equivalents |  |  | 1 | % |  |  | 3 | % |  | 0-6%
Global balanced asset allocation funds |  |  | 16 | % |  |  | 14 | % |  | 12-18%
Other |  |  | 29 | % |  |  | 31 | % |  | 27-39%
Total |  |  | 100 | % |  |  | 100 | % |  |
Kodak’s weighted-average asset allocations for its major Non-U.S. defined benefit pension plans by asset category, are as follows:
|  | As of December 31, |  |  |
|  | 2017 |  |  | 2016 |  |  | 2017 Target
Asset Category |  |  |  |  |  |  |  |  |  |
Equity securities |  |  | 3 | % |  |  | 4 | % |  | 0-6%
Debt securities |  |  | 32 | % |  |  | 31 | % |  | 30-40%
Real estate |  |  | 1 | % |  |  | 1 | % |  | 0-6%
Cash and cash equivalents |  |  | 2 | % |  |  | 3 | % |  | 0-6%
Global balanced asset allocation funds |  |  | 5 | % |  |  | 4 | % |  | 2-8%
Other |  |  | 57 | % |  |  | 57 | % |  | 55-65%
Total |  |  | 100 | % |  |  | 100 | % |  |
Fair Value Measurements Kodak’s asset allocations by level within the fair value hierarchy at December 31, 2017 and 2016 are presented in the tables below for Kodak’s major defined benefit plans. Kodak’s plan assets are accounted for at fair value and are classified within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement, with the exception of investments for which fair value is measured using the net asset value per share expedient. Kodak’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair value of assets and their placement within the fair value hierarchy levels. Assets not utilizing the net asset value per share expedient are valued as follows: Equity and debt securities traded on an active market are valued using a market approach based on the closing price on the last business day of the year. Real estate investments are valued primarily based on independent appraisals and discounted cash flow models, taking into consideration discount rates and local market conditions. Cash and cash equivalents are valued utilizing cost approach valuation techniques. Other investments are valued using a combination of market, income, and cost approaches, based on the nature of the investment. Private equity investments are valued primarily based on independent appraisals, discounted cash flow models, cost, and comparable market transactions, which include inputs such as discount rates and pricing data from the most recent equity financing. Insurance contracts are primarily valued based on contract values, which approximate fair value. For investments with lagged pricing, Kodak uses the available net asset values, and also considers expected return, subsequent cash flows and relevant material events. Major U.S. Plans December 31, 2017
|  | U.S. |
(in millions) |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  |  | Significant Observable Inputs (Level 2) |  |  | Significant Unobservable Inputs (Level 3) |  |  | Measured at NAV |  |  | Total |
Cash and cash equivalents |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 30 |  |  | $ | 30 |
Equity Securities |  |  | 60 |  |  |  | — |  |  |  | — |  |  |  | 322 |  |  |  | 382 |
Debt Securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Government Bonds |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,179 |  |  |  | 1,179 |
Investment Grade Bonds |  |  | — |  |  |  | 421 |  |  |  | — |  |  |  | — |  |  |  | 421 |
Real Estate |  |  | — |  |  |  | — |  |  |  | 26 |  |  |  | 68 |  |  |  | 94 |
Global Balanced Asset Allocation Funds |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 597 |  |  |  | 597 |
Other: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Absolute Return |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 489 |  |  |  | 489 |
Private Equity |  |  | — |  |  |  | — |  |  |  | 14 |  |  |  | 601 |  |  |  | 615 |
Derivatives with unrealized losses |  |  | (3 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (3 | )
|  | $ | 57 |  |  | $ | 421 |  |  | $ | 40 |  |  | $ | 3,286 |  |  | $ | 3,804 |
Major U.S. Plans December 31, 2016
|  | U.S. |
(in millions) |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  |  | Significant Observable Inputs (Level 2) |  |  | Significant Unobservable Inputs (Level 3) |  |  | Measured at NAV |  |  | Total |
Cash and cash equivalents |  | $ | 1 |  |  | $ | — |  |  | $ | — |  |  | $ | 106 |  |  | $ | 107 |
Equity Securities |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 582 |  |  |  | 582 |
Debt Securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Government Bonds |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 849 |  |  |  | 849 |
Investment Grade Bonds |  |  | — |  |  |  | 373 |  |  |  | — |  |  |  | — |  |  |  | 373 |
Real Estate |  |  | — |  |  |  | — |  |  |  | 32 |  |  |  | 84 |  |  |  | 116 |
Global Balanced Asset Allocation Funds |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 511 |  |  |  | 511 |
Other: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Absolute Return |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 457 |  |  |  | 457 |
Private Equity |  |  | — |  |  |  | — |  |  |  | 14 |  |  |  | 645 |  |  |  | 659 |
Derivatives with unrealized losses |  |  | (1 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (1 | )
|  | $ | — |  |  | $ | 373 |  |  | $ | 46 |  |  | $ | 3,234 |  |  | $ | 3,653 |
For Kodak’s major U.S. defined benefit pension plans, equity investments are invested broadly in U.S. equity, developed international equity, and emerging markets. Fixed income investments are comprised primarily of long duration U.S. Treasuries and investment-grade corporate bonds. Real estate investments primarily include investments in limited partnerships that invest in office, industrial, retail and apartment properties. Global Balanced Asset Allocation investments are commingled funds that hold a diversified portfolio of passive market exposures, including equities, debt, currencies and commodities. Absolute return investments are comprised of a diversified portfolio of hedge funds using equity, debt, commodity, and currency strategies held separate from the derivative-linked hedge funds described later in this footnote. Private equity investments are primarily comprised of limited partnerships and fund-of-fund investments that invest in distressed investments, venture capital, leveraged buyouts and special situations. Natural resource investments in oil and gas partnerships and timber funds are also included in this category. Major Non-U.S. Plans December 31, 2017
|  | Non - U.S. |
(in millions) |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  |  | Significant Observable Inputs (Level 2) |  |  | Significant Unobservable Inputs (Level 3) |  |  | Measured at NAV |  |  | Total |
Cash and cash equivalents |  | $ | 6 |  |  | $ | — |  |  | $ | — |  |  | $ | 5 |  |  | $ | 11 |
Equity Securities |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 24 |  |  |  | 24 |
Debt Securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Government Bonds |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 79 |  |  |  | 79 |
Inflation-Linked Bonds |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 5 |  |  |  | 5 |
Investment Grade Bonds |  |  | — |  |  |  | 62 |  |  |  | — |  |  |  | 76 |  |  |  | 138 |
Global High Yield & Emerging Market Debt |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 11 |  |  |  | 11 |
Real Estate |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 10 |  |  |  | 10 |
Global Balanced Asset Allocation Funds |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 33 |  |  |  | 33 |
Other: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Absolute Return |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 8 |  |  |  | 8 |
Private Equity |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 43 |  |  |  | 43 |
Insurance Contracts |  |  | — |  |  |  | 358 |  |  |  | — |  |  |  | — |  |  |  | 358 |
Derivatives with unrealized gains |  |  | 1 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1 |
|  | $ | 7 |  |  | $ | 420 |  |  | $ | — |  |  | $ | 294 |  |  | $ | 721 |
Major Non-U.S. Plans December 31, 2016
|  | Non - U.S. |
(in millions) |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  |  | Significant Observable Inputs (Level 2) |  |  | Significant Unobservable Inputs (Level 3) |  |  | Measured at NAV |  |  | Total |
Cash and cash equivalents |  | $ | 9 |  |  | $ | — |  |  | $ | — |  |  | $ | 9 |  |  | $ | 18 |
Equity Securities |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 28 |  |  |  | 28 |
Debt Securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Government Bonds |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 86 |  |  |  | 86 |
Inflation-Linked Bonds |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 5 |  |  |  | 5 |
Investment Grade Bonds |  |  | — |  |  |  | 59 |  |  |  | — |  |  |  | 57 |  |  |  | 116 |
Global High Yield & Emerging Market Debt |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 11 |  |  |  | 11 |
Real Estate |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 6 |  |  |  | 6 |
Global Balanced Asset Allocation Funds |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 29 |  |  |  | 29 |
Other: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Absolute Return |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 8 |  |  |  | 8 |
Private Equity |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 56 |  |  |  | 56 |
Insurance Contracts |  |  | — |  |  |  | 333 |  |  |  | — |  |  |  | — |  |  |  | 333 |
Derivatives with unrealized gains |  |  | (3 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (3 | )
|  | $ | 6 |  |  | $ | 392 |  |  | $ | — |  |  | $ | 295 |  |  | $ | 693 |
For Kodak’s major non-U.S. defined benefit pension plans, equity investments are invested broadly in local equity, developed international and emerging markets. Fixed income investments are comprised primarily of government and investment grade corporate bonds. Real estate investments primarily include investments in limited partnerships that invest in office, industrial, and retail properties. Global Balanced Asset Allocation investments are commingled funds that hold a diversified portfolio of passive market exposures, including equities, debt, currencies and commodities. Absolute return investments are comprised of a diversified portfolio of hedge funds using equity, debt, commodity, and currency strategies held separate from the derivative-linked hedge funds described late in this footnote. Private equity investments are comprised of limited partnerships and fund-of-fund investments that invest in distressed investments, venture capital and leveraged buyouts. Insurance contracts are typically annuities from life insurance companies covering specific pension obligations. For Kodak’s major defined benefit pension plans, certain investment managers are authorized to invest in derivatives such as futures, swaps, and currency forward contracts. Investments in derivatives are used to obtain desired exposure to a particular asset, index or bond duration and require only a portion of the total exposure to be invested as cash collateral. In instances where exposures are obtained via derivatives, the majority of the exposure value is available to be invested, and is typically invested, in a diversified portfolio of hedge fund strategies that generate returns in addition to the return generated by the derivatives. Of the December 31, 2017 investments shown in the major U.S. plans table above, 2% of the total pension assets represented equity securities exposure obtained via derivatives and are reported in equity securities, and 31% of the total pension assets represented U.S. government bond exposure, at 18 years target duration, obtained via derivatives and are reported in government bonds. Of the December 31, 2016 investments shown in the major U.S. plans table above, 10% of the total pension assets represented equity securities exposure obtained via derivatives and are reported in equity securities, and 23% of the total pension assets represented U.S. government bond exposure, at 18 years target duration, obtained via derivatives and are reported in government bonds. Of the December 31, 2017 investments shown in the major Non-U.S. plans table above, 0% and 7% of the total pension assets represented derivative exposures to equity securities and government bonds (at 13 years target duration) and are reported in those respective classes. Of the December 31, 2016 investments shown in the major Non-U.S. plans table above, 0% and 9% of the total pension assets represented derivative exposures to equity securities and government bonds (at 13 years target duration) and are reported in those respective classes. The following is a reconciliation of the beginning and ending balances of level 3 assets of Kodak’s major U.S. defined benefit pension plans:
|  | U.S. |
(in millions) |  | Balance at January 1, 2017 |  |  | Net Realized and Unrealized Gains and (Losses) Relating to Assets Still Held |  |  |  | Net Transfer Into/(Out of) Level 3 |  |  | Balance at December 31, 2017 |
Real Estate |  | $ | 32 |  |  | $ | 5 |  |  |  | $ | (11 | ) |  | $ | 26 |
Private Equity |  |  | 14 |  |  |  | 3 |  |  |  |  | (3 | ) |  |  | 14 |
Total |  | $ | 46 |  |  | $ | 8 |  |  |  | $ | (14 | ) |  | $ | 40 |
|  | U.S. |
(in millions) |  | Balance at January 1, 2016 |  |  | Net Realized and Unrealized Gains and (Losses) Relating to Assets Still Held |  |  |  | Net Transfer Into/(Out of) Level 3 |  |  | Balance at December 31, 2016 |
Real Estate |  | $ | 34 |  |  | $ | 7 |  |  |  | $ | (9 | ) |  | $ | 32 |
Private Equity |  |  | 24 |  |  |  | (6 | ) |  |  |  | (4 | ) |  |  | 14 |
Total |  | $ | 58 |  |  | $ | 1 |  |  |  | $ | (13 | ) |  | $ | 46 |
The following pension benefit payments, which reflect expected future service, are expected to be paid (in millions):
|  | U.S. |  |  | Non-U.S. |
2018 |  | $ | 335 |  |  | $ | 50 |
2019 |  |  | 321 |  |  |  | 50 |
2020 |  |  | 311 |  |  |  | 50 |
2021 |  |  | 299 |  |  |  | 49 |
2022 |  |  | 289 |  |  |  | 49 |
2023 - 2027 |  |  | 1,290 |  |  |  | 228 |

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- Definition The entire disclosure for pension and other postretirement benefits. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -URI http://asc.fasb.org/topic&trid=2235017 + Details
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