Good day, ladies and gentlemen. Thank you for standing by. Welcome to Eastman Kodak's Third Quarter 2011 Sales and Earnings Conference Call. [Operator Instructions] This conference is being recorded today, Thursday, November 3, 2011. I would now like to turn the conference over to Ms. Sandy Rowland, Director of Investor Relations. Please go ahead, ma'am.

Good morning, and thank you for joining us today for Kodak's third quarter 2011 sales and earnings conference call. Here with me today are Antonio M. Perez, Kodak's Chairman and CEO; as well as Ann McCorvey, Kodak's Chief Financial Officer. Antonio will begin this morning with his observations on the quarter, and then Ann will provide a review of the quarterly financial performance. Certain statements during this conference call and question-and-answer session may be forward-looking in nature or forward-looking statements as defined in the United States Private Securities Litigation Reform Act of 1995. For example, references to the company's expectations regarding the following are forward-looking statements: revenue; revenue growth; gross margins; cost improvements; earnings; earnings from operations; cash generation and usage; seasonality of cash flow and sales; gross profit; product pricing; raw materials; demand for our products including Commercial Inkjet, Consumer Inkjet, Workflow Software and Packaging; potential revenue; cash and earnings from intellectual property licensing and the potential outcome of intellectual property infringement litigation; liquidity; balance on our credit facility; potential proceeds from asset sales and from the potential sale of our Digital Imaging Patent portfolio. These forward-looking statements are subject to a number of important risk factors and uncertainties, which are fully described in our 10-Q that we issued this morning. Listeners are advised 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 and uncertainties. And now, I will turn the call over to Antonio Perez.

Thank you, Sandy, and good morning, everyone. Before I share with you my observations on the third quarter, I would like to spend a few minutes to address several points relating to our liquidity position and the status of our sale of our Digital Imaging Patent portfolios, and I'll start by making some comments about the statements included in the Liquidity section of our 10-Q. A few things on this. First, as you know, under SEC rules, companies are required to identify all potential risks that could impact business performance and results and to communicate various scenarios. This requirement statements shouldn't be misunderstood in any way as dampening my optimism in our ability to complete the sale of our Digital Imaging Patent portfolio, which is very high. We have been successfully monetizing our IP portfolio for 7 years and we have both the value in the portfolio and the expertise in our team to execute this well. Second, to be clear, we outlined several things that we can fund our operations, including continuing our successful IP licensing strategy that we have had in place for years, the sales of assets and other actions. We are an asset-rich company, and we have many tools in our kit. Keep in mind that our expected year-end cash position does not contemplate a new financing or the sale of our IP portfolio. We expect to reach this range by executing our operational plans and generating full year sales of nonstrategic assets of approximately $200 million and intellectual property licensing transactions between $250 million and $350 million. Now, as you are aware, on September 23, we borrowed $160 million from our U.S. revolver credit facility. We withdrew these funds to bridge timing differences between our cash outflows and our cash inflows. As we have said…

Thanks, António, and good morning, everyone. I'd like to spend some time discussing our third quarter financial results, and then Antônio and I will take your questions. Third quarter consolidated revenues were $1.462 billion, a 17% decrease versus the prior year. This year-over-year decrease is primarily due to the onetime benefit of a $210 million nonrecurring IP transaction recognized in the third quarter of 2010, lower volumes from digital cameras, and continued industry-related volume declines for our Film and Paper businesses. This decline was partially offset by a 13% increase for our 4 digital growth businesses and favorable foreign exchange. Looking forward, we now expect our full year revenue to be in the range of $6.3 billion to $6.4 billion, reflecting our year-to-date performance and the uncertainties surrounding the fourth quarter global economic environment. Our third quarter gross profit margin improved 3 percentage points, driven by the doubling of ink gross profit dollars in our Consumer Inkjet business when we exclude the benefit of nonrecurring IP in the third quarter of 2010 and the $56 million year-over-year gross profit impact due to higher silver and aluminum costs. These improvements were partially offset by the competitive pricing pressures for our digital plate, in line with our expectations, and the continued higher startup costs associated with our commercial inkjet PROSPER platform, resulting in a third quarter segment gross profit margin of 15% versus 27% in the year-ago quarter. Segment SG&A and R&D expense decreased by $64 million for the third quarter as we continued to adjust our structural costs and lower our advertising spend, primarily in digital cameras. The company recorded $18 million in restructuring charges for the quarter and $89 million year-to-date. Restructuring-related payments for the corporate cash were $16 million for the quarter and $52 million year-to-date. Turning to segment…

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

My first question is can you talk a little bit -- given all the commentary out there and news reports and all of that, can you talk about how -- what the conversations have been like with some of the vendors, the manufacturing partners you have, your channel partners, et cetera, about payment terms, about where Kodak stands? Just can you give us some -- has anything changed with your relationships with those? Or how are those progressing?

Well, there were calls, Shannon, there were calls. They were reading articles. And some people call and we explain with many of them we have NDAs, so they understand. We have no issue with suppliers, and we have nothing to report.

So just to make sure, be clear, because clearly payables is a big deal in fourth quarter. There is no change to sort of how you view your working capital metrics this year versus prior years.

No.

Okay. And then my next question is for Ann. Can you talk a little bit about the $310 million that you repatriated which you had a $4 million tax payment on? Was that NOLs? Like how was that -- or were they done as loans? How are you able to bring the cash back with only a cash -- tax across the $4 million [ph]?

So as you said, Shannon, the $310 million was a combination of repatriation of cash and loans, and the $4 million was the -- recognized the withholding tax that we had associated with that.

And was it more NOLs or loans, or how should we sort of think about how you brought it back?

You should think about it as a combination of both.

Okay. And then my final question is just on asset sales and IP licensing. It appears that, I think you'll have to do an additional $150 million to $200 million of the combination of IP licensing and asset sales this quarter. Is that kind of the correct number to come up with?

That's correct, yes.

Okay. And I'm curious, how much of that has sort of been signed? I know you tend to sign the IP licensing in fourth quarter, so that's fine, but just given that you need to sort of collect the cash and have everything closed in the next 8 weeks or so, how confident are you in that number?

Well, we're not starting now with the process, Shannon, you know that, so a bunch of cases in which we've been negotiating and we have not agreed, and one term is not the right term, and this has been our life since I've been here. And then in the fourth quarter we tend to resolve those issues one way or another. So there is a list of candidates for that money, and we have contingencies to deal with those. And it is true that the market conditions haven't been ideal for us at sales, and we have refused, and we stay away from certain asset sales because we didn't think it was the appropriate value for our shareholders, and we did that. It's a combination of things. There's nothing special about this year that hasn't happened in the last 7 years. We always end up in the fourth quarter with a variety of options in a variety of companies that we've been working with, and with some we close, and with some we don't close, but I don't see any difference than any other year.

And Shannon, I think it's also important to remind you that when Antonio gave his prepared remarks, he talked about the fact that we expect to close on the sale of one strategic asset, actually today, and that we've already received cash from 2 nonintellectual -- nonrecurring intellectual property licensing already in the fourth quarter. In aggregate, that was about $120 million. So we've already had progress that we've made in the fourth quarter, and we have plans to complete those.

Correct. But just to clarify, you -- it's -- I think with those numbers it's still $150 million to $200 million total between asset and IP that you need to close in the next -- before the end of the quarter.

Not [ph] close, yes. What I was telling you is we know that this one is going to close anytime today. I don't know. Anytime today. So the number will go down. But we still have to work for the other $120 million, and we have a list of candidates and we have to work them hard, and we realize there's only 2 months. We're fully aware there's only 2 months, but at the same time, it's been our life every single year.

Right. Okay. Antonio, could you just talk -- one more sort of business question in terms of demand, because clearly, there's been a lot of concern about demand from the consumer, and Europe has been just -- the channel has been saying, not about Kodak per se, but about other companies, has had some questions. So I'm curious as to what you're seeing in terms of European demand as you go sort of in the holiday season, or what you're hearing from your channel partners.

We're really only present in the U.K., in Germany, and we just started Spain. We are -- our value proposition is so differentiated that we expect a very good fourth quarter.

And our next question is from the line of Ananda Baruah with Brean Murray. Ananda Baruah - Brean Murray, Carret & Co., LLC, Research Division: A couple, if I could. Antonio, is there -- at this point, with the sale of the IP asset portfolio exercise, sort of -- and the ongoing, I guess, sort of waiting game with the Apple-RIM litigation, are they having an impact on each other? I guess not so much Apple-RIM on the sale of the IP asset portfolio, but is the IP asset portfolio exercise having an impact on Apple-RIM? Just wanted to get your thoughts there. And if it is, do you think it's positive impact? Could it have a -- I mean, is it a negative impact? Or does it have a positive impact? Or is it just sort of just a waiting game at this point?

Yes, it's a hard question to answer. We have 3 different activities that are working in parallel. I couldn't tell you they are completely isolated, but they're very much isolated. We do have licensing efforts that in many cases have absolutely nothing to do with what's going on in the ITC. An example will be IMAX and others, and we will continue with those. Then we have the ITC case. We -- let me give you my recollection of the case. We don't comment on things that are in trial, but this is my recollection of the case, which gives me confidence for the future. We have a valuable portfolio that has been tested more than 30x by 30 of the best companies in the world that produce products and services very similar to the ones that are in test in this case. And in any -- in each one of those cases, those 30 or 32 companies have settled with us, either before the litigation, during the litigation or after the litigation. But they all have done that. Then the patenting case has been tested several times. The U.S. Patent Office has tested that patent several time. It's been challenged logically by some of the people that we were in litigation with, and every single time the U.S. Patent Office has come out and say, "This is a valid patent," okay? And this has happened for 7 years, 8 years. I mean, the last time that this patent was challenged was in December, the -- actually it was December 2010. The U.S. Patent Office confirmed that this is a valid patent, okay? Now in 2011, we have a negative opinion by one judge. Following that, the commission decided to -- remanded the case under certain conditions, conditions that we…

I can't really answer that question. I don't know. I'm sure some people would have liked -- well, some people probably are happy that the decision of the ITC didn't come yet because they might be able to get a portfolio a little cheaper. Some others, they may want it to -- I don't know. I mean, you can speculate for 3 hours about what. All I know is that key, fundamental, very important companies all over the world have a true, strong interest in this portfolio for very obvious reasons. Imaging is a fundamental part of any wireless device. I remember the time when we were negotiating with one of our partners, and we kept arguing and arguing. And all we said is, "Listen, we don't have to argue about this. Just take the camera away and we go away. You're free to go." Well, no one is going to take the camera away from a wireless device, whatever wireless device you're talking about. So even though our patents are not wireless patents, are a very intrinsical, fundamental part of the wireless ecosystem. They're very valuable, and we expect to get a fair value for our shareholders from that.

And ladies and gentlemen we have time for one more question. And our final question is from the line of Mark Kaufman with Rafferty Capital Markets.

If we could shift the conversation to the digital presses at this time. I was wondering if you could comment on numbers that are out in the field, specifically, let's say, on the printheads that you've started selling, I guess, really last year. What's the installed base of the 1000 XL, the black-and-white printers that you have? And probably more importantly, if you can discuss as you have in the past, backlogs on the PROSPER presses that you have out there? And also, if you could comment about the digital camera business, the digital video cameras as well. You've got the sales down or the inventories down as well, because what I have found in the last few years, one of the biggest issues -- or one of the big issues of your cash flow in the first quarter of the following year is liquidation of inventory, that has weighed heavily on the operating results. So if you could comment on that, I'd appreciate it.

Okay, that was a short question.

Well, I only got one so...

We don't disclose the number of heads, but there are many, many, many hundreds. There are many hundreds. And we don't want to disclose because the key for that business for us is that there are a lot of customers. They have offset presses. They are good customers for us, for our digital plates, but they're not ready to move to full digital and they won't be for years. But they find this hybrid system fantastic. And it's fantastic for us because we sell the heads and we sell the ink and the service that is associated with it. So we are, say, 1,000 heads that are out there working perfectly, and there are many, many more to come. And what was the other question, Mark? I lost you with the...

If you could comment on the installs on the 1000 and also backlog for the 1000 and the 5000?

[Indiscernible] Biggest secret in the world because -- I will if you tell me the installs of HP and Océ and all the others, then I will tell you mine. But it's just -- it's -- we have a very strong funnel. I specifically mentioned 3 very important leading printers in Asia Pacific because a lot of the growth is going to come from over there. Many of the institutions in Europe and in the U.S., they're going to have a tendency to do hybrid first, try to utilize the assets that they have, because their volumes are soft. I mean, not all. We are selling black-and-white presses and color presses in the U.S. and in Europe, but we can see the demand clearly outside the U.S. a lot stronger. And the names that I put there are very, very important names in the industry. I realize I didn't name one of them in Japan because we're not allowed yet, but as soon as I can, I will tell you. But they're all leading institutions that will be great showcases for the rest of those geographies. PROSPER, I don't -- I am disappointed with the results of our legacy inkjet, Commercial Inkjet, because the new products I wish we would have been a little earlier. But I'm very pleased with PROSPER. 40% growth in a market like this is just extraordinary, and you can only get that with something that is truly different and differentiated, even with the problems we have in installations, which by the way, we're done with. You will see that we will have -- I mean, a lot of growth in the fourth quarter comes from installations that are already there. We don't have to sell anything. We just have to get paid for them because…

And that does conclude the question-and-answer session. I would now like to turn the call back over to Mr. Perez for closing remarks.

Well, first of all, thank you, all. This was a especially important meeting for us. Given all the speculation, I will encourage everybody to pay a lot of attentions of the details of our reports. And the unnamed sources that -- they may mean something, they may mean nothing, right, at least in my view. Our fourth quarter is our largest cash generation. I'm confident that we are going to execute on plan, and I want to emphasize again that our 2012 cash performance from our digital business will be significantly better than this year. 2011 was the peak of our cash usage. It was there in the plan, because as you all know, I kept saying that by the end of 2012, we're going to get to this self-standing digital company. So we're ready for the fourth quarter and we're ready for 2012. Thank you very much.

Ladies and gentlemen, this concludes Eastman Kodak's Third Quarter 2011 Sales and Earnings Conference Call. If you'd like to listen to a replay of today's conference, please dial 1 (800) 406-7325 or (303) 590-3030, with the access code of 4474312. ACT would like to thank you for your participation. You may now disconnect.