SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 3, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 1-4085
POLAROID CORPORATION
____________________________________________________________________________
(Exact name of registrant as specified in its charter)
DELAWARE 04-1734655
(State or other jurisdiction (I.R.S. Employer
incorporation or organization) Identification No.)
549 TECHNOLOGY SQUARE, CAMBRIDGE, MASSACHUSETTS 02139
____________________________________________________________________________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (6l7) 386-2000
____________________________________________________________________________
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months, and (2) has been subject to such
filing requirements for the past 90 days.
YES X NO _
Shares Common Stock, $1 par value, outstanding as of May 6, 1994:46,665,950
shares
____________________________________________________________________________
This document contains 18 pages.
____________________________________________________________________________
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
POLAROID CORPORATION AND SUBSIDIARY COMPANIES
Condensed Consolidated Statement of Earnings (Unaudited)
Periods ended April 3, 1994 and April 4, 1993
(In millions, except per share data)
First Quarter
1994 1993***
Net sales:
United States $211.4 $213.3
International 251.2 255.2
------ ------
Total net sales 462.6 468.5
------ ------
Cost of sales 278.5 284.4
Marketing, research, engineering
and administrative expenses 177.2 171.3
Early retirement and other - 44.0
------ ------
Total costs 455.7 499.7
------ ------
Profit/(loss) from operations 6.9 (31.2)
Other income 3.8 2.8
Interest expense 10.6 12.8
------ ------
Earnings/(loss) before income taxes and cumulative effect
of changes in accounting principle 0.1 (41.2)
Federal, state and foreign income tax benefit (1.3) (17.2)
------ ------
Earnings/(loss) before cumulative effect of changes in
accounting principle 1.4 (24.0)
------ ------
Cumulative effect to January 1,1993
of changes in accounting principle for:
Postretirement benefits other than pensions,
net of tax of $85.0 million - (132.9)
Income taxes - 33.6
Postemployment benefits,
net of tax of $12.7 million - (19.9)
------ --------
Net earnings/(loss) $1.4 ($143.2)
====== =========
Primary earnings/(loss) per common share:
Earnings/(loss) before cumulative effect of changes
in accounting principle $0.03 ($0.51)
Cumulative effect to January 1,1993
of changes in accounting principle for:
Postretirement benefits other than pensions - (2.85)
Income taxes - 0.72
Postemployment benefits - (0.43)
------ ------
Net earnings/(loss) $0.03 ($3.07)
Fully diluted earnings per common share * *
------ ------
Cash dividends per common share $0.15 $0.15
Weighted average common shares used for primary
earnings per share calculation (in thousands) 47,242** 46,669**
Common shares outstanding at end of period(in thousands)46,820 46,670
====== ======
* Fully diluted earnings per share are not stated because they are
greater than primary earnings per common share.
* The weighted average shares used to calculate primary earnings per
common share include assumed conversion of options outstanding.
*** Restated for fourth quarter adoption of FAS 112 retroactive to
01/01/93.
2
<PAGE>
POLAROID CORPORATION AND SUBSIDIARY COMPANIES
Condensed Consolidated Balance Sheet (Unaudited)
(In millions)
April 3, December 31, April 4,
Assets 1994 1993 1993*
------- ----------- --------
Current assets
Cash and cash equivalents $96.1 $114.4 $116.8
Short-term investments 31.5 24.5 38.5
Receivables 488.6 557.6 434.5
Inventories:
Raw materials 127.5 122.9 135.4
Work-in-process 259.8 252.5 260.2
Finished goods 236.2 202.8 250.1
-------- -------- --------
Total inventories 623.5 578.2 645.7
Prepaid expenses and other assets 149.6 139.0 165.3
-------- -------- --------
Total current assets 1,389.3 1,413.7 1,400.8
-------- -------- --------
Property, plant and equipment
Gross property, plant and equipment 1,933.4 1,907.8 1,803.5
Less accumulated depreciation 1,213.3 1,189.6 1,137.8
-------- -------- --------
Net property, plant and equipment 720.1 718.2 665.7
-------- -------- --------
Deferred tax assets 80.4 80.4 69.8
-------- -------- --------
Total assets $2,189.8 $2,212.3 $2,136.3
======== ======== ========
Liabilities and stockholders' equity
Current liabilities
Short-term debt $102.8 $106.2 $137.6
Current portion of long-term debt 32.6 32.6 29.5
Payables and accruals 235.5 243.5 219.9
Compensation and benefits 118.9 118.3 153.6
Federal, state and foreign income taxes 64.7 79.5 52.2
-------- -------- --------
Total current liabilities 554.5 580.1 592.8
-------- -------- --------
Long-term debt 602.4 602.3 637.5
-------- -------- --------
Accrued postretirement benefits 235.2 229.1 213.5
Accrued postemployment benefits 35.2 33.5 33.5
-------- -------- --------
Common stockholders' equity
Common stock, $1 par value 75.4 75.4 75.4
Additional paid-in capital 385.8 385.6 379.5
Retained earnings 1,596.6 1,602.0 1,530.4
Less: Treasury stock, at cost 1,145.3 1,145.5 1,147.1
Deferred compensation 150.0 150.2 179.2
-------- -------- --------
Total common stockholders' equity 762.5 767.3 659.0
-------- -------- --------
Total liabilities and stockholders'
equity $2,189.8 $2,212.3 $2,136.3
====== ======== ========
* Restated for fourth quarter adoption of FAS 112 retroactive to 01/01/93.
3
<PAGE>
POLAROID CORPORATION AND SUBSIDIARY COMPANIES
Condensed Consolidated Statement of Cash Flows (Unaudited)
Three months ended April 3, 1994 and April 4, 1993
(In millions)
Net cash flows from operating activities 1994 1993*
---- -----
Net earnings/(loss) $1.4 ($143.2)
Cumulative effect of changes in accounting principle - 119.2
Depreciation of property, plant and equipment 30.4 25.0
(Increase)/decrease in receivables 81.6 58.0
(Increase)/decrease in inventories (45.3)
(Increase)/decrease in prepaids and other assets (9.8) (26.2)
Increase/(decrease) in payables and accruals (16.0) (17.8)
Increase/(decrease) in compensation and benefits (2.3) 39.6
Increase/(decrease) in federal, state and
foreign income taxes payable (15.1) (6.1)
Other non cash items 12.0 5.8
------ ---------
Net cash provided/(used) by operating activities 36.9 (5.1)
------ ---------
Cash flows from investing activities
(Increase)/decrease in short-term investments (6.7) 41.9
Additions to property, plant and equipment (32.3) (33.5)
------ ---------
Net cash provided/(used) by investing activities (39.0) 8.4
------ ---------
Cash flows from financing activities
Net increase/(decrease) in short-term debt
(maturities 90 days or less) (15.0) 12.4
Short-term debt having maturities more than 90 days
Proceeds 5.8 -
Cash dividends paid (7.0) (7.0)
Stock options exercised 0.4 -
------ ---------
Net cash provided/(used) by financing activities (15.8) 5.4
------ ---------
Effect of exchange rate changes on cash (0.4) (1.0)
------ ---------
Net increase/(decrease) in cash and
cash equivalents (18.3) 7.7
Cash and equivalents at beginning of period 114.4 109.1
------ ---------
Cash and cash equivalents at end of period $96.1 $116.8
====== =========
* Restated for fourth quarter adoption of FAS 112 retroactive to 01/01/93.
4
<PAGE>
POLAROID CORPORATION AND SUBSIDIARY COMPANIES
Condensed Consolidated Statement of Changes in Common Stockholders' Equity
(Unaudited)
Periods Ended April 3, 1994 and April 4, 1993
(In millions)
First Quarter
1994 1993 *
Common stock
Balance at the beginning of the period $75.4 $75.4
------- --------
Balance at the end of the period 75.4 75.4
------- --------
Additional paid-in capital
Balance at the beginning of the period 385.6 379.5
Stock options exercised 0.2 -
------- --------
Balance at the end of the period 385.8 379.5
------- --------
Retained earnings
Balance at the beginning of the period 1,602.0 1,680.3
Net earnings/(loss) 1.4 (143.2)
Dividends declared-common stock (7.0) (7.0)
ESOP dividend tax benefit received 0.2 0.3
------- --------
Balance at the end of the period 1,596.6 1,530.4
------- --------
Less:
Treasury stock
Balance at the beginning of the period 1,145.5 1,147.1
Stock options exercised (0.2) -
------- --------
Balance at the end of the period 1,145.3 1,147.1
------- --------
Deferred compensation
Balance at the beginning of the period 150.2 179.2
Stock options - 1993 (0.2) -
------- --------
Balance at the end of the period 150.0 179.2
------- --------
Total common stockholders' equity $762.5 $659.0
======= ========
* Restated for fourth quarter adoption of FAS 112 retroactive to 01/01/93.
5
<PAGE>
Polaroid Corporation and Subsidiary Companies
Notes to Condensed Consolidated Financial Statements (Unaudited)
The condensed consolidated financial statements include the accounts of the
domestic and foreign subsidiaries, all of which are wholly owned.
Intercompany accounts and transactions are eliminated. This is an interim
unaudited report, subject to year-end audit and adjustments. The
information furnished, however, reflects all adjustments (consisting of
normal recurring accruals) which, in the opinion of Management, are
necessary for a fair statement of the results of the interim periods.
Independent Auditors' Report
- - ----------------------------
The April 3, 1994 and April 4, 1993 condensed consolidated financial
statements included in this filing on Form 10-Q have been reviewed by KPMG
Peat Marwick, independent certified public accountants, in accordance with
established professional standards and procedures for such review. The
report by KPMG Peat Marwick commenting upon their review of the condensed
consolidated financial statements appears on page 7.
New Accounting Standard
- - -----------------------
The Company became subject to the provisions of Financial Accounting
Standards Board Statement No. 115 "Accounting for Certain Investments in
Debt and Equity Securities" as of January 1, 1994, although its
effectiveness had no impact on the Company's financial position or results
of operations.
6
<PAGE>
Independent Auditors' Report
----------------------------
The Board of Directors
Polaroid Corporation
We have reviewed the condensed consolidated balance sheets of Polaroid
Corporation and subsidiaries as of April 3, 1994 and April 4, 1993, and the
related condensed consolidated statements of earnings, cash flows and
changes in common stockholders' equity for the three month periods ended
April 3, 1994 and April 4, 1993. These financial statements are the
responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical review
procedures to financial data and making inquiries of persons responsible for
financial and accounting matters. It is substantially less in scope than an
audit conducted in accordance with generally accepted auditing standards,
the objective of which is the expression of an opinion regarding the
financial statements taken as a whole. Accordingly, we do not express such
an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the condensed consolidated financial statements referred
to above for them to be in conformity with generally accepted accounting
principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Polaroid Corporation and
subsidiaries as of December 31, 1993, and the related consolidated
statements of earnings, cash flows and changes in common stockholders'
equity for the year then ended (not presented herein); and in our report
dated February 1, 1994, we have expressed an unqualified opinion on those
consolidated financial statements. In our opinion, the information set
forth in the accompanying condensed consolidated balance sheet as of
December 31, 1993, is fairly presented, in all material respects in relation
to the consolidated balance sheet from which it has been derived.
KPMG Peat Marwick
Boston, Massachusetts
April 18, 1994
7
<PAGE>
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations
First Quarter Results
- - ---------------------
Worldwide sales in the first quarter of 1994 were $462.6 million, a 1%
decrease from last year's first quarter sales of $468.5 million. Worldwide
shipments of instant cameras increased substantially in the first quarter of
1994 compared with the same period last year. Worldwide shipments of
instant film increased slightly in the first quarter of 1994 compared to the
first quarter of 1993, as increases in integral film shipments were offset
by a decline in shipments of peel-apart film. Sales of the Helios medical
laser imaging system continued to make progress with growing customer
awareness and interest in the product. U.S. sales revenue decreased 1% in
the first quarter of 1994 to $211.4 million from $213.3 million in the first
quarter of 1993. The decrease in U.S. sales was primarily due to reduced
revenues from videotape and conventional 35mm cameras and film.
International sales declined 2% to $251.2 million in the first quarter of
1994 from $255.2 million for the same period in 1993. The decline in
international sales was primarily attributable to the decrease in hardware
and peel-apart film sales from the Mexican voter registration program in the
first quarter of 1993, which offset increases in instant cameras and
integral film generated by the Company's continuing sales gains in Russia,
in the first quarter of 1994. The decline in international sales was also
affected by continued weakness in the Western European markets, partly
offset by sales gains in the Asia Pacific markets.
Gross margin as a percent of sales was 40% for the 1994 first quarter and
39% for the 1993 first quarter. Marketing, research, engineering and
administrative expenses for the first quarter of 1994 were $177.2 million
compared to $171.3 million in the same period of 1993. In the first quarter
of 1993, the Company recorded charges of $40.0 million for an early
retirement and severance program and $4.0 million for the write down of
certain non-strategic assets. Profit from operations was $6.9 million as
compared to a loss of $31.2 million in the first quarter of 1993, including
the charges mentioned above. Without these charges, the operating profit
for the first quarter of 1993 would have been $12.8 million. The first
quarter of 1994 profit from operations was negatively impacted by the start-
up of the Company's major new coating facility, and the marketing
introduction expenses and manufacturing scale-up associated with the Helios
laser medical imaging system.
Other income was $3.8 million in the first quarter of 1994 compared to $2.8
million in the first quarter of 1993. Interest expense decreased to $10.6
million in the first quarter of 1994 from $12.8 million in the first quarter
of 1993. The decrease in interest expense was primarily due to lower
interest rates and a reduction in outstanding debt in the first quarter of
1994 as compared to the first quarter of 1993.
The income tax benefit for the first quarter of 1994 was $1.3 million
compared with a benefit of $17.2 million in the first quarter of 1993. The
tax benefit for the first quarter of 1994 was primarily due to the
beneficial tax effect of foreign currency exchange in 1994. The effective
tax rate for the first quarter of 1993 was 42%. There was an after-tax
foreign currency exchange gain on the translation of the balance sheet of
$.4 million in the first quarter of 1994 and 1993.
Net earnings for the first quarter of 1994 were $1.4 million, or $.03 per
common share. The net loss for the first quarter of 1993 was $143.2 million
or $3.07 per common share. The 1993 first quarter results included one time
charges associated with the adoption of Financial Accounting Standard Board
(FASB) Statement No. 106 "Employers' Accounting for Postretirement Benefits
Other Than Pensions" and FASB Statement No. 109 "Accounting for Income
Taxes". In addition, the 1993 first quarter net loss and per common share
amount have been restated to include the adoption of FASB Statement No. 112
"Employers' Accounting for Postemployment Benefits" (FASB 112) in the fourth
quarter of 1993, retroactive to January 1, 1993. Excluding the one-time
accounting changes and the charge for the early
8
<PAGE>
retirement and other expenses, the net earnings for the first quarter of
1993 would have been $2.4 million or $.05 per share, after the restatement
associated with the adoption of FASB 112. Fully diluted earnings per common
share were not disclosed in the first quarters of 1994 and 1993 because they
were greater than primary earnings per common share.
Foreign Currency Exchange and Inflation
- - ---------------------------------------
The Company generates a significant portion of its revenues in international
markets, which subjects its operations to the exposure of foreign currency
fluctuations. The impact of currency fluctuations can be positive or
negative in any given period. The Company carefully considers the impact of
currency fluctuations in its business decisions. The Company maintains an
International Monetary Control Center to manage its foreign currency
exposure. Hedging strategies, which may from time to time include foreign
currency borrowings, foreign exchange swaps and options are used to minimize
the impacts of currency fluctuations on the Company's financial position.
Inflation continues to be a factor in many countries in which the Company
does business. The Company's pricing strategy has been sufficient to offset
inflation and normal cost increases. Therefore, the overall inflationary
impact on earnings is immaterial.
Financial Liquidity and Capital Resources
- - -----------------------------------------
At April 3, 1994, the Company's cash and cash equivalents and short-term
investments amounted to $127.6 million compared to $138.9 million at
December 31, 1993. During the first three months of 1994, the Company
expended cash to increase its inventories and to continue capital spending
related to new products. The primary sources of cash for the first three
months of 1994 were positive cash flows from operations and receipts from
accounts receivable. The remaining increases and decreases in the
components of the Company's cash position during this three month period
reflect normal operating activity. Cash and cash equivalents and short-term
investments were $155.3 million at April 4, 1993. The decrease in the
Company's cash position from April 4, 1993 to April 3, 1994 was primarily
attributable to a reduction of debt, continued capital spending for new
products and cash payments made under a 1993 severance program. These
activities were supported primarily through positive cash flows from
operations. The remaining increases and decreases in the components of the
Company's cash position during the twelve month period from April 4, 1993 to
April 3, 1994 reflect normal operating activity.
Additions to property, plant and equipment were $32.3 million in the first
quarter of 1994 compared to $33.5 million in the same period of 1993.
Capital expenditures in 1994 are expected to be approximately the same as
1993 which was $161 million.
The Company maintains a $150 million three-year revolving credit facility
for general corporate purposes which expires in 1995. At April 3, 1994, the
entire $150 million of additional borrowing capacity remained available to
meet working capital needs. Available unused, uncommitted lines of credit
for international and U.S. operations at April 3, 1994 were approximately
$160 million and $125 million, respectively.
The Company also has $100 million remaining from its existing shelf
registration, filed in January 1992, available for general corporate
purposes. The Company's total borrowing capacity is limited by certain debt
covenants.
As of May 6, 1994, approximately 3.6 million shares had been repurchased
under the Company's $150 million stock repurchase program for approximately
$99 million. The timing and amounts of any future purchases under this
program depend upon many factors, including market conditions, as well as
the Company's business and financial condition.
The Company believes that its borrowing capacity and other existing
corporate resources are adequate to meet working capital needs, to fund
planned capital expenditures, to pursue future growth opportunities, and to
fund other corporate requirements.
9
<PAGE>
PART II. OTHER INFORMATION
Item 1. - Legal Proceedings
- - ---------------------------
In October 1992, a Polaroid employee and former member of the Company's
Employees' Committee filed a complaint in the United States District Court
for the District of Massachusetts challenging the Company's decision in June
1992 to dissolve the Committee. The complaint alleged a variety of
violations of law and asserted a variety of claims against the Company, the
Employees' Committee, William R. Graney, Vincent R. Tognarelli (formerly
Chair and Vice Chair of the Employees' Committee), I.M. Booth, and the
Secretary of Labor of the United States. The plaintiff seeks compensatory
and punitive damages of an unspecified amount. On October 17, 1992 the
Company and Mr. Booth moved to dismiss the complaint, and Messrs. Graney and
Tognarelli have moved for summary judgment. The court granted the Company's
and Mr. Booth's motion to dismiss the complaint and Messrs. Graney and
Tognarelli's motion for summary judgment on June 7, 1993. On September 27,
1993, the plaintiff appealed this dismissal to the Court of Appeals for the
First Circuit, which affirmed the dismissal on April 15, 1994. The
plaintiff filed a petition for re-hearing on April 27, 1994.
In 1994, the Company received a letter alleging that a broad range of the
Company's manufacturing equipment and products infringe a number of patents
owned by Jerome H. Lemelson. The letter proposes that the Company enter
into licensing negotiations to pay substantial past and future royalties
under those patents. The Company is studying the allegations.
The Company, together with other parties, is currently designated a
Potentially Responsible Party (PRP) by the United States Environmental
Protection Agency (EPA) and certain state agencies with respect to the
response costs for environmental remediation at several sites identified
below. The Company believes that its potential liability with respect to
any site and with respect to all sites in the aggregate will not have a
materially adverse effect on the financial condition or operating results of
the Company.
Due to a wide range of estimates with regard to response costs at those
sites and various other uncertainties, the Company cannot firmly establish
its ultimate liability concerning those sites. In each case where the
Company is able to determine the likely exposure, such amount has been
included in the Company's reserve. Where a range of comparably likely
exposures exists, the Company has included in its reserve the minimum amount
of the range. The Company's aggregate reserve for these liabilities was
$6.0 million as of April 3, 1994. The Company's analysis of data which
underlies its establishment of this reserve is undertaken on a quarterly
basis. The reserve for such liability does not provide for associated
litigation costs, which, if any, are expected to be inconsequential in
comparison with the amount of the reserve. The Company will continue to
accrue in its reserve appropriate amounts from time to time as circumstances
warrant. This reserve does not take into account potential recoveries from
third parties.
Federal law provides that PRPs may be held jointly and severally liable for
response costs. Based on current estimates of those costs and after
consideration of the potential estimated liabilities of other PRPs with
respect to those sites and their respective estimated levels of financial
responsibility, the Company does not believe its potential liability will be
materially enlarged by the fact that liability is joint and several.
10
<PAGE>
Legal Proceedings (continued)
- - -----------------------------
The Company has been advised of the intention of the EPA to seek recovery
under the Comprehensive Environmental Response, Compensation and Liability
Act (CERCLA) from it and other PRPs of response costs related to the sites
of: Bridgeport Rental and Oil Services in Logan Township, New Jersey:
Sealand Restoration in Lisbon, New York; Solvents Recovery Service of New
England in Southington, Connecticut; Ironhorse Park in Billerica,
Massachusetts; Old Southington Landfill in Southington, Connecticut; and
Jack's Creek/Sitkin Smelting in Mifflin County, Pennsylvania; to which were
allegedly delivered hazardous substances generated or transported by or
otherwise related to the Company and those other PRPs. The Company and
other PRPs have initiated litigation with the objective of minimizing their
exposure with respect to the Bridgeport Rental and Oil Services site.
In addition, the Company is involved in the following legal proceedings
relating to the designated sites:
In 1989, the United States of America and the Commonwealth of Massachusetts
commenced actions against the Company and other PRPs in the United States
District Court for Massachusetts. The plaintiffs ask for recovery under
CERCLA of response costs related to the Charles George Reclamation Trust
Landfill in Tyngsboro, Massachusetts. The Company has entered into a
consent decree to resolve the issues raised in these actions. The consent
decree was entered by the court on May 24, 1993. An appeal by non-
consenting parties is presently pending.
In 1990, an Administrative Order was issued by the EPA under Section 106 of
CERCLA ordering the Company and other PRPs to perform remediation activities
at the Landfill and Resource Recovery, Inc. site in North Smithfield, Rhode
Island. The Company and other PRPs are presently performing remediation
activities at the site.
Also in 1990, Transtech Industries, Inc., et al. commenced actions against
the Company and other entities in the United States District Court for New
Jersey. The plaintiffs ask for contribution toward response costs they have
paid, and will pay, for remediation activities at the Kin-Buc Landfill in
Edison, New Jersey. The Company has filed its answer to the complaints.
In 1993, the United States of America commenced an action against the
Company and other PRPs in the United States District Court for West
Virginia. The Plaintiff asks for recovery under CERCLA of response costs
related to the Artel Chemical Corporation site in Nitro, West Virginia. The
Company has filed its answer to the complaint.
Also in 1993, Duffy Brothers Construction Company, Inc., et al., commenced
an action against the Company and other entities in the United States
District Court for Massachusetts. The plaintiffs ask for contribution
toward response costs they have paid, and will pay, for remediation
activities at property owned by them and located at Waverly Oaks Park in
Waltham, Massachusetts. The Company has filed its answer to the complaint.
11
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Item 6. Exhibits and Reports on Form 8 - K
- - -------------------------------------------
(a) Exhibits:
(11) Computation of earnings per share.
(15) Letter from KPMG Peat Marwick re unaudited interim financial
information.
(b) Reports on Form 8-K:
There were no reports on Form 8-K during the quarter ended
April 3, 1994.
12
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
POLAROID CORPORATION
--------------------
(Registrant)
May 17, 1994 William J. O'Neill, Jr.
------------ ----------------------------------
(Date) Executive Vice President and Chief
Financial Officer
13
<PAGE>
EXHIBIT 11
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
POLAROID CORPORATION
COMPUTATION OF EARNINGS PER COMMON SHARE
(IN MILLIONS, EXCEPT FOR PER SHARE DATA)
FIRST QUARTER, 1994
PRIMARY COMPUTATION
Net earnings per statement of earnings $ 1.4
======
Weighted average number of common
stock equivalents .4
Weighted average number of common
shares outstanding 46.8
-----
47.2
=====
Primary earnings per common share $ .03
======
14
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POLAROID CORPORATION
COMPUTATION OF EARNINGS PER COMMON SHARE (Continued)
(IN MILLIONS, EXCEPT FOR PER SHARE DATA)
FIRST QUARTER, 1994
FULLY DILUTED COMPUTATION
Net earnings per statement of earnings $ 1.4
Add: effect of after-tax interest expense
on convertible debentures 1.7
------
Net earnings, as adjusted $ 3.1
======
Weighted average number of common
shares outstanding 46.8
Weighted average number of common
stock equivalents .4
Add: effect of converting 8% debentures
into common stock 4.3 (A)
------
51.5
======
Fully diluted earnings per common share $ .06 (B)
======
(A) Assumes conversion of convertible debentures at a price of $32.50 per
common share in accordance with the convertible debenture exchange
agreement.
(B) This computation is submitted as an exhibit to the Company's Form 10-Q
in accordance with Regulation S-K item 601(b)(11), although presenting the
computation is not in accord with paragraph 40 of APB Opinion 15 because the
computation produces an antidilutive result.
15
<PAGE>
POLAROID CORPORATION
COMPUTATION OF EARNINGS PER COMMON SHARE (Continued)
(IN MILLIONS, EXCEPT FOR PER SHARE DATA)
FIRST QUARTER, 1993
PRIMARY COMPUTATION
Net loss per statement of earnings $(143.2) (A)
========
Weighted average number of common
shares outstanding 46.7
========
Primary earnings per common share $ (3.07) (A)
========
(A) The net loss and the loss per share have been restated to reflect the
adoption of Financial Accounting Standards Board Statement No. 112
"Accounting for Postemployment Benefits" in the fourth quarter of 1993,
retroactive to January 1, 1993.
16
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POLAROID CORPORATION
COMPUTATION OF EARNINGS PER COMMON SHARE (Continued)
(IN MILLIONS, EXCEPT FOR PER SHARE DATA)
FIRST QUARTER, 1993
FULLY DILUTED COMPUTATION
Net loss per statement of earnings $ (143.2) (C)
Add: effect of after-tax interest expense
on convertible debentures 1.7
----------
Net loss, as adjusted $ (141.5)
==========
Weighted average number of common
shares outstanding used for primary computation 46.7
Weighted average number of common
stock equivalents .2
Add: effect of converting 8% debentures
into common stock 4.3 (A)
---------
Weighted average number of common shares
outstanding, as adjusted 51.2
=========
Fully diluted loss per common share $(2.76) (B)(C)
=========
(A) Assumes conversion of convertible debentures at a price of $32.50 per
common share in accordance with the convertible debenture exchange
agreement.
(B) This computation is submitted as an exhibit to the Company's Form 10-Q
in accordance with Regulation S-K Item 601(b)(11), although presenting
the computation is not in accord with paragraph 40 of APB Opinion
15 because the computation produces an antidilutive result.
(C) The net loss and the loss per share have been restated to reflect the
adoption of Financial Accounting Standards Board Statement No. 112
"Accounting for Postemployment Benefits" in the fourth quarter of 1993,
retroactive to January 1, 1993.
17
<PAGE>
Exhibit 15
The Board of Directors
Polaroid Corporation
Re: Registration Statements No. 33-36384, No. 33-44661 and No. 33-51173
Gentlemen:
With respect to the subject registration statements, we acknowledge our
awareness of the use therein of our report dated April 18, 1994, related
to our review of interim financial information.
Pursuant to Rule 436(c) under the Securities Act of 1933, such report is
not considered a part of a registration statement prepared or certified
by an accountant or a report prepared or certified by an accountant
within the meaning of Sections 7 and 11 of the Act.
Very truly yours,
KPMG Peat Marwick
Boston, Massachusetts
May 17, 1994
18
