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Note 13 - Income Taxes
 3 Months Ended
Mar. 31, 2026
Income Tax Disclosure [Abstract]  
Income Taxes

NOTE 13: INCOME TAXES

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

 

 

 

Three Months Ended

 

 

 

March 31,

 

(dollars in millions)

 

2026

 

 

2025

 

Loss from operations before income taxes

 

$

(13

)

 

$

(5

)

Effective tax rate

 

 

(23.1

)%

 

 

(40.0

)%

Provision for income taxes

 

 

3

 

 

 

2

 

Benefit for income taxes at U.S. statutory tax rate

 

 

(3

)

 

 

(1

)

Difference between tax at effective vs. statutory rate

 

$

6

 

 

$

3

 

 

For the three months ended March 31, 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); and (3) foreign withholding taxes.

For the three months ended March 31, 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 and (2) 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 months ended March 31, 2026 and 2025.

In March 2026, German Federal Fiscal Court (BFH) ruling (I R 37/22) confirmed that profit and loss transfer agreements ("PLTA") must be actually and timely implemented to maintain a valid tax group in Germany, including timely settlement of profit or loss compensation amongst entities in the group. Kodak is in the process of gathering information and assessing the impacts, if any, on the tax positions of the entities in the Company's German group for the 2021-2025 periods that are impacted by this ruling.