Eastman Kodak Company (EK)

Restatement of Previously Issued Financial Statements:

The Company has restated the accompanying quarterly consolidated financial statements as of and for the three and six months ended June 30, 2005 through the filing of this Form 10-Q/A.  The restatement reflects adjustments to correct non-cash errors in the Company’s accounting for restructuring accruals associated with severance and special pension-related termination benefits that were discovered in connection with the third quarter 2005 closing process.  The restatement has resulted in the Company’s reducing its previously reported net losses for the three and six month periods ended June 30, 2005 of $154 million ($.54 per share) and $296 million ($1.03 per share), respectively, to net losses of $141 million ($.49 per share) and $281 million ($.98 per share), respectively.  The nature and impact of these adjustments are described in Note 1: “Basis of Presentation and Restatement” in this Form 10-Q/A.     

Restatement of Previously Issued Financial Statements

The Company restated the accompanying quarterly consolidated financial statements for the first quarter of 2005 through the filing of this Form 10-Q/A.  The restatement reflects adjustments to correct non-cash errors in the Company’s accounting for restructuring accruals associated with special pension-related termination benefits that were discovered in connection with the third quarter 2005 closing process.  The restatement has resulted in the Company’s reducing its previously reported net loss for the three months ended March 31, 2005 of $142 million ($.50 per share) to a net loss of $140 million ($.49 per share).  The nature and impact of these adjustments are described in Note 1: “Basis of Presentation and Restatement” in this Form 10-Q/A.

RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

In April 2005, the Company restated its consolidated financial statements as of and for the year ended December 31, 2003.  In addition, the Company restated its quarterly consolidated financial statements for each of the quarterly periods in 2003 and for the first three quarters of 2004.  The restatement reflected adjustments to correct errors in the Company’s accounting for income taxes, accounting for pensions and other postretirement benefits as well as other miscellaneous adjustments.  The restatement resulted in the Company adjusting its previously reported net earnings for the three and nine months ended September 30, 2004 of $479 million ($1.67 per share) and $661 million ($2.31 per share), respectively, to net earnings of $458 million ($1.60 per share) and $615 million ($2.15 per share), respectively, and adjusting its previously reported net earnings for the three and nine months ended September 30, 2003 of $122 million ($.42 per share) and $246 million ($.86 per share), respectively, to net earnings of $146 million ($.51 per share) and $269 million ($.94 per share), respectively.  The nature and impact of these adjustments are described below. 

RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

In April 2005, the Company restated its consolidated financial statements as of and for the year ended December 31, 2003.  In addition, the Company restated its quarterly consolidated financial statements for each of the quarterly periods in 2003 and for the first three quarters of 2004.  The restatement reflected adjustments to correct errors in the Company’s accounting for income taxes, accounting for pensions and other postretirement benefits as well as other miscellaneous adjustments.  The restatement resulted in the Company adjusting its previously reported net earnings for the three and six months ended June 30, 2004 of $154 million ($.54 per share) and $182 million ($.64 per share), respectively, to net earnings of $136 million ($.48 per share) and $157 million ($.55 per share), respectively, and adjusting its previously reported net earnings for the three and six months ended June 30, 2003 of $112 million ($.39 per share) and $124 million ($.43 per share), respectively, to net earnings of $118 million ($.41 per share) and $123 million ($.43 per share), respectively.  The nature and impact of these adjustments are described below. 

Restatement of Previously Issued Financial Statements

In April 2005, the Company restated its consolidated financial statements as of and for the year ended December 31, 2003.  In addition, the Company restated its quarterly consolidated financial statements for each of the quarterly periods in 2003 and for the first three quarters of 2004.  The restatement reflected adjustments to correct errors in the Company’s accounting for income taxes, accounting for pensions and other postretirement benefits as well as other miscellaneous adjustments.  The restatement resulted in the Company adjusting its previously reported net earnings for the three months ended March 31, 2004 of $28 million ($.10 per share) to net earnings of $21 million ($.07 per share) and adjusting its previously reported net earnings for the three months ended March 31, 2003 of $12 million ($.04 per share) to net earnings of $5 million ($.02 per share.  The nature and impact of these adjustments are described in Note 1: “Basis of Presentation and Restatement.”   

Restatement of Previously Issued Financial Statements

On April 6, 2005, the Company restated its consolidated financial statements as of and for the year ended December 31, 2003.  In addition, the Company restated its quarterly consolidated financial statements for each of the quarterly periods in 2003 and for the first three quarters of 2004.  The restatement reflected adjustments to correct errors in the Company’s accounting for income taxes, accounting for pensions and other postretirement benefits as well as other miscellaneous adjustments.  The restatement resulted in the Company adjusting its previously reported net earnings for the three months ended March 31, 2004 of $28 million ($.10 per share) to net earnings of $21 million ($.07 per share).  The nature and impact of these adjustments are described in Note 1: “Basis of Presentation and Restatement.”   

RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

The Company restated its consolidated financial statements as of and for the year ended December 31, 2003.  In addition, the Company restated its quarterly consolidated financial statements for each of the quarterly periods in 2003 and for the first three quarters of 2004.  The restatement reflects adjustments to correct errors in the Company’s accounting for income taxes, accounting for pensions and other postretirement benefits as well as other miscellaneous adjustments.  The restatement resulted in the Company adjusting its previously reported 2003 net income of $265 million ($.92 per share) to net income of $253 million ($.88 per share).  The nature and impact of these adjustments are described below. Also see Note 24: “Quarterly Sales and Earnings Data - Unaudited” for the impact of these adjustments on each of the quarterly periods.