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Note 12 - Revenue
6 Months Ended
Jun. 30, 2019
Revenue From Contract With Customer [Abstract]  
Revenue

NOTE 12:  REVENUE

 

Disaggregation of Revenue

 

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

 

 

 

Three Months Ended

 

 

 

June 30, 2019

 

(in millions)

 

Print Systems

 

 

Enterprise Inkjet Systems

 

 

Kodak Software

 

 

Brand, Film and Imaging

 

 

Advanced Materials and 3D Printing Technology

 

 

Eastman Business Park

 

 

Total

 

Plates, inks and other

   consumables

 

$

158

 

 

$

9

 

 

$

 

 

$

3

 

 

$

 

 

$

 

 

$

170

 

Ongoing service

   arrangements (1)

 

 

32

 

 

 

18

 

 

 

11

 

 

 

1

 

 

 

 

 

 

 

 

 

62

 

Total Annuities

 

 

190

 

 

 

27

 

 

 

11

 

 

 

4

 

 

 

 

 

 

 

 

 

232

 

Equipment & Software

 

 

17

 

 

 

2

 

 

 

3

 

 

 

 

 

 

 

 

 

 

 

 

22

 

Film and chemicals

 

 

 

 

 

 

 

 

 

 

 

42

 

 

 

 

 

 

 

 

 

42

 

Other (2)

 

 

 

 

 

 

 

 

 

 

 

8

 

 

 

 

 

 

3

 

 

 

11

 

Total

 

$

207

 

 

$

29

 

 

$

14

 

 

$

54

 

 

$

 

 

$

3

 

 

$

307

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended

 

 

 

June 30, 2019

 

(in millions)

 

Print Systems

 

 

Enterprise Inkjet Systems

 

 

Kodak Software

 

 

Brand, Film and Imaging

 

 

Advanced Materials and 3D Printing Technology

 

 

Eastman Business Park

 

 

Total

 

Plates, inks and other

   consumables

 

$

307

 

 

$

17

 

 

$

 

 

$

6

 

 

$

 

 

$

 

 

$

330

 

Ongoing service

   arrangements (1)

 

 

64

 

 

 

36

 

 

 

22

 

 

 

2

 

 

 

 

 

 

 

 

 

124

 

Total Annuities

 

 

371

 

 

 

53

 

 

 

22

 

 

 

8

 

 

 

 

 

 

 

 

 

454

 

Equipment & Software

 

 

28

 

 

 

8

 

 

 

6

 

 

 

 

 

 

 

 

 

 

 

 

42

 

Film and chemicals

 

 

 

 

 

 

 

 

 

 

 

80

 

 

 

 

 

 

 

 

 

80

 

Other (2)

 

 

 

 

 

 

 

 

 

 

 

15

 

 

 

2

 

 

 

5

 

 

 

22

 

Total

 

$

399

 

 

$

61

 

 

$

28

 

 

$

103

 

 

$

2

 

 

$

5

 

 

$

598

 

 

 

 

Three Months Ended

 

 

 

June 30, 2018

 

(in millions)

 

Print Systems

 

 

Enterprise Inkjet Systems

 

 

Kodak Software

 

 

Brand, Film and Imaging

 

 

Advanced Materials and 3D Printing Technology

 

 

Eastman Business Park

 

 

Total

 

Plates, inks and other consumables

 

$

176

 

 

$

8

 

 

$

 

 

$

4

 

 

$

 

 

$

 

 

$

188

 

Ongoing service arrangements (1)

 

 

33

 

 

 

20

 

 

 

12

 

 

 

1

 

 

 

 

 

 

 

 

 

66

 

Total Annuities

 

 

209

 

 

 

28

 

 

 

12

 

 

 

5

 

 

 

 

 

 

 

 

 

254

 

Equipment & Software

 

 

18

 

 

 

5

 

 

 

4

 

 

 

 

 

 

 

 

 

 

 

 

27

 

Film and chemicals

 

 

 

 

 

 

 

 

 

 

 

41

 

 

 

 

 

 

 

 

 

41

 

Other (2)

 

 

 

 

 

 

 

 

 

 

 

7

 

 

 

1

 

 

 

2

 

 

 

10

 

Total

 

$

227

 

 

$

33

 

 

$

16

 

 

$

53

 

 

$

1

 

 

$

2

 

 

$

332

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended

 

 

 

June 30, 2018

 

(in millions)

 

Print Systems

 

 

Enterprise Inkjet Systems

 

 

Kodak Software

 

 

Brand, Film and Imaging

 

 

Advanced Materials and 3D Printing Technology

 

 

Eastman Business Park

 

 

Total

 

Plates, inks and other consumables

 

$

343

 

 

$

16

 

 

$

 

 

$

9

 

 

$

 

 

$

 

 

$

368

 

Ongoing service arrangements (1)

 

 

67

 

 

 

39

 

 

 

24

 

 

 

1

 

 

 

 

 

 

 

 

 

131

 

Total Annuities

 

 

410

 

 

 

55

 

 

 

24

 

 

 

10

 

 

 

 

 

 

 

 

 

499

 

Equipment & Software

 

 

33

 

 

 

9

 

 

 

8

 

 

 

 

 

 

 

 

 

 

 

 

50

 

Film and chemicals

 

 

 

 

 

 

 

 

 

 

 

82

 

 

 

 

 

 

 

 

 

82

 

Other (2)

 

 

 

 

 

 

 

 

 

 

 

13

 

 

 

2

 

 

 

4

 

 

 

19

 

Total

 

$

443

 

 

$

64

 

 

$

32

 

 

$

105

 

 

$

2

 

 

$

4

 

 

$

650

 

 

(1)

Service revenue in the Consolidated Statement of Operations includes the ongoing service revenue shown above as well as revenue from project-based document management and managed print services businesses, which is included in Other above.

 

(2)

Other includes revenue from professional services, non-recurring engineering services, print and managed media services, tenant rent and related property management services and licensing.

 

Product Portfolio Summary:

 

 

 

Three Months Ended

 

 

 

June 30, 2019

 

(in millions)

 

Print Systems

 

 

Enterprise Inkjet Systems

 

 

Kodak Software

 

 

Brand, Film and Imaging

 

 

Advanced Materials and 3D Printing Technology

 

 

Eastman Business Park

 

 

Total

 

Growth engines (1)

 

$

45

 

 

$

18

 

 

$

14

 

 

$

7

 

 

$

 

 

$

 

 

$

84

 

Strategic other businesses (2)

 

 

155

 

 

 

 

 

 

 

 

 

44

 

 

 

 

 

 

3

 

 

 

202

 

Planned declining

   businesses (3)

 

 

7

 

 

 

11

 

 

 

 

 

 

3

 

 

 

 

 

 

 

 

 

21

 

 

 

$

207

 

 

$

29

 

 

$

14

 

 

$

54

 

 

$

 

 

$

3

 

 

$

307

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended

 

 

 

June 30, 2019

 

(in millions)

 

Print Systems

 

 

Enterprise Inkjet Systems

 

 

Kodak Software

 

 

Brand, Film and Imaging

 

 

Advanced Materials and 3D Printing Technology

 

 

Eastman Business Park

 

 

Total

 

Growth engines (1)

 

$

85

 

 

$

39

 

 

$

28

 

 

$

15

 

 

$

2

 

 

$

 

 

$

169

 

Strategic other businesses (2)

 

 

298

 

 

 

 

 

 

 

 

 

82

 

 

 

 

 

 

5

 

 

 

385

 

Planned declining

   businesses (3)

 

 

16

 

 

 

22

 

 

 

 

 

 

6

 

 

 

 

 

 

 

 

 

44

 

 

 

$

399

 

 

$

61

 

 

$

28

 

 

$

103

 

 

$

2

 

 

$

5

 

 

$

598

 

 

 

 

 

Three Months Ended

 

 

 

June 30, 2018

 

(in millions)

 

Print Systems

 

 

Enterprise Inkjet Systems

 

 

Kodak Software

 

 

Brand, Film and Imaging

 

 

Advanced Materials and 3D Printing Technology

 

 

Eastman Business Park

 

 

Total

 

Growth engines (1)

 

$

39

 

 

$

19

 

 

$

16

 

 

$

7

 

 

$

1

 

 

$

 

 

$

82

 

Strategic other businesses (2)

 

 

180

 

 

 

 

 

 

 

 

 

42

 

 

 

 

 

 

2

 

 

 

224

 

Planned declining

   businesses (3)

 

 

8

 

 

 

14

 

 

 

 

 

 

4

 

 

 

 

 

 

 

 

 

26

 

 

 

$

227

 

 

$

33

 

 

$

16

 

 

$

53

 

 

$

1

 

 

$

2

 

 

$

332

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended

 

 

 

June 30, 2018

 

(in millions)

 

Print Systems

 

 

Enterprise Inkjet Systems

 

 

Kodak Software

 

 

Brand, Film and Imaging

 

 

Advanced Materials and 3D Printing Technology

 

 

Eastman Business Park

 

 

Total

 

Growth engines (1)

 

$

74

 

 

$

37

 

 

$

32

 

 

$

13

 

 

$

2

 

 

$

 

 

$

158

 

Strategic other businesses (2)

 

 

350

 

 

 

 

 

 

 

 

 

83

 

 

 

 

 

 

4

 

 

 

437

 

Planned declining

   businesses (3)

 

 

19

 

 

 

27

 

 

 

 

 

 

9

 

 

 

 

 

 

 

 

 

55

 

 

 

$

443

 

 

$

64

 

 

$

32

 

 

$

105

 

 

$

2

 

 

$

4

 

 

$

650

 

 

(1)

Growth engines consist of Sonora, PROSPER, Kodak Software, AM3D, excluding intellectual property (IP) licensing, and brand licensing.

 

(2)

Strategic Other Businesses include plates, Computer to Plate (“CTP”) and related service, and Nexpress and related toner business in the Print Systems segment, Motion Picture and Industrial Film and Chemicals in the Brand, Film and Imaging segment, Eastman Business Park and IP licensing.

 

(3)

Planned Declining Businesses are product lines where the decision has been made to stop new product development and manage an orderly expected decline in the installed product and annuity base. These product families consist of Consumer Inkjet in the Brand, Film and Imaging segment, Versamark in the Enterprise Inkjet Systems segment and Digimaster in the Print Systems segment.

 

Geography:

 

 

 

Three Months Ended

 

 

 

June 30, 2019

 

(in millions)

 

Print Systems

 

 

Enterprise Inkjet Systems

 

 

Kodak Software

 

 

Brand, Film and Imaging

 

 

Advanced Materials and 3D Printing Technology

 

 

Eastman Business Park

 

 

Total

 

United States

 

$

56

 

 

$

11

 

 

$

7

 

 

$

34

 

 

$

 

 

$

3

 

 

$

111

 

Canada

 

 

4

 

 

 

1

 

 

 

 

 

 

1

 

 

 

 

 

 

 

 

 

6

 

North America

 

 

60

 

 

 

12

 

 

 

7

 

 

 

35

 

 

 

 

 

 

3

 

 

 

117

 

Europe, Middle East and Africa

 

 

82

 

 

 

11

 

 

 

5

 

 

 

6

 

 

 

 

 

 

 

 

 

104

 

Asia Pacific

 

 

53

 

 

 

6

 

 

 

1

 

 

 

13

 

 

 

 

 

 

 

 

 

73

 

Latin America

 

 

12

 

 

 

 

 

 

1

 

 

 

 

 

 

 

 

 

 

 

 

13

 

Total Sales

 

$

207

 

 

$

29

 

 

$

14

 

 

$

54

 

 

$

 

 

$

3

 

 

$

307

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended

 

 

 

June 30, 2019

 

(in millions)

 

Print Systems

 

 

Enterprise Inkjet Systems

 

 

Kodak Software

 

 

Brand, Film and Imaging

 

 

Advanced Materials and 3D Printing Technology

 

 

Eastman Business Park

 

 

Total

 

United States

 

$

110

 

 

$

26

 

 

$

13

 

 

$

65

 

 

$

2

 

 

$

5

 

 

$

221

 

Canada

 

 

7

 

 

 

1

 

 

 

1

 

 

 

1

 

 

 

 

 

 

 

 

 

10

 

North America

 

 

117

 

 

 

27

 

 

 

14

 

 

 

66

 

 

 

2

 

 

 

5

 

 

 

231

 

Europe, Middle East and Africa

 

 

159

 

 

 

21

 

 

 

10

 

 

 

10

 

 

 

 

 

 

 

 

 

200

 

Asia Pacific

 

 

100

 

 

 

12

 

 

 

3

 

 

 

26

 

 

 

 

 

 

 

 

 

141

 

Latin America

 

 

23

 

 

 

1

 

 

 

1

 

 

 

1

 

 

 

 

 

 

 

 

 

26

 

Total Sales

 

$

399

 

 

$

61

 

 

$

28

 

 

$

103

 

 

$

2

 

 

$

5

 

 

$

598

 

 

 

 

Three Months Ended

 

 

 

June 30, 2018

 

(in millions)

 

Print Systems

 

 

Enterprise Inkjet Systems

 

 

Kodak Software

 

 

Brand, Film and Imaging

 

 

Advanced Materials and 3D Printing Technology

 

 

Eastman Business Park

 

 

Total

 

United States

 

$

60

 

 

$

11

 

 

$

7

 

 

$

33

 

 

$

1

 

 

$

2

 

 

$

114

 

Canada

 

 

3

 

 

 

 

 

 

1

 

 

 

1

 

 

 

 

 

 

 

 

 

5

 

North America

 

 

63

 

 

 

11

 

 

 

8

 

 

 

34

 

 

 

1

 

 

 

2

 

 

 

119

 

Europe, Middle East and Africa

 

 

93

 

 

 

13

 

 

 

5

 

 

 

5

 

 

 

 

 

 

 

 

 

116

 

Asia Pacific

 

 

57

 

 

 

8

 

 

 

2

 

 

 

14

 

 

 

 

 

 

 

 

 

81

 

Latin America

 

 

14

 

 

 

1

 

 

 

1

 

 

 

 

 

 

 

 

 

 

 

 

16

 

Total Sales

 

$

227

 

 

$

33

 

 

$

16

 

 

$

53

 

 

$

1

 

 

$

2

 

 

$

332

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended

 

 

 

June 30, 2018

 

(in millions)

 

Print Systems

 

 

Enterprise Inkjet Systems

 

 

Kodak Software

 

 

Brand, Film and Imaging

 

 

Advanced Materials and 3D Printing Technology

 

 

Eastman Business Park

 

 

Total

 

United States

 

$

117

 

 

$

22

 

 

$

14

 

 

$

65

 

 

$

2

 

 

$

4

 

 

$

224

 

Canada

 

 

6

 

 

 

 

 

 

2

 

 

 

2

 

 

 

 

 

 

 

 

 

10

 

North America

 

 

123

 

 

 

22

 

 

 

16

 

 

 

67

 

 

 

2

 

 

 

4

 

 

 

234

 

Europe, Middle East and Africa

 

 

186

 

 

 

25

 

 

 

11

 

 

 

10

 

 

 

 

 

 

 

 

 

232

 

Asia Pacific

 

 

106

 

 

 

15

 

 

 

4

 

 

 

27

 

 

 

 

 

 

 

 

 

152

 

Latin America

 

 

28

 

 

 

2

 

 

 

1

 

 

 

1

 

 

 

 

 

 

 

 

 

32

 

Total Sales

 

$

443

 

 

$

64

 

 

$

32

 

 

$

105

 

 

$

2

 

 

$

4

 

 

$

650

 

 

 

Contract Balances

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 June 30, 2019 and December 31, 2018 were $2 million and $3 million, respectively, and are reported in Other current assets 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 June 30, 2019 and December 31, 2018 were $56 million and $48 million, respectively, of which $37 million and $42 million, respectively, are reported in Other current liabilities and $19 million and $6 million, respectively, are reported in Other long-term liabilities in the Consolidated Statement of Financial Position.

 

Revenue recognized for the quarter and six months ended June 30, 2019 and 2018 that was included in the contract liability balance at the beginning of the year was $5 million and $30 million in 2019, respectively, and $4 million and $27 million in 2018, respectively, and primarily represented revenue from prepaid service contracts and equipment revenue recognition.  Contract liabilities as of June 30, 2019 included $20 million and $23 million of cash payments received during the quarter and six months ended June 30, 2019, respectively.  Contract liabilities as of June 30, 2018 included $23 million and $30 million of cash payments received during the quarter and six months ended June 30, 2018, respectively.

 

Unsatisfied Performance Obligations

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 June 30, 2019, there was approximately $79 million of unrecognized revenue from unsatisfied performance obligations. Approximately 20% of the revenue from unsatisfied performance obligations is expected to be recognized in the rest of 2019, 30% in 2020, 15% in 2021 and 35% thereafter.