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Kodak and Official Committee of Retirees Agree on Modification of U.S. Retiree Health Care and Survivor Benefits

Eastman Kodak Company announced today that, following extensive negotiations, it has reached an agreement in principle with the Official Committee of Retirees (the 1114 Committee) that provides for a comprehensive resolution of Kodak’s retiree health care and survivor benefits liabilities.

The company’s retiree benefits program includes medical, dental, life insurance and survivor income benefits, collectively referenced as Other Post-Employment Benefits or OPEB. Under the proposed agreement, the company will terminate these benefits as of December 31, 2012.

In satisfaction of the company’s $1.2 billion OPEB liability, Kodak will provide the 1114 Committee with a $7.5 million cash payment to support initial administration and benefit obligations, a $635 million unsecured claim, and a $15 million allowed administrative claim that would have priority status in Kodak’s reorganization proceedings. These funds can be used at the 1114 Committee’s discretion to make payments to retirees to subsidize a limited portion of future benefit costs. Additional information will be provided to retirees in coming weeks about their options once Kodak coverage ends.

The agreement has the support of the debtor’s Official Committee of Unsecured Creditors, and will significantly reduce one of the company’s most substantial legacy liabilities, marking another major step toward Kodak’s successful emergence from Chapter 11.

As of December 31, 2011, the company’s aggregate U.S. OPEB liability exceeded $1.2 billion. OPEB coverage currently costs the company approximately $10 million per month. Since filing for Chapter 11 and while seeking a negotiated solution with the 1114 Committee, the company has paid 100 percent of its share of the costs for these benefits, resulting in cash expenditures in excess of $90 million.

The company said that the proposed agreement results in significant cost savings and liquidity enhancement and eliminates the need for costly and lengthy litigation. Ultimately, through the allowed claims process, the retirees’ recovery is linked to Kodak’s successful reorganization.

Kodak noted that it recognizes this action will pose challenges for retirees. This agreement is one of the many necessary steps to put the company on a path to emerge as a profitable, sustainable company.

The agreement is subject to approval by the Bankruptcy Court and is scheduled to be heard at a hearing on October 29, 2012.

Note to Editors: A summary of Kodak’s key accomplishments in its restructuring process can be found in its motion to the Court requesting an extension of the period of exclusivity to file a plan of reorganization. It is available at http://www.kccllc.net/kodak. Click on Court Documents and search docket number 2103. This progress is summarized in a news release issued on Sept. 28.

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, 2011, Quarterly Reports on Form 10-Q for the quarters ended March 31, 2012, and June 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; our ability to fairly resolve legacy liabilities; the resolution of claims against the company; 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; 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 Company’s ability to improve its operating structure, financial results and profitability; the potential adverse effects of the Chapter 11 proceedings on the Company's liquidity, results of operations, brand or business prospects; our ability to raise sufficient proceeds from the sale of non-core assets; the monetization of our digital imaging patent portfolio; 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 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; 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 document. 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.

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