EKDKQ Emerges From Chapter 11

Kodak Announces Comprehensive Settlement with U.K. Pension Plan, Moving Kodak toward Exit from Chapter 11

Business Wire “Press Releases – English”
Agreement Spins Off Personalized Imaging and
Document Imaging Businesses to KPP, Settles $2.8 Billion in KPP Claims,
and Funds Emergence of Commercial Imaging Business from Chapter 11

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ROCHESTER, N.Y.–(BUSINESS WIRE)–
Eastman Kodak Company today announced a comprehensive settlement
agreement with the U.K. Kodak Pension Plan (KPP), its largest creditor,
with respect to its Chapter 11 Plan of Reorganization. Under the
agreement, which will be filed with the U.S. Bankruptcy Court, Kodaks
Personalized Imaging and Document Imaging businesses will be spun off
under new ownership to KPP.
The settlement agreement provides, among other things, for the spin-off
of Kodaks Personalized Imaging and Document Imaging businesses to KPP
for cash and non-cash consideration of $650 million. Certain proceeds
will be used to support the emergence of Kodak from Chapter 11 and the
growth of its Commercial Imaging business. The agreement also settles
approximately $2.8 billion of claims by KPP against Kodak and certain of
its affiliates.
In one comprehensive transaction, Kodak will realize its previously
announced intention to divest its Personalized Imaging and Document
Imaging businesses and settle its largest legacy liability, said
Antonio M. Perez, Kodak Chairman and Chief Executive Officer. The KPP
transaction moves us past several key hurdles in our reorganization,
resolving all potential claims worldwide, assuring continued operations
outside of the United States, placing our Personalized Imaging and
Document Imaging businesses with a new owner that recognizes their value
and is focused on their growth and success, and providing the remaining
liquidity we require to emerge from Chapter 11. We are very pleased with
the transaction, the value it creates for our stakeholders, and the
dedication and creativity of KPP that made it possible to achieve this
extraordinary result.
Steven Ross, Chairman of KPP, said, KPP and Kodak have been working
collaboratively since the beginning of the case, and this acquisition
provides security for and delivers the greatest value to, the KPP
members. Overall, this settlement gives the KPP members greatly improved
future prospects whilst being good for Kodaks employees, its creditors
and for UK businesses.
The businesses that we are acquiring will deliver long-term cash flows
to support the plans obligations. The financial stability that KPP will
provide for the Personalized Imaging and Document Imaging businesses
will be beneficial to those businesses employees, customers and
partners.
The agreement will be implemented as part of Kodaks Chapter 11 plan in
the United States. At consummation of the spin-off, Kodak and its
worldwide affiliates will be released from their obligations to KPP. The
UK Pensions Regulator (the Regulator) has been kept fully informed of
this process and the Regulator has granted clearance in respect of the
acquisition. The Regulator has decided that it will approve the release
of Kodak Limited, the KPPs sponsoring employer, from its liabilities to
the KPP and the UK Pension Protection Fund has confirmed that it has no
objection. Closing of the transaction is subject to the approval of the
U.S. Bankruptcy Court, approval by the Regulator and the satisfaction or
waiver of other conditions precedent.
Kodak intends to file a draft Chapter 11 plan with the Bankruptcy Court
on April 30, and to seek approval of the KPP settlement and related
transactions promptly thereafter, withdrawing the previously-filed
motion for the standalone sale of the Document Imaging business.
CAUTIONARY STATEMENT PURSUANT TO SAFE HARBOR PROVISIONS OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This document includes forward-looking statements as that term is
defined under the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include statements concerning the Companys
plans, objectives, goals, strategies, future events, future revenue or
performance, capital expenditures, liquidity, financing needs, business
trends, and other information that is not historical information. When
used in this document, the words estimates, expects, anticipates,
projects, plans, intends, believes, predicts, forecasts, or
future or conditional verbs, such as will, should, could, or
may, and variations of such words or similar expressions are intended
to identify forward-looking statements. All forward-looking statements,
including, without limitation, managements examination of historical
operating trends and data are based upon the Companys expectations and
various assumptions. Future events or results may differ from those
anticipated or expressed in these forward-looking statements. Important
factors that could cause actual events or results to differ materially
from these forward-looking statements include, among others, the risks
and uncertainties described in more detail in the Companys most recent
Annual Report on Form 10-K for the year ended December 31, 2012, under
the headings Business, Risk Factors, and Managements Discussion
and Analysis of Financial Condition and Results of OperationsLiquidity
and Capital Resources, and those described in filings made by the
Company with the U.S. Bankruptcy Court for the Southern District of New
York and in other filings the Company makes with the SEC from time to
time, as well as the following: the Companys ability to successfully
emerge from Chapter 11 as a profitable sustainable company; the ability
of the Company and its subsidiaries to develop, secure approval of and
consummate one or more plans of reorganization with respect to the
Chapter 11 cases; the Companys ability to improve its operating
structure, financial results and profitability; the ability of the
Company to achieve cash forecasts, financial projections, and projected
growth; our ability to raise sufficient proceeds from the sale of
businesses and non-core assets; the businesses the Company expects to
emerge from Chapter 11; the ability of the company to discontinue
certain businesses or operations; the ability of the Company to continue
as a going concern; the Companys ability to comply with the Earnings
Before Interest, Taxes, Depreciation and Amortization (EBITDA) covenants
in its debtor-in-possession credit agreements; our ability to obtain
additional financing; the potential adverse effects of the Chapter 11
proceedings on the Companys liquidity, results of operations, brand or
business prospects; the outcome of our intellectual property patent
litigation matters; the Companys ability to generate or raise cash and
maintain a cash balance sufficient to comply with the minimum liquidity
covenants in its debtor-in-possession credit agreements and to fund
continued investments, capital needs, restructuring payments and service
its debt; our ability to fairly resolve legacy liabilities; the
resolution of claims against the Company; the Companys ability to
retain key executives, managers and employees; the Companys ability to
maintain product reliability and quality and growth in relevant markets;
our ability to effectively anticipate technology trends and develop and
market new products, solutions and technologies; and the impact of the
global economic environment on the Company. There may be other factors
that may cause the Companys actual results to differ materially from
the forward-looking statements. All forward-looking statements
attributable to the Company or persons acting on its behalf apply only
as of the date of this document, and are expressly qualified in their
entirety by the cautionary statements included in this report. The
Company undertakes no obligation to update or revise forward-looking
statements to reflect events or circumstances that arise after the date
made or to reflect the occurrence of unanticipated events.
About Kodak
Kodak is transforming into a B2B company focused on its Commercial
Imaging business. Kodak will be centered on commercial, packaging and
functional printing solutions and enterprise services, markets in which
it offers customers advanced technologies that give them a competitive
edge. The company also offers leading products and services in
Entertainment Imaging and Commercial Films. For additional information
on Kodak, visit kodak.com.
About Kodaks Personalized Imaging Business
The Personalized Imaging business leverages Kodaks unique imaging
heritage, expertise and ongoing innovation to provide customers and
end-consumers with high-quality products and services to meet their
individual needs. The Personalized Imaging business consists of Retail
Systems Solutions, the world leader in retail photo kiosks and dry
lab systems, offering retailers a competitive advantage in the photo
services market; Paper
& Output Systems, offering photo specialty retailers,
professional and wholesale labs, and photographers the broadest
portfolio of traditional photographic paper and workflow solutions; Film
Capture, offering consumers and professionals an award-winning range
of still-camera film products; and Event
Imaging Solutions, offering theme parks and other venues a total
solution in souvenir photo operations.
About Kodak’s Document Imaging Business
Kodak’s Document Imaging business enables customers to capture and
manage valuable information from electronic and paper documents. Our
solutions include award-winning scanners and capture software,
information workflow software, an expanding range of professional
services, and industry-leading service and support. From small offices
to global operations, Kodak has the solutions to automate your business
processes and intelligently deliver the information your enterprise
needs.
Notes to Editors on Kodak Pension Plan
The KPP is a defined benefit pension plan which was closed to new
members on 1 July 2006 and closed to future accrual on 31 March 2012.
The Plan has assets of circa 1bn and a deficit on a buy out basis of
circa 1.9bn.
The Plan is relatively mature with approximately 6,230 deferred members
and 8,610 pensioners.
The terms of the Settlement reached give the members of the UK Kodak
Pension Plan (KPP) the best outcome that could be achieved in Kodaks
current circumstances.
The Trustees appreciated that to maximise returns for all the creditors
(including KPP) in the Chapter 11 reorganisation of Kodak, it would be
important to preserve value. The businesses that the Trustees are
acquiring have significant value and will develop, which will be good
for their employees, customers and suppliers, and they will over time be
able to fund pension benefits and enable the Trustees to achieve their
objective which is to get the best pensions for KPP members.
Whilst this transaction provides the best deal for the KPP, the trustees
have concluded that the existing deficit is so large that the scheme
cannot continue in its current form. Therefore members will be offered
the chance to transfer to a new scheme which offers lower benefits
(though still better than the compensation provided by the Pension
Protection Fund (PPF)). If members do not wish to transfer, they will
stay with the remainder of the KPP when it transfers to the PPF.
The Trustees will fully consult with members regarding these alternative
arrangements. The Trustees will be writing to all members with details
of the implications of the settlement for each of their pensions and
will undertake a series of presentations around the UK in the near
future. Following receipt of the information, members will have the
opportunity to vote to participate in the new Plan. The Pensions
Regulator and the PPF have been and will continue to be fully engaged in
the process.

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