Kodak’s Operating Loss in Commercial Imaging Segments Narrows in 2012

  Kodak’s Operating Loss in Commercial Imaging Segments Narrows in 2012

Business Wire

ROCHESTER, N.Y. -- March 11, 2013

Eastman Kodak Company today filed its 2012 Form 10-K with the U.S. Securities
and Exchange Commission, reporting an improvement in earnings for the two
reporting segments comprising Commercial Imaging that it has indicated will be
the strategic focus of the company in the future.

The operating loss for the Commercial Imaging segments (Digital Printing and
Enterprise and Graphics, Entertainment and Commercial Films) improved by $278
million in 2012. On a GAAP basis, the consolidated 2012 loss from continuing
operations before interest expense, other income (charges), net,
reorganization items, net and income taxes increased by $33 million.

Selling, general and administrative costs fell by $226 million as Kodak
continued its focus on cost reductions. With other profit improvement
initiatives implemented for 2013, Kodak believes it is on a path to emerge
from Chapter 11 reorganization in mid-2013.

Kodak reported a 2012 consolidated net loss of $1.38 billion. Excluding
reorganization and restructuring costs totaling $1.07 billion, the loss for
the year would have been $308 million.

Kodak’s revenue of $4.11 billion in 2012 was a decline of 20% from the
previous year, reflecting strategic decisions to focus on profitable
businesses and accounts, soft industry demand as a result of the broader
economic downturn in some businesses and regions, lower sales of traditional
products, and unfavorable foreign exchange impact.

“We progressed in 2012 by maintaining absolute focus on our customers,” said
Antonio M. Perez, Chairman and Chief Executive Officer. “We earned our
customers’ continuing loyalty, and look forward to moving ahead with even
deeper business relationships built around the industry’s most comprehensive
and innovative portfolio of solutions.

“We also optimized our use of the Chapter 11 process, which offers valuable
restructuring advantages despite the many demands it also imposes.”

The company’s worldwide cash balance was $1.14 billion at the end of 2012.

“Our momentum continues as we work to file our Plan of Reorganization and then
complete the final actions that will enable us to emerge from Chapter 11 in
mid-2013,” said Perez. "Thanks to the talent and dedication of our employees,
our 2012 performance was on track or ahead of our adjusted EBITDA and cash
projections, and we have remained in compliance with the covenants of our
debtor-in-possession facility, laying the foundation for emergence as a
profitable, sustainable company.”

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 Company’s 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,
management’s examination of historical operating trends and data are based
upon the Company’s 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
Company’s most recent Annual Report on Form 10-K for the year ended December
31, 2012, Quarterly Reports on Form 10-Q for the quarters ended March 31,
2012, June 30, 2012 and September 30, 2012, under the headings “Business,”
“Risk Factors,” and “Management’s Discussion and Analysis of Financial
Condition and Results of Operations–Liquidity 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 Company’s
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 corporate governance of the Company prior to and
following emergence from Chapter 11; the Company’s 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
Company’s ability to comply with the Earnings Before Interest, Taxes,
Depreciation and Amortization (EBITDA) covenants in its Debtor-in-Possession
Credit Agreement; our ability to obtain additional financing; the potential
adverse effects of the Chapter 11 proceedings on the Company’s liquidity,
results of operations, brand or business prospects; the outcome of our
intellectual property patent litigation matters; the Company’s 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 Agreement
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; our ability to retain key
executives, managers and employees; our 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; the Company’s ability to satisfy any of the
conditions to the closing of the Junior DIP Facility; the risk that the Offer,
while extended, may be terminated by the Company and not consummated; and the
impact of the global economic environment on the Company. There may be other
factors that may cause the Company’s 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.

Eastman Kodak Company
2012 Financial Results
Non-GAAP Reconciliation

Within the Company’s 2012 earnings release, reference is made to the non-GAAP
financial measures of commercial imaging segments’ improvement in operating
loss and net loss excluding reorganization items, net and restructuring costs.

The Company believes that these non-GAAP measures represent important internal
measures of performance. Accordingly, they are provided to give the same
financial data management uses with the belief that this information will
assist users of it in properly assessing the underlying performance of the
Company.

The following reconciliations are provided with respect to terms used in the
March 11, 2013, earnings release.

The following table reconciles the commercial imaging segments’ improvement in
operating loss to the most directly comparable GAAP measures of loss from
continuing operations before interest expense, other income (charges), net,
reorganization items, net and income taxes (amounts in millions):

                                  2012      2011      Improvement (decline)
                                                         
Commercial imaging segments        $ (244 )   $ (522 )   $      278
operational loss, as presented
Personalized and document
imaging businesses operational      (56  )    75            (131     )
(loss) earnings
Segment operating loss               (300 )     (447 )          147
Restructuring costs and other
(including restructuring related     (245 )     (130 )          (115     )
expenses reported in cost of
sales)
Corporate component of pension       (122 )     (28  )          (94      )
and OPEB expenses (1)
Other operating income, net         94       65            29       
Loss from continuing operations
before interest expense, other
income (charges), net,             $ (573 )   $ (540 )   $      (33      )
reorganization items, net and
income taxes (GAAP basis), as
presented

(1) Includes interest cost, expected return on plan assets, amortization of
actuarial gains and losses, and special termination benefits, curtailments and
settlement components of pension and other post-retirement benefit expenses,
except for settlements in connection with the chapter 11 bankruptcy
proceedings that are recorded in Reorganization items, net in the Consolidated
Statement of Operations.

The following table reconciles net loss excluding reorganization items, net
and restructuring costs to the most directly comparable GAAP measure of net
loss (amounts in millions):

                                                                     2012
                                                                       
Net loss excluding reorganization items, net and restructuring         $ 308
costs, as presented
Reorganization items, net                                                843
Restructuring costs and other                                           228
Net loss (GAAP basis), as presented                                    $ 1,379

Contact:

Eastman Kodak Company
Media:
Christopher Veronda, +1 585-724-2622,
christopher.veronda@kodak.com
Krista Gleason, +1 585-724-5952,
krista.gleason@kodak.com
 
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