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Note 15 - Income Taxes | 9 Months Ended
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Sep. 30, 2019
Income Tax Disclosure [Abstract] |
Income Taxes | NOTE 15: INCOME TAXES Tax Asset Protection Plan and Amendment to the Certificate of Incorporation On September 12, 2019, the Company adopted a Tax Asset Protection Plan (the “Plan”) and filed a certificate of amendment to its Second Amended and Restated Certificate of Incorporation (the “Protective Amendment”). The purpose of the Plan and the Protective Amendment is to help protect the Company’s ability to utilize net operating loss and foreign tax credit carryforwards (the “Tax Benefits”) to minimize U.S. federal taxes during future periods. The Company’s use of the Tax Benefits in the future may be significantly limited if it experiences an “ownership change” for U.S. federal income tax purposes as defined under Section 382 of the U.S. Internal Revenue Code. In general, an ownership change will occur when the percentage of the Company’s ownership (by value) of one or more “5-percent shareholders” has increased in the aggregate by more than 50 percent over the lowest percentage owned by such shareholders at any time during the prior three years (calculated on a rolling basis). In the Company’s case, because the Company’s outstanding convertible preferred stock and convertible notes are aggregated together with the Company’s common stock in determining if there is a 5-percent shareholder for tax purposes, the Plan and the Protective Amendment discourage or restrict, as applicable, the ownership of 10% or more of the Company’s common stock, rather than the 5% usually contained in such plans. The Plan is designed to reduce the likelihood that the Company will experience an ownership change by (i) discouraging any person or group from acquiring 10% or more of the Company’s common stock and (ii) discouraging any existing 10% holder of the common stock from acquiring more than 1,000,000 additional shares of Company common stock. The Protective Amendment will generally restrict the transfer of the Company’s common stock if the effect will be to increase the beneficial ownership of any person to 10% or more of the outstanding common stock or cause the beneficial ownership of a 10% holder of common stock to increase by more than 1,000,000 shares on common stock. There is no guarantee, however, that the Plan and the Protective Amendment will prevent the Company from experiencing an ownership change. Kodak’s income tax provision and effective tax rate were as follows:
|  | Three Months Ended |  |  | Nine Months Ended |
|  | September 30, |  |  | September 30, |
(in millions) |  | 2019 |  |  | 2018 |  |  | 2019 |  |  | 2018 |
(Loss) earnings from continuing operations before income taxes |  | $ | (3 | ) |  | $ | 23 |  |  | $ | (16 | ) |  | $ | 5 |
Effective tax rate |  |  | (233.3 | )% |  |  | 13.0 | % |  |  | (75.0 | )% |  |  | 140.0 | %
Provision for income taxes |  |  | 7 |  |  |  | 3 |  |  |  | 12 |  |  |  | 7 |
(Benefit) provision for income taxes at U.S. statutory tax rate |  |  | (1 | ) |  |  | 5 |  |  |  | (3 | ) |  |  | 1 |
Difference between tax at effective vs. statutory rate |  | $ | 8 |  |  | $ | (2 | ) |  | $ | 15 |  |  | $ | 6 |
For the three months ended September 30, 2019, the difference between Kodak’s effective tax rate and the U.S. statutory rate of 21.0% is primarily attributable to: (1) the impact related to existing valuation allowances associated with changes in net deferred tax assets from current earnings and losses, (2) the results from operations in jurisdictions outside the U.S., (3) a provision associated with the establishment of a deferred tax asset valuation allowance outside the U.S. and (4) a benefit associated with foreign withholding taxes on undistributed earnings. For the nine months ended September 30, 2019, the difference between Kodak’s effective tax rate and the U.S. statutory rate of 21.0% is primarily attributable to: (1) the impact related to existing valuation allowances associated with changes in net deferred tax assets from current earnings and losses, (2) the results from operations in jurisdictions outside the U.S., (3) a provision associated with the establishment of a deferred tax asset valuation allowance outside the U.S. and (4) changes in audit reserves. For the three months ended September 30, 2018, the difference between Kodak’s effective tax rate and the U.S. statutory rate of 21.0% is primarily attributable to: (1) the impact related to existing valuation allowances associated with changes in net deferred tax assets from current earnings and losses, (2) the results from operations in jurisdictions outside the U.S., (3) a benefit associated with foreign withholding taxes on undistributed earnings and (4) changes in audit reserves, including a settlement with a taxing authority in a location outside the U.S. For the nine months ended September 30, 2018, the difference between Kodak’s effective tax rate and the U.S. statutory rate of 21.0% is primarily attributable to: (1) the impact related to existing valuation allowances associated with changes in net deferred tax assets from current earnings and losses, (2) the results from operations in jurisdictions outside the U.S. and (3) changes in audit reserves, including a settlement with a taxing authority in a location outside the U.S.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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