Kodak Confirms Continuity Despite Financial Challenges

Financial Challenges and Company Announcement

Kodak, the photography giant with a 133-year history, affirmed it will overcome current financial challenges and continue its operations. This statement came after the company warned investors in a regulatory disclosure of insufficient liquidity to repay $500 million in debt due within the next twelve months, raising doubts about the company's ability to continue.

Clarification on Accounting Rules and Pension Funds

In a clarifying statement, Denise Goldfarb, Kodak's Chief Marketing Officer and Head of Sales for Europe, the Middle East, and Africa, stated that the company plans to use approximately $300 million from its U.S. employee pension fund (Kodak Retirement Income Plan - KRIP) to repay a significant portion of its long-term debt before its due date.

Goldfarb explained that the use of the term "going concern" in the financial disclosure was a necessary procedure under U.S. Generally Accepted Accounting Principles (GAAP), which requires this disclosure when debts are due within 12 months. Since the recovery of pension funds is not entirely within Kodak's control, it was not considered "probable" from an accounting perspective, thus necessitating the warning.

Optimistic Future Outlook

Goldfarb added that Kodak expects its financial position to become stronger than it has been in years, and to become almost net-debt free once the pension fund recovery process is complete.