EASTMAN KODAK CO

Management’s Assessment of Liquidity

Kodak ended the quarter with a cash balance of $317 million, a decrease of$20 million from December 31, 2025.

During the fourth quarter of 2025, the Company completed the settlement of the KRIP and received $144 million in net cash proceeds from the reversion of KRIP assets, after required debt payments and payment of excise taxes, as well as $158 million of investment assets, of which $9 million was converted to cash in December 2025. The investment assets received by the Company are primarily hedge fund investments which are in redemption.

During the first, second and third quarters of 2026, the Company received $46 million, $41 million and $6 million, respectively, of cash from these redemptions. In October 2026, the Company received an additional $5 million of cash from these redemptions. The remaining value of the investment assets is expected to be converted to cash primarily in 2027 and 2028.

As of September 30, 2026, Kodak estimates that KRIP had excess assets of approximately $10 million due to a cash refund received from Metropolitan Tower Life Insurance Company in September 2026. Kodak expects that it will direct the transfer of or otherwise contribute 25% of the excess assets to the Kodak Cash Balance Plan (the “Replacement Plan”). After contribution to the Replacement Plan and the payment of the 20% excise tax due on the remaining excess amount, Kodak projects it will receive additional net cash proceeds from KRIP of approximately $6 million. Kodak expects the reversion to occur either in the fourth quarter of 2026 or first quarter of 2027.

Available liquidity includes existing cash and cash equivalent balances. The amount of available liquidity is subject to fluctuations and includes cash balances held by various entities worldwide. At September 30, 2026 and December 31, 2025 approximately $168 million and $231 million, respectively, of cash and cash equivalents were held within the U.S. and approximately $149 million and $106 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 which could 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, 2026 and December 31, 2025, outstanding intercompany loans to the U.S. were $461 million and $509 million, respectively, which included short-term intercompany loans from Kodak’s international finance center of $192 million and $235 million, respectively. In China, where approximately $43 million and $35 million of cash and cash equivalents was held as of September 30, 2026 and December 31, 2025, respectively, there are limitations related to net asset balances which may impact the ability to make cash available to other jurisdictions in the world.

The Company’s Hong Kong subsidiary has an intercompany loan from one of the Company’s Chinese subsidiaries, the proceeds of which were in turn loaned to the Company. The outstanding balance of the intercompany loan as of September 30, 2026 was $63 million. The Company paid $5 million of the outstanding balance in October 2026. The existing intercompany loan agreement remains in effect in accordance with its terms and has a stated maturity date of November 16, 2026. The Company understands the State Administration of Foreign Exchange (“SAFE”) will not approve a further extension of this loan arrangement. Accordingly, the intercompany loan is expected to be classified as overdue by SAFE following its contractual maturity. Notwithstanding this classification, the Company does not currently anticipate the Chinese subsidiary demanding immediate repayment of the outstanding balance. The Company will continue to settle interest payments and withholding taxes as required under the terms of the agreement.

The Company and its subsidiaries will continue to evaluate repayment and repatriation alternatives to address the outstanding obligation in a manner which will allow Kodak and its subsidiaries to meet their respective obligations while minimizing the impact on U.S. liquidity considering the applicable 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., which could reduce the Company’s U.S. liquidity.

On March 11, 2026, the Company filed with the Department of Treasury of the State of New Jersey a Certificate of Amendment to the Series B Certificate of Designations which amended certain terms of the Company’s 4.0% Series B Preferred Stock (the “Series B Preferred Stock Amendment”) and set forth the terms of the Company’s 6.0% Series B Convertible Preferred Stock, no par value (the “6.0% Series B Preferred Stock”). The Series B Preferred Stock Amendment (i) extended the mandatory redemption date from May 28, 2026 to June 11, 2029, (ii) increased the annual cash dividend rate from 4.0% to 6.0% and (iii) reduced the conversion price from $10.50 to $10.00 per share and modified certain other conversion terms. The 6.0% Series B Preferred Stock is convertible into shares of common stock; however, the timing and likelihood of such conversion are dependent on market conditions and other factors and is subject to certain restrictions whereby the Company would be required to pay cash in lieu of issuing shares in excess of a maximum number. The cash payment is determined based on the market value of the Company’s common stock as of the applicable conversion date.

On March 11, 2026, in connection with the Series B Preferred Stock Amendment, the Company and certain of its subsidiaries entered into the Fourth Amendment to the term loan credit agreement (the “Term Loan Amendment”), which amends the Company’s Amended and Restated Credit Agreement, dated as of June 30, 2023 (as amended, the “Term Loan Credit Agreement”). Under the Term Loan Credit Agreement, the term loan lenders provided the Company with a commitment to provide term loans in an aggregate principal amount of $450 million (the “Term Loans”). The Term Loan Amendment required the Company to prepay an aggregate principal amount of $100 million of Term Loans, consisting of a $50 million prepayment due on or prior to March 18, 2026 and $50 million prepayment due on or prior to June 1, 2026, in each case, plus a prepayment premium equal to one percent. On June 1, 2026, the Company and the term loan lenders entered into a Limited Waiver Agreement to the Term Loan Credit Agreement, which extended the due date for the second $50 million prepayment to be payable on or before July 1, 2026.

The terms of the 6.0% Series B Preferred Stock limit the Company’s ability to incur certain indebtedness for borrowed money without the consent of the holders of 66 2/3% of the outstanding 6.0% Series B Preferred Stock. If such consent is not provided, the Company has the right to redeem the 6.0% Series B Preferred Stock in full for cash, subject to the terms of the Series B Preferred Stock Amendment. As a result, the Company’s ability to obtain additional debt financing, including to fund the mandatory redemption of the 6.0% Series B Preferred Stock, may depend on obtaining such consent or on having sufficient liquidity to redeem the 6.0% Series B Preferred Stock in full.

On March 13, 2026, the Company paid $50 million of the outstanding principal amount of the Term Loans, $1 million in accrued uncapitalized interest and a prepayment premium equal to one percent of the principal amount paid. The Company recorded a loss on early extinguishment of debt of approximately $1 million during the first quarter of 2026. On June 26, 2026, the Company paid $50 million of the outstanding principal amount of the Term Loans, $1 million in accrued uncapitalized interest and a prepayment premium equal to one percent of the principal amount paid. The Company recorded a loss on early extinguishment of debt of approximately $1 million during the second quarter of 2026. The Company funded these payments through a combination of cash proceeds from the redemption of KRIP investment assets and cash on hand.

Kodak's cash flows continue to be negatively impacted by higher manufacturing, labor, material and distribution costs, along with volume declines, supply chain disruptions and shortages in materials and labor. These impacts have been largely mitigated by price increases, savings relating to rationalization, cost reductions and operational efficiencies and supply chain-related cost improvements. In addition, the cash proceeds from the KRIP reversion and redemption of reverted investment assets, reduced cash interest payments due to the paydown of the Term loans, and additional cash proceeds expected from the further redemption or other monetization of investment assets provides additional liquidity to the Company to adequately fund ongoing operations.

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, geopolitical conflicts and other factors such as the Company's 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's plans to return to sustainable positive cash flow include generating profitable revenues through continued pricing actions and customer-focused initiatives, investing in new product innovation to drive growth in Kodak’s businesses of print and advanced materials and chemicals, 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.

Kodak believes its liquidity position is adequate to fund operations, meet its obligations and provide the flexibility to respond as necessary to ordinary changes in the business and economic environment within twelve months as of the filing of this Form 10-Q.

Letter of Credit Facility Agreement

Approximately $19 million and $24 million of letters of credit were issued under the Amended and Restated L/C Facility Agreement as of September 30, 2026 and December 31, 2025, 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 $20 millionas of September 30, 2026 and$25 million as of December 31, 2025, 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 used in operating activities decreased by $9 million for the nine months ended September 30, 2026 as compared with the corresponding period in 2025 primarily due to improved earnings ($42 million) and a decrease in trade receivables ($9 million). This was partially offset by an increase in inventory ($32 million), an increase in miscellaneous receivables ($7 million) and a decrease in trade payables ($2 million).

Investing Activities

Net cash provided by (used in) investing activities for the nine months ended September 30, 2026 increased $102 million compared to the corresponding period in 2025 due to cash proceeds from the redemption of KRIP reversion investments ($93 million), proceeds from the sale of preferred equity investment ($2 million) and a decrease in capital expenditures ($10 million), partially offset by lower proceeds from the sale of assets in the current year ($3 million).

Financing Activities

Net cash used in financing activities for the nine months ended September 30, 2026 increased $105 million compared to the corresponding period in 2025 primarily driven by the $101 million prepayment of the Term Loans and an increase in preferred stock cash dividend payments due to the increase in the annual cash dividend rate from 4.0% to 6.0% based on the Series B Preferred Stock Amendment.

Other Collateral Requirements

The NYS WCB requires security deposits related to self-insured workers’ compensation obligations, which security deposits are recalculated annually. 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 that 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 2025. 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 previously been made or the capital used to support such security deposits.

As of September 30, 2026, the Company had $50 million of surety bonds and $25 million deposited directly with the NYS WCB supporting the associated liability. The surety bonds are collateralized with $27 million of cash and the Company could be required to provide up to $23 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 12.5% which can be paid fully in cash or paid at a rate of 7.5% per annum in cash and 5.0% per annum payable in kind ("PIK") at the Company’s option (or entirely in PIK through the October 1, 2026 interest payment date). As a result of the Series B Preferred Stock Amendment, the holders are now entitled to cumulative dividends payable quarterly in cash at a rate of 6.0% per annum. All interest and dividends have been paid when due in cash.

Defined Benefit Pension and Postretirement Plans

Kodak made net contributions (funded plans) or paid benefits (unfunded plans) totaling approximately $8 million to its non-U.S. defined benefit pension and postretirement benefit plans for the nine months ended September 30, 2026. For the balance of 2026, the forecasted contribution (funded plans) and benefit payment (unfunded plans) requirements for these pension and postretirement plans are approximately $2 million.

Capital Expenditures

Cash flows from investing activities included $18 million of capital expenditures for the nine months ended September 30, 2026. Kodak expects approximately $30 million to $35 million of total capital expenditures for 2026.

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 2025 Form 10-K. There have been no material changes in the Company's critical accounting policies or estimates since December 31, 2025.

Item 3. Quantitative and Qualitative Disclosures About Market Risk