<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended _______________ to _____________
Commission File Number 1-4085
POLAROID RETIREMENT SAVINGS PLAN
--------------------------------------------------------------------------------
(Full title of the plan)
POLAROID CORPORATION
784 Memorial Drive
Cambridge, Massachusetts 02139
--------------------------------------------------------------------------------
(Name of issuer of the securities help pursuant to the plan
and the address of its principal executive office)
<PAGE>
POLAROID RETIREMENT SAVINGS PLAN
INDEX TO FINANCIAL STATEMENTS
AND SUPPLEMENTARY SCHEDULES
<TABLE>
<S> <C>
Report of Independent Auditors 1
Financial Statements
Statements of Net Assets Available for Benefits 2
Statements of Changes in Net Assets Available for Benefits 3
Notes to Financial Statements 4
Supplementary Schedules
Item 27a - Schedule of Assets Held for Investment Purposes 14
Item 27d - Schedule of Reportable Transactions 15
Exhibit Index
Exhibit 23 - Consent of KPMG LLP
</TABLE>
<PAGE>
SIGNATURES
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,
thereunto duly authorized.
POLAROID RETIREMENT SAVINGS PLAN
(Name of Plan)
By // JUDITH G. BOYNTON JUNE 28, 2000
-------------------- -------------
Judith G. Boynton
Chairman
Fund Manager
<PAGE>
POLAROID RETIREMENT SAVINGS PLAN
Financial Statements and Supplemental Schedules
December 31, 1999 and 1998
(With Independent Auditors' Report Thereon)
<PAGE>
INDEPENDENT AUDITORS' 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, 1999 and 1998, 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, 1999 and 1998, 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.
June 22, 2000
<PAGE>
POLAROID RETIREMENT SAVINGS PLAN
Statements of Net Assets Available for Benefits
December 31, 1999 and 1998
<TABLE>
<CAPTION>
ASSETS 1999 1998
------------ ------------
<S> <C> <C>
Investments (note 4) $858,739,176 824,836,887
Temporary cash investments -- 52,905
------------ ------------
858,739,176 824,889,792
------------ ------------
Receivables:
Accrued interest and dividends 2,023,186 1,649,210
Due from investments sold 26,148 61,581
------------ ------------
Total receivables 2,049,334 1,710,791
------------ ------------
Total assets 860,788,510 826,600,583
------------ ------------
LIABILITIES
Administrative fees payable 735,904 176,963
Income distribution payable 915,823 741,641
------------ ------------
Total liabilities 1,651,727 918,604
------------ ------------
Net assets available for benefits $859,136,783 825,681,979
============ ============
</TABLE>
See accompanying notes to financial statements.
2
<PAGE>
POLAROID RETIREMENT SAVINGS PLAN
Statements of Changes in Net Assets Available for Benefits
Years ended December 31, 1999 and 1998
<TABLE>
<CAPTION>
1999 1998
------------ ------------
<S> <C> <C>
Additions to net assets attributed to:
Contributions:
Employer's contributions $ 21,492,820 24,228,792
Employees' 401(k) contributions 17,131,773 18,685,948
Employees' voluntary contributions 649,556 718,266
Rollover contributions 12,621,895 1,118,193
------------ ------------
Total contributions 51,896,044 44,751,199
------------ ------------
Investment income:
Dividends 42,799,231 33,304,596
Interest 8,475,252 8,731,025
Net appreciation (depreciation) in fair market value of
investments (note 4) 45,056,118 (128,013,392)
------------ ------------
Total investment income/(loss) 96,330,601 (85,977,771)
------------ ------------
Total additions (deductions) 148,226,645 (41,226,572)
------------ ------------
Deductions from net assets attributed to:
Benefit payments 113,775,705 91,335,660
Administrative fees 996,136 978,960
------------ ------------
Total deductions 114,771,841 92,314,620
------------ ------------
Net increase (decrease) in net assets 33,454,804 (133,541,192)
Net assets available for benefits:
Beginning of year 825,681,979 959,223,171
------------ ------------
End of year $859,136,783 825,681,979
============ ============
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
POLAROID RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 1999 and 1998
(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.
On December 1, 1997, the Polaroid Employee Stock Equity Plan (the "ESOP")
was merged with the 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) EMPLOYER CONTRIBUTIONS
Beginning on January 1, 1998, the Company contributed for each
plan participant an amount equal to 3% of their annual
compensation consisting of regular and overtime wages. These
contributions are 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 on January 1, 1998, the Company contributed for
each plan participant, an amount equal to 5% of their annual
compensation consisting of regular and overtime wages. These
contributions are automatically 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.
(B) 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.
(Continued)
4
<PAGE>
POLAROID RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 1999 and 1998
(C) 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.
(D) PARTICIPATION AND VESTING
Employees become participants upon their first day of employment
and are 100 percent vested in their accounts at all times.
(E) 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 account balances of $3,500 or less
will receive their benefits in the form of a lump sum cash
payment.
(F) ADMINISTRATIVE EXPENSES
Administrative expenses are paid by the Plan unless the Company
elects to pay them. In 1999 and 1998, this election was not made.
(G) 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% (8.75% - 9.5%
in 1999 and 1998).
(H) 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.
(Continued)
5
<PAGE>
POLAROID RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 1999 and 1998
(I) 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.
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 an S&P 500-Registered
Trademark- 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.
(Continued)
6
<PAGE>
POLAROID RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 1999 and 1998
FIDELITY PURITAN-Registered Trademark- 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 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-Registered Trademark-.
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.
FIDELITY MAGELLAN-Registered Trademark- 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 any 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.
(Continued)
7
<PAGE>
POLAROID RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 1999 and 1998
MELLON CAP GTAA FUND
The Fund became available to participants on August 1, 1998. The
Fund's investment objective is to provide capital appreciation
across global markets with reduced risk across the long term.
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 COMMON STOCK FUND
The assets of the Fund are invested in Polaroid Corporation common
stock.
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.
(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.
(Continued)
8
<PAGE>
POLAROID RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 1999 and 1998
Net appreciation or depreciation of investments includes both
realized and unrealized gains and losses.
(C) PAYMENT OF BENEFITS
Benefits are recorded when paid.
(D) 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.
(3) FEDERAL INCOME TAX
On September 12, 1995, the Internal Revenue Service (the "IRS") issued a
Determination letter which stated that the Polaroid Retirement Savings
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 on
December 1, 1997. However, the Plan sponsor believes the Plan is designed
and is currently being operated in compliance with applicable
requirements of the Code.
(4) INVESTMENTS
In September 1999, the American Institute of Certified Public Accountants
issued Statement of Position (SOP) No. 99-3, ACCOUNTING FOR AND REPORTING
OF CERTAIN DEFINED CONTRIBUTION PLAN INVESTMENTS AND OTHER DISCLOSURE
MATTERS. SOP No. 99-3 simplifies the disclosure for certain investments
and is effective for plan years ending after December 15, 1999. The Plan
adopted SOP No. 99-3 during the Plan year ended December 31, 1999.
Accordingly, information previously required to be disclosed about
participant-directed fund investment programs is not presented in the
Plan's 1999 financial statements. The Plan's 1998 financial statements
have been reclassified to conform with the current year's presentation.
(Continued)
9
<PAGE>
POLAROID RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 1999 and 1998
The following table presents investments at fair market value.
Investments that represent 5% or more of the Plan's net assets are
separately identified:
<TABLE>
<CAPTION>
1999 1998
---------------- ----------------
<S> <C> <C>
U.S. Government and Agency Obligations $ 3,762,216 6,565,361
Certificates of Deposit 2,998,230 4,193,978
Short-term Corporate Debt 33,440,063 35,177,462
Long-term Corporate Debt 57,183,994 62,746,303
Other Investments 10,537,617 7,548,276
Polaroid Corporation Common Stock 138,346,897 135,759,974
Pooled Funds:
Mellon Daily Opening Asset Allocation Fund 100,141,877 114,223,542
Mellon Daily Opening Stock Index Fund 82,949,436 74,667,077
Other pooled funds 8,898,276 8,015,896
Mutual Funds:
Fidelity Contrafund 74,272,861 63,964,680
Fidelity Magellan-Registered Trademark- Fund 63,810,988 43,746,491
Fidelity Blue Chip Growth Fund 84,210,729 71,677,130
Fidelity Growth & Income Portfolio 59,433,796 68,429,194
Other mutual funds 126,547,676 115,198,106
Participants' loans 12,204,520 12,923,417
------------- -------------
Total investments $ 858,739,176 824,836,887
============= =============
Net appreciation (depreciation) in fair market value of investments for
the years ended December 31, 1999 and 1998, is as follows:
1999 1998
------------- -------------
U.S. Government and Agency Obligations $ (184,219) (85,688)
Short-term Corporate Debt (26,471) (48,073)
Long-term Corporate Debt (2,231,468) 322,809
Other Investments (293,008) (104,519)
Polaroid Corporation Common Stock 2,014,411 (214,869,392)
Pooled Funds 15,885,777 37,492,232
Mutual Funds 29,891,096 49,279,239
------------- -------------
Net appreciation (depreciation) in fair market
value of investments $ 45,056,118 (128,013,392)
============= =============
</TABLE>
(Continued)
10
<PAGE>
POLAROID RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 1999 and 1998
(6) 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.
(7) 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.
11
<PAGE>
POLAROID RETIREMENT SAVINGS PLAN
Item 27a - Schedule of Assets Held for Investment Purposes
December 31, 1999
<TABLE>
<CAPTION>
ISSUER RATE MATURITY PAR/SHARES COST FAIR VALUE
------------------------------------------------ ----------- -------------- ---------------- ----------------- ------------------
<S> <C> <C> <C> <C> <C>
CERTIFICATES OF DEPOSIT
Bankers Trust Co Instl CD 4.980% 4/10/00 3,000,000 2,998,230 2,998,230
----------------- ------------------
U.S. GOVERNMENT AND AGENCY
OBLIGATIONS:
FHLMC Group #16-1056 9.250% 9/1/08 3,351 3,265 3,517
FHLMC Group #18-3143 7.000% 3/1/09 455,294 457,855 447,827
FHLMC Group #54-4327 7.000% 5/1/06 19,718 20,310 19,581
FHLMC Group #85-0082 9.000% 10/1/05 419,066 448,663 431,415
FHLMC Group #B7-0069 8.000% 4/1/08 252,494 265,750 254,898
FNMA Pool #0049622 6.000% 7/1/14 31,100 31,722 30,235
FNMA Pool #0062431 7.500% 3/1/09 270,686 275,761 272,096
FNMA Pool #0107048 7.500% 8/1/04 17,553 18,157 17,498
GNMA Pool #0024840 8.250% 5/15/08 24,103 22,703 24,536
Guaranteed Expt Tr 93-C Cl A 5.200% 10/15/04 444,445 444,445 429,665
Guaranteed ExptFr 94-F 8.187% 12/15/04 1,266,672 1,308,433 1,304,589
Student Ln Marketing Assn Nt 7.500% 3/8/00 525,000 526,359 526,359
----------------- ------------------
Total U.S. Government
and Agency Obligations 3,823,423 3,762,216
----------------- ------------------
SHORT-TERM CORPORATE DEBT:
Bank West Australia Emtn 2/22/00 3,000,000 2,999,734 2,999,734
Citibank Cr Card Master Tr Bds 6.250% 2/10/00 1,500,000 1,501,020 1,501,020
Caisse Des Depots Disc 1/14/00 500,000 498,906 498,906
African Dev Bk Sub Nt 9.300% 7/1/00 1,500,000 1,521,986 1,521,986
American Gen Fin Corp Sr Nt 6.875% 1/15/00 562,000 562,039 562,039
Avco Finl Svcs Inc 5.500% 4/1/00 2,025,000 2,020,769 2,020,769
Banque Et Caisse Disc 1/20/00 900,000 897,079 897,079
Banque Gen Du Lux Disc 1/26/00 3,500,000 3,485,368 3,485,368
Capita Equip Rec Tr 96-1 Cl A4 6.280% 6/15/00 943,398 946,557 946,557
Capita Equip Rec 97-1 Cl A-3 6.120% 9/15/00 539,598 539,683 539,683
Ciesco L P Disc 1/26/00 500,000 497,691 497,691
Ciesco L P Disc 2/2/00 500,000 497,333 497,333
Coop Assn Trac A Disc 1/18/00 1,000,000 997,167 997,167
Coop Assn Trac A Disc 1/20/00 2,300,000 2,292,535 2,292,535
Coop Assn Trac B Disc 2/16/00 1,000,000 992,244 992,244
Discover Card Tr 9-B Cr Card 6.750% 2/15/00 820,000 821,108 821,108
Ford Cr Auto Owner Tr 1998-C 5.730% 11/15/00 107,996 107,996 107,996
Golden West Finl Corp Sub Nt 7.000% 1/15/00 2,000,000 2,000,115 2,000,115
Jcp Master Cr Card Tr Ser C 9.625% 6/15/00 1,085,000 1,099,711 1,099,711
Japan Fin Corp For Mun Gtd Bd 9.125% 10/11/00 900,000 919,073 919,073
Kfw Intl Fin Inc Disc 1/19/00 579,000 577,263 577,263
Kfw Intl Fin Inc Disc 1/25/00 560,000 557,555 557,555
Lehman Bros Mtn # Tr 00079 8.875% 2/15/00 810,000 812,193 812,193
Mobil Oil Corp Esop Tr Deb 9.170% 2/29/00 735,608 743,236 738,482
National Aust Fdg Disc 2/2/00 1,400,000 1,391,911 1,391,911
Premier Auto Tr 98-3 Nts A2 5.820% 12/8/00 127,067 127,114 127,114
Queensland Treas Disc 2/23/00 400,000 396,290 396,290
Wal-mart Stores Inc Nts 5.850% 6/1/00 660,000 659,046 659,046
Commonwlth Bk Aus Disc 3/22/00 1,000,000 986,650 986,650
Electric France Disc 1/14/00 2,000,000 1,995,445 1,995,445
----------------- ------------------
Total Short-Term Corporate Debt 33,444,817 33,440,063
----------------- ------------------
</TABLE>
12
<PAGE>
POLAROID RETIREMENT SAVINGS PLAN
Item 27a - Schedule of Assets Held for Investment Purposes (Continued)
December 31, 1999
<TABLE>
<CAPTION>
ISSUER RATE MATURITY PAR/SHARES COST FAIR VALUE
------------------------------------------------ ----------- -------------- ---------------- ----------------- ------------------
<S> <C> <C> <C> <C> <C>
LONG-TERM CORPORATE DEBT:
Abn Amro Bk Nv Chicago Sub Nt 7.250% 5/31/05 500,000 501,335 493,906
At&t Cap Corp Mtn Tr #00638 6.600% 5/15/05 1,000,000 980,390 952,500
At&t Cap Corp Mtn Tr #00658 5.860% 4/26/02 2,000,000 2,000,000 1,950,000
Abbey Natl Cap B V Gtd 8.200% 10/15/04 1,000,000 1,110,500 1,026,250
Arcadia Auto Rec 97-B Cl A-4 6.700% 2/15/05 1,300,000 1,326,000 1,302,478
Asset Backed Secs Corp 98-A 5.900% 5/14/04 1,682,250 1,688,033 1,672,834
Associated Corp MTN # Sr 00877 7.580% 4/12/04 1,000,000 1,082,490 1,012,500
Associated Corp MTN # Sr 00085 8.625% 11/15/04 1,000,000 1,142,760 1,056,250
Associated Corp MTN # Sr 00119 8.180% 2/15/05 1,000,000 1,051,250 1,036,250
Bear Stearns Cos Inc Global Nt 6.450% 8/1/02 2,000,000 1,994,020 1,962,836
California Infrastructure 6.150% 6/25/02 481,071 480,396 480,396
California Infrastructure 97-1 6.140% 3/25/02 987,920 988,534 988,534
California Infract 1997-1 A-2 6.040% 3/25/02 641,870 642,161 642,161
Case Equip Ln Tr 96B Cl A-3 6.650% 9/15/03 1,342,600 1,343,478 1,343,478
Case Equip Rec 98-B Nts Cl A1 5.700% 5/15/02 128,441 128,468 128,468
Chase Cr Crd Master Tr 96-3Cla 7.090% 2/15/09 1,000,000 999,844 1,002,516
Chevron Corp Pft/Sh Tr Amtzg 8.110% 12/1/04 909,333 947,498 932,067
Chevy Chase Auto Rec 96-1 Cl A 6.600% 12/15/02 239,815 239,965 239,998
Circuit City Cr 95-1 Ctf Cl A 6.375% 9/15/05 465,000 465,000 465,000
Deutsche Bk Finl Bk Gtd 7.500% 4/25/09 1,000,000 1,103,550 988,750
FMC Corp Mtn #Tr 00008 6.530% 12/22/03 500,000 498,260 473,473
Fifth Third Bk auto Tr 96A Cla 6.200% 9/1/01 124,701 124,837 124,732
First Chicago Master Tr II 94L 7.150% 4/16/01 175,000 175,218 175,218
First Chicago Master Tr II 94K 6.950% 4/16/01 133,333 133,333 133,333
First Un Corp Sr Nt 8.000% 11/15/02 1,000,000 1,086,250 1,019,300
Ford Mtr Cr Mtn #Tr 00613 6.620% 2/27/06 1,000,000 949,850 957,500
Gmac Grantor Tr 97-A Cl A 6.500% 4/15/02 634,678 635,286 635,286
General Elec Cap Corp Nt 7.875% 11/22/04 1,000,000 1,118,230 1,031,250
Gmac Mtn 5.400% 4/9/01 2,000,000 1,996,220 1,968,604
Hrpt Ppyts Tr Sr Nts 6.875% 8/26/02 600,000 594,750 578,496
Heller Equip Asset 97-1 Cl A-2 6.390% 5/25/05 638,027 642,712 636,806
Hyundai Auto Rec 98-A Cl A1 5.900% 4/15/01 930,575 929,238 929,238
Illinois Pwr Spl Tr 98-1 5.390% 6/25/02 518,127 517,089 517,089
Inter Amern Dev Bk 12.250% 12/15/08 1,000,000 1,389,250 1,317,500
Intl Lease Fin Cp Mtn Tr00181 8.150% 10/1/04 1,000,000 1,098,130 1,025,000
International Lease Fin Corp 5.750% 2/19/05 1,500,000 1,452,480 1,442,835
Lehman Bros Mtn # Tr 00213 6.900% 1/29/01 2,500,000 2,504,625 2,496,875
Merrill Lynch mtg Invs Inc 89E 9.400% 9/15/09 1,044,002 1,096,552 1,076,384
Mid-st Tr II Mtg Bckd Nt Cl A4 9.625% 4/1/03 1,400,000 1,506,400 1,444,058
Midland Bk Plc Shelf 1 7.625% 6/15/06 1,000,000 997,620 991,250
Morgan Stanley Dean Witter & Co 7.125% 1/15/03 1,000,000 999,780 998,750
Ncnb Corp Sub Nt 9.125% 10/15/01 2,000,000 2,088,020 2,066,358
Nationsbank Corp Sub Notes 7.750% 8/15/15 500,000 527,813 487,500
Navistar Finl Tr 97-B CL A-3 6.200% 3/15/01 848,607 848,392 848,392
Neiman Marcus Group 95-1 Cl A 7.600% 6/15/03 2,000,000 2,009,064 2,009,064
New Court Rec Asset Tr 96-1cla 6.790% 8/20/03 317,939 317,939 317,939
New Court Rec Asset Tr 96-2cla 6.870% 6/20/04 554,148 554,167 554,167
Pemex Expt Grantor Tr Ser 95-A 7.660% 8/15/01 824,718 822,062 832,844
Private Expt Fdg Corp Ser G 6.670% 9/15/09 1,000,000 1,000,000 975,000
Railcar Tr No 1992-1 7.750% 6/1/04 1,552,822 1,584,332 1,567,730
Salomon Inc Nts 7.000% 3/15/04 1,000,000 1,053,550 985,000
Sears Cr Acct Master Tr 95-2 A 8.100% 6/15/04 1,313,542 1,371,908 1,325,766
</TABLE>
13
<PAGE>
POLAROID RETIREMENT SAVINGS PLAN
Item 27a - Schedule of Assets Held for Investment Purposes (Continued)
December 31, 1999
<TABLE>
<CAPTION>
ISSUER RATE MATURITY PAR/SHARES COST FAIR VALUE
------------------------------------------------ ----------- -------------- ---------------- ----------------- ------------------
<S> <C> <C> <C> <C> <C>
(Continued)
Swiss Bk Corp N Y Mtn #Tr00012 7.375% 6/15/17 1,000,000 1,040,010 965,000
Textron Finl 97-A Nts Cl A 6.050% 3/16/09 180,846 180,606 179,448
Travelers Mtg Sec Ser 84-1 Z-2 12.000% 3/1/14 265,734 301,193 284,683
Wfs Finl Owner Tr 96-A Cl A-4 6.150% 6/1/01 92,020 92,047 92,047
Wal Mart Stores Remarketed Bds 5.650% 2/1/10 500,000 499,472 499,472
Western Finl 95-4 Cl A-1 6.200% 2/1/02 554,566 554,698 554,698
Yamaha Mtr Tr D 1995-1 Cl A 6.200% 5/15/03 3,000,000 2,992,499 2,988,737
----------------- ------------------
Total Long-Term Corporate Debt 58,499,554 57,183,994
----------------- ------------------
POLAROID CORPORATION COMMON STOCK:
Polaroid Corporation 7,353,988 222,987,698 138,346,897
----------------- ------------------
LOANS TO PARTICIPANTS:
1,984 outstanding loans
(Interest rate 8.75% - 10.00%) 12,204,520 12,204,520 12,204,520
----------------- ------------------
OTHER INVESTMENTS:
Canada Global Bnd 6.500% 5/30/00 500,000 500,163 500,163
Export Dev Corp Bds Us $ 8.625% 3/24/00 2,000,000 2,009,041 2,009,041
Sweden Kingdom Nts 5.600% 1/27/00 2,000,000 1,998,960 1,998,960
British Columbia Prov of Disc 2/2/00 700,000 695,956 695,956
Israel State NTS 6.375% 12/15/05 850,000 820,878 777,750
Manitoba Prov Cda U S$ Ser CJ 9.500% 10/1/00 300,000 306,643 306,643
Manitoba Prov Cda Mtn # Tr 00007 9.000% 12/15/00 300,000 307,269 307,269
Quebec Prov Cda Mtn #TR 00007 8.690% 2/22/01 2,900,000 3,205,834 2,954,375
Texas Agric Fin Auth T/E 3/15/00 1,000,000 987,460 987,460
----------------- -----------------
Total Other Investments 10,832,204 10,537,617
----------------- -----------------
POOLED FUNDS:
Mellon Temp Inv Fund * 1,276 1,276 1,276
Mellon Cap GTAA Fund * 3,650 433,750 461,141
Mellon Daily Opening Stock Index Fund * 231,240 31,957,429 82,949,436
Mellon Daily Opening Asset Alloc Fund * 459,927 52,223,706 100,141,877
TBC Inc Pooled Employee Funds * 8,435,860 8,435,859 8,435,859
----------------- -----------------
Total Pooled Funds 93,052,020 191,989,589
----------------- -----------------
MUTUAL FUNDS:
Fidelity International Growth & Income Fund * 396,026 8,568,168 11,920,393
Fidelity Asset Manager * 871,674 13,920,768 16,021,363
Fidelity Contrafund Fund * 1,237,469 57,085,029 74,272,861
Fidelity Investment Grade Bond Fund * 1,687,371 12,077,223 11,625,985
Fidelity Magellan Fund * 467,035 46,533,904 63,810,988
Fidelity Retirement Money Market Portfolio * 39,179,040 39,179,040 39,179,040
Fidelity Overseas Fund * 339,802 11,762,878 16,313,878
Fidelity Puritan Fund * 1,654,599 28,634,324 31,487,017
Fidelity Growth & Income Portfolio * 1,260,259 44,124,387 59,433,796
Fidelity Blue Chip Growth Fund * 1,400,944 50,468,255 84,210,729
----------------- -----------------
Total Mutual Funds 312,353,976 408,276,050
----------------- -----------------
Total Assets Held for Investment Purposes $750,196,442 858,739,176
================= =================
</TABLE>
* Denotes party-in-interest.
See accompanying auditors' report.
14
<PAGE>
Schedule 2
POLAROID RETIREMENT SAVINGS PLAN
Item 27d - Schedule of Reportable Transactions
Year ended December 31, 1999
<TABLE>
<CAPTION>
(F) CURRENT
VALUE
OF ASSET ON (G) NET
(A) IDENTITY OF PARTY (C) PURCHASE (D) SELLING (E) COST OF TRANSACTION GAIN OR
INVOLVED (B) DESCRIPTION OF ASSET PRICE PRICE ASSET DATE (LOSS)
--------------------- ------------------------ ------------ ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Mellon Trust* Daily Liquidity Funds $279,374,123 -- 279,374,123 279,374,123 --
Mellon Trust* Daily Liquidity Funds -- 278,779,219 278,779,219 278,779,219 --
</TABLE>
*Denotes party-in-interest
See accompanying auditors' report.
15
