EASTMAN KODAK CO Income Taxes Disclosure

NOTE 18: INCOME TAXES

Kodak's tax rate for the period was unfavorably impacted by a nondeductible U.S. federal excise tax of $153 million ($32 million tax effected) paid in connection with the completed reversion of KRIP assets.

The significant components of deferred tax assets and liabilities were as follows:

Deferred tax liabilities are reported in the following component within the Consolidated Statement of Financial Position:

The decrease in net deferred tax assets and net deferred tax liabilities during the period was primarily associated with the utilization of such items in connection with the completed reversion of the KRIP pension plan to minimize income taxes upon such reversion.

Upon reversion, certain previously unrecognized pension and postretirement liabilities were recognized for tax purposes, contributing to an increase in current taxable income and related current tax liabilities. In addition, as reflected in the Company’s effective tax rate, nondeductible U.S. federal excise taxes associated with the reversion resulted in higher current tax expense and current tax liabilities. Domestic net operating losses and other previously disallowed deferred tax assets were utilized to substantially offset these current tax liabilities, resulting in minimal cash tax requirements for the period. Accordingly, the valuation allowance previously recorded against the related net operating loss and other previously suspended deferred tax assets that were utilized was released.

As of December 31, 2025, Kodak had available domestic federal and state net operating loss ("NOL") carryforwards for income tax purposes of approximately $873 million and $1,033 million, respectively, and foreign NOL carryforwards for income tax purposes of approximately $589 million. Approximately $1,043 million of these NOLs have an indefinite carryforward period, including $63 million of U.S interest carryforward. The remaining $1,452 million that do not have an indefinite carryforward period expire between the years 2026 and 2044. Kodak also had foreign tax and investment tax credit carryforwards of $37 million and $17 million, respectively, which expire between 2026 and 2040. A total of $18 million of the foreign tax credit carryforwards will expire in 2026 if left unutilized. If written off, these tax attributes are expected to be fully offset by a corresponding decrease in Kodak's valuation allowance, resulting in no net tax provision.

As of December 31, 2025, approximately $97 million of unused foreign tax credits expired and were written off. The write-off of these tax attributes was fully offset by a corresponding reduction in Kodak’s valuation allowance, which resulted in no net tax provision.

As of December 31, 2025, Kodak had available $11 million of tax credits related to its research and development activities. These credits expire between 2034 and 2045. A full valuation allowance has been recorded on these credits.

Kodak’s ability to utilize its U.S. NOLs and tax credits may be subject to limitations imposed by Section 382 of the Internal Revenue Code. Section 382 limits the utilization of NOLs in the event of significant changes in the stock ownership of the Company. An ownership change occurs if, among other things, the aggregate ownership of stockholders owning five percent of Kodak’s stock increases by more than 50 percentage points over a three-year rolling period. An ownership change can also occur by other events, such as the sale of Kodak shares that are owned by its 5% shareholders. Future transactions, when combined with reported transactions within the testing period could aggregate to an ownership change during the testing period in excess of 50 percentage points.

Kodak intends to repatriate its offshore earnings when prudent. Accordingly, it recorded deferred tax liabilities of $15 million for potential taxes on undistributed earnings as of both December 31, 2025 and 2024, respectively. These taxes are primarily attributable to foreign withholding taxes.

Kodak’s valuation allowance as of December 31, 2025 was $589 million. Of this amount, $267 million was attributable to Kodak’s net deferred tax assets outside the U.S. of $258 million, and $322 million related to Kodak’s net deferred tax assets in the U.S. of $303 million, for which Kodak believes it is not more likely than not that the assets will be realized.

Kodak’s valuation allowance as of December 31, 2024 was $671 million. Of this amount, $259 million was attributable to Kodak’s net deferred tax assets outside the U.S. of $251 million, and $412 million related to Kodak’s net deferred tax assets in the U.S. of $396 million, for which Kodak believes it is not more likely than not that the assets will be realized.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. While the OBBBA did not have a material impact on Kodak's effective tax rate in 2025, there was a beneficial impact to Kodak’s current cash taxes related in part, to the immediate expensing of certain qualified domestic research expenses.

Accounting for Uncertainty in Income Taxes

A reconciliation of the beginning and ending amount of Kodak’s liability for income taxes associated with unrecognized tax benefits is as follows:

Kodak’s policy is to recognize interest and/or penalties related to income tax matters as a component of its provision for income taxes. Kodak had approximately $12 million, $11 million and $10 million of interest and penalties associated with uncertain tax benefits accrued as of December 31, 2025, 2024 and 2023 respectively.

Kodak had uncertain tax benefits of approximately $16 million, $14 million and $13 million as of December 31, 2025, 2024 and 2023 respectively, that, if recognized, would affect the effective income tax rate. Kodak has classified certain income tax liabilities as current or noncurrent based on management’s estimate of when these liabilities will be settled. The current income tax liabilities are recorded in Other current liabilities in the Consolidated Statement of Financial Position. Noncurrent income tax liabilities are recorded in Other long-term liabilities in the Consolidated Statement of Financial Position.

It is reasonably possible that the liability associated with Kodak’s unrecognized tax benefits will increase or decrease within the next twelve months. These changes may be the result of settling ongoing audits or the expiration of statutes of limitations. Audit outcomes and the timing of audit settlements are subject to significant uncertainty.

Although management believes that adequate provision has been made for such issues, there is the possibility that the ultimate resolution of such issues could have an adverse effect on the earnings of Kodak. Conversely, if these issues are resolved favorably in the future, the related provision would be reduced, thus having a positive impact on earnings.

Kodak is subject to taxation and files income tax returns in the U.S. federal jurisdiction and in many state and foreign jurisdictions. Kodak has substantially concluded all U.S. federal income tax matters for years through 2020 and state income tax matters for years through 2017 with the respective tax authorities. With respect to countries outside the U.S., Kodak has substantially concluded all material foreign income tax matters through 2013 with respective foreign tax jurisdiction authorities.