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        October 1, 1995      
                                               ----------------------------

                                       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 of Common Stock, $1 par value, outstanding as of November 3, 1995:
  45,440,481 shares
_______________________________________________________________________________


                     This document contains 26 pages.
                     Exhibit index appears on page 15

_______________________________________________________________________________
<PAGE>


PART I.   FINANCIAL INFORMATION
              Item 1.   Financial Statements

           POLAROID CORPORATION AND SUBSIDIARY COMPANIES
          Condensed Consolidated Statement of Earnings           (Unaudited)
        Periods ended OCTOBER 1, 1995 and OCTOBER 2, 1994
                (In millions, except per share data)


                                       Third Quarter       Nine Months
                                       1995      1994      1995      1994
                                    --------  --------  --------  --------
Net sales:
     United States                   $268.2    $296.2    $690.1    $813.4
     International                    311.8     280.5     872.0     813.2
-----------------------------------------------------------------------------
Total net sales                       580.0     576.7   1,562.1   1,626.6
-----------------------------------------------------------------------------
     Cost of sales                    320.0     326.0     899.0     936.0

     Marketing, research, engineering
        and administrative expenses   209.7     198.0     603.3     574.2

     Restructuring charge               -         -        77.0       -
-----------------------------------------------------------------------------
Total costs                           529.7     524.0   1,579.3   1,510.2
-----------------------------------------------------------------------------
Profit/(loss) from operations          50.3      52.7     (17.2)    116.4

     Other income                       0.4       1.0       9.4       5.0

     Interest expense                  12.6      10.3      38.7      33.4
-----------------------------------------------------------------------------

Earnings/(loss) before income taxes    38.1      43.4     (46.5)     88.0

     Federal, state and foreign
      income tax expense/(benefit)     14.4      14.1     (17.3)     28.1
-----------------------------------------------------------------------------
Net earnings/(loss)                   $23.7     $29.3    ($29.2)    $59.9
=============================================================================

Primary earnings/(loss)
    per common share                  $0.51     $0.62    ($0.64)    $1.27

Fully diluted earnings
    per common share                  $0.50     $0.60         *     $1.26
-----------------------------------------------------------------------------

Cash dividends per common share       $0.15     $0.15     $0.45     $0.45

Weighted average common shares
  used for primary earnings per
  share calculation (in thousands)   46,326 ** 47,057 ** 45,387 ** 47,124 **

Common shares outstanding
  at end of period (in thousands)    45,399    46,395    45,399    46,395

=============================================================================


*   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,
    as appropriate.


                                       2
<PAGE>



                      POLAROID CORPORATION AND SUBSIDIARY COMPANIES
                       Condensed Consolidated Balance Sheet
                                 (In millions)


                                     (Unaudited)                 (Unaudited)
                                     October 1,    December 31,  October 2,
Assets                                  1995          1994            1994
-----------------------------------------------------------------------------
Current assets

  Cash and cash equivalents             $56.0        $143.3         $78.9
  Short-term investments                 10.7          85.6          50.6
  Receivables                           470.1         541.0         536.1
  Inventories:
     Raw materials                      149.2         112.4         111.2
     Work-in-process                    262.0         231.2         251.0
     Finished goods                     290.1         233.8         232.3
-----------------------------------------------------------------------------
  Total inventories                     701.3         577.4         594.5
  Prepaid expenses and other assets     181.9         141.4         152.5
-----------------------------------------------------------------------------
Total current assets                  1,420.0       1,488.7       1,412.6
-----------------------------------------------------------------------------
Property, plant and equipment
  Gross property, plant and equipment 2,136.4       2,043.4       1,993.4
  Less accumulated depreciation       1,366.9       1,296.1       1,269.1
-----------------------------------------------------------------------------
  Net property, plant and equipment     769.5         747.3         724.3
-----------------------------------------------------------------------------
Deferred tax assets                      82.8          80.7          80.5
-----------------------------------------------------------------------------
Total assets                         $2,272.3      $2,316.7      $2,217.4
=============================================================================


Liabilities and stockholders' equity
-----------------------------------------------------------------------------
Current liabilities

  Short-term debt                      $155.3        $117.1         $70.6
  Current portion of long-term debt      37.8          35.9          34.2
  Payables and accruals                 240.1         275.7         253.2
  Compensation and benefits             153.2         121.4         132.6
  Federal, state and foreign
        income taxes                     28.9          51.8          47.6
-----------------------------------------------------------------------------
Total current liabilities               615.3         601.9         538.2
-----------------------------------------------------------------------------
Long-term debt                          547.0         566.0         584.3
-----------------------------------------------------------------------------
Accrued postretirement benefits         254.9         247.2         246.6

Accrued postemployment benefits          42.5          37.2          38.6
-----------------------------------------------------------------------------

Common stockholders' equity

  Common stock, $1 par value             75.4          75.4          75.4
  Additional paid-in capital            398.7         387.2         387.2
  Retained earnings                   1,643.1       1,692.1       1,641.5
  Less:    Treasury stock, at cost    1,207.0       1,174.5       1,161.6
           Deferred compensation         97.6         115.8         132.8
-----------------------------------------------------------------------------
  Total common stockholders' equity     812.6         864.4         809.7
-----------------------------------------------------------------------------
Total liabilities and
    stockholders' equity             $2,272.3      $2,316.7      $2,217.4
=============================================================================


                                       3
<PAGE>



               POLAROID CORPORATION AND SUBSIDIARY COMPANIES
             Condensed Consolidated Statement of Cash Flows
         Nine Months Ended October 1, 1995 and October 2, 1994   (Unaudited)
                                  (In millions)

Cash flows from operating activities                      1995         1994
----------------------------------------------------------------------------
     Net earnings/(loss)                                ($29.2)       $59.9
     Depreciation of property, plant and equipment       100.1         89.1
     Decrease in receivables                              83.2         51.2
     Increase in inventories                            (123.9)       (16.3)
     Increase in prepaids and other assets               (40.2)       (10.9)
     Decrease in payables and accruals                   (46.0)       (10.2)
     Increase in compensation and benefits                 5.1          4.3
     Decrease in federal, state and 
               foreign income taxes payable              (20.5)       (33.9)
     Other non cash items                                 59.2         51.4
----------------------------------------------------------------------------
     Net cash provided/(used) by operating activities    (12.2)       184.6
----------------------------------------------------------------------------


Cash flows from investing activities
----------------------------------------------------------------------------
     (Increase)/decrease in short-term investments        74.8        (25.6)
     Additions to property, plant and equipment         (127.1)       (96.6)
     Proceeds from sale of fixed assets                    2.1          0.2
----------------------------------------------------------------------------
     Net cash used by investing activities               (50.2)      (122.0)
----------------------------------------------------------------------------


Cash flows from financing activities
----------------------------------------------------------------------------
     Net increase/(decrease) in short-term debt
                        (maturities 90 days or less)      36.4        (48.4)

     Short-term debt having maturities more than 90 days
          Proceeds                                          -           8.9
          Payments                                          -          (8.9)

     Repayments of long-term debt                        (17.5)       (15.5)
     Cash dividends paid                                 (20.2)       (21.0)
     Stock options exercised                              16.3          3.1
     Purchase of treasury stock                          (37.3)       (17.0)
----------------------------------------------------------------------------
     Net cash used by financing activities               (22.3)       (98.8)
----------------------------------------------------------------------------

Effect of exchange rate changes on cash                   (2.6)         0.7
----------------------------------------------------------------------------

Net decrease in cash and cash equivalents                (87.3)       (35.5)
----------------------------------------------------------------------------

Cash and equivalents at beginning of period              143.3        114.4
----------------------------------------------------------------------------

Cash and cash equivalents at end of period               $56.0        $78.9
============================================================================


                                    4
<PAGE>



         POLAROID CORPORATION AND SUBSIDIARY COMPANIES
 Condensed Consolidated Statement of Changes in Common Stockholders' Equity
       Periods Ended October 1, 1995 and October 2, 1994          (Unaudited)
                         (In millions)


                                             Third Quarter       Nine Months
                                            1995      1994      1995      1994
                                         --------  --------  --------  --------

Common stock

  Balance at the beginning of the period   $75.4     $75.4     $75.4     $75.4
                                           -----     -----     -----     -----
  Balance at the end of the period          75.4      75.4      75.4      75.4
-------------------------------------------------------------------------------

Additional paid-in capital

  Balance at the beginning of the period   391.8     386.2     387.2     385.6
    Stock options exercised - tax benefit    2.0       0.2       3.0       0.1
    Stock options exercised                  4.9       0.8       8.5       1.5
                                           -----     -----     -----     -----
  Balance at the end of the period         398.7     387.2     398.7     387.2
-------------------------------------------------------------------------------

Retained earnings

  Balance at the beginning of the period 1,625.9   1,619.0   1,692.1   1,602.0
    Net earnings/(loss)                     23.7      29.3     (29.2)     59.9
    Dividends declared-common stock         (6.6)     (7.0)    (20.2)    (21.0)
    ESOP dividend tax benefit received       0.1       0.2       0.4       0.6
                                         -------   -------   -------   -------
  Balance at the end of the period       1,643.1   1,641.5   1,643.1   1,641.5
-------------------------------------------------------------------------------

Less:

Treasury stock

  Balance at the beginning of the period 1,206.3   1,152.1   1,174.5   1,145.5
      Repurchase of common shares            4.9      10.3      40.2      17.6
      Stock options exercised               (4.2)     (0.8)     (7.7)     (1.5)
                                         -------   -------   -------   -------
  Balance at the end of the period       1,207.0   1,161.6   1,207.0   1,161.6
-------------------------------------------------------------------------------

Deferred compensation

  Balance at the beginning of the period    97.8     133.0     115.8     150.2
      Stock options - 1993                  (0.2)     (0.2)     (0.7)     (0.7)
      Loan repayment from ESOP Trust         0.0       0.0     (17.5)    (16.7)
                                            -----   -----      -----     -----
  Balance at the end of the period          97.6     132.8      97.6     132.8
-------------------------------------------------------------------------------
Total common stockholders' equity         $812.6    $809.7    $812.6    $809.7
===============================================================================


                                      5
<PAGE>




Polaroid Corporation and Subsidiary Companies
Notes to Condensed Consolidated Financial Statements    (Unaudited)


Basis of Presentation
---------------------

The condensed consolidated financial statements include the accounts of the
Company's domestic and foreign subsidiaries, all of which are either wholly
owned or majority 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 presentation of the results of the interim period.


Restructuring Charge
--------------------
In the first quarter of 1995, the Company implemented a restructuring plan
which resulted in a pre-tax charge of $77 million.  The Company offered an
early retirement program to certain qualified employees and a voluntary
severance program to all employees, both of which were open from February 13,
1995 to March 31, 1995.  As a result of these programs, approximately 930
employees terminated or will terminate their employment.  The pre-tax costs
related to the voluntary severance program were approximately $56 million.
Additionally, approximately $18 million represents enhanced retirement benefits
provided under the early retirement program that will be funded from the
Company's pension plans, and therefore has been reflected as a non-cash item on
the Company's statement of cash flows.

By the end of the third quarter of 1995, 862 of these terminations and $42
million of related cash severance payments were completed.  Approximately $5
million of additional cash severance payments are expected to be paid in the
fourth quarter of 1995 with approximately $9 million expected to be paid in the
first quarter of 1996.  The remainder of the restructuring charge consisted of
a pre-tax charge of approximately $3 million for exit costs related to the
shutdown of certain facilities.


Legal Proceedings
-----------------

Certain legal proceedings to which the Company is a party are discussed in Part
II, Item 1 of this filing on Form 10-Q.


Independent Auditors' Report
----------------------------

The October 1, 1995 and October 2, 1994 condensed consolidated financial
statements included in this filing on Form 10-Q have been reviewed by KPMG Peat
Marwick LLP, independent certified public accountants, in accordance with
established professional standards and procedures for such review.  The report
by KPMG Peat Marwick LLP commenting upon their review of the condensed
consolidated financial statements appears on page 7.


                                       6
<PAGE>

                         Independent Auditors' Report
                            ----------------------------

The Board of Directors
Polaroid Corporation

We have reviewed the condensed consolidated balance sheet of Polaroid
Corporation and subsidiaries as of October 1, 1995 and October 2, 1994, and the
related condensed consolidated statements of earnings, cash flows and changes
in common stockholders' equity for the three-month and nine-month periods ended
October 1, 1995 and October 2, 1994.  These condensed consolidated 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 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, 1994, 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 January 31, 1995, we
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, 1994, is fairly stated, in all
material respects, in relation to the consolidated balance sheet from which it
has been derived.



                                                          KPMG Peat Marwick LLP




Boston, Massachusetts
October 17, 1995


                                    7
<PAGE>

                 Item 2. Management's Discussion and Analysis
                    --------------------------------------------
               of Financial Condition and Results of Operations
                  ------------------------------------------------

Third quarter Results
---------------------

Worldwide sales of Polaroid Corporation and its subsidiaries increased 1% to
$580.0 million in the third quarter of 1995 compared to sales of $576.7 million
in the third quarter of 1994.  In the third quarter of 1995, worldwide
shipments of instant cameras decreased moderately and worldwide shipments of
instant film decreased slightly compared to the same period last year.  Sales in
the third quarter of 1995 were favorably impacted by a weaker U.S. dollar and
higher film prices.

In the third quarter of 1995, sales in the United States were $268.2 million, a
decrease of 9% compared with $296.2 million in the third quarter of 1994.  This
decline is attributable to substantially lower camera shipments and moderately
lower film shipments to U.S. dealers, representing some softness in U.S.
retail. The Company is planning to stimulate consumer demand with the bulk of
its promotional spending coinciding with the fourth quarter holiday picture-
taking season.

International sales increased 11% to $311.8 million in the third quarter of
1995 from $280.5 million in the same period a year ago.  This increase is
attributable to substantially higher sales in Russia, China and other emerging
markets.  Sales in Russia accounted for 23% of the international sales in the
third quarter of 1995 compared to 18% in the third quarter of 1994.  While the
Company believes that emerging markets present particularly attractive
opportunities, such markets tend to be considerably less stable than more
established markets.  There can be no assurance that emerging markets will
continue to produce favorable results.

Gross margins as a percent of sales were 44.8% and 43.5% for the third quarter
of 1995 and 1994, respectively.  The gross margin for the third quarter of 1995
was favorably impacted by higher film prices and a weaker U.S. dollar.
Marketing, research, engineering and administrative expenses for the third
quarter of 1995 were $209.7 million compared to $198.0 million in the same
period of 1994.  Profit from operations for the third quarter of 1995 decreased
to $50.3 million from $52.7 million in the third quarter of 1994 as a result of
lower sales in the U.S. which more than offset the progress made in the
Company's expansion into new geographic markets, including Russia and China.
The decline in operating profit also reflected the infrastructure costs
associated with the Company's decision to switch from third-party distribution
to direct distribution to dealers in Japan.  This change in distribution became
effective July 1, 1995.  The Company expects to benefit from this change
beginning in the fourth quarter of 1995.

Other income was $0.4 million in the third quarter of 1995 compared with $1.0
million in the third quarter of 1994.  Included in other income was a foreign
currency loss of $0.8 million from balance sheet translations in the third
quarter of 1995 compared to a foreign currency gain of $0.1 million in the same
period last year.  Interest expense increased to $12.6 million in the third
quarter of 1995 from $10.3 million in the third quarter of 1994 primarily as a
result of lower amounts of interest capitalized on qualifying assets and higher
short-term borrowings.

                                     8
<PAGE>
Third quarter Results (continued)
---------------------------------

Income tax expense was $14.4 million in the 1995 third quarter compared to
$14.1 million in the 1994 third quarter.  The effective tax rate for the third
quarter of 1995 was 38%, compared with 32% for the third quarter of 1994. The
net after-tax foreign currency loss from balance sheet translation amounted to
$1.6 million in the third quarter of 1995 compared to a foreign currency gain
of $1.5 million in the third quarter of 1994.

Net earnings for the third quarter of 1995 were $23.7 million compared to $29.3
million in the same period of 1994.  Primary earnings per common share were
$0.51 for the third quarter of 1995 compared to $0.62 in the same period a year
ago.  Fully diluted earnings per common share were $0.50 and $0.60 in the third
quarter of 1995 and 1994, respectively.

Nine Month Review
-----------------

Worldwide sales for the first nine months of 1995 decreased 4% to $1.56 billion
from $1.63 billion for the first nine months of 1994.  Sales in the first nine
months of the current year were negatively impacted by the Company's dealer
inventory adjustment program initiated in the first quarter of 1995.  In the
first nine months of 1995, worldwide shipments of instant cameras decreased
significantly and worldwide shipments of instant film decreased moderately
compared to the same period last year.  U.S. sales decreased 15% during the
first nine months of 1995 compared to the same period in 1994.  In the first
nine months of 1995, instant camera shipments in the U.S. decreased
substantially and instant film shipments were down significantly compared to
the first nine months of 1994.  International sales in the first nine months of
1995 increased 7% to $872.0 million from $813.2 million in the same period a
year ago.  Sales in Russia accounted for 17% of international sales in the
first nine months of 1995 compared to 12% in the first nine months of 1994.

Gross margin as a percent of sales was 42.4% for the first nine months of 1995
and 42.5% for the first nine months of 1994.  Marketing, research, engineering
and administrative expenses for the first nine months of 1995 increased to
$603.3 million compared to $574.2 million in the first nine months of 1994.
This increase primarily reflects increased marketing expenses in emerging
markets and for the digital imaging businesses, as well as infrastructure costs
associated with the Company's switch from third-party distribution to direct
distribution to dealers in Japan.

As previously reported, in the first quarter of 1995 the Company implemented a
restructuring plan which resulted in a pre-tax charge of $77.0 million.  The
Company offered an early retirement program to certain qualified employees and
a voluntary severance program to all employees, both of which were open from
February 13, 1995 to March 31, 1995.  As a result of these programs,
approximately 930 employees terminated or will terminate their employment.  The
pre-tax costs related to the voluntary severance program were approximately
$56.0 million.  Additionally, approximately $18.0 million represents enhanced
retirement benefits provided under the early retirement program that will be
funded from the Company's pension plans, and therefore has been reflected as a
non-cash item on the Company's statement of cash flows.


                                        9
<PAGE>

Nine Month Review (continued)
-----------------------------

By the end of the third quarter of 1995, 862 of these terminations and $42.0
million of related cash severance payments were completed.  Approximately $5.0
million of additional cash severance payments are expected to be paid in the
fourth quarter of 1995 with approximately $9.0 million expected to be paid in
the first quarter of 1996.  The remainder of the restructuring charge consisted
of a pre-tax charge of approximately $3.0 million for exit costs related to the
shutdown of certain facilities

The loss from operations for the first nine months of 1995 was $17.2 million
compared to a profit from operations of $116.4 million for the first nine
months of 1994.  The loss from operations for the first nine months of 1995
included the $77.0 million first quarter restructuring charge and was also
impacted by volume-related effects of the dealer inventory adjustment program.
It also reflected increased marketing expenses in emerging markets and for the
digital imaging businesses, as well as infrastructure costs associated with the
Company's switch from third-party distribution to direct distribution to
dealers in Japan.

Other income was $9.4 million for the first nine months of 1995 compared to
$5.0 million for the first nine months of 1994.  Included in other income was a
foreign currency loss from balance sheet translation of $0.8 million and $3.3
million in the first nine months of 1995 and 1994, respectively.  Interest
expense increased to $38.7 million in the first nine months of 1995 from $33.4
million in the same period in 1994 primarily as a result of lower amounts of
interest capitalized on qualifying assets and higher short-term borrowings.

The pre-tax loss of $46.5 million for the first nine months of 1995 generated a
tax benefit of $17.3 million.  For the first nine months of 1994, earnings
before taxes were $88.0 million.  Income tax expense for the first nine months
of 1994 was $28.1 million, resulting in an effective tax rate of 32%.  The net
after-tax foreign currency gain from balance sheet translation amounted to $0.5
million and $3.3 million in the first nine months of 1995 and 1994,
respectively.

The net loss for the first nine months of 1995 was $29.2 million or $.64 per
common share compared with net earnings of $59.9 million or $1.27 per common
share for the first nine months of 1994.  Excluding the first quarter
restructuring charge of $77.0 million, earnings per common share would have
been $.45 for the first nine months of 1995.


Financial Liquidity and Capital Resources
-----------------------------------------

At October 1, 1995, the Company's cash and cash equivalents and short-term
investments amounted to $66.7 million, compared with $228.9 million at December
31, 1994.  In addition, working capital decreased to $804.7 million at October
1, 1995 from $886.8 million at December 31, 1994.  Net cash used by operating
activities of $12.2 million during the first nine months of 1995 was impacted
by an increase in inventories partly offset by a decrease in receivables,
reflecting lower shipments of instant cameras and films.  Cash payments of
$42.0 million were made under the Company's 1995 severance program in the first
nine months of 1995. Approximately $5.0 million of additional cash severance
payments are expected to be paid in the fourth quarter of 1995 with
approximately $9.0 million expected to be paid in the first quarter of 1996.
During the first nine months of 1995, capital spending was $127.1 million and
depreciation expense was $100.1 million.  Total capital expenditures in 1995
are expected to be approximately $165.0 million.  The Company expended cash
during the first nine months of 1995 to purchase $37.3 million of treasury
stock and to pay $20.2 million of dividends to common stockholders.

                                       10
<PAGE>

Financial Liquidity and Capital Resources (continued)
-----------------------------------------------------

At October 2, 1994, cash and cash equivalents and short-term investments were
$129.5 million and working capital was $874.4 million.   During the period from
October 2, 1994 to October 1, 1995, cash used by investing and financing
activities more than offset cash provided by operating activities.  Cash
provided by profitable operations was affected by an increase in inventories
partly offset by a decrease in receivables, reflecting lower shipments of
instant cameras and films.  Cash payments of $42.0 million were made under the
Company's 1995 severance program in the first nine months of 1995.
Approximately $6.0 million of additional cash severance payments are expected
to be paid in the fourth quarter of 1995 with approximately $9.0 million
expected to be paid in the first quarter of 1996.  Capital spending during the
period from October 2, 1994 to October 1, 1995 was $177.2 million, which
exceeded depreciation expense of $129.2 million.  The Company expended cash
during the twelve month period from October 2, 1994 to October 1, 1995 to
reduce borrowings, to purchase treasury stock, and to pay dividends to common
stockholders.

The Company maintains a five year $150 million working capital line of credit
for general corporate purposes which expires in 1999.  As of October 1, 1995,
the entire $150 million of borrowing capacity under this facility remained
available to meet working capital needs.  Additional available, uncommitted
lines of credit for U.S. and international operations were $145.0 million and
$137.1 million, respectively, at October 1, 1995.  As of October 1, 1995, gross
borrowings from U.S. and international uncommitted lines of credit were $15.0
million and $140.3 million, respectively.  The Company also has $100 million of
unsold debt securities 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.

In the third quarter of 1995, the Company repurchased 123,561 shares for $4.9
million.  As of October 1, 1995, the unexpended balance under the Company's
$100.0 million common stock repurchase program, which was approved by the Board
of Directors in January 1995, was $85.2 million.  The timing and amounts of any
future purchases under these programs 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 for at least the next twelve months to meet working
capital needs, to fund planned capital expenditures, to pursue future growth
opportunities, and to fund other corporate requirements.


Foreign Currency Exchange
-------------------------

The Company generates a substantial 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's ability to counteract foreign currency
exchange movement is primarily dependent on pricing.

To minimize the adverse impact of foreign currency fluctuations on its foreign
currency-denominated net assets, the Company may engage in foreign currency-
denominated borrowings.  The Company determines the aggregate amount of such
borrowings based on its forecast of the Company's net asset position and the



                                       11
<PAGE>

Foreign Currency Exchange (continued)
-------------------------------------

relative strength of the U.S. dollar as compared to foreign currencies.  These
borrowings create foreign currency-denominated liabilities that hedge the
Company's foreign currency-denominated net assets.  Upon receipt of the
borrowed foreign currency-denominated funds, the Company converts those funds
to U.S. dollars at the spot exchange rate.  Exchange gains and losses on the
foreign currency-denominated borrowings are recognized in earnings as incurred.
At October 1, 1995 and October 2, 1994, the amount of the Company's outstanding
short-term foreign currency-denominated borrowings were $121.2 million and
$70.6 million, respectively.

From time to time, the Company may use over-the-counter foreign exchange swaps
to reduce the interest expense incurred through the borrowings described above
and to replace the hedge created by those borrowings.  When a foreign exchange
swap is used to replace a hedge, the currency received by the Company in the
spot market component of the foreign exchange swap is used to close out the
borrowings and simultaneously, the hedge is reinstituted through a forward
contract (not exceeding nine months).  The net interest value of the foreign
exchange swap contract is amortized to earnings over the life of the contract.
Exchange gains or losses on the foreign currency obligation component of the
forward contract are recognized in earnings as incurred in each accounting
period.  The Company does not enter into foreign exchange swaps for trading
purposes.  The aggregate notional value of these short-term foreign exchange
swap contracts outstanding at October 1, 1995 and October 2, 1994 was $3.4
million and $58.7 million, respectively.

When the Company may not have sufficient flexibility to change prices, the
Company may, from time to time, also purchase U.S. dollar call options.  The
term of these call options typically does not exceed one year.  The Company's
purchase of call options allows it to protect a portion of its expected foreign
currency-denominated revenues from adverse foreign currency exchange movement.
The Company does not buy call options which can be exercised prior to the
expiration date, nor does it write options or purchase call options for trading
purposes.  The Company defers premiums and any gains for its call options
activity until the option exercise date.  At October 1, 1995 and October 2,
1994, option contracts with a notional value of $59.4 million and $27.6 million
were outstanding, respectively.

The Company maintains a Monetary Control Center (the MCC), which operates under
written policies and procedures defining day-to-day operating guidelines,
including exposure limits, to contract for the foreign currency-denominated
borrowings, foreign exchange swaps and call options described above.  The MCC
is subject to random independent audits and reports to a supervisory committee
comprised of members of the Company's management.  The MCC publishes monthly
reports to the Company's management detailing the foreign currency activities
it has engaged in for the prior month.


Impact of Inflation
-------------------

Inflation continues to be a factor in many countries in which the Company does
business.  The Company's pricing strategy has offset to a considerable degree
inflation and normal cost increases.  The overall inflationary impact on
earnings has been immaterial.


                                       12
<PAGE>


Recent Developments
-------------------

In October 1995, the Board of Directors elected Gary T. DiCamillo chairman and
chief executive officer, effective December 1, 1995, succeeding I. MacAllister
Booth, who will retire from the Company.

Mr. DiCamillo joined Black & Decker in 1986 as vice president of marketing for
its U.S. Power Tools Division and was named president of the division in 1988.
In early 1993, he was given the added responsibility for the entire North
American Power Tool and Accessories businesses.  Six months later, he was named
to the position of group vice president of Black & Decker Corporation and
president of its Power Tools and Accessories business.

Prior to joining Black & Decker, Mr. DiCamillo worked at Beatrice Corporation
from 1983 to 1986 where he was vice president and general manager of Culligan
U.S.A.  From 1980 to 1983, he was a manager in McKinsey & Company's Chicago
office where clients included several consumer product companies.  Mr.
DiCamillo joined Procter & Gamble Company directly from graduate school in
1975.

Mr. DiCamillo received his Bachelor of Science degree in chemical engineering
from Rensselaer Polytechic Institute in 1973 and his MBA with honors from
Harvard University in 1975.


                                       13
<PAGE>


                          PART II.  OTHER INFORMATION

                          Item 1. - Legal Proceedings
                            ----------------------------


The Company, together with other parties, is currently designated a Potentially
Responsible Party (PRP) by the United States Environmental Protection Agency
and certain state agencies with respect to the response costs for environmental
remediation at several sites.  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 these sites
and various other uncertainties, the Company cannot firmly establish its
ultimate liability concerning these sites.  In each case in which the Company
is able to determine the likely exposure, such amount has been included in the
Company's reserve for environmental liabilities.  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 as
of October 1, 1995 was $5.2 million, the majority of which the Company
currently expects to be payable over the next two to three years.  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 such amounts as management believes
appropriate from time to time as circumstances warrant.  This reserve does not
take into account potential recoveries from third parties.

The Company reviews its recurring internal expenditures on environmental
matters, as well as capital expenditures related to environmental compliance,
on a monthly basis, and reviews its third-party expenditures on environmental
matters on a quarterly basis.  The Company believes that these expenditures
have not had and will not have a materially adverse effect on the financial
condition or operating results of the Company.

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 the liability is joint and several.

The Company is involved in various other legal proceedings and claims arising
in the ordinary course of business.  Management believes that the disposition
of these matters will not have a materially adverse effect on the financial
condition or results of operations of the Company.


                                       14
<PAGE>


                   Item 6.  Exhibits and Reports on Form 8-K
                     ------------------------------------------

(a)   Exhibits:

      (11)     Computation of earnings per share.

      (15)     Letter from KPMG Peat Marwick LLP re unaudited interim 
               financial information.

      (27)     Financial Data Schedule

(b)   Reports on Form 8-K:

      There were no reports on Form 8-K during the quarter ended October 1,
      1995.


                                       15
<PAGE>
   
   
                                   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)
   
   
   
   
   
   
   November 13, 1995            William J. O'Neill, Jr. 
   -----------------            ------------------------------------
                                William J. O'Neill, Jr.
                                Executive Vice President and
                                Chief Financial Officer
   
   
                                       16
<PAGE>