David Bullwinkle - Director, Global Financial Planning & Analysis and Investor Relations Jeffrey Clarke - Chief Executive Officer John McMullen - Chief Financial Officer

Shannon Cross - Cross Research Jen Ganzi - NewMark Capital Alex Yaggy - Cortina Asset Management Amer Tiwana - CRT Capital

Good day, ladies and gentlemen, and welcome to the Eastman Kodak Fourth Quarter Earnings Call. At this time, all participants are in a listen-only mode. Later we’ll conduct a question-and-answer session, and instructions will follow at that time. I’d now like to turn the call over to your host, David Bullwinkle. Please go ahead.

Good afternoon. My name is David Bullwinkle, Director, Global Financial Planning and Analysis, and Investor Relations for Kodak. Welcome to the Fourth Quarter 2014 Kodak Earnings Call. At 4:00 p.m. this afternoon, Kodak filed its Annual Report on Form 10-K and issued its release on financial results for the fourth quarter and full-year of 2014. You may access the presentation and webcast for today's call on our Investor Center at investor.kodak.com. During today's call, we'll be making certain forward-looking statements as defined by the United States Private Securities Act of 1995. These forward-looking statements are subject to a number of uncertainties or risk factors, which are clearly described in the company's 10-K, and which are qualified by the Safe Harbor provisions in our filings. We advise listeners to read these important cautionary statements in their entirety, as any forward-looking statement needs to be evaluated in light of these important risk factors or uncertainties. In addition, the release just issued and the presentation provided contains certain measures that are deemed non-GAAP measures. Reconciliations to the most directly comparable GAAP measures have been provided with the release and within the presentation on our website, in our Investor Center at investor.kodak.com. Speakers on today's call will be Jeff Clarke, Chief Executive Officer of Kodak; and John McMullen, Chief Financial Officer of Kodak. Jeff will provide some opening remarks, his perspectives on the business performance, and outlook for the company. Then John will take you through additional details of our fourth quarter results and cash flow results and outlook, before we open it up to questions. I will now turn this over to Kodak's CEO, Jeff Clarke.

Thanks, Dave. Welcome everyone and thank you for joining the Q4 investor call for Kodak. On the call today, we’ll talk about the progress made in 2014 in transforming Kodak toward a path of sustainable growth, and profitability. After 12 months here at Kodak, I am more excited than ever about the opportunities ahead. I also recognize our success is based on the acceptance and continued growth of several new technologies in the industries we serve. We’re establishing several new growth businesses based on our technology assets and the value of the Kodak brand, while at the same time managing the decline of our mature businesses. Enabled by our new divisional organization, we are reducing our cost structure to create an efficient and entrepreneurial set of operations appropriate for our scale and the portfolio of businesses we compete in within the marketplace. We continue to benefit from the pride and resilience of our dedicated and committed workforce, while at the same time evolving where needed the mix of skills required for the company going forward. Kodak is in the midst of a transformation. In November, we provided you with a summary of our portfolio which illustrated we’ve businesses in different stages of their life cycle. Several of them are predictable, stable, and have significant areas of growth while others are like start-ups and therefore less predictable. We also have businesses which are declining in line with their life cycle and due to the changes in their underlying technologies. We’re making progress towards achieving predictable financial performance. In November when we last spoke to you, we said we’d meet our guidance in 2014. I am pleased to say today that we met our commitment. In addition, we’ll continue to provide investors with greater transparency into the company. On the call today, we’ll summarize the overall performance for the fourth quarter and full year. We’ll review financial performance for our strategic growth and mature businesses, and update you on our ongoing efforts to reduce costs and optimize our structure to drive increased efficiency, and effectiveness throughout Kodak. We’ll also provide you with our outlook for 2015. So let’s begin with a review of our overall 2014 performance. For the year, revenue was $2.1 billion, and operational EBITDA was a $154 million, both within our guidance. Importantly in the fourth quarter on an apples-to-apples comparative basis, operational EBITDA improved year over year by 40%. Within our strategic technology businesses, we achieved a total revenue of approximately $1.8 billion for the year. Operational EBITDA for the strategic technology businesses of $89 million improved for the full year driven by a one-time $61 million increase in non-recurring Intellectual Property licensing revenue. Now let's get into the numbers for our key products. In the Graphics business for 2014, total plate volume was up 1% year over year. SONORA Plate was up 212% year over year. This is excellent performance for this business. Plate volume grew for the first time in several years in an overall market which is down. This is fuelled by the continued acceptance of SONORA technology by our customers. The value proposition of this product is resonating. SONORA Plates now represent 9% of our Total Plates business, and provide a higher level of profitability to the company than our traditional plate products. As we’ve indicated previously, we’re adding capacity for our SONORA Plates in our Columbus, Georgia plant. We’ll begin production in the third quarter of 2015 with an additional 15 million m² of SONORA capacity. We also delivered continued growth in our Packaging business. For 2014, FLEXCEL Plate volume grew by 38% driven by an excellent acceptance of Wide Format CTPs, and the Consumable Plates. We also increased our placements in 2014 by 16% year over year and reached install base of more than 400 units at year end. The FLEXCEL NX system uses our proprietary SQUAREspot Laser Imaging Technology to produce high-resolution imaging which reduces waste and ink usage. In our PROSPER product line for 2014, we installed eight presses and are now at an install base of 39 PROSPER systems. Page volume continues to increase dramatically as a result of the install base growth and ramping customer volumes. For 2014 PROSPER page volume increased by more than 50% year-over-year reaching 5 billion for new pages providing positive momentum for future annuity revenue growth. Let me now provide an update on our start-up micro 3D Printing or Functional Printing business. We’ve made good progress throughout the year, but we did not meet the timeline assumed in our 2014 plan as discussed with you on our third quarter call. This is breakthrough micro 3D science and we remain incredibly excited about the growth opportunity of touch-screen sensors and other micro 3D applications provided to Kodak going forward. As previously discussed within this business we’re focusing on developing two technologies with our partners, Kingsbury and UniPixel. I’d like to provide you with an update on where we’re with both of these technologies. Starting with Kingsbury, the Rochester Kingsbury factory has reached production quality levels for touch-screen sensors, a significant and exciting milestone. Product-specific samples are in the process of being assembled into touch display modules with our integration partners for testing, and will begin production in a couple of weeks for products anticipated to be released in the second and third quarters of 2015. As a result of these developments, Kodak is investing in additional capacity in Asia to produce sensor films utilizing Kodak’s technology. The Asia manufacturing facility is targeted to go online late in the fourth quarter of 2015. Now let me update you on our touch-sensor project with UniPixel. Last quarter, I told you both companies are making progress in addressing remaining technical hurdles which have continued to date. We continue to focus on ramping yields in the end-to-end manufacturing process targeting web conveyance improvements in our plating operation. Proof-of-concept designs show sufficient promise to extend a touchless design to an end-to-end plating line. We continue working with UniPixel on building the initial production quantities necessary to support lead customer assessments in the medium and large display tablet markets. Recent low volume trials achieved favorable integration yields. These and other samples are currently under evaluation for product reliability, and performance in a variety of environmental conditions. I’ll conclude this section with a few comments on our Mature businesses. In 2014, revenue in our Mature businesses decreased 34% year-over-year, while operational EBITDA for these businesses was $65 million for the year, a decrease of $77 million. Mature businesses exceeded our expectations for the year due to stronger retail performance for Kodak in the sale of consumer inkjet cartridges. Now let’s discuss the progress made and opportunities going forward for optimizing the organization, and reducing costs while continuing to invest in the future success of Kodak. For the year, we’ve reduced our operational SG&A by more than $65 million. As discussed previously, actions taken to achieve this include headcount reductions, movement of work where appropriate to lower cost of locations, and rigorous review and renegotiation of third-party expenditures as we continue to re-engineer our cost structure. It's important to note while we are reducing headcounts in many areas across the company, we also continue to hire where we see the need for critical new skills in support of the many areas of growth we’re investing in and focusing on for the future. As a rough metric this year, we made approximately one new hire in areas critical to the company's success moving forward for every three headcount reductions. As I’ve told you before, we’ve already implemented changes resulting in savings in global benefits expense in excess of $20 million for 2015. I’ll illustrate the total operational cost improvement we expect in 2015 when I discuss our 2015 outlook shortly. Although we made good progress in 2014, we clearly see additional opportunities to optimize our organizational structure and further improve processes. In fact subsequent to our third quarter investment call, we announced a new organizational structure designed to make the company faster moving, more competitive, entrepreneurial, and accountable. In 2015, we now have seven business divisions, five product divisions, an IP Research division, and the Eastman Business Park division. As shown on slide nine, these divisions along with their leaders are; Print Systems division led by Brad Kruchten. This division includes Plates, including Sonora, Computer-to-Plate devices, Electrophotographic Printing solutions and OEM Toner. Enterprise Inkjet Systems division lead by Philip Cullimore. This division includes Kodak Prosper systems, Kodak Versamark Systems and Print On-Demand Solutions, as well as Ink OEM solutions. Micro 3D Printing & Packaging division. Phil Cullimore will also lead this group on an interim basis. Micro 3D Printing & Packaging includes Flexcel NX systems and Plates, Legacy packaging solutions and Touch sensor films through the Kingsbury and UniPixel relationships. Software & Solutions division, Eric Mahe leads this division. It will include Kodak Technology solutions which is Kodak’s go-to-market engine to prioritize and monetize Kodak innovations and partnership with the Kodak research labs, Kodak Unified Workflow Solutions, Brand Protection Solutions, Kodak Services for business, and the Design 2 Launch Solutions. Consumer & Film division led by Steven Overman who is also Kodak’s Chief Marketing Officer. The division of products includes Consumer Inkjet Solutions, Brand Licensing, and Motion Picture and Commercial Films, as well as Synthetic Chemicals. Intellectual Property Solutions division led by Terry Taber, who is also Kodak’s Chief Technology Officer. This division will include the company's Technology Center, and research activities as well as Intellectual Property Licensing not directly related to the other business divisions. And finally the Eastman Business Park division led by John McMullen who is also Kodak’s Chief Financial Officer. We've also combined four regional sales organizations into two. Europe, United States, Canada, Australia and New Zealand, EUCAN; and Asia, Latin America, Middle East and Africa, ALMA. These organizations will be led by John O’Grady for EUCAN, and Lois Lebegue for ALMA. As you can see, common service and back office support will be hosted in a shared service model in each region for all businesses. The company is also optimizing its corporate functions by eliminating overlap, and enhancing accountability. We'll continue to pursue greater efficiencies in these areas. We’ll begin external reporting in the company in these divisions with our first-quarter earnings. We expect to provide our investors with the 2014 quarterly results recast in these new divisional structure during our Q1 earnings call in about six weeks. Now before going into our 2015 outlook, I would like to provide some overarching perspective on where we’re with our portfolio of businesses, so you can understand the progress we are making as well as the challenges we are taking head on. Here is the big picture of Kodak today. Let's start with the Plates business. Plates and CTPs is Kodak’s largest business, it’s foundational for us and it represents over half of our revenue. We've been successful over the course of the year in improving our leadership position with our SONORA offering, and the underlying recurring profitability of this business for the company. This business is core for Kodak and it's healthy. Our Packaging business with the FLEXCEL NX offering which was a start-up in 2009. Today Packaging is a significantly profitable business in our portfolio with double-digit market share proving what we’re able to do in large markets in relatively short order with our technology innovation. Our PROSPER Inkjet Systems business is early in its life-cycle, where we’re well on our way to building a business with good scale and profitability, placing equipment with direct customers as well as the growing base of OEM partners. With the scale we achieved in 2014, we look forward to growing annuity revenue streams as we enter 2015. Another really exciting area for Kodak is our micro 3D Printing business, where we are developing capabilities which will revolutionize how interactive electronics are manufactured. This business is in a start-up phase, where our progress is still harder to forecast than in Kodak’s more established businesses. Kodak is in a unique position to apply our leadership and breakthrough material science to new market opportunities. We’re simultaneously inventing, and scaling up metallic deposition processes. On the theme of innovation and ambition at Kodak, early in 2014 we formed Kodak Technology Solutions which is the mandate to continually ensure the advances in materials science and digital technologies Kodak has to offer are being monetized. Within each of these product lines is significantly differentiated technology based on our own core technology platforms of material science, imaging science and deposition processes. Kodak has a portfolio of extraordinary businesses at different stages of its life-cycle, each with a significant market opportunity. We’re aggressively innovating to strengthen and broaden this portfolio for sustainable growth and profitability going forward. Now let me share with you our outlook for 2015 full-year performance. Our expectations for 2015 are between $1.8 billion and $2 billion of revenue and $100 million to a $120 million of operational EBITDA. I would like to give you my perspectives on 2015. As we discussed on our Q3 call in November, we experienced challenges in areas of our portfolio primarily micro 3D Printing during the year. These were offset by accelerating, and deepening cost reductions, strengthen other areas of our portfolio, and a significant level of non-recurring Intellectual Property revenue of $70 million. As we said before, IP transactions are lumpy and difficult to predict. As a result, we’ve not planned on a similar level of revenue from these arrangements in 2015. In addition like most US-based corporations, we’re experiencing headwinds in foreign currency. After adjusting for FX and non-recurring IP, 2015 operational EBITDA is an improvement of approximately 60% to 90% year-over-year on a comparable basis, and demonstrates both the significant progress we’re making from a cost structure point of view, and continued and accelerated growth we’re seeing in many of our key strategic product areas. Foreign exchange will also impact our top line in 2015. At current rates, revenue in 2015 will be negatively impacted by foreign exchange by about a $140 million year-over-year. Adjusted for currency, non-recurring IP and the expected decline in Consumer Inkjet, we expect revenue growth of approximately 4%. Another area of difficulty for us in 2015 is the cost of aluminum. Within the Print Services division, our plates are made of aluminum and we buy hundreds of millions of dollars of the commodity each year. While we have hedging programs in place to predict cost levels, the cost of aluminum and related processing piece has risen in comparison to 2014. We estimate the negative impact of this to be just over $20 million for 2015 versus 2014. We expect the continued decline in Mature and Legacy businesses as well as the headwind from aluminum will be partially offset from solid growth in our key strategic products, and cost reductions driven in large part from our new organization structure, already implemented changes in employee benefits. I'll take you through the expectations for our key strategic technology products on the next slide. Let's look at the highlights. On slide 11, we’ve presented the keys to delivering our plan for 2015. As I’ve indicated already, we expect to achieve significant year-over-year cost reductions. In terms of COGS, the shift from five plants to four plants in plates along with other productivity and employee benefit changes will drive about a point of improvement in gross margin, which will help offset the overall company gross margin decline. In terms of operating expense, we’ve spent greater than a $100 million or about a 25% improvement on an operational basis. This is hard, but necessary work and I'm pleased with the execution. Due to the new divisional structure, we’ve good visibility to continued efficiencies beyond $100 million. The run rate for savings for actions already taken in 2014 provides $58 million of operating expense improvement. In addition, the benefit reductions we’ve implemented provide an additional $10 million of operating expense savings. We'll continue to reduce our operating cost by taking action including headcount reductions, movement of work where appropriate to lower cost locations, and rigorous review and renegotiation of third-party expenditures as we continue to re-engineer our cost structure. We’re adjusting our cost structure to achieve appropriate levels consistent with the size and scope of the company we’re today, and the business models for markets in which we compete. Greater cost efficiency will allow us to compete effectively today and invest for growth in the future. We'll accomplish this by simplifying and streamlining our processes. In addition to the company’s cost re-engineering, we expect accelerated growth in our key strategic products. One area of growth is our PROSPER system placements. After five years since we launched PROSPER, we ended 2014 with an install base of 39 presses. In 2015, we expect placements of approximately 25 systems which will increase our base by over 60% in just one year, 2015. Our momentum is strong. In fact, we already have contracts completed for eight PROSPER systems through mid-March. With the growth in our install base, we expect improvement in annuities volume of over 30% in 2015. In FLEXCEL NX, we expect annuity growth of greater than 25% year-over-year driven by the install base of over 400 systems at the end of 2014. Like 2014, we expect to grow the install base by about 20% in 2015. Within the Print Systems division, we continue to convert our customers to the very successful SONORA product. We expect SONORA growth of greater than 50% in 2015, which will drive another year of total plate volume growth. During 2014, Kodak did save printers approximately 91 million kWh of power, 48 million gallons of water, and 317,000 gallons of chemical waste. In the last five months ending February, we’ve gained 825 customers in SONORA, bringing the total users to over 2000 to date, a growth of over 65%. Finally the progress we’ve made in micro 3D Printing will continue and the hard work of our team and those of our partners will pay off. We expect to begin recognizing revenue in the second quarter of 2015 at modest levels as we transition into commercial production. Overall the range of operational EBITDA presented in our 2015 outlook reflects a 60& to 90% comparable year-over-year improvement, a good baseline for growth. The sustainability of our revenue and earnings in 2015 will be markedly improved over the last two years. Please take the time to look at slide 12. The earnings contribution from our strategic businesses in 2013 was approximately 45%, a little less than half of the overall. We expect the contribution of our strategic businesses to provide approximately 90% of our EBITDA in 2015. I’d like to summarize the state of Kodak today. We are streamlining and re-engineering operations for greater efficiency. We’ve redesigned the company for greater transparency and accountability. We’re putting in place a cost structure which gives us the freedom to compete, to invest and to continue to innovate and provide greater value to our customers. We are well on our way to positioning Kodak as an engine for growth. In summary, 2015 is a pivot year in the transformation of Kodak to a sustainable, profitable company. I am incredibly excited about our plans for 2015, and confident the Kodak comeback is well under way. I'll now turn the call over to John, who will review the financial results for the quarter. John?

Thanks, Jeff and good afternoon. Today the company filed its Form 10-K for the year ended December 31, 2014 with the SEC. I recommend that you read this filing in its entirety. I am pleased to share my thoughts and comments on the company's fourth-quarter, and full-year results. On slide 15, you’ll see a summary of our consolidated results for the quarter. Total company revenue of $529 million is down 13% year-over-year. Gross profit improved by $11 million year-over-year and gross profit margin for the fourth quarter improved to 21% versus 16% for the fourth quarter of 2013. We also continue to drive year-over-year improvements in operating costs. For the fourth quarter, the reduction in operational SG&A was $30 million. These improvements are the result of a number of actions including headcount reductions, reduced overhead costs, savings from global benefit changes, facilities consolidations, and renegotiations of vendor contracts. We'll continue to focus on opportunities to further reduce our cost structure going forward by driving a simpler, more efficient and more execution-oriented organization consistent with our new divisional structure. Overall the company's operational EBITDA for the fourth quarter was $35 million, a year-over-year improvement of $10 million or 40% versus 2013 when excluding non-recurring IP licensing revenue. The results of the fourth quarter represent improvement for the company in its operations. As we reported in our earnings release, net loss for the quarter was $41 million compared with a net loss of $57 million in Q4 of 2013. 2013 is difficult to compare due to the impacts of fresh-start accounting implemented in September of 2013. Looking at slide 14, on a full-year basis when comparing our results for 2014 to the results for 2013 on an apples-to-apples basis the comparable improvement was $411 million year-over-year. Applying the same approach to the fourth quarter yields an improvement of $12 million year-over-year. It's important to note the $41 million loss for the fourth quarter includes $19 million in restructuring charges, and reorganization costs from prior years, a $16 million charge related to a markdown in the value of assets in Venezuela, and a $9 million charge related to an intangible asset impairment. These three charges totaled $44 million. This information is taken directly from the company's consolidated statement of operations in the 10-K and adjusted for large items in 2013 that are not comparable to results in 2014. I'd like to take you through some of the business highlights of the fourth quarter. For the fourth quarter Strategic Technology businesses revenue was $445 million and operational EBITDA was $18 million. Excluding non-recurring Intellectual Property licensing in Q4 of 2013, Strategic Technology businesses for the fourth quarter operational EBITDA improved by $10 million year-over-year. Within our Graphics business for the fourth quarter, total plate unit volume was up 1% year-over-year and SONORA plate volume was up a 138% year-over-year. For the quarter in our Packaging business, FLEXCEL NX plate volume grew by 38%. As Jeff mentioned at the end of the quarter, our install base of CTPs in the FLEXCEL NX product line has now exceeded 400 units. In our PROSPER product line we installed one additional press system in the quarter. Page volume for the quarter increased year-over-year by 57%. This is a positive signal for annuity growth in future periods. Finally in our mature businesses for the quarter, revenue decreased by 21% and operational EBITDA was flat with the fourth quarter of 2013. Performance in consumer inkjet cartridges were stronger than expected in the fourth quarter. Overall, we are pleased with the performance for the quarter, and we met the full-year commitments we provided you the last time we spoke in November. Now let's focus on cash and key items on the balance sheet. The company’s liquidity remained strong with ending cash for the year of $712 million. For the full year, cash used in operating activities improved by $530 million. As you can see on slide number 17, during the year the company used cash primarily for interest expense, and debt repayments; reorganization and legacy payments related to our chapter 11, and reemergence process; restructuring employee severance payments; payments related to 2013 incentive compensation paid during 2014; capital expenditures including cash usage associated with our commercial business; and the year-to-date negative impact of foreign exchange rates on cash. The impact of working capital movements for the year was a source of cash of approximately $50 million. On our last call, I walked you through these items for the year-to-date period ended September 30, 2014. At that time, I shared with you our year-end expectations for cash at or above September levels. Excluding the negative impact of foreign exchange on cash for the fourth quarter, we ended the year very close to this expectation and are generally pleased with our performance. To summarize the quarter and full-year performance, we’ve made significant progress throughout the year in key strategic technology businesses while in parallel improving the company's cost structure. We’ll continue to build on the progress we've made in both areas throughout 2015 as Jeff shared with you in his remarks. Now I'd like to provide you with our outlook for cash in 2015 given the revenue and operational EBITDA expectations Jeff provided. We continue to be comfortable with our liquidity position, but clearly see opportunities to improve our cash flow performance in 2015. We expect to end 2015 with a cash balance between $630 million and $650 million. Within this, we expect to move to positive cash flow from operations for the second half in 2015, and going forward. Key uses of cash in 2015 include interest and debt payments of about $65 million; legacy and final reorganization payments of approximately $30 million; reinvestment in our growing businesses through capital expenditures, including both direct and commercial capital of approximately $70 million; severance cash payments of approximately $50 million as we continue to drive efficiency within the new Kodak structure; and cash tax payments of approximately $20 million. Let me also provide you with some comments relative to linearity for 2015. During 2014, when you adjust for non-recurring IP the waiting of first half and second half operational EBITDA was roughly 25% and 75% respectively. You should expect similar linearity in 2015. One factor is the more significant impact of foreign exchange, and increases in aluminum prices in the first of the year versus the second half based on how these trended throughout the course of 2014. Second, like 2014 and the years prior, the Graphics business performance is more heavily weighted in the second half. Third, as we continue to grow our install base of our PROSPER and Packaging businesses, the annuity streams of those businesses will ramp throughout the year similar to last year. Before handing it back to Jeff and in closing, we’re taking the actions required to get to the cost structure necessary for both the current scale of our businesses, and the capacity needed to invest in the many growth opportunities we see going forward. We’ve made very good progress in 2014, and will continue to be laser focused on the actions necessary to drive further simplification, speed of execution, and efficiency where appropriate throughout 2015. Like Jeff, I'm very excited with the many opportunities for Kodak and our ability to move to sustain growth and profitability for the company going forward. I'll now turn it back to Jeff for some closing comments.

Thank you, John. In summary, we continue to carefully manage an exciting portfolio of Kodak offerings, and opportunities while taking the actions necessary to ensure our successful performance and continued investment in those growth areas going forward. I'm pleased with the 60% to 90% improvement we’ll see in operational EBITDA for 2015 on a comparative basis. Although, we're not providing guidance today for 2016 and beyond, I’ll briefly discuss our thinking on some of the factors we are considering. We've indicated we expect positive cash flow for the second half of 2015, and we told you the linearity of the plan would result in 75% of our EBITDA or $75 million to $90 million in the second half of 2015. We also shared with you 90% of this EBITDA will come from our strategic and growing businesses in 2015. Based on these building blocks as well as the execution required to deliver on our 2015 guidance, we feel operational EBITDA of approximately a $175 million is a reasonable goal for 2016. We'll add more color on this on our first-quarter call, and we expect to host an Analyst Day in the next several months. We'll now be happy to take your questions. Dave?

Thanks, Jeff. Patrick, we’re now ready to open the Q&A session. Please remind callers of the instructions. Question-and:

[Operator Instructions]. Our first question comes from Shannon Cross with Cross Research. Your line is open.

Thank you very much for taking my questions. I just had a few. But first, can you talk a little bit more about the Plate business? What you're seeing in terms of pricing, I am just curious you know traditional versus SONORA plates. Are there any differences there? And you know what the competitive landscape looks like?

So again, we thought we had a really good year in plates. It was effectively on our plan for the year. We had you know plate growth volume for the first time since 2011. And you know it's very good to grow in this business, but clearly we are taking market share. You know our primary competitors in this industry are Fuji and Agfa. There are several regional competitors, and there are also some commentators based in China. We believe we are gaining share against the majors and the regionals, and that's driven by a technology difference with SONORA. We continue to be able to charge a premium for the premium SONORA product. I shared with you the savings of chemicals, the savings of water, and the savings of electricity that make the value proposition so strong for SONORA. In terms of customers, I shared earlier that in the last five months we’ve created almost 40% of our overall customer base. So we’re very pleased that we continue to get converts to SONORA, and when you get that, you know when the process step is out, it is a system where with very high renewal rates, and very high consumption of our plates. So it's going well. One of the questions that I'm sure is out there is given the aluminum price differential, where aluminum costs are much higher than they were a year ago, you know are we able to pass any of this cost on to our customers. And the answer is no. This is a very competitive market. There is a lot of capacity in industry, and we are finding that our competitors since they do not have a technology-competitive product versus SONORA, they are tending to be very price sensitive and are eating the cost associated with the increased aluminum. We do feel overtime that aluminum will come back to a normal historic price point. But it is a volatile commodity, and it's a key input into our product. And so, all of our projections going forward are based on aluminum holding at this level for the rest of the year.

Okay great, and then you know you’ve restructured from a segment perspective. I'm curious when you look -- since you’ve done that, and I'm sure you know it's taken some investigation of the various business units in that, have you come up with any potential asset sales? Or are you pretty happy with the assets that you’ve right now?

Well we set up these into divisions and five groupings of products in these divisions. And we are pleased with the portfolio. I mean by definition, we're always going to evaluate you know what parts of the portfolio are growing, what parts are particularly important. But a part of the divisional structure was to provide optionality. You know, I believe at one point many of these businesses were viewed as highly synergetic, and there is some synergy across divisions. But not as much as they are independently-driven you know approaches to the industry. So you know we’re going to be pragmatic, but we continue to invest in these businesses and we are seeing as you can see strong growth. For example if you look at, and if you just take some of our most recent technologies within these divisions, and you look at PROSPER, the SONORA part of our plates business, FLEXCEL NX software solutions we expect to grow over 40% year-on-year. And so you know when you're growing at that rate, and we’ll be approaching half a billion dollars of our revenue coming from those categories along with software and services. So these businesses are doing well, they are just a relatively small part of the couple of billion dollars sized company. So one of the goals of the divisional structure is that we can operate more entrepreneurly, and that we can understand the segments. The other one is so we can give you as investors more visibility into some of the things going really well at Kodak. Thank you, Shannon.

Okay great, and then just a couple of questions for John quickly. Can you talk a little bit about your foreign exchange rates that you're using going forward given FX was you know a pretty big hit. So what is your guidance predicated on for the euro for instance? And then, can you give us a little idea on your hedging program?

Yeah, so we are taking basically March rates and running those forward, Shannon. So we are not making predictions relative to foreign exchange rates. We don't have a full economic hedging program within Kodak. So we’ve some natural hedges in place from a cost structure point of view, but we don't have a full-fledged hedging program that would smooth some of this out.

Okay, and then the last question was just, can you clarify the EBITDA guidance? Is there any non-recurring IP licensing in that? I wasn’t sure, and if there is not then obviously, there is some opportunity for upside?

Yeah, there is a very small element, but essentially you know we took out on a year-over-year basis everything that reflected getting us to a more comparable basis.

Our next question comes from Jen Ganzi with NewMark Capital. Your line is open.

Just a follow-up on Shannon’s last question about the IP licensing. I mean is it that you feel that, there’s you know no opportunities, and nothing on the horizon you know to generate EBITDA from that, you know portion of the business? Or is it just that, because you’ve no visibility you’d rather just be conservative and assume it’s zero?

So we're working as you would expect on multiple avenues to monetize the intellectual property of the company. There is nothing in the pipeline of the scale that we appreciate, that we saw with the Asia Optical IP transactions last year, as well as from the legal settlements. So we believe that it is prudent to put in plans, things that you can count on. And we want to make sure that when we forecast our performance going forward, these are things that we can execute to. And there is too much variability and too much distance between some of the areas that we’re targeting for license, and areas that we have visibility into within this 12-month period. So I wouldn't call it conservative. I wouldn't call it aggressive. I would just say, you know right now we’re exercising lots of areas, but there’s nothing, there’s no big lumpy piece that we’ve visibility to. That doesn't mean that there isn’t great opportunity here. We’ve an entire division structure to do just this. So we’re working it hard, but we’re not going to put in things that may or may not come in within the focus of this guidance.

So then I'm assuming then, when you gave the $175 million sort of goal estimate for 2016, that also does not include any sort of you know non-recurring IP licensing you know numbers in there?

First let me please clarify. It was not an estimate. It was not guidance. It was a discussion to give you a sense of some of the things that we are thinking about, and the direction that we are seeing. But to answer your question specifically, there is no lumpy piece of that. That $175 million relates to the $75 million to $90 million of operational EBITDA we’ll see in the second half of this year, which does not have IP component in it. That we believe is sustainable going forward, now that 90% of our business comes from that profit pool.

And then I guess just in terms of you know sort of your and it sounds like you said that your Packaging business you know has been profitable. I mean, can you give us a sense of what margins are looking like on that at this point in time? And you know kind of how you expect those to you know kind of on a go-forward basis, like how you expect those to like increase or you know even flatten out?

Sure Jen. I mean Jen, first of all the Packaging business has been terrific. I mean this is a business that has gone from start-up in five years to a business you know that at the end of this past year you know was close to $130 million in total, both the FLEXCEL NX and some of the legacy pieces. We are seeing very good margins, but equally important we're seeing margin expansion for multiple reasons. One is the product is as they call it closed system. So when we sell one of our 400 CTPs, they churn for a significant period of time. But typically these CTPs have a 9-year life cycle, and we’re very young in this entire life cycle. Second of all, we have expanded into a wider format, and this is very important because we are getting much higher levels of plate burn. I mentioned we’re in the 30% plate burn. The plates have very high margins, and you know over 30% EBITDA margins in these plates. And as the factory continues to fill, our margins go up. We’ve also hit record manufacturing metrics in the Packaging business. We’re hitting record levels of quality, and record levels of performance capacity. So Jen, we’re really pleased we’re in the Packaging business and we see strong margins today and expansion going forward.

Okay great, and then just on the -- I guess the Graphics business. You know it sounds like you're expecting real strong growth next year from SONORA. Do you feel like you will be at the point where you know sort of the growth in SONORA offsets to declines from sort of the legacy products in that division?

That's right, that's what we saw this year, and that's what we're planning for next year. And so we added about 7 million m² of plates last year. We expect to do a similar amount this year. So coming from different basis, well still and growing over 50% in 2015, and that will drive us to plate growth in aggregate, and obviously significant market share shifts.

Okay and finally on the Commercial Inkjet Solutions. I mean it looks like that's also you know obviously strong growth for the next year. Do you expect profitability in that business next year? Or is that further out?

No, we do expect that we'll move to breakeven and perhaps a little beyond. You know as we said, you know when you are shipping -- when you’ve 39 presses in your install base and you are adding 25 during a year, that's a big change. These are such sophisticated machines, particularly in the OEM space. That it’s going to take a while for them to burn. As I mentioned, we did just last year over 5 billion A4 page equivalents, which was up over 50%. So we are burning on the existing install base, and we see a significant opportunity going forward. But because these are such sophisticated systems, it does take a while to get them ramped up and going, you know when they get to the customer side. You know, you’ve to tune them specifically for the applications and so forth. So we would be at a higher profitability, but when we put these presses in, there’s a lot of service costs, and many of these presses go in that breakeven or even a loss for the later profitability. So, but we are deferring some profitability in this business because we’re willing to go for the longer-term plate burn, excuse me ink burn in this case. And you know, effectively we’d have higher profitability if we sold a few more systems, a fewer systems this year. But we would rather get those systems in place, so we’ve a much better second half and a much better 2016 and beyond.

Got it, so a lot of you know, I guess sort of Delta between you know we’re you seeing you know 2016 versus 2015. I guess a lot of that is due to sort of you know kind of the cash flow ramp, you know in that business.

Yeah, I mean, I want to give you some perspective. I mean you are keeping kind of, as a rule of thumb think that we lost, you know about $40 million last year, you know before corporate costs on the inkjet business. And this year, when I say we’re going to be breakeven, you know that's quite a significant shift for us, and a very important business that is at really a pivot point to go from heavy investment into starting to monetize going forward. And then obviously when you get more sets of systems in, that looks quite good for the future.

Okay, great and then just, so this is more of a request than you know a question. But I mean it would be possible to sort of you know give us back a couple of years, you know instead of pro forma numbers. So that you know the seven sectors that you're going to be going forward breaking out your business lines, and so that would be like super helpful for us. And that's it from me, thanks.

Our next question comes from Alex Yaggy with Cortina. Your line is open.

I have a quick question on the cash expectations. You laid out a lot of nice detail for 2015, but can you just give us a little bit of an indication going into 2016, how many of these are going to go away? And maybe what you think might happen with working capital going forward? If it’s going to become a cash drain as you continue to grow?

Yeah sure. So I think, it's a great question. I think, let me talk about some of the things that I think are either going away or more in variable in nature to start. So I talked about legacy and reorganization payments in 2015 of approximately $30 million. That number will be materially gone, okay by the time we get into 2016. There maybe some very low legacy type things, but the reorganization type payments will be gone. So you can count on that. Restructuring, you know will be a function of where we’re, and how we view the cost structure as we enter 2016, and that's a variable number. And we'll see when we get there, but I would expect that number to be in decline certainly as we get into 2016. Capital expenditures are going to be a function of both direct capital, but also in terms of how we’re doing, and how we’re choosing to go to market with businesses like the press business. I mean we see good opportunities in the marketplace, and we want to use our commercial capital as a way to penetrate that market place and we certainly will. From a working capital point of view, I think sure the growth in the business will have its impact. But I see a lot of opportunity for us over time to improve from a working capital point of view, our cash conversion cycle. And I am confident in our ability to make pretty significant improvements over time there. So as I made comments in my opening, in my prepared remarks, you know we expect to exit the year, second half cash flow positive, and we expect to continue to be cash flow positive going forward throughout 2016 on an annual basis, and start being in a position to rebuild and grow cash going forward.

Thanks, and can you update us on any plans you’ve for the Eastman Business Park? As I recall, I think there was some effort to sell that, but I haven't heard anything in a while on that?

Sure, so the Eastman Business Park, and one of the things we are going to do is break this out for you after our Q1 call in about six weeks. Yeah, it’s a lot of assets. You know it is one of the largest industrial parks in North America. It’s one that operates at significant underutilization, but it’s one that is -- we’re making steady progress on. There is not a -- we’ve yet to find despite significant effort to find a buyer who is willing to purchase the park in a manner that's favorable to Eastman Kodak. There’s lot of offers that have come in, but they are quite adverse to Eastman Kodak. So our job is to do a better job managing this park, and then eventually find partners whether that would be government partners, whether that would be commercial partners, but do a better job managing the park. One of the key elements of the park, the largest tenant in the park is film. As many of you’ve probably heard, we’re recommitted to film. We see this as a business that can make money over time, and should be breaking even this year for us. And we can see profitability going forward in that business, as it kind of hits a sustainable level, and perhaps even gets a little bit of a bump as we readdress some of the opportunities of it much like vinyl has. And if you look at film, film covers a lot of the cost of the park. And closing the film business would have been very difficult for the park if that had, had happened. We have more tenants in the park than Kodak employees now. And so we’ve made some progress, and we’ve got a good pipeline of new tenants. But a large part of this will be working business development with local community, government officials, and others to try and get higher utilization out of the park. We'll go through these numbers in detail with you at the end of our first quarter, but you know like many parts of Kodak you know the park has been there a long time. We need to manage it better, and we’re putting a lot of focus on it. It's no longer in a kind of a shutdown, and hope someone will buy it in that phase. It’s now in a place, we are going to manage this thing and we’re going to run this thing efficiently, and get the right partners to go do that.

[Operator Instructions]. Our next question comes from Amer Tiwana with CRT Capital. Your line is open.

I wanted to sort of go over the guidance for 2015. And you know just going through the numbers, there’s about $63 million as you mentioned is the base level for 2014. How do you build up to the 2015 guidance broken between growth and the strategic business as well as what the cost reduction you're getting from SG&A and R&D. Can you help me there?

Yeah, let's go back to page 11 on the webcast if we could, which outlines the drivers of the performance. You know obviously a huge driver of the performance, you know we’re talking about as we said an improvement. Let me just go over it. Wait for one second, and I’ll get the exact numbers for you. We’re talking about an improvement really from $63 million to a $100 million to $120 million, so a 60% to 90% improvement. If you take the midpoint of that, you're really talking about a $53 million improvement. And the first bullet here says that a 100% of that, more than $100 million of that $63 million is based on cost savings. So taking 25% of cost out is a very formidable task. We’re well on our way to doing it. I am highly confident we'll achieve that. As we mentioned, you know there is things moving both ways. While we take COGS out, we improve our COGS. We take out costs, and we see growth. You know I mentioned earlier in the call that we’ve 40% growth across some of our -- roughly $400 million on its way to $500 million of revenue in key strategic areas, and that is going to have a big impact most notably in PROSPER and in Packaging. The reality is that we also are facing a lot of other headwinds within this, and we mentioned those. You know we didn't mention, you know when we talk about the apples-to-apples performance, we talked about not having the $70 million non-recurring IP and $21 million of foreign exchange. But we are also facing the aluminum hit that we talked about and pricing pressure in some of our legacy businesses. You know while we're doing well in PROSPER, we’ve other legacy businesses that are still in decline. So this is a balance between growth in PROSPER, where as I mentioned that's going to be you know tens of millions of dollars of improvement year-on-year. A strong growth in our FLEXCEL business, you know SONORA helping us hold you know our profitability in our overall plates building, as flat as we can on a constant currency basis, with you know marginal growth and strong cost actions. And then the wild card for us, and as I mentioned earlier we are circumspect and conservative in this. Micro 3D printing, you know if that comes in a little earlier, that's very good news for us. If that comes in a little later, it's not as much bad news as it was in 2014 because we are not betting on new technologies, that we can’t demonstrate yet. And so what you're seeing here is a more cost-driven approach on balance because we’ve much more control over that. And that said, we’ve ambitious but achievable goals in our PROSPER and FLEXCEL NX business, as well as the SONORA part of our plates business.

Understood and maybe I can just follow up on that issue, how much functional print in terms of your guidance is you know coming from functional print in terms of EBITDA range? Is it a small number, a big number? I know you said, it's relatively hard to give guidance on that, but if you could just give us some range?

It's a very small number, and so that doesn't mean that we don't believe that the business is very important. This is a business that could be one of the largest producers of our profit in 2016, 2017 and 2018, and so we are committed to this business. There is not a lot of additional expenditure that we are doing. Most of the technology has been done, now we’re tuning the manufacturing processes, scaling the road of all processes. But in terms of revenue contribution in these businesses, we're going to be circumspect. You know, this is an area where perhaps I'm a little conservative, but I don't want to bet on the start-up businesses in our guidance.

Understood. And the last question I’ve is regarding your CapEx spending. You know you mentioned $70 million, how much of that is maintenance and you know, how much is related to the commercial capital?

Yeah it's about, a little over half of that is maintenance, and then the balance would be in commercial capital. We are going to manage that very tightly throughout the course of the year as well.

Yeah, we’ll we’re finding two things. Well first of all there, we are seeing such growth in our Packaging business that we’re going to start some of the investment that's required in the second half of this year to build a second factory. And that total factory cost will be about $50 million over a couple of years. But, I mean that's good news. I mean this shows great demand for our product sets. As we mentioned, we are putting in a new SONORA line in Columbus, Georgia. So that's going to have a [tail] of some capital. So we are putting capital in you know where it really makes sense in some highly profitable businesses. I think the difference from prior years, Kodak was significantly constrained particularly against you know deep-pocketed players like Hewlett-Packard and others around getting systems out there with commercial capital. And you know, the payback on this is quite strong. And so we will be careful how we do it, because we watch our cash balances. We watch our return. You know John has done a fantastic job adding a lot of discipline around returns, before we utilize capital. But we are seeing opportunities and a greater number of opportunities because of the growth of PROSPER. And you know there are certain industries particularly in the OEM space, where we can get machines out there faster if we’re willing to deploy some commercial capital. The returns are pretty quick.

Sure, I appreciate that. Actually can I just make one last question. And on the debt side, you know pretty heavy on interest payments at this point in time. Any plans on you know looking at the balance sheet and trying to either [re-fi] it or some other opportunities to perhaps bring down that you know cash outflow?

Sure, sure. I mean you know clearly that's an opportunity for us going forward, and I think like we’ve mentioned on the past one or two calls is you know we're opportunistically looking at what our market opportunities are in terms of our capital structure going forward. So you can be sure if there is an opportunity for us to do something different going forward, we’ll be all over that. So it's a good opportunity for us going forward and the health of our business and the great things we're accomplishing certainly will help us along the way that.

Thank you very much. We really appreciate it. And so I thank everyone for joining the call. As you can tell, John and I are pretty excited about you know the ability to drive real apples-to-apples improvement this year of a 60% to 90%. We’re very excited about some of the unlocked value we’re seeing by the divisional structure in terms of driving more cost out, and getting better entrepreneurial performance. We’re excited about many of the things we’re seeing in our pipeline, and so we look forward to talking to you in six weeks after. So we'll talk again about a little more about the divisional structure, our Q1 results and talk to you again soon. Well, thank you again.

Thank you.

Ladies and gentlemen, thanks for participating in today's program. This concludes the program. You may all disconnect.