Good day, ladies and gentlemen and welcome to the Eastman Kodak Third Quarter Earnings Conference Call. At this time, all participants lines on the telephones are in a listen-only mode to reduce background noise. Later we will be conducting a question-and-answer session. Instructions will follow at that time [Operator Instructions]. I would now like to introduce your first speaker for today, David Bullwinkle. You have the floor sir.

Thank you. Good afternoon. My name is David Bullwinkle, Director, Global Financial Planning and Analysis and Investor Relations for Kodak. Welcome to the third quarter 2015 Kodak earnings call. At 4:15 p.m. this afternoon, Kodak filed its quarterly report on Form 10-Q and issued its release on financial results for the third quarter of 2015. You may access the presentation and webcast for today’s call on our Investor Center at investor.kodak.com. During today’s call, we will 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 and risk, which are clearly described in the Company’s 10-K and 10-Qs and the Company’s other SEC filings. 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 risks and/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 has been provided with the release and within the presentation on our Web site 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 quarterly financial performance, and an update on the outlook for the Company. Then John will take you through a cost reduction update, additional details of our third 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 Q3 investor call for Kodak. I will start by giving you an overview of the quarter. John McMullen will follow with more details and then of course we’ll welcome your questions. We also like to invite you to join the webcast of our Analyst and Investor Day tomorrow, when we will talk more about the outlook for the rest of the year and for 2016, and 2017. Dave will provide details of the meeting in case you miss some and we will be webcasting for those who cannot join us in person. The link is on our Web site. We met our operational EBITDA expectations for the quarter, and are on track for the year as we drive the transformation of Kodak. Now onto Slide 5 of the earnings presentation please. Revenue for Q3 2015 totaled $446 million for the quarter, a 21% decline from the same period in 2014. On a constant currency basis, revenues in Q3 declined by 14% versus Q3 2014. The remaining decrease was primarily driven by the expected continued decline in legacy consumer and printer cartridge sales as well as non-recurring intellectual property revenues realized in the third quarter of 2014. When adjusted for foreign exchange and these items, revenues were down 4% year-over-year. On Slide 6, total Company operational EBITDA for Q3 was $39 million. In the same period in 2014, operational EBITDA was $90 million, again with one-time items. When adjusted for the non-recurring intellectual property revenues realized in the third quarter of 2014 and foreign exchange impact year-over-year, operational EBITDA improved by $9 million. This represents solid performance in the quarter given the challenges created by the strong U.S. dollar, the economic slowdown in China and weakening Latin America economy. On a…

Thanks Jeff and good afternoon. Today the Company filed its Form 10-Q for the quarter ended September 30, 2015 with the SEC. I recommend that you read this filing in its entirety. As Jeff noted in his opening remarks, we are pleased with our third quarter results and the overall year-to-date results of the Company. I will now provide a little more detail on several areas of our third quarter performance. As we reported in our earnings release the net loss for the quarter on a GAAP basis was a 21 million compared to a net gain of 19 million in Q3 of 2014, a decline of 40 million. Adjust in Q3 2014 for one-time non-recurring IT licensing revenues of $52 million, third quarter performance reflects an improvement of 12 million year-over-year. This information is taken directly from the companies, consolidated statement of operations in the 10-Q. We are pleased with the year-over-year improvement. Next, let me provide an update on our cost reduction programs. As we share with you over the course of the year, we expect greater than a $100 million and operational SG&A and R&D cost reductions for the full year 2015. As you can see on Slide 12, we have made significant progress to the first three quarters towards this objective. In Q3 2015, the reduction in operational SG&A and R&D was $15 million year-over-year. On a year-to-date basis, we’ve reduced operating expenses by $85 million year-over-year. And on a run rate basis, the reductions made and actions taken year-to-date would yield full year savings of approximately $101 million with no further actions. As you can see, we expect to achieve our goal of greater than $100 million in operating expense and cost reductions with one quarter of a fiscal year remaining. Key drivers of these…

Thanks John. Andrew we are now ready to open the Q&A session. Please remind callers of the instructions for asking questions.

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

Thank you very much. Had a couple of questions for you, can you talk a bit more about the 3D or the Micro 3D printing business? And just what exactly sort of changed relative to last quarter in terms of your expectations. Is this incremental investment because you have new products in the pipeline? Just any more color you can give, and I know won’t smile, but just given the significant reset for next year. And then I have a follow up question. Thank you.

First of all, I think you have to look at it in the context of all of the technologies that Kodak is bringing to market. If you look at the four growth engine, or the five growth engines, we’ll start with SONORA. SONORA is a part of our Company that took a relatively long time to get into place, and now you see enormous growth and significant profitability. It has passed the point of customer acceptance, but yet it was a breakthrough technology. FLEX NX as well, took about four-five years for FLEX NX to become accepted in the marketplace and now it is growing at very strong levels and has material improvement to our Company in terms of profitability in fact just this quarter year-over-year it improved by $5 million on a constant currency basis. So run rate of over $20 million improving year-over-year. So when you introduce new technologies it take a little while to get into market and then when they do they start working well. And the two areas that today are at an inflection is -- one piece is inflection that is PROSPER, so our PROSPER after many years of investment and lots of losses is at the point now where it's scaling quite significantly. You need to take about micro 3D printing as an absolute start up business. This is a business going an ambitious attempt to bring a brand new science to [disintermediate] a large market. And the reality of it is we have got the technology so works now and that’s taken a long time. So I am very pleased that our ability to both manufacture and design touch screen sensors. What is difficult is getting them into design wins. And while we are working very hard and have a nice pipeline…

Okay. Thank you. That was helpful. And then as we think about your EBITDA guidance for next year, what are sort of the key areas we should focus on that would drive EBITDA to like the higher end. So what you think those potentials flex up or you might be conservative just in terms of the other divisions? And then also if you can just let us know what currency levels you are using now for the 12 million so we can make sure we watch that as we go through the Q4?

The [indiscernible] is calculated as of a couple of days ago and I wouldn’t think days weights on that, so the 12 million would be comparison from the beginning of the year till now.

Okay.

And we don’t speculate where it forwards move. So as we give this direction we said it for today on the currency. So what are the drivers? Obviously $130 million to $150 million wide range. We expect kind of in the largest business a [PST] business we expect that business to be within a couple million dollars, our expectation is a big, it's a big business, it's relatively slow growth, it's a great contributor but it's not going to be a major swing factor, it's the base line really of our company. So the swing factors will be how fast PROSPER moves into basket already. You saw the 30% that we reported in annuities, that certainly is a good indicator that if that continues and with replacements that move us more to the higher end. How micro 3D performs is a big one as you know we have brought that down but as I stated that's probably or now probably move from aggressive parts of that and our forecast being more conservative. So one design win can swing that one quite a bit as when of the business like the big mover on the Company. I think we are counting on continued exemplary performance in the micro -- in the FLEXCEL NX business. That was pretty predictable because it's a very much an annuity business. So that will have good year-over-year, we don’t think there is a lot of upside there because we have -- we are expecting very strong results out of that. Software business will have solid impact but those are pretty predictable. So really when it comes down to in terms of it is our two businesses that are the most new to our business which is the continuing improvement on PROSPER and the continuing position of how micro 3D business goes. The rest of the business as I mentioned pretty much 81% annuity based and pretty predictable.

Great, thank you very much. We will see you tomorrow.

Thank you Shannon appreciate it. Next call, next question please.

Thank you. Our next question is from the line of Jen Ganzi from Newmark. Your line is open.

Hi guys thanks very much for taking the questions. And just quickly and this is, what's the total net impact on revenue EBITDA this quarter of FX?

I talked about year-over-year?

Yes, year-over-year growth versus what you had projected initially. I mean if there’s the way to kind of give up those numbers.

Okay, so let’s go to Slide 9. What you see, pull up the Slide 9 please, we’ll pull up those everybody to have. So in Slide 9, we cleared it out for you. So you see if you go to the bottom, you see that’s been totally year-over-year impact of revenue at the $122 million and then we give it to by division. And then we give it currency adjusted for you. So all you have to do is just crack cumulative numbers and you will see the impact.

And I mean I guess when you think about what you were expecting for the FX rate for this quarter versus what was actual, can you give us a sense of what the impact was there on an EBITDA basis?

Your question, what we expected?

I guess given what you expected I guess EBITDA to be versus where it is now and like what impact FX may have had on that, if at all?

So maybe I can give you more color on this. So, we gave guidance in the beginning of the year of $100 million to $120 million. We expect to meet that guidance despite a year-over-year headwind about $12 million of foreign exchange on EBITDA. And so the bottom line is we will deliver -- we're going to deliver $100 million to $120 million even though $12 million of win ahead in that. John earlier explained what balance sheet impact of that was. So, yes, it’s going to be a headwind, we worked our way through it, made a much trade off and then that’s getting there.

And it sounds like I guess, so it sounds like for the full you’re sort of on track with -- even with FX you don’t expect any significant misses through the year end?

And so again we’re reconfirming the guidance of $100 million to $120 million despite that $12 million headwind as you saw in earlier slide, we’re at $74 million at this stage and so we’re very comfortable on where we are relative to the guidance.

And in Q4 is that supposed to be like a stronger quarter seasonally?

Yes, Q4 is our strongest seasonal quarter. So, we’re very early in it obviously but we’re trending as you’ve expected so far here in October.

You just add on like the whatever the $39 million this quarter, which is probably seasonally stronger than you still be seeing pretty well in that guidance.

So again I want to stick with the guidance we’ve given you, I don’t want to plug it in there. I know that those doing model love to do that and we’ll watch you do the latitude -- to have the latitude to do that. But we are expecting -- we'll meet our guidance and we’re certainly well ahead of our plan so far this year on EBITDA.

Our next question comes from the line of Craig Carlozzi from Bulwark Bay. Your line is open.

Just a couple of quick ones on my end. Given the continued progress in business visibility, what do you guys believe the right cash balance needed to run the businesses?

Great question. I think over time and also subject to a little bit of the geographic mix of that, in the 300s plus is probably a reasonable number, it has set in more percent of the safe mode.

When you say over time, do you mean just so you have time to execute your 2016 operating plan, or do you mean over time i.e. the full development of your 3D printing, ’17, ’18, time period?

The way I would think about it is that if you look at over the last two years and we’ll go into a lot of detail around this. But we put a lot of things behind us from reorganization and legacy cost point of view, where we have the year in 2015, we have obviously made big investments in restructuring as a Company over the last two years. As Jeff talked about and discussed Micro 3D, the Company has made decision to invest into businesses like PROSPER, like Micro 3D. And the impact of that is within our operational EBITDA performance. But it is cash flow gone at some level. So as we turn the quarter with those businesses, we have things behind us. Our ability to operate at a lower cash level comes into play. So it’s not years from now. It’s relatively soon relatively to how we perform in 2016. But by no means of projection of where the cash flow be a bit easy and I think you’re asking more of a comfort level just operationally and more of a steady state.

Yes, and actually continuation of that question or your answer, you guys have done a tremendous job from Eastman Kodak several years ago, right? I mean, there’s been a lot of cost saves and you’ve done a tremendous amount of restructuring. You’ve seen the development of several new products start to gain traction. And now you’re one quarter closer to positive 2016 free cash flow, that was your latest guidance. This month high yield I believe has had the largest inflows ever, I could be wrong, but I mean like I am reading a run now that just says yowser, so I am imagining it's quite large. The markets clearly robust. Have you thought about addressing your capital structure perhaps refinancing your legacy capital structure? And if so, would you do anything that would be equity friendly along with that given your cash balance incur a little bit debt have a one-time debt, are you thinking along those lines, are you purely focused on the operational execution at this stage?

I think it's very fair to assume that we are watching the market very closely and would always consider being opportunistic if there was a good opportunity for us to do something different with our capital structure. So you can be sure that myself and our treasure build up are monitoring this on an ongoing basis.

You don’t have any more questions in the queue at this time. So I would like to turn the call back over to management for closing remarks.

Thank you very much. Well I look forward to discussing our outlook for the rest of 2015 as well as our goals for the next couple of years tomorrow at our Analyst and Investor Day Meeting. I appreciate everyone joining the call tonight and I look forward to seeing many of you tomorrow. For those who won’t be able to make it here at the New York Stock Exchange, I encourage you to dial in. We’ve got a lot of material to go through over five or six hours, so I think you will know a lot about Kodak at the end and then looking forward to spending some time with you. Thanks so much.

Thank you.

Ladies and gentlemen, thank you again for your participation in today's conference. This now concludes the program and you may all disconnect your lines at this time. Everyone have a great evening.