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Kodak Acts to Strengthen Financial Position

September 16, 2009
ROCHESTER, NY—Sept. 16, 2009—Eastman Kodak Co. (NYSE:EK) announced today that it expects to raise up to $700 million through a series of financing transactions, including a commitment from Kohlberg Kravis Roberts & Co. L.P. (KKR) managed investment vehicles to purchase up to $400 million in Senior Secured Notes due 2017, that reinforces the company’s strategic direction and strengthens its financial position.

In addition, Kodak agreed to issue to KKR warrants to purchase up to 53 million shares of Kodak common stock. Kodak, at its discretion, may issue to KKR as few as $300 million of the Senior Secured Notes, in which case the number of shares underlying the warrants will be adjusted to as few as 40 million, with the actual number of warrants pro-rated depending on the final amount of notes purchased. Under the terms of the agreement, KKR is required to hold the warrants and shares issuable upon exercise of the warrants for a minimum of two years.

The net proceeds of this transaction, along with the net proceeds of a separate private placement transaction of convertible senior notes announced today, will be used to repurchase the company’s existing 3.375% Convertible Senior Notes due 2033, a move that will bolster the company’s balance sheet and free up capital for core investments. Any excess proceeds will be used for general corporate purposes.

“We believe KKR’s investment is a validation of our strategy and our team,” said Antonio M. Perez, Kodak’s Chairman and Chief Executive Officer. “KKR has a long, successful record of working with, and investing in, companies with significant value-creation potential. We look forward to working with the KKR team to accelerate the growth of our portfolio of high-margin annuity businesses.”

Subject to the completion of the transaction, Kodak’s board of directors will appoint to the board, in accordance with customary corporate governance policies and guidelines, two individuals designated by KKR. Those individuals will be announced upon the closing of the transaction, which is expected on or before Sept. 30, 2009, subject to certain conditions.

“Kodak is renowned for its global brand and its leadership as an imaging innovator,” said Henry R. Kravis and George R. Roberts, Co-Founders of KKR. “This investment reflects our belief in Kodak’s strategy and our confidence in the Kodak management team to deliver on that strategy. We have a long history of working with companies to realize their full potential, and we look forward to making our global resources, experience, and expertise available to ensure success in the marketplace.”

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