Kodak Details Restructuring Progress; Will ‘Wind Down’ Consumer Inkjet Printer SalesSeptember 28, 2012
• The stabilization of its global business resulting in the maintenance of key customer and supplier relationships around the world;
• An extensive operational restructuring that has streamlined businesses and reduced corporate costs. This restructuring includes the reduction of Kodak’s global workforce by more than 2,700 positions so far in 2012, with the current expectation of a further reduction of at least 1,200 employees (up 200 from the 1,000 previously announced). This 23% headcount reduction will result in a savings of more than $340 million per year and a smaller workforce of approximately 13,100 employees;
• Negotiations with respect to a fair, equitable and permanent resolution of Kodak’s U.S. retiree benefit (OPEB) liability, which amounts to approximately $1.2 billion;
• Use of the applicable provisions of the Bankruptcy Code to renegotiate existing supply contracts or to enforce pre-petition contracts to achieve substantial cost savings;
• Actions to exit or sell unprofitable and declining businesses, such as the digital camera and on-line photo services businesses;
• Commencement of a process to sell the market-leading Personalized Imaging and Document Imaging businesses, which are not core to Kodak’s future. Kodak noted that, while the sale process is still in its early stages, there has already been significant interest among potential buyers for these businesses;
• Continued negotiations with respect to the sale of its intellectual property assets and the development of alternatives in the event a transaction on acceptable terms is not reached, and
• Continuation of normal global operations while aggressively conserving cash, with worldwide cash balances consistently in excess of $1 billion and with Days Payable Outstanding remaining stable.
The company anticipates that in the near term, it will begin realizing savings from its new, more strategically focused business, workforce reductions and other cost-reduction initiatives. Kodak continues its analysis of further operational and workforce reductions in an effort to streamline operations and generate profits.
“The actions we are taking are significant steps toward our successful emergence,” said Perez. “We are committed to take the remaining steps required for our emergence in 2013 as a profitable, sustainable company.”