EASTMAN KODAK CO

Management’s Assessment of Liquidity

Kodak ended the quarter with a cash balance of $168 million, a decrease of $33 million from December 31, 2024, primarily driven by the decline in cash in the first quarter of 2025 of $43 million.

The financing transactions entered into during 2023, cash proceeds related to brand licensing arrangements in 2024 and 2023 and savings relating to rationalization, cost reductions and operational efficiencies provided additional liquidity to the Company to fund on‐going operations and to invest in growth opportunities in Kodak’s businesses of print and advanced materials and chemicals and for corporate infrastructure investments expected to contribute to improvements in cash flow.

Available liquidity includes existing cash balances. The amount of available liquidity is subject to fluctuations and includes cash balances held by various entities worldwide. At September 30, 2025 and December 31, 2024, approximately $74 million and $118 million, respectively, of cash and cash equivalents were held within the U.S. and approximately $94 million and $83 million, respectively, of cash and cash equivalents were held outside the U.S. Cash balances held outside the U.S. are generally required to support local country operations and may have high tax costs or other limitations that delay the ability to repatriate, and therefore may not be readily available for transfer to other jurisdictions. Kodak utilizes cash balances outside the U.S. to fund needs in the U.S. through the use of intercompany loans.

As of September 30, 2025 and December 31, 2024, outstanding intercompany loans to the U.S. were $508 million and $483 million, respectively, which included short-term intercompany loans from Kodak’s international finance center of $234 million and $208 million, respectively. In China, where approximately $30 million and $29 million of cash and cash equivalents was held as of September 30, 2025 and December 31, 2024, respectively, there are limitations related to net asset balances that may impact the ability to make cash available to other jurisdictions in the world. Under the terms of the Amended and Restated Term Loan Credit Agreement, the Company is permitted to invest up to $60 million (or $75 million after the Deleveraging Milestone Date) in Restricted Subsidiaries that are not Loan Parties and in joint ventures or Unrestricted Subsidiaries that are not party to the Amended and Restated Term Loan Credit Agreement.

The Company’s Hong Kong subsidiary has an intercompany loan from one of the Company’s Chinese subsidiaries with a maturity date of November 16, 2026, the proceeds of which were in turn loaned to the Company. The terms of the intercompany loan require the Company to make efforts to repay the outstanding loan balance prior to maturity. The outstanding amount of the intercompany loan as of September 30, 2025 was $68 million. The Company is evaluating repayment alternatives for the current loan agreement which would allow Kodak and its subsidiaries to perform their obligations to each other while minimizing the impact on U.S. liquidity taking into account requirements imposed by Chinese regulators. Any amounts repaid to the Chinese subsidiary may not be able to be loaned, repatriated or otherwise moved back to the U.S., in which case the Company’s U.S. liquidity would be reduced.

On May 21, 2025, the Company entered into an ATM Equity Offering Sales Agreement (the “Sales Agreement”) with BofA Securities, Inc. (“BofA”), pursuant to which the Company may offer and sell up to $100 million of shares of the Company’s common stock (the “shares”), from time to time, in “at-the-market” offerings through BofA, as sales agent or as principal. During the third quarter of 2025, the Company sold 200,000 shares pursuant to the Sales Agreement for net proceeds of approximately $1 million. The Company intends to use the net proceeds from the sale of the shares for general corporate purposes.

On November 4, 2025, the Company and the Subsidiary Guarantors entered into the Third Amendment to the Amended and Restated Credit Agreement (the “November 2025 Term Loan Credit Agreement Amendment”) with the Term Loan Lenders and the Term Loan Agent. The November 2025 Term Loan Credit Agreement Amendment (i) modified the maturity date of the Term Loans to be August 15, 2028, (ii) eliminated the mandatory prepayment obligation requiring Kodak to use 50% of the net cash proceeds from certain transactions to prepay Term Loans below $200 million, (iii) provided the Company the option to prepay the Term Loans after May 15, 2026 with cash proceeds from certain transactions plus a 4% prepayment fee, (iv) removed limitations on restricted payments on the repurchase or redemption of the Series B Preferred Stock subject to certain restrictions and (v) removed the requirement to include reversion proceeds not used to prepay Term Loans in the calculation of Excess Cash Flow as defined in the Amended and Restated Term Loan Credit Agreement.

On November 4, 2025, the Company and the Subsidiary Guarantors entered into Amendment No. 4 to the Letter of Credit Facility Agreement (the “November 2025 L/C Facility Amendment”) with the L/C Lenders and Bank of America, N.A. The November 2025 L/C Facility Amendment (i) modified the maturity date of the facility to be May 17, 2028, the date that is 90 days prior to the maturity date of the Term Loans and (ii) removed limitations on restricted payments on the repurchase or redemption of the Series B Preferred Stock subject to certain restrictions.

Kodak has not extended or refinanced the existing Series B Preferred Stock past the current mandatory redemption date of May 28, 2026. The carrying value of the Series B Preferred Stock as of September 30, 2025 was $99 million.

The Company will receive sufficient proceeds from the reversion of cash from KRIP in December 2025 to adequately fund the Company's debt obligations required to be paid from such proceeds or otherwise maturing within twelve months as of the filing of this Form 10-Q. See further discussion below.

Additionally, Kodak's cash flows continue to be negatively impacted by volume declines, higher manufacturing costs and increased labor, material and distribution costs, supply chain disruptions and shortages in materials and labor. The impacts from price increases, continued cost reduction actions and supply chain-related cost improvements continue to positively impact Kodak’s operations.

In order to provide flexibility to respond as necessary to changes in the business and economic environment and to maintain sufficient U.S. liquidity, Kodak may accelerate the restructuring of Kodak’s cost structure, reduce or slow spend on capital expenditures and other investments, increase prices and implement working capital improvement initiatives.

Kodak's plans to return to sustainable positive cash flow include generating profitable revenues through continued pricing actions and customer-focused initiatives, implementing effective working capital utilization, reducing operating expenses, continuing to simplify the organizational structure, investing in IT systems to drive operational efficiencies, effectively managing world-wide cash through intercompany loans, distributions or other mechanisms, generating cash from selling and leasing underutilized assets or through new licensing opportunities and implementing ways to reduce cash collateral needs. In addition, proceeds received from the settlement of the KRIP, after required debt prepayments, as further discussed below, and proceeds from the sale of common stock under the at-the-market equity offering program would be available for use for strategic growth or general corporate purposes.

The economic uncertainties surrounding the current inflationary environment and other global events represent additional elements of complexity in Kodak’s plans to return to sustainable positive cash flow. The Company cannot predict the duration and scope of such events, including the impact of rising costs of labor, commodity and distribution costs and increased product costs from tariffs, the war in Ukraine and the conflicts involving Israel, and other factors such as the ability to continue to secure raw materials and components, the ability to increase prices to offset rising product costs or how quickly and to what extent normal economic and operating conditions can resume.

Kodak Retirement Income Plan

On January 21, 2025, the Board of Directors of Kodak approved the termination of KRIP effective March 31, 2025, at which time all benefits under KRIP were frozen. In addition, the Board of Directors approved a defined benefit retirement plan (the “Kodak Cash Balance Plan”) as a replacement for KRIP which became effective on March 1, 2025 for new hires and April 1, 2025 for current employees. The benefits under the Kodak Cash Balance Plan are substantially the same as those under the cash balance feature of KRIP.

On October 21, 2025, the annuity obligations with respect to all KRIP annuitants (approximately 27,000 participants and beneficiaries) representing approximately $1.8 billion of pension obligation was transferred to Metropolitan Tower Life Insurance Company through the purchase of a group annuity contract, the premium for which was funded directly and solely by the assets of KRIP. In addition, on October 1, 2025, KRIP settled approximately $76 million of pension obligations through lump-sum payments to deferred vested participants and on October 31, 2025, KRIP settled approximately $157 million of pension obligations through lump-sum payments to active participants. KRIP will transfer the remaining liabilities of approximately $15 million for missing participants and the appropriate level of assets to the Pension Benefit Guaranty Corporation (“PBGC”) missing program by the end of November 2025. Upon completing the transfer of these remaining liabilities to the PBGC, all pension obligations under KRIP will be fully settled and the excess pension assets will be distributed to the Company and the Kodak Cash Balance Plan.

After KRIP’s liabilities and applicable regulatory requirements have been fully satisfied, KRIP’s surplus assets will revert to Kodak as the settlor of KRIP subject to an excise tax. KRIP will distribute surplus assets to Kodak in December 2025 ("the Reversion Date"). Based on current assumptions, Kodak estimates KRIP would have surplus assets of approximately $1 billion as of the Reversion Date. The actual amount of surplus assets will be affected by the return on KRIP’s assets prior to the Reversion Date, the amounts realized from Hedge Fund Assets in the course of their redemption, the amounts realized from distributions from KRIP private equity investments and the value of Hedge Fund Assets or private equity investments held in the KRIP portfolio at the time of reversion.

In order to reduce the amount of the surplus assets subject to excise tax and to reduce the rate of the excise tax from 50% to 20%, Kodak expects that it would direct the transfer of or otherwise contribute 25% of the surplus assets (which may include all or a significant portion of remaining non-cash assets) to the Kodak Cash Balance Plan (the “Replacement Plan”). After the capitalization of the Replacement Plan and the payment of the 20% excise tax on the remaining surplus, Kodak projects it will receive proceeds from KRIP having a value of approximately $600 million, consisting of cash of approximately $450 million and the remaining amount in non-cash assets, primarily hedge funds, which are in the process of redemption. Kodak believes no material amount of income tax would be owed on this amount due to available tax attributes. In addition to the proceeds received by Kodak from KRIP, the Replacement Plan is projected to have assets having a value of approximately $250 million which would allow Kodak to provide valuable benefits to its current employee base for the foreseeable future without additional cash cost to Kodak.

Under the terms of the November 2025 Term Loan Credit Agreement Amendment, Kodak is obligated to use 100% of the net cash proceeds of any reversion from KRIP (“Reversion Proceeds”) to prepay Term Loans outstanding under the Amended and Restated Term Loan Credit Agreement until the amount of the Term Loans is reduced to $200 million plus a 1% prepayment fee.

Kodak is required under the terms of the November 2025 Term Loan Credit Agreement Amendment, to pay down the Term Loan balance using $300 million of the expected $450 million of cash proceeds received from the KRIP reversion in December 2025. The cash proceeds from redemption of hedge funds is expected to occur over several quarters and the Company has the option to prepay the Term Loans after May 15, 2026 using Reversion Proceeds plus a 4% prepayment fee. Assuming no other prepayments are made in the interim and Kodak uses the Reversion Proceeds to prepay only the minimum amount required under the Amended and Restated Term Loan Credit Agreement, the outstanding Term Loan balance at December 31, 2025 is estimated to be approximately $200 million and will mature August 15, 2028. Based on all of the foregoing projections and after the projected mandatory prepayments of Term Loans, receipt of cash from the redemption of hedge funds and receipt of other assets, Kodak projects that it would ultimately receive cash or other assets from the KRIP surplus having a value of approximately $290 million over the next three years. Kodak expects to use excess cash proceeds received from the KRIP reversion to redeem the Series B Preferred Stock in full on or prior to its maturity date of May 28, 2026 if it has not otherwise been refinanced or the shares of Series B Preferred Stock have not been converted prior to such date.

Letter of Credit Facility Agreement

Approximately $24 million and $27 million of letters of credit were issued under the Amended and Restated L/C Facility Agreement as of September 30, 2025 and December 31, 2024, respectively. The letters of credit under the Amended and Restated L/C Facility Agreement are collateralized by cash collateral (the “L/C Cash Collateral”). The L/C Cash Collateral was $25 million and $29 million at September 30, 2025, and December 31, 2024, respectively, which was classified as Restricted Cash.

Cash Flow

Cash, cash equivalents and restricted cash balances were as follows:

Cash Flow Activity

Operating Activities

Net cash from operating activities for the nine months ended September 30, 2025 increased $2 million compared with the corresponding period in 2024 primarily due to a decrease in trade receivables of $52 million primarily driven by $40 million of cash proceeds related to brand licensing received in the first quarter of 2024. This was offset by a decrease in liabilities excluding borrowings and trade payables driven by Kodak’s election to pay the cash interest payment on the Term Loan entirely in PIK and a decrease in miscellaneous receivables and inventory.

Investing Activities

Net cash used in investing activities for the nine months ended September 30, 2025 was relatively flat compared to the corresponding period in 2024 due to a decrease in proceeds from the sale of assets offset by a decrease in additions to properties.

Financing Activities

Net cash used in financing activities for the nine months ended September 30, 2025 decreased $18 million compared to the corresponding period in 2024 primarily driven by the $17 million Amended and Restated Term Loan prepayment in the prior year period.

Other Collateral Requirements

The NYS WCB requires security deposits related to self-insured workers’ compensation obligations, which security deposits are recalculated annually. Due to changes in 2019 to the manner in which the required security deposit is determined, the Company has been required to post additional collateral over the last several years. At December 31, 2022, the Company posted $75 million of collateral, representing 107% of the Company’s undiscounted actuarial workers’ compensation obligations. Effective May 1, 2023, the Company added New York to its existing workers compensation liability insurance policy and is no longer self-insured for future claims. As a result, the NYS WCB confirmed the Company will no longer be obligated to post any additional collateral. On July 1, 2025, the Company submitted a current actuarial report to the NYS WCB and requested a review of the collateral requirements. The NYS WCB confirmed no change in the collateral was required at this time.

Based on the legacy nature of the Company’s workers’ compensation obligations, the undiscounted actuarial obligation has been declining and the Company expects this trend to continue. While it may not be indicative of the rate of future declines, the undiscounted actuarial liability declined by an average of $5 million per year between 2014 and 2024. Accordingly, subject to the possibility of other changes to the calculation of required security deposits by the NYS WCB, the Company expects the amount of the required security deposits to decline over time and the gradual return of the security deposits that have been made or the capital used to support such security deposits.

In the third quarter of 2023, the Company deposited $68 million directly with the NYS WCB and cancelled the corresponding letter of credit supporting the associated liability. As of September 30, 2025, the Company had $45 million of surety bonds and $30 million deposited directly with the NYS WCB supporting the associated liability. The surety bonds are collateralized with $30 million of cash and the Company could be required to provide up to $15 million of cash or letters of credit to the issuers of certain surety bonds in the future to fully collateralize the bonds.

Other Uses of Cash Related to Financing Transactions

The holders of the Term Loans are entitled to quarterly cash interest payments at a rate of 7.5% per annum and holders of the Series B Preferred Stock are entitled to cumulative dividends payable quarterly in cash at a rate of 4.0% per annum. The May 2025 Term Loan Credit Agreement Amendment provides the Company the option to pay the Cash Interest Payment entirely in PIK for the next six quarterly interest payments. The Company elected to pay the Cash Interest Payment for the second and third quarters of 2025 entirely in PIK. In addition, until the second quarter of 2025, all dividends owed on the Series B Preferred Stock were declared and paid when due. No quarterly cash dividend was declared in the second and third quarters of 2025.

Series C Preferred Stock Exchange

On August 8, 2025, the Company issued 15,103,163 shares of common stock in exchange for all outstanding shares of Series C Preferred Stock, including accrued and unpaid dividends thereon, pursuant to a Series C Preferred Stock Exchange Agreement entered into with the Investor on August 8, 2025. Following the completion of the exchange, the Company had no outstanding shares of Series C Preferred Stock and the Company’s obligations with respect to the Series C Preferred Stock were fully discharged.

Defined Benefit Pension and Postretirement Plans

Kodak made net contributions (funded plans) or paid benefits (unfunded plans) totaling approximately $11 million to its non-U.S. defined benefit pension and postretirement benefit plans in the first nine months of 2025. For the balance of 2025, the forecasted contribution (funded plans) and benefit payment (unfunded plans) requirements for its pension and postretirement plans are approximately $3 million.

Capital Expenditures

Cash flows from investing activities included $28 million of capital expenditures for the nine months ended September 30, 2025. Kodak expects approximately $30 million to $40 million of total capital expenditures for fiscal year 2025.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Preparation of the Company’s Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States (U.S. GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. The accounting policies most critical to the preparation of the consolidated financial statements and that require the most difficult, subjective or complex judgments are described in Management's Discussion and Analysis of Financial Condition and Results of Operations included in the 2024 Form 10-K. There have been no material changes in the Company's critical accounting policies or estimates since December 31, 2024.