Risk & Compliance

Kodak Facing SEC Probe

''This type of inquiry is not unexpected following a restatement,'' says a company spokesman.
Stephen TaubAugust 9, 2005

Eastman Kodak Co. has disclosed that the Securities and Exchange
Commission is looking into its recently announced earnings restatement.

According to Kodak, which filed its second-quarter results Tuesday, the regulator informed the company in March that it had launched an informal inquiry “into the substance of the restatement” for the full year and quarters of 2003 and the first three unaudited quarters of 2004.

The company added that it has cooperated fully with the inquiry, and that the SEC staff has indicated that the inquiry should not be construed as an indication that any violations of law have occurred. “This type of inquiry is not unexpected following a restatement,” said company spokesman David Lanzillo, according to the Associated Press.

In March, Kodak said that the restatements reflect “inadvertent” accounting errors concerning income taxes, accruals for pensions and other post-retirement benefits, and other miscellaneous items that were “immaterial in the aggregate.”

In April, the company disclosed that an accounting review had
shown weakness in its internal controls. That month also saw Kodak reduce its previously reported 2004 profits by $93 million and its 2003 profits by $12 million, noted BusinessWeek.