Kodak has found a buyer for its imaging patent portfolios, an important step for the company as it tries to emerge from bankruptcy protection in the first half of 2013.
Kodak has been pummeled in recent years as consumers switched to digital photography from film. It put its patents up for sale in July 2011, and analysts initially thought the portfolio could fetch between $2 billion and $3 billion because patents have become highly valuable to digital device makers who want to protect themselves from intellectual property lawsuits. But Kodak struggled to find a buyer.
Meanwhile, Kodak has been working to refocus its business on commercial and packaging printing, leaving behind its digital cameras, pocket video cameras and digital picture frames businesses.
Here are key events in the recent history of Eastman Kodak Co.:
July 20, 2011 — Kodak begins shopping around its 1,100 digital-imaging patents.
Sept. 27 — Moody's Investors Services downgrades all of its debt ratings for Kodak, citing ongoing weakness in the company's core business operations and the likelihood that flagging demand will hamper results indefinitely.
Oct. 3 — Kodak confirms it has hired Jones Day, a law firm that lists bankruptcies and restructuring among its specialties.
Oct. 16 — Kodak says Imax Co is licensing thousands of patents covering laser projection technology, giving Kodak millions of dollars in revenue. The Kodak patents will allow Imax to provide high-quality digital content for theater screens larger than 80 feet and domed theaters for the first time. Screens that large had previously been limited to film content.
Dec. 22 — Kodak says it has agreed to sell its gelatin business as it looks to boost its dwindling cash reserves. The product is used in photographic and printing processes as well as in food, pharmaceuticals.
Jan. 10, 2012 — Kodak announces plans to realign and simplify its business to cut costs, accelerate its digital transformation and boost its share price. The new structure has two business units (commercial and consumer) instead of three (traditional film and photo paper products; consumer digital imaging; and graphic communications, which included printing equipment).
Jan. 19 — Kodak files for Chapter 11 bankruptcy protection as it seeks to boost its cash position and stay in business.
Feb. 9 — Kodak says it will stop making digital cameras, pocket video cameras and digital picture frames.
Feb. 15 — Kodak receives court approval to end its sponsorship deal with the Hollywood theater that is the venue for the Academy Awards. Kodak had signed a $74 million deal for naming rights to the theater in 2000. During the Feb. 26 Oscars ceremony, host Billy Crystal jokingly refers to the venue as "the beautiful Chapter 11 Theater."
March 1 — Kodak says it plans to sell its online photo service business to Shutterfly Inc. for $23.8 million.
April 27 — Kodak says its first-quarter loss widened on a drop in sales and hefty charges related to its reorganization. Revenue fell 27 percent to $965 million, partially as a result of the company's decision to stop selling digital cameras and focus on its other businesses.
April 30 — Kodak lawyers tell a bankruptcy judge that turnover has become a serious problem. The company was granted approval to pay up to $13.5 million in bonuses to persuade key managers to stay on.
May 1 — Audio technology company Dolby Laboratories Inc. gets naming rights to the Oscars venue after Kodak ends a deal early. Bankruptcy judge issues order approving sale of online photo business to Shutterfly.
May 3 — Kodak says Pradeep Jotwani is resigning as the president of consumer business and chief marketing officer. No reason was given.
July 2 — Kodak shuts down Kodak Gallery. North American accounts go to Shutterfly. Judge rules that Kodak can proceed with auctioning some 1,100 digital imaging patents, about 10 percent of the company's portfolio.
Aug. 3 — Kodak says its second-quarter loss widened as revenue fell. Its loss totaled $299 million, up from $179 million a year earlier, and includes costs related to restructuring and reorganization under bankruptcy protection. Revenue fell 27 percent to $1.08 billion, due to the company's exit from the digital camera business, lower sales of traditional camera products and the stronger dollar.
Aug. 23 — Kodak says it will sell its document imaging and personalized imaging businesses to better focus on printing and business services. The company says the sale of the units, along with cost-cutting measures and the auction of its patent portfolio, will help it emerge from bankruptcy sometime in 2013. Kodak's document imaging division makes scanners and offers related software and services. The personalized imaging business includes photo paper and still camera film products. It also offers souvenir photo products at theme parks and other venues.
Sept. 10 — Kodak says it is reshuffling executives and cutting thousands of jobs. Kodak says it cut about 2,700 employees worldwide since the beginning of the year and plans to cut about 1,000 more by the end of 2012. The company says annual savings from the cuts should reach about $330 million.
Sept. 14 — Kodak postpones indefinitely an auction of its imaging patent portfolios, even as negotiations with potential buyers continue. Kodak also says an alternative option is to keep the patents and create a company to make money by licensing the technology.
Oct. 30 — Kodak says its loss widened to $312 million in the third quarter. The latest loss includes charges taken to account for the elimination of 775 jobs during the quarter and compares with a loss of $222 million a year earlier. Revenue fell 19 percent to $1 billion.
Nov. 28 — Kodak says it will get loans worth $830 million in a new financing package that replaces an earlier, $793 million deal. The offer comes from a committee of 10 institutional investors who all hold senior secured notes in Kodak. The financing is subject to court approval and requires the company to complete the sale of its digital imaging patent portfolio for at least $500 million.
Wednesday — Kodak says it will receive about $525 million from the sale of its digital imaging patents. The company says the sale will help it repay a substantial amount of its initial debtor-in-possession loan. It satisfies a key condition of the financing announced Nov. 28.
Source: Kodak, Associated Press research