Kodak completes pension reversion process, freeing up $1 billion

Eastman Kodak Co. announced it has completed the reversion process for the $1.023 billion in excess pension assets held in the company-funded Kodak Retirement Income Plan (“KRIP”), the final step in the previously disclosed KRIP transition. The move provides Kodak with a substantial liquidity boost and further stabilizes its long-term financial outlook. 

Approximately $767 million of the excess assets were returned to the company, including $609 million in cash and $158 million in non-cash assets, significantly strengthening Kodak’s balance sheet and positioning it for future growth, the company said. Approximately $312 million of those cash proceeds have been used to pre-pay Kodak’s term loans, reducing the balance to $200 million. Kodak is now in a net-positive cash position, with a cash balance exceeding $300 million after accounting for the excise tax due on the reverted assets.

All pension obligations to KRIP participants have been fully settled, and Kodak has directed $251 million in investment assets and $5 million in cash to fully fund a new defined benefit plan for current U.S.-based employees, the Kodak Cash Balance Plan (“KCBP”). KCBP will provide substantially the same benefits as those under the cash balance feature of KRIP for the foreseeable future without additional cash cost to the company.

“Thanks to the rigorous planning and diligent execution of our team and advisors, we continue to strengthen our financial foundation, which allows us to continue focusing on operations while also fulfilling our commitment to safeguarding the retirement benefits of our plan beneficiaries,” said Jim Continenza, Kodak’s Executive Chairman and CEO. “As part of our long-term plan, this transaction reduces our debt and ongoing interest expense, freeing us to devote our energies to unlocking the full potential of our company and creating value for our employees, shareholders, and customers.”

The announcement puts to rest speculation, earlier this year, that Eastman Kodak was in danger of going out of business, due to financial stress, as had been widely reported.