SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
______________
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One):
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from______ to______
Commission File Number 1-4085
POLAROID RETIREMENT SAVINGS PLAN
_____________________________________________________________
(Full title of the plan; address is the same as
that of the issuer named below)
POLAROID CORPORATION
549 TECHNOLOGY SQUARE
CAMBRIDGE, MASSACHUSETTS 02139
___________________________________________________________
(Name of issuer of securities held pursuant to the plan
and the address of its principal executive office)
<PAGE>
POLAROID RETIREMENT SAVINGS PLAN
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTARY SCHEDULES
Page
-----
Report of Independent Accountants.............................. F-1
FINANCIAL STATEMENTS
Statements of Net Assets Available for Benefits -
as of December 31, 1997 and 1996 ......................... F-2
Statements of Changes in Net Assets Available for Benefits -
Years ended December 31, 1997 and 1996 ................... F-3
Notes to Financial Statements ................................. F-4
SUPPLEMENTARY SCHEDULES
Item 27a - Form 5500:
Schedule of Assets Held for Investment Purposes -
as of December 31, 1997 ..................... F-18
Item 27d - Form 5500:
Schedule of Reportable Transactions
Year ended December 31, 1997 ................ F-21
EXHIBIT INDEX
Exhibit 23 Consent of KPMG Peat Marwick LLP.
-2-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange
act of 1934, the trustees (or other persons who administer the
employee benefit plan) have duly caused this annual report to
be signed on its behalf by the undersigned hereunto duly
authorized.
POLAROID RETIREMENT SAVINGS PLAN
--------------------------------
(Name of plan)
June 22 , 1998 /S/ William J. O'Neill, Jr.
- ------------ -------------------------
William J. O'Neill, Jr.
Chairman
Fund Manager
<PAGE>
Independent Accountants' Report
-------------------------------
The Board of Trustees
Polaroid Retirement Savings Plan:
We have audited the accompanying statements of net assets available for benefits
of the Polaroid Retirement Savings Plan as of December 31, 1997 and 1996, and
the related statements of changes in net assets available for benefits for the
years then ended. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 1997 and 1996, and the changes in the net assets available for
benefits for the years then ended in conformity with generally accepted
accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes and reportable transactions are presented for purposes
of additional analysis and are not a required part of the basic financial
statements, but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The supplemental schedules have been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ KPMG Peat Marwick LLP
May 18, 1998
F-1
<PAGE>
POLAROID RETIREMENT SAVINGS PLAN
Statements of Net Assets Available for Benefits
December 31, 1997 and 1996
Assets 1997 1996
------ ------
Investments (note 4) $ 955,999,600 539,321,614
Temporary cash investments 2,122,137 -
------------ -----------
958,121,737 539,321,614
------------ -----------
Receivables:
Accrued interest and dividends 1,303,502 1,148,251
Due from investments sold 268,849 427,639
---------- ----------
Total receivables 1,572,351 1,575,890
---------- ------------
Total assets 959,694,088 540,897,504
------------ -----------
Liabilities
Administrative fees payable 162,002 195,917
Income distribution payable 308,915 284,977
Payable for investments purchased - 498,635
----------- ------------
Total liabilities 470,917 979,529
------------ ------------
Net assets available for benefits $ 959,223,171 539,917,975
============== ==============
See accompanying notes to financial statements.
F-2
<PAGE>
POLAROID RETIREMENT SAVINGS PLAN
Statements of Changes in Net Assets Available for Benefits
Years Ended December 31, 1997 and 1996
1997 1996
------ ------
Additions to net assets attributed to:
Contributions:
Employee 401(k) contributions $ 16,277,982 15,149,739
Employee voluntary contributions 572,510 683,884
Rollover contributions 657,291 612,842
----------- ----------
Total contributions 17,507,783 16,446,465
------------ -----------
Investment income:
Dividends 25,117,412 26,502,181
Interest 8,906,959 8,486,533
Net appreciation in fair market
value of investments (note 4) 114,476,177 27,730,850
------------- ------------
Total investment income 148,500,548 62,719,564
------------ -----------
Transfer from other plan (note 1) 302,029,729 -
-------------- -----------
Total additions 468,038,060 79,166,029
-------------- -------------
Deductions from net assets attributed to:
Benefit payments 47,840,917 72,012,577
Administrative fees 891,947 860,456
-------------- ------------
Total deductions 48,732,864 72,873,033
-------------- -----------
Net increase in net assets 419,305,196 6,292,996
Net assets available for benefits:
Beginning of year 539,917,975 533,624,979
--------------- ------------
End of year $ 959,223,171 539,917,975
============== ============
See accompanying notes to financial statements.
F-3
<PAGE>
POLAROID RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 1997 and 1996
(1 )Plan Description
The Polaroid Retirement Savings Plan (the "Plan") is a defined contribution
plan sponsored by Polaroid Corporation (the "Company") covering substantially
all domestic employees. The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974 ("ERISA"). Plan assets are held in
safekeeping under a master trust contract with the Trustee, Boston Safe
Deposit and Trust Company. Fidelity Investments serves as the Plan record
keeper and as a sub-trustee of the Plan assets. State Street Bank serves as
the custodian and also a sub-trustee of the shares of Polaroid Corporation
common stock held in the Polaroid ESOP Stock Fund and the Polaroid Common
Stock Fund. The investment advisors for the Plan are Fidelity Investments,
Merganser Capital Management Corporation, and Mellon Bank, N.A.
Effective December 1, 1997, the Polaroid Employee Stock Equity Plan (the
"ESOP") was merged with the Polaroid Profit Sharing Retirement Plan. In
connection with the merger, the Polaroid Profit Sharing Retirement Plan was
renamed the Polaroid Retirement Savings Plan. As required by the Plan, the
ESOP account is separately maintained. The assets are currently maintained in
the Polaroid ESOP Stock Fund.
The following description of the Plan provides only general information.
Participants should refer to the Plan document for a more complete
description of the Plan's provisions:
(a) Employee 401(k) Contributions
Employees may make elective pre-tax contributions of up to 14
percent of their pre-tax compensation through payroll deductions, subject
to limitations established by the Internal Revenue Service. For purposes
of calculating these contributions, compensation is limited to $160,000.
(b) Employee Voluntary Contributions
Employees may voluntarily elect to make after-tax contributions of
up to 10 percent of their compensation through payroll deductions,
subject to limitations established by the Internal Revenue Service. For
purposes of calculating these contributions, compensation is limited to
$160,000.
(c) Participation and Vesting
Employees become participants upon their first day of employment and
are 100 percent vested in their accounts at all times.
(d) Benefits
Participants with account balances over $3,500 can elect to have
benefits paid in the form of a life annuity, a lump sum cash payment,
periodic installments, or stock for the stock portion of the payment.
Participants with accounts balances of $3,500 or less, will receive their
benefits in the form of a lump sum cash payment.
F-4
<PAGE>
POLAROID RETIREMENT SAVINGS PLAN
Notes to Financial Statements, Continued
(1), Continued
(e) Administrative Expenses
Administrative expenses are paid by the Plan unless the Company
elects to pay them. In 1997 and 1996, this election was not made.
(f) Participant Loans
Active employees of the Company who participate in the Plan are
eligible to take a loan from their account balance. Participants may
borrow up to 50% of their account balance, subject to a $1,000 minimum
and $50,000 maximum loan amount. Loan balances are repaid through
after-tax payroll deductions and interest is charged on outstanding loan
balances at a rate of prime plus 1% (9.25% - 9.5% in 1997 and 8.25% -
8.5% in 1996).
(g) Related Party Transactions
Certain Plan investments are shares of funds managed by Boston Safe
Deposit and Trust Company or Fidelity Investments. Boston Safe Deposit
and Trust Company is the trustee and Fidelity Investments is a
sub-trustee as defined by the Plan, and therefore, these transactions
qualify as party-in- interest.
(h) Participant Accounts
A separate account is established for each participant at the time
of enrollment in the Plan. Each participant's account is credited with
the participant's contribution and an allocation of Plan earnings and
charged with an allocation of administrative expenses. Allocations are
based on account balances. The participant's contribution is credited in
accordance with the directions given by the participant in one or more of
the following funds:
Merganser Money Market Fund
---------------------------
The Fund's goal is to obtain the highest level of current income
possible, consistent with the preservation of capital and a stable share
price. The Fund invests in the highest quality money market instruments
of U.S. and foreign issuers, including short-term corporate obligations,
certificates of deposit, and U.S. government obligations.
Fidelity Retirement Money Market Portfolio
------------------------------------------
The Fund strives to provide current income while maintaining a
stable investment value. It invests in high quality money market
instruments of U.S. and foreign issuers, including short-term corporate
obligations, U.S. government obligations and certificates of deposit.
F-5
<PAGE>
POLAROID RETIREMENT SAVINGS PLAN
Notes to Financial Statements, Continued
(1), Continued
Merganser Conservative Bond Fund
--------------------------------
The Fund's goal is to earn returns that exceed inflation over a
market cycle with a low variability of returns and low risk of principal
loss. The Fund will maintain an average maturity of less than three years
and will invest in a diversified selection of fixed- income securities of
investment grade quality. The Fund was formerly known as the Stable
Income Fund.
Fidelity Investment Grade Bond Fund
------------------------------------
The Fund seeks a rate of current income consistent with reasonable
risk. It invests in a broad array of fixed-income obligations that are
primarily "investment grade" and of any maturity. "Investment Grade"
refers to bonds rated with medium to high quality.
Mellon/Merganser Balanced Fund
--------------------------------
The Fund is designed to provide long-term growth through interest
and dividend income, plus appreciation from stocks. The Fund invests
approximately 50% of its assets in a S&P 500(R) index, and 50% in high
quality bonds.
Fidelity Growth & Income Portfolio
------------------------------------
The Fund seeks to provide long-term growth, current income, and
growth of income consistent with reasonable risk through investment in
mostly equity securities, from both the U.S. and abroad, that offer
growth of earnings while paying current dividends.
Fidelity Puritan(R) Fund
-----------------------
The goal of the Fund is to provide as much income as possible while
preserving the value of the investments. The fund invests in high
yielding U.S and and foreign securities, including those in emerging
markets which may involve additional risks, common and preferred stocks
as well as bonds of any quality or maturity .
Mellon Common Stock Fund
--------------------------
The Fund is designed to provide long-term growth of capital through
investment in companies that comprise the S&P 500(R).
Fidelity Blue Chip Growth Fund
-------------------------------
The Fund seeks growth through investment in common stocks of
well-known, established growth companies that are generally considered
industry leaders.
Fidelity Contrafund
-----------------------
The Fund is considered an aggressive growth fund and seeks to
achieve its objective of long-term capital growth by investing primarily
in common stocks from companies both in the U.S. and abroad, which the
Fund's manager believes are undervalued or out of favor.
F-6
<PAGE>
POLAROID RETIREMENT SAVINGS PLAN
Notes to Financial Statements, Continued
(1), Continued
Fidelity Magellan Fund
----------------------
As an aggressive growth fund, the Fund attempts to achieve long-term
capital growth through investment primarily in common and preferred
stocks of all types of companies in the U.S. and abroad. The fund is
limited to investing 20% of its holdings in Bonds with latitude as to
quality level.
Fidelity International Growth & Income Fund
-------------------------------------------
The Fund seeks both capital growth and current income through
investment in companies who mostly operate outside the United States.
Fidelity Overseas Fund
----------------------
The Fund seeks capital growth through investment in common stock,
convertible securities, and debt instruments of companies that have their
principal business activity outside of the United States.
Mellon Asset Managed Fund
--------------------------
The Fund strives for long-term growth through investments in stocks,
bonds, and money market investments.
Fidelity Asset Manager TM
---------------------------
The Fund is designed to provide a high total return with reduced
risk over the long term. It is an aggressively managed asset allocation
fund with holdings in domestic and foreign stocks, bonds, and short term
investments.
Polaroid Stock Fund
--------------------
The assets of the Fund are invested in Polaroid Corporation common
stock. Effective July 1, 1997, participants were allowed to contribute to
this Fund. On December 1, 1997, this Fund was closed and the balances in
participants' accounts were transferred to the Polaroid Common Stock
Fund.
Polaroid Common Stock Fund
---------------------------
The Fund was established December 1, 1997. The assets of the Fund
are invested in Polaroid Corporation common stock. Participants who are
55 or over may transfer amounts from this Fund into other funds.
Polaroid ESOP Stock Fund
-------------------------
The Fund holds shares of Polaroid Corporation common stock that have
been allocated to participants from 1988 to present. For participants who
are at least 55 years of age and have ten or more years of participation
in the Polaroid Employee Stock Equity Plan, the Company will gradually
move shares from a restricted category into an unrestricted category
within the Fund. This transfer allows the participant to retain the stock
or transfer the asset to other investment options.
F-7
<PAGE>
POLAROID RETIREMENT SAVINGS PLAN
Notes to Financial Statements, Continued
(2) Summary of Significant Accounting Policies
(a) Basis of Presentation
The accompanying financial statements have been prepared on an
accrual basis. Benefits payable at year- end are not required to be
accrued, as they are considered to be a component of the net assets
available for benefits.
(b) Investments
Investments are stated at fair market value. The fair market value
of marketable securities is based on quotations obtained from national
securities exchanges. Certain short-term obligations are valued at cost,
which when combined with accrued interest receivable approximates fair
market value. Participant loans are valued at cost which approximates
fair market value.
Securities transactions are recognized on the trade date (the date
the order to buy or sell is executed). Interest income is recorded on the
accrual basis and dividend income is recorded on the ex- dividend date.
Net appreciation or depreciation of investments includes both
realized and unrealized gains and losses.
(c) Payment of Benefits
Benefits are recorded when paid.
(d) Reclassifications
Certain amounts as of and for the year ended December 31, 1996, have
been reclassified to conform with the presentation of the amounts as of
and for the year ended December 31, 1997.
(e) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires the plan administrator to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of additions to
and deductions from net assets during the reporting period. Actual
results could differ from those estimates.
F-8
<PAGE>
POLAROID RETIREMENT SAVINGS PLAN
Notes to Financial Statements, Continued
(3) Federal Income Tax
On September 12, 1995, the Internal Revenue Service (the "IRS") issued a
Determination letter which stated that the Polaroid Profit Sharing Retirement
Plan and its underlying Trust qualify under Section 401(a) of the Internal
Revenue Code (the "Code") and therefore, is exempt from federal income taxes
under Section 501(a) of the Code. On August 9, 1995, the IRS issued a
Determination letter which stated that the Polaroid Employee Stock Equity
Plan and its underlying trust qualify under Section 401(a) of the Code, and
therefore is exempt from federal income taxes under Section 501(a) of the
Code. As discussed in note 1, these plans merged. However, the Plan sponsor
believes the Plan is designed and is currently being operated in compliance
with applicable requirements of the Code.
(4) Investments
The following table presents investments at fair market value. Investments
that represent 5 percent or more of the Plan's net assets are separately
identified:
1997 1996
------ ------
U.S. Government and Agency
Obligations $ 7,546,482 8,001,109
Certificates of Deposit - 500,753
Short-term Corporate Debt 37,571,155 57,573,980
Long-term Corporate Debt 60,642,869 49,656,651
Other Investments 5,380,949 5,172,350
Polaroid Corporation Common Stock 357,017,378 12,930,636
Pooled Funds:
Mellon Daily Opening Asset
Allocation Fund 96,440,549 85,166,644
Mellon Daily Opening Stock
Index Fund 64,139,615 48,689,801
Other pooled funds 5,051,992 3,208,286
Mutual Funds:
Fidelity Contrafund 56,504,983 47,035,438
Fidelity Magellan (R) Fund 33,763,471 27,855,305
Fidelity Puritan(R) Fund 37,545,028 31,292,301
Fidelity Blue Chip Growth Fund 56,465,058 45,293,675
Fidelity Growth & Income
Portfolio 56,251,466 40,990,730
Other mutual funds 69,866,761 64,419,257
Participant Loans 11,811,844 11,534,698
------------ ----------
Total investments $ 955,999,600 539,321,614
============= ===========
F-9
<PAGE>
POLAROID RETIREMENT SAVINGS PLAN
Notes to Financial Statements, Continued
(4), Continued
Net appreciation (depreciation) in fair market value of investments for the
years ended December 31, 1997 and 1996, is as follows:
1997 1996
------ ------
U.S. Government and Agency Obligations $ 124,591 61,199
Certificates of Deposit - (13,750)
Short-term Corporate Debt 55,458 143,239
Long-term Corporate Debt 451,857 (255,829)
Other Investments 102,940 (14,778)
Polaroid Corporation Common Stock 45,168,981 (1,291,483)
Pooled Funds 33,065,913 17,104,081
Mutual Funds 35,506,437 11,998,171
----------- -----------
Net appreciation of investments $ 114,476,177 27,730,850
============= ============
(5) Unit and Share Valuation
Participants' accounts in the Polaroid Common Stock Fund and the Polaroid
ESOP Stock Fund are maintained by the "share accounting" concept. Participant
assets in the remaining funds are maintained on the "unit accounting"
concept. Unit and share values and the total units and shares (in 000s) used
in valuing participants' accounts for each quarter since December 31, 1996
are listed below.
Merganser Money Fidelity Retirement
Market Fund Money Market Portfolio
------------------- -----------------------
Unit Unit
Units Value Units Value
-------- ------ ------ -------
December 31, 1996 56,920 $1.00 26,225 $1.00
March 31, 1997 54,610 1.00 26,336 1.00
June 30, 1997 53,836 1.00 26,328 1.00
September 30, 1997 52,122 1.00 25,449 1.00
December 31, 1997 51,570 1.00 26,421 1.00
Merganser Conservative Fidelity Investment
Bond Fund Grade Bond Fund
-------------------- --------------------
Unit Unit
Units Value Units Value
-------- ------ ------ ------
December 31, 1996 4,292 $11.69 1,251 $7.12
March 31, 1997 4,103 11.77 1,233 6.96
June 30, 1997 3,983 12.04 1,207 7.09
September 30, 1997 3,793 12.29 1,351 7.20
December 31, 1997 3,703 12.42 1,447 7.28
Mellon/Merganser Fidelity Growth &
Balanced Fund Income Portfolio
------------------ -------------------
Unit Unit
Units Value Units Value
-------- ------- ------ ------
December 31, 1996 2,472 $14.38 1,334 $30.73
March 31, 1997 2,433 14.53 1,386 30.98
June 30, 1997 2,377 16.13 1,415 36.05
September 30, 1997 2,315 17.03 1,485 37.16
December 31, 1997 2,267 17.42 1,476 38.10
Fidelity Mellon Common
Puritan(R) Fund Stock Fund
---------------- ---------------
Unit Unit
Units Value Units Value
------- -------- ------ -------
December 31, 1996 1,815 $17.24 1,873 $16.40
March 31, 1997 1,806 17.34 1,894 16.83
June 30, 1997 1,851 19.32 1,904 19.74
September 30, 1997 1,884 19.54 1,987 21.23
December 31, 1997 1,937 19.38 1,995 21.80
F-10
<PAGE>
POLAROID RETIREMENT SAVINGS PLAN
Notes to Financial Statements, Continued
(5), Continued
Fidelity Blue Chip Fidelity
Growth Fund Contrafund
---------------------- --------------------
Unit Unit
Units Value Units Value
------- ------- ------ ------
December 31, 1996 1,386 $32.69 1,116 $42.15
March 31, 1997 1,376 32.69 1,158 40.85
June 30, 1997 1,353 38.16 1,113 46.11
September 30, 1997 1,417 39.79 1,110 51.61
December 31, 1997 1,431 39.46 1,212 46.63
Fidelity Fidelity International
Magellan(R) Fund Growth & Income Fund
----------------- ---------------------
Unit Unit
Units Value Units Value
------- ------ ----- -----
December 31, 1996 345 $80.65 304 $19.55
March 31, 1997 326 80.20 301 19.63
June 30, 1997 330 91.05 308 21.54
September 30, 1997 336 99.85 308 22.09
December 31, 1997 354 95.27 322 19.70
Fidelity Mellon Asset
Overseas Fund Managed Fund
--------------- ------------------
Unit Unit
Units Value Units Value
------ ----- ------ ------
December 31, 1996 289 $30.84 5,529 $15.45
March 31, 1997 303 31.83 5,328 15.63
June 30, 1997 336 35.80 5,188 17.58
September 30, 1997 331 36.69 5,022 18.79
December 31, 1997 326 32.54 4,949 19.67
Fidelity Polaroid
Asset ManagerTM Stock Fund
----------------- ---------------
Unit Unit
Units Value Units Value
------ ----- ------ ------
December 31, 1996 876 $16.47 981 $13.25
March 31, 1997 849 16.33 950 12.15
June 30, 1997 831 18.03 919 16.99
September 30, 1997 817 19.01 898 15.73
December 31, 1997 870 18.35 - -
Polaroid Polaroid
ESOP Stock Common Stock
Fund Fund
-------------- --------------
Share Share
Shares Value Shares Value
------ ------- ------ ------
December 31, 1997 7,056 $ 48.68 277 $ 48.68
F-11
<PAGE>
POLAROID RETIREMENT SAVINGS PLAN
Notes to Financial Statements, Continued
(6) 5500 Reconciliation
Under generally accepted accounting principles, benefits payable to
participants represent a component of net assets available for benefits and
not a liability of the Plan. Benefits payable to participants are, however,
recorded as a liability of the Plan for Form 5500 filing purposes. A
reconciliation of net assets available for benefits as of December 31, 1997
and 1996, presented in accordance with generally accepted accounting
principles, as reflected in the accompanying financial statements and Form
5500, is as follows:
Net assets Net assets
available available
for benefits for benefits
December 31, 1997 December 31, 1996
----------------- ------------------
Per accompanying
financial statements $ 959,223,171 539,917,975
ESOP stock fund dividends
payable at year end (2,116,860) -
--------------- -------------
Per Form 5500 $ 957,106,311 539,917,975
============= ============
Increase in net
assets
available for benefits
for the year ended
December 31, 1997
---------------------
Per accompanying
financial statements $ 419,305,196
ESOP stock fund dividends payable
at December 31, 1997 (2,116,860)
----------------------
Per Form 5500 $ 417,188,336
=======================
(7) Plan Termination
Although it has expressed no intent to do so, the Company has the right under
the Plan to terminate the Plan. If the Plan were terminated, all participants
would remain 100 percent vested in their accounts. Upon termination of the
Plan, all accounts would be distributed to the participants or their
beneficiaries.
F-12
<PAGE>
POLAROID RETIREMENT SAVINGS PLAN
Notes to Financial Statements, Continued
(8) Plan Amendments
The Plan may be amended at any time by the Company. However, no amendment can
reduce the amount of any participant's account or the participant's vested
percentage on that account. In addition, notices of all amendments shall be
given in writing to each participant, or beneficiary of deceased participants
of the Plan.
(9) Subsequent Event
Beginning January 1, 1998, the Company will contribute for each plan
participant an amount equal to 3% of their annual compensation consisting of
regular and overtime wages. These contributions will be invested according to
each participant's investment instructions. Until the investment instructions
have been established by the participant, these funds will be allocated into
the Merganser Money Market Fund and the Fidelity Retirement Money Market
Portfolio in approximately equal portions. For purposes of calculating these
contributions, compensation will be subject to limitations established by the
Internal Revenue Service.
Also, beginning January 1, 1998, the Company will contribute for each plan
participant, an amount equal to 5% of their annual compensation consisting of
regular and overtime wages. These contributions will automatically be
invested in participant balances of the Polaroid ESOP Stock Fund. For
purposes of calculating these contributions, compensation will be subject to
limitations established by the Internal Revenue Service.
F-13
<PAGE>
POLAROID RETIREMENT SAVINGS PLAN
Notes to Financial Statements, Continued
(9) Net Assets Available for Benefits by Fund as of December 31, 1997
Fidelity
Merganser Retirement
Money Market Money Market
Fund Portfolio
------------- ------------
Assets:
Investments $ 51,316,406 26,420,566
Temporary cash investments - -
----------- -----------
Total investments 51,316,406 26,420,566
----------- -----------
Receivables:
Accrued interest and dividends 715,667 -
Due from investments sold - -
------------ -----------
Total receivables 715,667 -
----------- -----------
Total assets 52,032,073 26,420,566
----------- -----------
Liabilities:
Administrative fees payable 162,002 -
Income distribution payable 300,354 -
----------- ----------
Total liabilities 462,356 -
----------- ----------
Net assets available for benefits $ 51,569,717 26,420,566
============= ============
Fidelity
Merganser Investment
Conservative Grade
Bond Fund Bond Fund
-------------- -------------
Assets:
Investments 45,328,937 10,536,838
Temporary cash investments - -
----------- -----------
Total investments 45,328,937 10,536,838
----------- -----------
Receivables:
Accrued interest and dividends 571,446 -
Due from investments sold 88,462 -
----------- -----------
Total receivables 659,908 -
----------- -----------
Total assets 45,988,845 10,536,838
----------- -----------
Liabilities:
Administrative fees payable - -
Income distribution payable - -
---------- ----------
Total liabilities - -
----------- -----------
Net assets available for benefits 45,988,845 10,536,838
============= =============
Fidelity
Growth &
Mellon/Merganser Income
Balanced Fund Portfolio
--------------- ----------
Assets:
Investments 39,296,512 56,251,466
Temporary cash investments - -
------------ ------------
Total investments 39,296,512 56,251,466
------------ ------------
Receivables:
Accrued interest and dividends 8,092 -
Due from investments sold 180,387 -
------------- ------------
Total receivables 188,479 -
-------------- ------------
Total assets 39,484,991 56,251,466
-------------- ------------
Liabilities:
Administrative fees payable - -
Income distribution payable - -
------------- ------------
Total liabilities - -
------------- ------------
Net assets available for benefits 39,484,991 56,251,466
============= =============
Fidelity Mellon
Puritan(R) Common
Fund Stock Fund
--------------- -----------
Assets:
Investments 37,545,028 43,478,140
Temporary cash investments - -
------------ ----------
Total investments 37,545,028 43,478,140
------------ ----------
Receivables:
Accrued interest and dividends - 8,297
Due from investments sold - -
------------ -----------
Total receivables - 8,297
------------ -----------
Total assets 37,545,028 43,486,437
------------- ------------
Liabilities:
Administrative fees payable - -
Income distribution payable - -
------------- ------------
Total liabilities - -
------------- ------------
Net assets available for benefits 37,545,028 43,486,437
============= =============
Fidelity
Blue Chip
Growth
Fund
---------
Assets:
Investments 56,465,058
Temporary cash investments -
-----------
Total investments 56,465,058
-----------
Receivables:
Accrued interest and dividends -
Due from investments sold -
-----------
Total receivables -
-----------
Total assets 56,465,058
-----------
Liabilities:
Administrative fees payable -
Income distribution payable -
----------
Total liabilities -
-----------
Net assets available for benefits 56,465,058
============
(continued)
F-14
<PAGE>
POLAROID RETIREMENT SAVINGS PLAN
Notes to Financial Statements, Continued
(9) Net Assets Available for Benefits by Fund as of
December 31, 1997, (continued)
Fidelity
Fidelity Magellan(R)
Contrafund Fund
----------- ----------
Assets:
Investments $ 56,504,983 33,763,471
Temporary cash investments - -
----------- -----------
Total investments 56,504,983 33,763,471
----------- -----------
Receivables:
Accrued interest and dividends - -
Due from investments sold - -
----------- -----------
Total receivables - -
----------- -----------
Total assets 56,504,983 33,763,471
----------- -----------
Liabilities:
Administrative fees payable - -
Income distribution payable - -
----------- -----------
Total liabilities - -
----------- -----------
Net assets available for benefits $ 56,504,983 33,763,471
============= =============
Fidelity
International Fidelity
Growth & Overseas
Income Fund Fund
----------- ----------
Assets:
Investments 6,340,591 10,606,318
Temporary cash investments - -
----------- -----------
Total investments 6,340,591 10,606,318
----------- -----------
Receivables:
Accrued interest and dividends - -
Due from investments sold - -
----------- -----------
Total receivables - -
----------- -----------
Total assets 6,340,591 10,606,318
----------- -----------
Liabilities:
Administrative fees payable - -
Income distribution payable - -
----------- -----------
Total liabilities - -
----------- -----------
Net assets available for benefits 6,340,591 10,606,318
============= =============
Mellon Fidelity
Asset Managed Asset
Fund ManagerTM
----------- ----------
Assets:
Investments 97,353,616 15,962,448
Temporary cash investments - -
----------- -----------
Total investments 97,353,616 15,962,448
----------- -----------
Receivables:
Accrued interest and dividends - -
Due from investments sold - -
----------- -----------
Total receivables - -
----------- -----------
Total assets 97,353,616 15,962,448
----------- -----------
Liabilities:
Administrative fees payable - -
Income distribution payable 8,561 -
----------- -----------
Total liabilities 8,561 -
----------- -----------
Net assets available for benefits
97,345,055 15,962,448
============= =============
Polaroid Polaroid
Common ESOP Stock
Stock Fund Fund
----------- ------------
Assets:
Investments 13,468,618 343,548,760
Temporary cash investments - 2,122,137
----------- -----------
Total investment 13,468,618 345,670,897
----------- -----------
Receivables:
Accrued interest and dividends - -
Due from investments sold - -
----------- -----------
Total receivables - -
----------- -----------
Total assets 13,468,618 345,670,897
----------- -----------
Liabilities:
Administrative fees payable - -
Income distribution payable - -
----------- -----------
Total liabilities - -
----------- -----------
Net assets available for benefits 13,468,618 345,670,897
============= =============
Participant
Loan Fund Total
------------- ------------
Assets:
Investments 11,811,844 955,999,600
Temporary cash investments - 2,122,137
----------- ------------
Total investments 11,811,844 958,121,737
----------- ------------
Receivables:
Accrued interest and dividends - 1,303,502
Due from investments sold - 268,849
----------- -----------
Total receivables - 1,572,351
----------- -----------
Total assets 11,811,844 959,694,088
----------- -----------
Liabilities:
Administrative fees payable - 162,002
Income distribution payable - 308,915
----------- -----------
Total liabilities - 470,917
----------- -----------
Net assets available for benefits 11,811,844 959,223,171
============= =============
F-15
<PAGE>
POLAROID RETIREMENT SAVINGS PLAN
Notes to Financial Statements, Continued
(9) Changes in Net Assets Available for Benefits by Fund for the Year Ended
December 31, 1997
Fidelity
Merganser Retirement
Money Market Money Market
Fund Portfolio
----------- ------------
Additions to net assets attributed to:
Contributions:
Employee 401(k) contributions $ 972,520 682,719
Employee voluntary contributions 120,338 36,936
Rollover contributions 22,331 12,172
----------- ----------
Total contributions 1,115,189 731,827
Investment income:
Dividends - 1,396,455
Interest 3,393,873 -
Net appreciation (depreciation) in
fair market value of investments (8,514) -
----------- -----------
Total investment income (loss) 3,385,359 1,396,455
----------- -----------
Transfer from other plan (note 1) - -
----------- ----------
Total additions 4,500,548 2,128,282
----------- ----------
Deductions from net assets attributed to:
Benefit payments 8,283,343 2,112,160
Administrative fees 135,147 1,844
----------- -----------
Total deductions 8,418,490 2,114,004
----------- -----------
Net increase (decrease) before interfund
transfers (3,917,942) 14,278
Loans issued (638,314) (383,826)
Loans repaid 803,330 604,087
Exchanges in 43,555,925 23,365,409
Exchanges out ( 44,903,129) (23,404,119)
------------- -------------
Net transfers (1,182,188) 181,551
------------- -------------
Net increase (decrease) (5,100,130) 195,829
Net assets available for benefits:
Beginning of year 56,669,847 26,224,737
------------- -------------
End of year $ 51,569,717 26,420,566
============= =============
Fidelity
Merganser Investment
Conservative Grade
Bond Fund Bond Fund
--------------- --------------
Additions to net assets attributed to:
Contributions:
Employee 401(k) contributions 733,586 249,973
Employee voluntary contributions 85,648 13,489
Rollover contributions - 4,199
----------- -----------
Total contributions 819,234 267,661
Investment income:
Dividends - 574,654
Interest 3,145,312 -
Net appreciation (depreciation) in
fair market value of investments (149,574) 207,811
----------- -----------
Total investment income (loss) 2,995,738 782,465
----------- -----------
Transfer from other plan (note 1) - -
----------- -----------
Total additions 3,814,972 1,050,126
----------- -----------
Deductions from net assets attributed to:
Benefit payments 5,388,465 943,651
Administrative fees 99,935 970
----------- ----------
Total deductions 5,488,400 944,621
----------- ----------
Net increase (decrease) before interfund
transfers (1,673,428) 105,505
Loans issued (373,495) (56,000)
Loans repaid 390,511 70,617
Exchanges in 2,482,874 3,803,629
Exchanges out (5,004,609) (2,295,456)
----------- -----------
Net transfers (2,504,719) 1,522,790
------------ -----------
Net increase (decrease) (4,178,147) 1,628,295
Net assets available for benefits:
Beginning of year 50,166,992 8,908,543
----------- -----------
End of year 45,988,845 10,536,838
============= =============
Fidelity
Growth &
Mellon/Merganser Income
Balanced Fund Portfolio
---------------- ------------
Additions to net assets attributed to:
Contributions:
Employee 401(k) contributions 709,878 1,836,469
Employee voluntary contributions 39,914 34,899
Rollover contributions 4,030 54,344
----------- ----------
Total contributions 753,822 1,925,712
Investment income:
Dividends 404,090 2,574,542
Interest 1,277,603 -
Net appreciation (depreciation) in
fair market value of investments 5,611,946 10,175,359
----------- -----------
Total investment income (loss) 7,293,639 12,749,901
----------- -----------
Transfer from other plan (note 1) - -
----------- ----------
Total additions 8,047,461 14,675,613
----------- ----------
Deductions from net assets attributed to:
Benefit payments 2,945,507 4,023,669
Administrative fees 63,567 3,041
----------- -----------
Total deductions 3,009,074 4,026,710
----------- -----------
Net increase (decrease) before interfund
transfers 5,038,387 10,648,903
Loans issued (384,132) (426,314)
Loans repaid 258,257 444,616
Exchanges in 1,684,282 15,130,052
Exchanges out (2,662,406) (10,536,521)
----------- ------------
Net transfers (1,103,999) 4,611,833
----------- ------------
Net increase (decrease) 3,934,388 15,260,736
Net assets available for benefits:
Beginning of year 35,550,603 40,990,730
------------ ------------
End of year 39,484,991 56,251,466
============= =============
Fidelity Mellon
Puritan(R) Common
Fund Stock Fund
------------- --------------
Additions to net assets attributed to:
Contributions:
Employee 401(k) contributions 1,061,863 1,003,904
Employee voluntary contributions 24,558 32,817
Rollover contributions 20,740 95,128
Total contributions 1,107,161 1,131,849
----------- -----------
Investment income:
Dividends 3,006,078 734,273
Interest - 33,648
Net appreciation (depreciation) in
fair market value of investments 3,874,302 9,635,187
----------- -----------
Total investment income (loss) 6,880,380 10,403,108
----------- -----------
Transfer from other plan (note 1) - -
---------- -----------
Total additions 7,987,541 11,534,957
------------ -----------
Deductions from net assets attributed to:
Benefit payments 1,967,039 2,714,424
Administrative fees 15,028 26,650
----------- -----------
Total deductions 1,982,067 2,741,074
----------- -----------
Net increase (decrease) before interfund
transfers 6,005,474 8,793,883
Loans issued (214,898) (364,202)
Loans repaid 312,508 271,902
Exchanges in 6,420,364 20,105,036
Exchanges out (6,270,721) (16,027,179)
----------- -----------
Net transfers 247,253 3,985,557
----------- -----------
Net increase (decrease) 6,252,727 12,779,440
Net assets available for benefits:
Beginning of year 31,292,301 30,706,997
----------- -----------
End of year 37,545,028 43,486,437
============ ============
Fidelity
Blue Chip
Growth
Fund
-----------
Additions to net assets attributed to:
Contributions:
Employee 401(k) contributions 2,102,824
Employee voluntary contributions 36,323
Rollover contributions 138,769
-----------
Total contributions 2,277,916
Investment income:
Dividends 2,778,752
Interest -
Net appreciation (depreciation) in
fair market value of investments 9,147,377
-----------
Total investment income (loss) 11,926,129
-----------
Transfer from other plan (note 1) -
-----------
Total additions 14,204,045
------------
Deductions from net assets attributed to:
Benefit payments 3,250,493
Administrative fees 2,403
-------------
Total deductions 3,252,896
-------------
Net increase (decrease) before interfund
transfers 10,951,149
Loans issued (553,554)
Loans repaid 612,802
Exchanges in 8,539,195
Exchanges out (8,378,209)
-------------
Net transfers 220,234
------------
Net increase (decrease) 11,171,383
Net assets available for benefits:
Beginning of year 45,293,675
-------------
End of year 56,465,058
=============
(continued)
F-16
<PAGE>
POLAROID RETIREMENT SAVINGS PLAN
Notes to Financial Statements
(9) Changes in Net Assets Available for Benefits by Fund for the Year Ended
December 31, 1997, (continued)
Fidelity Fidelity
Contrafund Magellan(R)
Fund Fund
------------- -------------
Additions to net assets attributed to:
Contributions:
Employee 401(k) contributions $ 2,194,584 1,360,073
Employee voluntary contributions 30,470 25,339
Rollover contributions 126,366 81,159
----------- ---------
Total contributions 2,351,420 1,466,571
Investment income:
Dividends 5,422,708 2,152,665
Interest - -
Net appreciation (depreciation) in
fair market value of investments 5,146,077 4,765,405
---------- ---------
Total investment income (loss) 10,568,785 6,918,070
---------- ---------
Transfer from other plans (note 1) - -
---------- ---------
Total additions 12,920,205 8,384,641
---------- ----------
Deductions from net assets attributed to:
Benefit payments 3,153,597 1,862,074
Administrative fees 7,460 10,908
---------- ---------
Total deductions 3,161,057 1,872,982
---------- ----------
Net increase (decrease) before interfund
transfers 9,759,148 6,511,659
Loans issued (504,961) (299,367)
Loans repaid 504,498 408,994
Exchanges in 20,028,685 7,928,335
Exchanges out (20,317,825) (8,641,455)
------------ -----------
Net transfers (289,603) (603,493)
------------ -----------
Net increase (decrease) 9,469,545 5,908,166
Net assets available for benefits:
Beginning of year 47,035,438 27,855,305
----------- -----------
End of year $ 56,504,983 33,763,471
============= =============
Fidelity
International Fidelity
Growth & Overseas
Income Fund Fund
----------------- --------------
Additions to net assets attributed to:
Contributions:
Employee 401(k) contributions 312,803 568,959
Employee voluntary contributions 12,899 9,494
Rollover contributions 32,577 52,696
----------- -----------
Total contributions 358,279 631,149
Investment income:
Dividends 379,564 524,699
Interest - -
Net appreciation (depreciation) in
fair market value of investments 42,983 537,540
----------- -----------
Total investment income (loss) 422,547 1,062,239
----------- -----------
Transfer from other plan (note 1) - -
----------- -----------
Total additions 780,826 1,693,388
----------- -----------
Deductions from net assets attributed to:
Benefit payments 208,292 721,363
Administrative fees 237 682
----------- -----------
Total deductions 208,529 722,045
----------- -----------
Net increase (decrease) before interfund
transfers 572,297 971,343
Loans issued (49,815) (101,879)
Loans repaid 61,566 155,418
Exchanges in 1,583,328 12,324,736
Exchanges out (1,768,968) (11,665,467)
------------ ------------
Net transfers (173,889) 712,808
------------ ------------
Net increase (decrease) 398,408 1,684,151
Net assets available for benefits:
Beginning of year 5,942,183 8,922,167
------------ ------------
End of year 6,340,591 10,606,318
============= =============
Mellon Fidelity
Asset Managed Asset
Fund ManagerTM
------------- ------------
Additions to net assets attributed to:
Contributions:
Employee 401(k) contributions 1,995,877 486,976
Employee voluntary contributions 57,854 11,417
Rollover contributions 11,770 1,010
------------- ------------
Total contributions 2,065,501 499,403
Investment income:
Dividends 3,593,425 1,407,038
Interest 36,440 -
Net appreciation (depreciation) in
fair market value of investments 18,671,010 1,608,389
-------------- ------------
Total investment income (loss) 22,300,875 3,015,427
-------------- ------------
Transfer from other plan (note 1) - -
-------------- ------------
Total additions 24,366,376 3,514,830
-------------- ------------
Deductions from net assets attributed to:
Benefit payments 8,160,130 1,054,923
Administrative fees 512,539 539
-------------- ------------
Total deductions 8,672,669 1,055,462
-------------- ------------
Net increase (decrease) before interfund
transfers 15,693,707 2,459,368
Loans issued (660,031) (151,523)
Loans repaid 652,467 167,929
Exchanges in 7,938,929 1,418,743
Exchanges out (11,685,865) 2,353,693
--------------- -----------
Net transfers (3,754,500) (918,544)
--------------- -----------
Net increase (decrease) 11,939,207 1,540,824
Net assets available for benefits:
Beginning of year 85,405,848 14,421,624
--------------- ------------
End of year 97,345,055 15,962,448
=============== ============
Polaroid Polaroid
Stock Common
Fund Stock Fund
------------ -----------
Additions to net assets attributed to:
Contributions:
Employee 401(k) contributions 3,176 1,798
Employee voluntary contributions 99 16
Rollover contributions - -
--------- -----------
Total contributions 3,275 1,814
Investment income:
Dividends 168,469 -
Interest 2,428 84
Net appreciation (depreciation) in
fair market value of investments (146,638) 1,711,833
---------- ------------
Total investment income (loss) 24,259 1,711,917
---------- ------------
Transfer from other plan (note 1) - -
----------- -----------
Total additions 27,534 1,713,731
----------- -----------
Deductions from net assets attributed to:
Benefit payments 849,794 20,928
Administrative fees 6 246
----------- ---------
Total deductions 849,800 21,174
----------- ---------
Net increase (decrease) before interfund
transfers (822,266) 1,692,557
Loans issued (867) (1,422)
Loans repaid 1,849 162
Exchanges in 118,863 11,797,379
Exchanges out (12,290,084) (20,058)
------------- -----------
Net transfers (12,170,239) 11,776,061
------------- -----------
Net increase (decrease) (12,992,505) 13,468,618
------------- -----------
Net assets available for benefits:
Beginning of year 12,992,505 -
------------ -----------
End of year - 13,468,618
============ =============
Polaroid
ESOP Stock Participant
Fund Loan Fund
-------------- --------------
Additions to net assets attributed to:
Contributions:
Employee 401(k) contributions - -
Employee voluntary contributions - -
Rollover contributions - -
----------- -----------
Total contributions - -
Investment income:
Dividends - -
Interest 6,229 1,011,342
Net appreciation (depreciation) in
fair market value of investments 43,645,684 -
----------- ------------
Total investment income (loss) 43,651,913 1,011,342
----------- ------------
Transfer from other plans (note 1) 302,029,729 -
----------- ------------
Total additions 345,681,642 1,011,342
------------ ------------
Deductions from net assets attributed to:
Benefit payments - 181,065
Administrative fees 10,745 -
----------- -----------
Total deductions 10,745 181,065
----------- -----------
Net increase (decrease) before interfund
transfers 345,670,897 830,277
Loans issued - 5,164,600
Loans repaid - (5,721,513)
Exchanges in - -
Exchanges out - -
------------ ------------
Net transfers - (556,913)
------------ ------------
Net increase (decrease) 345,670,897 273,364
Net assets available for benefits:
Beginning of year - 11,538,480
------------- ------------
End of year 345,670,897 11,811,844
================ =============
Total
----------
Additions to net assets attributed to:
Contributions:
Employee 401(k) contributions 16,277,982
Employee voluntary contributions 572,510
Rollover contributions 657,291
-----------
Total contributions 17,507,783
Investment income:
Dividends 25,117,412
Interest 8,906,959
Net appreciation (depreciation) in
fair market value of investments 114,476,177
-------------
Total investment income (loss) 148,500,548
-------------
Transfer from other plan (note 1) 302,029,729
-------------
Total additions 468,038,060
-------------
Deductions from net assets attributed to:
Benefit payments 47,840,917
Administrative fees 891,947
-------------
Total deductions 48,732,864
-------------
Net increase (decrease) before interfund
transfers 419,305,196
Loans issued -
Loans repaid -
Exchanges in 176,473,885
Exchanges out (176,473,885)
--------------
Net transfers -
--------------
Net increase (decrease) 419,305,196
Net assets available for benefits:
Beginning of year 539,917,975
--------------
End of year 959,223,171
==============
F-17
<PAGE>
POLAROID RETIREMENT SAVINGS PLAN
Item 27a - Schedule of Assets Held for Investment Purposes
December 31, 1997
Issuer Rate Maturity Par/Shares Cost Fair Value
- ----------------- ----- -------- ---------- ---- ----------
U.S. GOVERNMENT
AND AGENCY OBLIGATIONS:
FHLMC Group #16-1056 9.250% 9/1/08 5,759 $ 5,611 $ 6,095
FHLMC Group #18-3143 7.000% 3/1/09 919,255 924,426 934,349
FHLMC Group #54-4327 7.000% 5/1/06 81,785 84,239 82,413
FHLMC Group #85-0082 9.000% 10/1/05 791,511 1,103,235 1,066,928
FHLMC Group #87-0069 8.000% 4/1/08 484,388 509,819 500,404
FNMA Pool #0028928 5.250% 12/1/98 9,295 9,342 9,157
FNMA Pool #0049622 6.000% 7/1/14 262,421 267,670 259,327
FNMA Pool #0062431 7.500% 3/1/09 427,012 435,018 439,839
FNMA Pool #0107048 7.500% 8/1/04 722,808 747,678 738,468
FNMA Pool #0173835 6.500% 9/1/92 83,709 85,855 83,386
Federal Farm Cr Bks
Cons Mtn 6.140% 5/6/98 500,000 500,072 500,072
GNMA Pool #0024840 8.250% 5/15/08 48,220 45,417 50,175
Guaranteed Expt Trust
93-C CI A 5.200% 10/15/04 622,222 622,222 608,834
Guaranteed Expt Trust
94-F 8.190% 12/15/04 1,884,449 1,946,577 2,003,828
Resolution Trust Corp
92-15 CLAI 6.730% 7/25/27 261,908 261,703 263,207
-------- --------
Total U.S. Government
and Agency Obligations 7,548,884 7,546,482
----------- ---------
SHORT-TERM CORPORATE DEBT :
American Gen Cp Mtn #
00166 6.290% 3/22/98 500,000 501,369 501,369
Associates Corporation
North America Notes 8.375% 1/15/98 600,000 600,579 600,579
Associates Corporation
North America Notes 5.750% 11/15/98 275,000 274,055 274,055
Bellsouth Telcom Dic - 1/7/98 3,500,000 3,495,848 3,495,848
BBL North America Disc - 1/14/98 973,000 970,927 970,927
Capita Equip Rec Trust
96-1 A-2 5.950% 7/15/98 1,874,941 1,874,521 1,874,521
Ciesco L P Disc 1/12/98 1,159,000 1,156,837 1,156,837
COOP Assn Tract A Disc 1/23/98 650,000 647,637 647,637
COOP Assn Tract A Disc 2/10/98 1,000,000 993,500 993,500
COOP Assn Tract A Disc 2/6/98 1,000,000 994,000 994,000
Deutsche Bk B/A Disc 1/20/98 913,935 911,113 911,113
Discover Cr Corp Ser
Ii Mtn 9.000% 4/1/98 900,000 933,939 906,894
Eurofima Notes 4.875% 1/20/98 1,100,000 1,099,136 1,099,136
Europeau Coal & Steel 5.330% 1/14/98 1,500,000 1,389,750 1,499,475
Ford Motor Cr Co Mtn 8.900% 2/12/98 2,000,000 2,006,032 2,006,032
Ford Mtr Cr Co Deb
Notes 6.250% 2/26/98 500,000 500,205 500,205
General Electric
Capital Disc 1/16/98 1,100,000 1,097,799 1,097,799
General Electric
Capital Disc 1/16/98 1,100,000 1,097,273 1,097,273
Goldman Sachs LPL Disc 1/30/98 2,500,000 2,488,219 2,488,219
Guaranteed Expt Trust
Ser 93-B 4.430% 6/15/98 80,000 80,000 80,179
Imi Fdg Corp Usa Disc 2/5/98 2,500,000 2,485,416 2,485,416
Ing Amer Ins Hldg Disc 1/13/98 1,270,000 1,267,439 1,267,439
Intl Nederlanden Disc 2/5/98 300,000 298,206 298,206
KFW Intl Fin Inc Gtd
Notes 9.375% 7/15/98 859,000 873,831 873,831
(Continued)
F-18
<PAGE>
POLAROID RETIREMENT SAVINGS PLAN
Item 27a - Schedule of Assets Held for Investment Purposes
December 31, 1997
Issuer Rate Maturity Par/Shares Cost Fair Value
------------- ----- -------- ----------- ----- -----------
Merrill Lynch Co Disc 1/8/98 988,000 $ 986,818 $ 986,818
Merrill Lynch Co Disc 1/9/98 2,500,000 2,496,219 2,496,219
Mid-St Trust Ii
Mtg Backd Notes C-A3 9.350% 4/1/98 560,000 577,651 564,582
Morgan City Trust B/A Disc 2/26/98 875,000 867,174 867,174
Morgan JP & Co Inc Sub
Notes 4/1/98 565,000 556,791 556,791
Old Kent Bk Trust Co Mtn
00008 6.875% 4/15/98 500,000 501,276 501,276
Quebec Prov Cda
Mtn Trust 00018 8.780% 3/30/98 580,000 583,826 583,826
Texas Dept Comm Disc 1/16/98 2,400,000 2,393,850 2,393,850
USLife Corp Notes 6.750% 1/15/98 500,000 500,129 500,129
Total Short-Term ---------- ---------
Corporate Debt 37,501,365 37,571,155
---------- ---------
LONG-TERM CORPORATE DEBT:
American Express Ser
94-1 Cl A 7.150% 8/15/99 2,500,000 2,519,299 2,519,299
Associates Corp Mtn
Sr 00119 8.180% 2/15/05 1,000,000 1,051,250 1,103,750
Associates Corp
NA Sr 00242 5.990% 12/15/00 2,000,000 2,006,198 1,992,500
Bank One Cr Card
Mtr 94-C A 7.800% 12/15/00 3,000,000 3,040,928 3,040,928
Bear Stearns Co
Inc Sr Notes 6.500% 7/5/00 2,500,000 2,495,450 2,525,001
Carco Auto Ln
Master Trust Ab Ctf 1/18/00 3,000,000 3,000,469 3,000,469
Case Equip Ln Tr
94-C Cl A-2 8.100% 6/15/01 377,180 375,589 380,305
Chase Credit Card
Master Trust 96-3cla 7.090% 2/15/09 1,000,000 999,844 1,058,983
Chevy Chase Auto
Rec 96-1 Cl A 6.600% 12/15/02 1,087,914 1,088,594 1,094,098
Chevy Chase Auto
Rec Trust 95-I 6.000% 12/15/01 665,645 665,436 665,175
Cit Group Hldgs Mtn Sr
00028 6.125% 11/15/99 2,000,000 1,998,240 2,002,500
Daiwa Mortgage
Acceptance Corp
92-1 Cl A 7.875% 10/25/19 45,631 46,090 45,810
Deutsche Bank Finl
Bk Gtd 7.500% 4/25/09 1,000,000 995,940 1,075,000
Discover Card Trust
92-B Cl A 6.800% 6/16/00 1,300,000 1,300,905 1,300,905
Discover Card Trust
Credit Card Cl A 6.250% 8/16/00 1,458,333 1,361,188 1,361,188
Fifth Third Bk Auto
Trust 96a Cla 6.200% 9/1/01 1,024,470 1,025,590 1,025,736
First Dep Master
Trust Abc 93-1 5.750% 6/15/01 2,100,000 2,097,737 2,097,737
First Security Trust
95-A Cl A 6.250% 1/15/01 485,545 485,317 486,020
First Usa Credit Card
Trust 93-1 Cl A 2/15/00 937,500 937,645 937,645
Ford Mtr Credit
Co Notes 6.550% 9/10/02 2,000,000 1,996,140 2,027,500
Ford Mtr Credit
Mtn Trust 00613 6.620% 2/27/06 1,000,00 949,850 1,011,250
GE Home Equity Ln
A/B Ctf 91-1 7.200% 9/15/11 323,827 333,542 325,784
General Elec Cap
Corp Mtn 7.750% 6/9/09 1,000,000 1,053,051 1,139,730
General Motors
Accept Corp Notes 5.630% 2/25/00 2,000,000 1,964,141 1,978,261
Home Equity Ln
Trust Abs 92-2 Cla 6.650% 11/20/12 168,354 171,827 169,526
Household Fin Corp
Mtn Sr 00445 7.150% 6/15/00 1,000,000 1,019,381 1,023,750
Inter Amern Dev Bk 12.250% 12/15/08 1,000,000 1,389,251 1,471,250
Lehman Bros Hldgs
Mtn 00256 6.375% 10/23/00 2,325,000 2,324,047 2,329,627
Merrill Lynch Mtg
Invs 90f-A 9.650% 9/15/10 273,890 291,935 286,821
Merrill Lynch Mtg
Invs Inc 89e 9.400% 9/15/09 1,852,389 1,945,629 1,941,050
Mobil Oil Corp Esop
Trust Deb 9.170% 2/29/00 390,000 416,427 395,944
Nationsbank Corp
Sub Notes 7.750% 8/15/15 500,000 527,813 550,625
Navistar Finl 95-A
Cl A-2 6.550% 11/20/01 720,879 720,541 724,935
(Continued)
F-19
<PAGE>
POLAROID RETIREMENT SAVINGS PLAN
Item 27a - Schedule of Assets Held for Investment Purposes
December 31, 1997
Issuer Rate Maturity Par/Shares Cost Fair Value
--------------- ---- --------- ---------- ------- ---------
Pemex Expt Grantor
Trust Ser 95-A 7.660% 8/15/01 1,791,510 $ 1,785,741 $ 1,845,614
People Bank Credit Card
Ser 94-2 A 3/15/01 714,286 714,425 714,425
Quebec Province Cda Mtn
Trust 00007 8.690% 2/22/01 2,900,000 3,205,835 3,099,375
Salomon Inc Mtn Sr
00070 6.625% 11/30/00 2,500,000 2,499,500 2,528,125
Salomon Inc Notes 7.300% 5/15/02 1,000,000 1,021,501 1,035,000
Standard Credit Card
Master Trust 1-3 8.750% 9/7/99 695,000 704,469 704,469
Standard Credit Card
Ser 6 Cl-A 6.750% 6/7/00 2,090,000 2,100,151 2,100,151
Swiss Bank Corp-Ny Sub
Notes 7.250% 9/1/06 1,000,000 996,480 1,058,751
TextronFinl 97-A Notes
Cl A 6.050% 3/16/09 893,078 891,895 893,093
Travelers Mtg Sec
Ser 84-1 2-2 12.000% 3/1/14 478,199 542,008 549,825
Yamaha Mtr Trust
D 1995-1 ClA 6.200% 5/15/03 3,000,000 2,992,500 3,024,939
--------- ---------
Total Long-Term
Corporate Debt 60,049,789 60,642,869
----------- ----------
OTHER INVESTMENTS:
British Columbia Privince 1,000,000 996,471 996,471
Israel State Notes 800,000 771,440 797,000
Midland Bank Plc Shelf 1 1,000,000 997,620 1,075,000
Quebec Province Cda Mtns
Trust 0009 2,500,000 2,512,478 2,512,478
--------- ---------
Total Other
Investments 5,278,009 5,380,949
---------- ---------
POLAROID CORPORATION COMMON STOCK:
Polaroid Corporation* 7,332,834 308,986,466 357,017,378
----------- ---------
POOLED FUNDS:
Mellon Daily Opening Asset
Allocation Fund* 550,215 57,915,760 96,440,549
Mellon Daily Opening Stock
Index Fund 269,688 34,763,785 64,139,615
Mellon Temporary
Investment Fund* 725 720 720
The Inc Pooled Employee
Funds* 5,051,272 5,051,272 5,051,272
----------- ----------
Total Pooled Funds 97,731,537 165,632,156
---------- -----------
MUTUAL FUNDS:
Fidelity Asset Manager TM* 869,888 13,161,220 15,962,448
Fidelity Contrafund* 1,211,773 44,621,997 56,504,983
Fidelity Investment Grade
Bond Fund* 1,447,368 10,294,462 10,536,838
Fidelity International
Growth & Income Fund* 321,857 5,840,579 6,340,591
Fidelity Magellan(R) Fund* 354,398 27,784,089 33,763,471
Fidelity Retirement Money
Market Portfolio* 26,420,566 26,420,566 26,420,566
Fidelity Overseas Fund* 325,947 9,871,219 10,606,318
Fidelity Puritan(R) Fund* 1,937,308 31,296,756 37,545,028
Fidelty Blue Chip Growth
Fund* 1,430,944 40,996,483 56,465,058
Fidelity Growth & Income
Portfolio* 1,476,416 40,339,205 56,251,466
----------- -----------
Total Mutual Funds 250,626,576 310,396,767
----------- ---------
LOANS TO PARTICIPANTS:
2,163 Outstanding Loans
(Interest Rate 9.25%-9.5%)* 11,811,844 11,811,844 11,811,844
---------- -----------
Total Assets Held
for Investment Purposes $779,534,470 $955,999,600
============ ============
See accompanying accountants' report.
*Party-in-interest
F-20
<PAGE>
POLAROID RETIREMENT SAVINGS PLAN
Item 27d - Schedule of Reportable Transactions
Year Ended December 31, 1997
<TABLE>
<CAPTION>
(a) Identity of (c) Purchase (d) Selling (e) Cost of
Party Involved (b) Description of Asset Price Price Asset
- ------------------ ------------------------ ------------ ----------- -----------
<S> <C> <C> <C> <C>
Mellon Trust* Daily Liquidity Fund $352,128,113 - 352,128,113
Mellon Trust* Daily Liquidity Fund - 350,284,877 350,284,877
Mellon Trust* Polaroid ESOP Stock Fund 299,793,427 - 299,793,427
Fidelity Investments* Fidelity Contrafund 28,307,721 - 28,307,721
- 23,983,843 21,909,659
Fidelity Investments* Fidelity Growth and Income
Portfolio 20,075,172 - 20,075,172
- 14,989,545 12,846,172
Fidelity Investments* Fidelity Retirement Money 26,097,778 - 26,097,778
Market Portfolio - 25,901,950 25,901,950
</TABLE>
(f) Current Value
of Asset on (g) Net Gain
Transaction Date or (Loss)
------------------- -------------
352,128,113 -
350,284,877 -
299,793,427 -
28,307,721 -
23,983,843 2,074,184
20,075,172 -
14,989,545 2,143,373
26,097,778 -
25,901,950 -
*Denotes party-in-interest
See accompanying accountants' report.
F-21
EXHIBIT 23
Independent Accountants' Consent
The Board of Directors
Polaroid Corporation:
We consent to the incorporation by reference in registration statement
No. 333-32285 on Form S-8 with respect to the Polaroid Retirement Savings
Plan (the Plan) of our report dated May 18, 1998, relating to the statements
of net assets available for plan benefits of the Plan as of December 31, 1997
and 1996, and the related statements of changes in net assets available
for plan benefits for the years then ended, which report appears in the
December 31, 1997 annual report on Form 11-K of the Polaroid Retirement
Savings Plan.
/s/ KPMG Peat Marwick LLP
Boston, Massachusetts
June 24, 1998
