2011 SIP Annual Report

Transcription

1 211 SIP Annual Report Eastman Kodak Employees Savings and Investment Plan

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3 Contents Introduction... 2 Tier I: Retirement Date Trusts... 4 Tier II: Core Funds... 1 Short-Term Bond Fund Barclays Aggregate Bond Index Fund S&P 5 Index Fund Russell 2 Index Fund MSCI EAFE Equity Index Fund Money Market Fund Appendix: Funds Offered in 211 and No Longer Available Fixed Income Fund Kodak Stock Fund Legal Information... 2

4 About your 211 SIP Annual Report The Eastman Kodak Employees Savings and Investment Plan (SIP) offers many different options in which to invest your savings. To keep it simple, SIP separates these choices into three easy-to-understand tiers that meet the needs of almost any investor: Retirement Date Trusts, Core Funds, and a brokerage window known as TradeLink. SIP OFFERS CHOICE, FLEXIBILITY, AND SIMPLICITY The 211 SIP Annual Report explains the three tiers. It also provides important background information about the options and reports how they ve performed over the past 1 years. You should consider this information as you are making your investment decisions. If you would like more information after reading the SIP Annual Report, call the SIP-Line at 1-8-SIP-4YOU ( ). The fund information sheets include investment objectives, risks, fees, expenses, and other information that you should read and consider carefully before investing. Tier I: Retirement Date Trusts* This tier is made up of 12 common trust funds: the T. Rowe Price Retirement Date Trusts. Each Retirement Date Trust offers a professionally managed, diversified portfolio, which is automatically rebalanced with specific dates in mind. Each Retirement Date Trust is designed to satisfy the task of allocating one s assets among a variety of appropriate asset classes. If you aren t very comfortable with choosing your own investments or determining the correct asset allocation, Tier I could be right for you. The Retirement Date Trusts simplify investment decision-making so you can concentrate on the big picture. Each Retirement Date Trust is a one-step, premixed, professionally managed trust of trusts, designed to provide: One-step, complete portfolios The trusts are truly one-step, complete portfolios. You don t need to mix and match them with other options. Diversification The trusts offer you professional diversification that may mitigate the overall risk of your portfolio. Exposure to equities and income The trusts give you exposure to both equities and income-generating securities that seek the highest total return over time at a level of risk that is appropriate for the investment time horizon. The risk level is gradually reduced as the trust nears the stated target date and continues for approximately 3 years after the target date. Rebalancing Professional rebalancing is designed to help your retirement account stay on track with your goals without having to rebalance the investment yourself. If you decide a Retirement Date Trust is right for you, simply select the one that most closely matches the year you plan to retire, or choose one based on the year you were born (see chart below). If you were born... In 1988 or after In 1937 or before This Retirement Date Trust may be right for you... Retirement 255 Trust Retirement 25 Trust Retirement 245 Trust Retirement 24 Trust Retirement 235 Trust Retirement 23 Trust Retirement 225 Trust Retirement 22 Trust Retirement 215 Trust Retirement 21 Trust Retirement 25 Trust Retirement Income Trust The trusts assume a retirement age of 65, but this is a guideline only. If the date you have in mind falls between two trusts, choosing the trust with the earlier date may expose you to less risk (the chance of losing money) and also less return (the chance to earn more). Trusts with later dates invest more aggressively that is, you have a greater potential for both risk and reward. * The T. Rowe Price Retirement Date Trusts (the Trusts ) are not mutual funds. They are common trust funds established by T. Rowe Price Trust Company under Maryland banking law, and their units are exempt from registration under the Securities Act of Units of the Trusts are not deposits or obligations of, or guaranteed by, the U.S. government, its agencies, or T. Rowe Price Trust Company and are subject to investment risks, including possible loss of principal. Diversification cannot assure a profit or protect against loss in any market. 2

5 Tier II: Core Funds Core Funds allow you to choose from funds that represent a broad range of asset classes. These funds are primarily index-based funds, which are designed to hold the same securities as the indexes they follow. An index is an unmanaged basket of securities whose collective performance is used to track various segments of the financial markets. Some of the core funds are considered passively invested because the manager simply invests to follow the index. The Tier II Core Funds cost less compared to actively managed funds. The main idea of Tier II is to provide low-cost access to major asset classes. With these funds, you can spread your investments across the major asset classes and create your own diversified portfolio to match your needs and comfort level with risk. Tier III: TradeLink TradeLink is a brokerage service* for those who like lots of choice and are experienced with investing. With TradeLink, you may expand and diversify your retirement plan account with mutual funds outside of the funds offered within SIP.** The service is offered to you through an arrangement SIP has with T. Rowe Price Investment Services, Inc. Summaries of your TradeLink balances appear on your SIP quarterly account statement, and detailed brokerage statements are sent each quarter and in any month when trading activity occurs. TradeLink investment choices may be subject to greater volatility and risk of loss than SIP s Tier II plan investments. Also, there can be additional transaction fees associated with investing through TradeLink. Potential investment gains may be offset by transaction fees. Transaction fees for no-load mutual funds range from $ (for no transaction-fee funds) to $7 (for exchanges between different transaction-fee fund families). Additional fees may be charged for early redemption. Purchases of funds involving load fees and sales of funds involving redemption fees will result in sales commissions being charged to you at the time of the trade. To request a TradeLink application kit or to obtain more information, please call the SIP-Line Service Center at 1-8-SIP-4YOU ( ). *Brokerage services are offered by T. Rowe Price Investment Services, Inc., member FINRA/SIPC. TradeLink brokerage accounts are carried by Pershing, LLC, a subsidiary of The Bank of New York Mellon Corporation (member NYSE/FINRA/SIPC), which acts as a clearing broker for T. Rowe Price Investment Services. **Some investments may be closed to new investors or otherwise not available. The TradeLink application kit provides details on these exceptions. For assistance with asset allocation If you need help in determining your asset allocation, log in to the website for SIP at rps.troweprice.com and check out planning tools from Morningstar, including Morningstar Retirement Manager SM. In addition, you should feel free to consult a financial advisor as a resource. The Morningstar name and trademarks are used under license from Morningstar Associates, LLC. Investment advisory products and services are provided solely by Morningstar Associates, LLC, a registered investment advisor and a wholly owned subsidiary of Morningstar, Inc. Morningstar Associates, LLC, is not affiliated with, nor is it an employee or agent of, T. Rowe Price. Plan sponsors must elect to make the Morningstar services available. 3

6 Tier I: Retirement Date Trusts The historical charts below show where each of the Tier I s 12 Retirement Date Trusts falls on the spectrum of risk and return. As the 25-year chart shows, generally, the lower the relative risk of an investment, the lower its historical return has been. Likewise, the higher the degree of risk, the higher its historical return has been over the long term. Past performance is no guarantee of future results. Historical 8-Year Risk and Return 2% Historical 25-Year Risk and Return 2% Annualized Return 1 5 5% 1% 15% 2% 25% Risk Standard Deviation of Monthly Returns Annualized 2 2 The principal value of the Retirement Date Trusts is not guaranteed at any time, including at or after the target date, which is the approximate date when investors turn age 65. The trusts invest in up to five underlying trusts that include ROR stocks, bonds, and short-term investments and are subject to the risks of different areas of the market. The trusts emphasize potential capital appreciation during the early phases of retirement 15 asset accumulation, balance the need for appreciation with the need for income as retirement approaches, and focus more on income Move and upprin- cipal stability during retirement. The trusts maintain a substantial allocation to equities both prior to and after the target date, which 242 can PTS result in 15 greater volatility. 1 1 Retirement Income Trust 25 Trust 21 Trust 215 Trust 22 Trust 23 Trust 225 Trust 235 Trust 24 Trust 245 Trust 25 Trust 255 Trust Annualized Return Trust 25 Trust Retirement Income Trust 225 Trust 23 Trust 215 Trust 22 Trust 235 Trust 24 Trust 245 Trust 25 Trust 255 Trust 5% 1% 15% 2% 25% Risk Standard Deviation of Monthly Returns Annualized t pts DTP move chart vertically 242 pts for placement Two time periods are presented for perspective on volatility over the longer term (25 years) and over the more recent period (8 years). The charts are for periods ending 12/31/11. Returns for a given trust represent the actual trust performance dating back to the inception date of that trust. For all trusts shown, actual trust performance does not date back 8 or 25 years. As a result, a blended index return has been linked to each trust prior to its inception date. The blended index is composed of four major indices (Wilshire 5, Barclays Capital U.S. Aggregate Bond, MSCI EAFE Net, and 9 Day T-bills), which are mixed in a way such that they reflect the allocation of the trust at the time of inception. For all of the T. Rowe Price Trusts, the returns are based on actual portfolio returns starting July 1, 28, and returns for the major indices are used as proxies prior to that date. These proxies were calculated and rebalanced monthly using the allocations of the trusts at inception. 4

7 Tier I: Retirement Date Trusts (cont.) The T. Rowe Price Retirement Date Trusts seek the highest total return over time through both capital growth and income, with an emphasis on capital growth. Each trust is made up of a diversified portfolio of T. Rowe Price trusts, which together consist of different proportions of stocks and bonds. As a result, each trust has exposure to the risks of many different areas of the market. RETIREMENT 255 TRUST Fund #212 Investment objective/approach: For those who are planning to retire around 255 and prefer a diversified approach to retirement investing. Objective: The objective is to provide the highest total return over time through both capital growth and income. Strategy: The trust invests in a diversified portfolio consisting of approximately 7.25% bonds (domestic and international) and cash equivalents, % inflation-focused bonds, and 92.75% stocks (domestic, international) and real assets. Risks/other information: The trust will implement its strategy by investing in a set of underlying commingled T. Rowe Price trusts, each one emphasizing a different market sector: U.S. equity (stocks), non-u.s. equity (stocks), real assets (commodity-related stocks), inflation focused bonds, fixed income (U.S. and non-u.s. bonds), and, as retirement draws closer, short-term income (bond/cash equivalents). As a result, it will have partial exposure to the risks of many different areas of the market. This trust will reach its final, most conservative allocation of approximately 2% stocks 3 years after reaching its target date. RETIREMENT 245 TRUST Fund #2129 Investment objective/approach: For those who are planning to retire around 245 and prefer a diversified approach to retirement investing. Objective: The objective is to provide the highest total return over time through both capital growth and income. Strategy: The trust invests in a diversified portfolio consisting of approximately 7.25% bonds (domestic and international) and cash equivalents, % inflation-focused bonds, and 92.75% stocks (domestic, international) and real assets. Risks/other information: The trust will implement its strategy by investing in a set of underlying commingled T. Rowe Price trusts, each one emphasizing a different market sector: U.S. equity (stocks), non-u.s. equity (stocks), real assets (commodity-related stocks), inflation focused bonds, fixed income (U.S. and non-u.s. bonds), and, as retirement draws closer, short-term income (bond/cash equivalents). As a result, it will have partial exposure to the risks of many different areas of the market. This trust will reach its final, most conservative allocation of approximately 2% stocks 3 years after reaching its target date. RETIREMENT 25 TRUST Fund #2121 Investment objective/approach: For those who are planning to retire around 25 and prefer a diversified approach to retirement investing. Objective: The objective is to provide the highest total return over time through both capital growth and income. Strategy: The trust invests in a diversified portfolio consisting of approximately 7.25% bonds (domestic and international) and cash equivalents, % inflation-focused bonds, and 92.75% stocks (domestic, international) and real assets. Risks/ other information: The trust will implement its strategy by investing in a set of underlying commingled T. Rowe Price trusts, each one emphasizing a different market sector: U.S. equity (stocks), non-u.s. equity (stocks), real assets (commodity-related stocks), inflation focused bonds, fixed income (U.S. and non-u.s. bonds), and, as retirement draws closer, short-term income (bond/cash equivalents). As a result, it will have partial exposure to the risks of many different areas of the market. This trust will reach its final, most conservative allocation of approximately 2% stocks 3 years after reaching its target date. RETIREMENT 24 TRUST Fund #213 Investment objective/approach: For those who are planning to retire around 24 and prefer a diversified approach to retirement investing. Objective: The objective is to provide the highest total return over time through both capital growth and income. Strategy: The trust invests in a diversified portfolio consisting of approximately 7.25% bonds (domestic and international) and cash equivalents, % inflation-focused bonds, and 92.75% stocks (domestic, international) and real assets. Risks/other information: The trust will implement its strategy by investing in a set of underlying commingled T. Rowe Price trusts, each one emphasizing a different market sector: U.S. equity (stocks), non-u.s. equity (stocks), real assets (commodity-related stocks), inflation focused bonds, fixed income (U.S. and non-u.s. bonds), and, as retirement draws closer, short-term income (bond/cash equivalents). As a result, it will have partial exposure to the risks of many different areas of the market. This trust will reach its final, most conservative allocation of approximately 2% stocks 3 years after reaching its target date. The volatility graphs shown above are based on the historical 8-year standard deviation of monthly returns annualized as of 12/31/11. In July of 21, T. Rowe Price added 2 products as underlying managers to the trusts, an inflation-focused bond product and a real assets product. The inflation-focused bond product has the ability to invest anywhere from 2% to 1% in Treasury Inflation Protected Securities. The real assets product invests in commodity-related stocks. 5

8 Tier I: Retirement Date Trusts (cont.) RETIREMENT 235 TRUST Fund #2112 Investment objective/approach: For those who are planning to retire around 235 and prefer a diversified approach to retirement investing. Objective: The objective is to provide the highest total return over time through both capital growth and income. Strategy: The trust invests in a diversified portfolio consisting of approximately 8.75% bonds (domestic and international) and cash equivalents, % inflation-focused bonds, and 91.25% stocks (domestic, international) and real assets. Risks/other information: The trust will implement its strategy by investing in a set of underlying commingled T. Rowe Price trusts, each one emphasizing a different market sector: U.S. equity (stocks), non-u.s. equity (stocks), real assets (commodityrelated stocks), inflation focused bonds, fixed income (U.S. and non- U.S. bonds), and, as retirement draws closer, short-term income (bond/ cash equivalents). As a result, it will have partial exposure to the risks of many different areas of the market. This trust will reach its final, most conservative allocation of approximately 2% stocks 3 years after reaching its target date. RETIREMENT 225 TRUST Fund #2115 Investment objective/approach: For those who are planning to retire around 225 and prefer a diversified approach to retirement investing. Objective: The objective is to provide the highest total return over time through both capital growth and income. Strategy: The trust invests in a diversified portfolio consisting of approximately 18.25% bonds (domestic and international) and cash equivalents, 1.5% inflation-focused bonds, and 8.25% stocks (domestic, international) and real assets. Risks/other information: The trust will implement its strategy by investing in a set of underlying commingled T. Rowe Price trusts, each one emphasizing a different market sector: U.S. equity (stocks), non-u.s. equity (stocks), real assets (commodity-related stocks), inflation focused bonds, fixed income (U.S. and non-u.s. bonds), and, as retirement draws closer, short-term income (bond/cash equivalents). As a result, it will have partial exposure to the risks of many different areas of the market. This trust will reach its final, most conservative allocation of approximately 2% stocks 3 years after reaching its target date. RETIREMENT 23 TRUST Fund #2113 Investment objective/approach: For those who are planning to retire around 23 and prefer a diversified approach to retirement investing. Objective: The objective is to provide the highest total return over time through both capital growth and income. Strategy: The trust invests in a diversified portfolio consisting of approximately 13.75% bonds (domestic and international) and cash equivalents, % inflation-focused bonds, and 86.25% stocks (domestic, international) and real assets. Risks/other information: The trust will implement its strategy by investing in a set of underlying commingled T. Rowe Price trusts, each one emphasizing a different market sector: U.S. equity (stocks), non-u.s. equity (stocks), real assets (commodity-related stocks), inflation focused bonds, fixed income (U.S. and non-u.s. bonds), and, as retirement draws closer, short-term income (bond/cash equivalents). As a result, it will have partial exposure to the risks of many different areas of the market. This trust will reach its final, most conservative allocation of approximately 2% stocks 3 years after reaching its target date. RETIREMENT 22 TRUST Fund #2116 Investment objective/approach: For those who are planning to retire around 22 and prefer a diversified approach to retirement investing. Objective: The objective is to provide the highest total return over time through both capital growth and income. Strategy: The trust invests in a diversified portfolio consisting of approximately 23.75% bonds (domestic and international) and cash equivalents, 3.5% inflationfocused bonds, and 72.75% stocks (domestic, international) and real assets. Risks/other information: The trust will implement its strategy by investing in a set of underlying commingled T. Rowe Price trusts, each one emphasizing a different market sector: U.S. equity (stocks), non-u.s. equity (stocks), real assets (commodity-related stocks), inflation focused bonds, fixed income (U.S. and non-u.s. bonds), and, as retirement draws closer, short-term income (bond/cash equivalents). As a result, it will have partial exposure to the risks of many different areas of the market. This trust will reach its final, most conservative allocation of approximately 2% stocks 3 years after reaching its target date. As a result, it will have partial exposure to the risks of many different areas of the market. This trust will reach its final, most conservative allocation of approximately 2% stocks 3 years after reaching its target date. The volatility graphs shown above are based on the historical 8-year standard deviation of monthly returns annualized as of 12/31/11. In July of 21, T. Rowe Price added 2 products as underlying managers to the trusts, an inflation-focused bond product and a real assets product. The inflation-focused bond product has the ability to invest anywhere from 2% to 1% in Treasury Inflation Protected Securities. The real assets product invests in commodity-related stocks. 6

9 Tier I: Retirement Date Trusts (cont.) RETIREMENT 215 TRUST Fund #2117 Investment objective/approach: For those who are planning to retire around 215 and prefer a diversified approach to retirement investing. Objective: The objective is to provide the highest total return over time through both capital growth and income. Strategy: The trust invests in a diversified portfolio consisting of approximately 28.75% bonds (domestic and international) and cash equivalents, 6.5% inflation-focused bonds, and 64.75% stocks (domestic, international) and real assets. Risks/other information: The trust will implement its strategy by investing in a set of underlying commingled T. Rowe Price trusts, each one emphasizing a different market sector: U.S. equity (stocks), non-u.s. equity (stocks), real assets (commodity-related stocks), inflation focused bonds, fixed income (U.S. and non-u.s. bonds), and, as retirement draws closer, short-term income (bond/ cash equivalents). As a result, it will have partial exposure to the risks of many different areas of the market. This trust will reach its final, most conservative allocation of approximately 2% stocks 3 years after reaching its target date. RETIREMENT 25 TRUST Fund #2114 Investment objective/approach: For those who are retired or are close to retirement and prefer a diversified approach to retirement investing. Objective: The objective is to provide the highest total return over time through both capital growth and income. Strategy: The trust invests in a diversified portfolio consisting of approximately 37.75% bonds, (domestic and international) and cash equivalents, 15.5% inflationfocused bonds, and 46.75% stocks (domestic, international) and real assets. Risks/other information: The trust will implement its strategy by investing in a set of underlying commingled T. Rowe Price trusts, each one emphasizing a different market sector: U.S. equity (stocks), non- U.S. equity (stocks), real assets (commodity-related stocks), inflation focused bonds, fixed income (U.S. and non-u.s. bonds), and, as retirement draws closer, short-term income (bond/cash equivalents). As a result, it will have partial exposure to the risks of many different areas of the market. This trust will reach its final, most conservative allocation of approximately 2% stocks 3 years after reaching its target date. RETIREMENT 21 TRUST Fund #2119 Investment objective/approach: For those who are close to retirement and prefer a diversified approach to retirement investing. Objective: The objective is to provide the highest total return over time through both capital growth and income. Strategy: The trust invests in a diversified portfolio consisting of approximately 33.25% bonds (domestic and international) and cash equivalents, 11.5% inflationfocused bonds, and 55.25% stocks (domestic, international) and real assets. Risks/other information: The trust will implement its strategy by investing in a set of underlying commingled T. Rowe Price trusts, each one emphasizing a different market sector: U.S. equity (stocks), non-u.s. equity (stocks), real assets (commodity-related stocks), inflation focused bonds, fixed income (U.S. and non-u.s. bonds), and, as retirement draws closer, short-term income (bond/cash equivalents). As a result, it will have partial exposure to the risks of many different areas of the market. This trust will reach its final, most conservative allocation of approximately 2% stocks 3 years after reaching its target date. RETIREMENT INCOME TRUST Fund #2118 Investment objective/approach: For retired investors who seek income and relative stability from bonds and capital appreciation potential from stocks. Objective: The objective is to provide the highest total return over time through both capital growth and income. Strategy: The trust invests in a diversified portfolio consisting of approximately 27.25% bonds (domestic and international) and cash equivalents, 3% inflation-focused bonds, and 42.75% stocks (domestic, international) and real assets. Risks/other information: The trust will implement its strategy by investing in a set of underlying commingled T. Rowe Price trusts, each one emphasizing a different market sector: U.S. equity (stocks), non-u.s. equity (stocks), real assets (commodity-related stocks), inflation focused bonds, fixed income (U.S. and non-u.s. bonds), and, as retirement draws closer, short-term income (bond/cash equivalents). As a result, it will have partial exposure to the risks of many different areas of the market. This trust will reach its final, most conservative allocation of approximately 2% stocks 3 years after reaching its target date. The volatility graphs shown above are based on the historical 8-year standard deviation of monthly returns annualized as of 12/31/11. In July of 21, T. Rowe Price added 2 products as underlying managers to the trusts, an inflation-focused bond product and a real assets product. The inflation-focused bond product has the ability to invest anywhere from 2% to 1% in Treasury Inflation Protected Securities. The real assets product invests in commodity-related stocks. 7

10 Tier I: Retirement Date Trusts (cont.) THE MIX: MORE CONSERVATIVE AS THE TARGET DATE NEARS The chart below shows how the Retirement Date Trusts change over time. Market Risk 1% 1% Stocks Bonds Age: Exposure to stocks and bonds, both U.S. and non-u.s., comes from holdings of the T. Rowe Price U.S. Equities Trust, Non-U.S. Equities Trust, Real Assets Trust, Fixed Income Trust, and Inflation Focused Bond Trust. While these underlying trusts invest primarily in U.S. stocks, non-u.s. stocks, U.S. and non-u.s. bonds, and inflation focused investments, respectively, each may invest a portion of its portfolio in other asset classes. For example, while the U.S. Equities Trust invests primarily in U.S. stocks, it can also invest a portion of its assets in non U.S. stocks, or in bonds or cash. Benchmark: Retirement 255 Trust Weighted Benchmark Retirement 255 Retirement 25 Trust Weighted Benchmark Retirement 25 Retirement 245 Trust Weighted Benchmark Retirement 245 Retirement 24 Trust Weighted Benchmark Retirement 24 Retirement 235 Trust Weighted Benchmark Retirement 235 Retirement 23 Trust Weighted Benchmark Retirement 23 Retirement 225 Trust Weighted Benchmark Retirement 225 Retirement 22 Trust Weighted Benchmark Retirement 22 Retirement 215 Trust Weighted Benchmark Retirement 215 Retirement 21 Trust Weighted Benchmark Retirement 21 Retirement 25 Trust Weighted Benchmark Retirement 25 Retirement Income Trust Weighted Benchmark Retirement Income 8

11 Tier I: Retirement Date Trusts (cont.) Investment manager: The trustee, T. Rowe Price Trust Company (Baltimore, MD), is responsible for the day-to-day management of the trusts and is advised by T. Rowe Price Associates, Inc., and T. Rowe Price International Ltd. registered investment advisers. Where to find the trusts: These are collective investment trusts organized for employee benefit plans and are privately offered. Daily price information is available by calling the SIP-Line or going online. Estimated annual expenses: Estimated expense ratio:.43% Trustee fee: The trustee fees listed here represent the annualized trustee fee of the T. Rowe Price Retirement Date Trusts. The trustee of the T. Rowe Price Retirement Date Trusts, T. Rowe Price Trust Company, uses the fee primarily to pay normal operating expenses associated with the trusts, including custodial, accounting, recordkeeping, and investment advisory services provided by third parties. Such providers may be affiliates of the trustee. 211 recap: Each trust beat its respective index portfolio benchmark for the fourth quarter, yet lagged for the year. In 211, the markets experienced volatility, led mainly by macro-economic events. In the first half of the year, political turmoil in the Middle East; the Japanese disaster; the downgrade of Greece s government bonds followed by Spain and Portugal; and inflationary concerns in China derailed the markets. Strong corporate profit news and optimism for a potential QE3 boosted markets toward the tail end of June. In the third quarter, Congress grappled with the U.S. debt ceiling and Standard & Poor s took away the country s pristine AAA-rated status. Internationally, the eurozone agreement, aimed at fixing sovereign debt concerns in the region, and Greece s subsequent referendum vote, shocked markets. The fourth quarter was a continuation of these major concerns, but markets did get a boost as investors reacted positively to data on unemployment, consumer spending, and corporate earnings announcements. Domestically, GDP growth increased to 2.8% in the fourth quarter, up from 1.8% in the third. Unemployment fell to 8.5%, the lowest level since 29. The Consumer Price Index (CPI) was at 3% by year-end, with Core CPI at around 2.2%. Fixed income markets were mostly positive. Long-term Treasuries and Treasury Inflation Protected Securities were the strongest performing sectors in the bond market. Global bond performance was led by U.K. and Australian bonds. In equities, nearly all S&P 5 sectors, with the exception of financials, industrials, and materials, ended up positive. Large-capitalization stocks outpaced their smaller-capitalization counterparts, and growth stocks outperformed value stocks across the market capitalization spectrum. Additionally, domestic equities outpaced international equities for the year. Internationally, most MSCI EAFE sectors lagged for the year, with the exceptions of consumer staples, health care, and energy. Emerging markets lagged developed international markets, a reversal from 21. According to the manager, equities continue to be favored over fixed income. Domestically, growth stocks were favored over value stocks, as T. Rowe Price is looking to take advantage of the low-growth environment. Exposure to emerging market equities and bonds were also slightly dialed up. T. Rowe Price maintains its commitment to providing participants with retirement success. 9

12 Tier II: Core Funds The historical charts below show Tier II s six Core Funds and where each falls on the spectrum of risk and return. Remember, past performance is no guarantee of future results. Historical 8-Year Risk and Return 1% Barclays Aggregate Bond Index Fund S&P 5 Index Fund Russell 2 Index Fund MSCI EAFE Equity Index Fund Annualized Return % 5% 1% 15% 2% 25% 3% 35% 4% 45% 5% 55% 6% Risk Standard Deviation of Monthly Returns Annualized Historical 25-Year Risk and Return move chart below 32pts Kodak Stock Fund 1 9% S&P Russell 25 2 Index Fund Index Fund U.S. Barclays Aggregate Bond Index Fund 6 MSCI EAFE Equity Index Fund -1 3 ROR -2 Annualized Return Kodak Stock Fund -15 % 5% 1% 15% 2% 25% 3% 35% 4% Risk Standard Deviation of Monthly Returns Annualized 45% Move -4pts Two time periods are presented for perspective on volatility over the longer term (25 years) and over the most recent period (8 years). The charts for periods ending 12/31/211 are based on monthly returns. For the Fixed Income and Kodak Stock Fund, returns reflect actual SIP experience. The index funds were incepted into the SIP Plan 6 in December 27. As a result, longer-term performance in terms of actual SIP experience is not available. For these funds prior to January 1, 28, monthly returns of the benchmark that best represents each index fund is used as a proxy for the return. Past performance is no guarantee of future results. 3 ROR

13 Short-Term Bond Fund Fund #562 Investment objective/approach: The fund employs a management strategy designed to track the performance of a blend of fixed income indices consisting of 5% Barclays Capital U.S. Government Bond 1-5 Year Index, 4% Barclays Capital U.S. Credit 1-5 Year Index, and 1% Barclays Capital Asset Backed Securites Aaa Index. Collectively, these indices are composed of U.S. securities in Treasury, government-related, corporate, and securitized sectors. The fund holds a broadly diversified collection of securities that, in the aggregate, approximates the blend of indices in terms of key characteristics. This fund is designed for investors who seek a low-cost way to invest in the short-term government bond and investment-grade credit markets and can accept the risk of price fluctuation. This is not a money market fund and its price and yield will fluctuate. 211 recap:* The fund returned approximately.44% for the fourth quarter and 3.35% for 211, nearly matching its blended benchmark (5% Barclays Capital U.S. Government Bond 1-5 Year Index, 4% Barclays Capital U.S. Credit 1-5 Year Index, and 1% Barclays Capital Asset Backed Securites Aaa Index) as expected. The returns of the fund and index were led by returns in the investment-grade and treasury sectors. Returns in both sectors were driven by continued lower yields, as the Federal Reserve kept interest rates at historic lows and investors fled to the perceived safety of U.S. debt as eurozone debt contagion fears continued to grow. Fund manager: The Savings and Investment Plan Committee (SIPCO), a committee of Kodak managers that helps to administer SIP, Rochester, New York; NISA Investment Advisors, L.L.C., St. Louis, Missouri; BlackRock Capital Management, Inc., Wilmington, Delaware; Merganser Capital Management JP, Boston, Massachusetts; BNY Mellon Cash Investment Strategies, Pittsburgh, PA. Where to find the fund: This is a proprietary fund managed solely for SIP. Daily price information is available by calling the SIP-Line at 1-8-SIP-4YOU Estimated annual expenses: Estimated fund expense ratio:.12% Securities by Quality as of 12/31/ % AA 12.97% AAA 1.44% A 6.12% BBB.63% B.18% BB Note: BB quality is too small of a percentage to view Volatility: The volatility graph above and the returns shown on this page are based on the historical 8-year standard deviation of monthly returns annualized of the fund benchmark annualized as of 12/31/11, and annual returns, respectively. Fund performance:* Please note that the numerical data reflected are projections of what the fund may have returned if invested historically in accordance with the benchmarks stated and their weights. Fund % Best Year: % Worst Year: % Periods Ending 12/31/11 Average Annual One Year 3.35% Three Years 5.21 Five Years Years 4.45 Please remember: Past performance is no guarantee of future results. *The data reflected above are for illustrative purposes only based on the fund s blended benchmark. This is a new proprietary fund with no past performance but, had a fund with these investments existed, the above 211 recap and fund performance sections reflect how it could have performed had the fund been invested according to its blended benchmark Dollars Fund 562 Blended Benchmark Allocations Growth of a dollar through 12/31/11: Indicates what one dollar invested in the fund at 1/1/2 would have been worth at the end of each year through 12/31/11. Barclays Capital US Govt. Bond 1-5 Yr Index 5.% Barclays Capital US Credit 1-5 Yr Index 4.% Barclays Capital Asset Backed Securities Aaa Index 1.% 11

14 Barclays Aggregate Bond Index Fund Fund #565 Investment objective/approach: This is an index fund that seeks to match the performance of the Barclays Capital Aggregate Bond Index by investing in a diversified sample of the bonds that make up the index. The index is the broadest measure of the U.S. investment-grade bond market and is composed of U.S. Treasury and federal agency bonds, corporate bonds, residential and commercial mortgage-backed securities, and asset-backed securities. This fund is designed for investors who seek a lowcost way to participate in the U.S. investment-grade bond market and who can accept the risk of price fluctuation. This fund is not a money market fund and its price and yield will fluctuate. 211 recap: The fund returned 1.14% for the fourth quarter and 7.87% for calendar year 211, outpacing its index. Fixed income markets were mostly positive for the year, producing higher single digit returns. Long-term treasury and Treasury Inflation Protected Securities were among the best performing fixed income sectors. The Treasury curve ended much flatter for the year, with long-term yields being brought down by the Federal Reserve s Operation Twist. With the volatility of equities, domestic and global, many investors flocked to the bond space. Fund manager: BlackRock Institutional Trust Company Where to find the fund: This is a collective investment fund organized for employee benefit plans and is privately offered. Daily price information is available by calling the SIP-Line. Securities by Quality Securities by Market Sector 12/31/11 12/31/11 Estimated annual expenses: Fund management fees:.4% Volatility: The volatility graph above and the returns shown on this page are based on the historical 8-year standard deviation of monthly returns annualized as of 12/31/11, and annual returns, respectively. Please see page 1 for more information. Fund performance: Fund % Best Year: % Worst Year: % Periods Ending 12/31/11 Average Annual One Year 7.87% Three Years 6.84 Five Years Years 5.85 Please remember: Past performance is no guarantee of future results. 76% AAA 4% AA 11% A 9% BBB 42.11% Government 3.31% Securitized 19.81% Corporate 6.89% Cash & Equivalents.88% Municipal Growth of a dollar through 12/31/11: Indicates what one dollar invested in the fund at 1/1/2 would have 5 been worth at the end of each year through 12/31/ Dollars Fund BBB A AA AAA or above Non-US Credit Industrial US Treasury Mortage Backed

15 S&P 5 Index Fund Fund #566 Investment objective/approach: Volatility: This is an index fund that seeks to match the performance of the S&P 5 Index by investing in stocks that make up the index. The S&P 5 Index, considered a large-capitalization benchmark, is composed of a sample of leading U.S. companies in leading industries and accounts for more than 75% of the market value of all publicly traded stocks in the U.S. The fund The volatility graph above and the returns shown on this page are based on the historical is intended for investors who seek long-term capital growth with modest 8-year standard deviation of monthly returns annualized as of 12/31/11, and annual dividend income and can accept the price volatility inherent in common returns, respectively. Please see page 1 for more information. stock investing. Fund performance: 211 recap: The fund was up 11.87% for the fourth quarter and returned 2.23% for calendar year 211, outpacing its index. Equity returns for the fourth quarter were led by the cyclical sectors, which are generally tied to an economic recovery. These sectors were the energy, industrials, and materials sectors. For 211 as a whole, the more defensive sectors, such as the health care and utilities, led the way. Within the large-capitalization market, growth names outperformed value names again this year. Investors remain concerned about eurozone agreement, unemployment, the housing market, and inflation as the markets head into Fund 2.23% Fund manager: BlackRock Institutional Trust Company Where to find the fund: 22 Best Year: % Worst Year: % This is a collective investment fund organized for employee benefit plans Periods Ending 12/31/11 Average Annual and is privately offered. Daily price information is available by calling the One Year 2.23% SIP-Line. Three Years Five Years Years 3.3 Please remember: Past performance is no guarantee of future results. 5 Growth of a dollar through 12/31/11: Indicates what one dollar invested in the fund at 1/1/2 would have 4 been worth at the end of each year through 12/31/11. Top 1 Holdings (%) Exxon Mobil Corp Apple Inc By Size of Company Intl Business 12/31/6 Machines Corp Chevron Corp Microsoft Corp. 1.7 General Electric Co Proctor & Gamble Co. 1.6 AT&T Inc Johnson & Johnson 1.56 Pfizer Inc % Largest 2 stockst 18.88% The other 3 stocks Estimated annual expenses: Fund management fees:.2% Sector Weights 12/31/ % Technology 12.48% Financial Services 12.2% Energy 12.12% Consumer Defensive 11.66% Industrials 11.49% Health Care 9.38% Consumer Cyclical 4.32% Communication Services 3.8% Utilities 3.19% Basic Materials 1.87% Real Estate Dollars Fund

16 Russell 2 Index Fund Fund #567 Investment objective/approach: This is an index fund that seeks to match the performance of the Russell 2 Index by investing in a diversified sample of the stocks that make up the index. The index is composed of the 2, smallest companies in the Russell 3 Index and represents approximately 8% of the total market capitalization of the Russell 3 Index. The Russell 3 Index represents 98% of the total U.S. equity market capitalization. The fund is intended for investors who seek long-term capital growth and can accept the price volatility inherent in common stock investing. Small-company stocks are more volatile than large-company stocks and may show more frequent and sharper upswings and downturns in value. 211 recap: The fund was up 15.48% for the fourth quarter and returned -4.11% for calendar year 211, outpacing its index. Small-capitalization equities outpaced their larger-capitalization counterparts for the quarter, but lagged for the year. Smaller-capitalization stocks lagged for 211 mostly due to declines in health care and producer durables. Within the small-capitalization market, growth names outperformed value names. Investors remain concerned about the eurozone agreement, unemployment, the housing market, and inflation as the markets head into 212. Fund manager: BlackRock Institutional Trust Company Where to find the fund: This is a collective investment fund organized for employee benefit plans and is privately offered. Daily price information is available by calling the SIP-Line. Volatility: The volatility graph above and the returns shown on this page are based on the historical 8-year standard deviation of monthly returns annualized as of 12/31/11, and annual returns, respectively. Please see page 1 for more information. Fund 5 performance: 4 Fund % '1 Best Year: % Worst Year: % Periods Ending 12/31/11 Average Annual One Year -4.11% Three Years DTP Operator: copy parts of original graph into a dummy job. Five Years Then paste into top graph by moving up +25 pts Years 5.68 Please remember: Past performance is no guarantee of future results. '11 Top 1 Holdings By Size (%) of Company 12/31/6 Healthspring, Inc..33 NetLogic Microsystems, Inc..3 SuccessFactors, Inc..3 Clean Harbors, Inc..27 World Fuel Services Corporation.27 American Campus Communities, Inc..26 Henry Jack & Associates, Inc..26 BioMed Realty 26.87% Trust, Inc. Largest 2 stocks.25 Home Properties, 73.13% Inc. The other 1,8.25 stocks National Retail Properties, Inc..25 Estimated annual expenses: Fund management fees:.2% Sector Weights 12/31/ % Industrials 16.54% Technology 12.88% Financial Services 12.71% Consumer Cyclical 11.28% Health Care 9.19% Real Estate 5.64% Energy 5.1% Basic Materials 4.58% Consumer Defensive 3.75% Utilities 1.28% Communication Services Growth 5 of a dollar through 12/31/11: Indicates what one dollar invested in the fund at 1/1/2 would have been 4worth at the end of each year through 12/31/11. Dollars Fund

17 MSCI EAFE Equity Index Fund Fund #568 Investment objective/approach: This is an index fund that seeks to match the performance of the MSCI EAFE Index by investing in stocks that make up the index. The Morgan Stanley Capital International (MSCI) EAFE (Europe, Australasia, Far East) Index is a market-cap weighted index composed of approximately 1, foreign stocks, representing established companies in developed countries across Western Europe and the Pacific Rim. The fund is intended for longterm investors who can accept the price volatility inherent in common stock investing as well as risks unique to international investing, such as changes in currency values. 211 recap: The fund was up 4.66% for the fourth quarter and returned % for calendar year 211, outpacing the index. Developed international markets, as measured by the MSCI EAFE Index, returned approximately % for the year mainly due to concerns over the European debt crisis. Japan, the United Kingdom, and Europe all posted negative results for 211. Fund manager: BlackRock Institutional Trust Company Where to find the fund: This is a collective investment fund organized for employee benefit plans and is privately offered. Daily price information is available by calling the SIP-Line. Volatility: Best Year: % Worst Year: % The volatility graph above and the returns shown on this page are based on the historical 8-year standard deviation of monthly returns annualized as of 12/31/11, and annual returns, respectively. Please see page 1 for more information. 5 Fund performance: 4 Fund % ' Periods Ending 12/31/11 Average Annual One Year % Three Years 7.47 DTP Operator: copy parts of original graph into a dummy job Five Years -4.4 Then paste into top graph by moving up +25 pts. 1 Years 4.58 Please remember: Past performance is no guarantee of future results. '11 5 Growth of a dollar through 12/31/11: Indicates what one dollar invested in the fund at 1/1/2 would have been 4worth at the end of each year through 12/31/11. Top 1 Holdings (%) Nestle 2. Vodafone AG 1.48 HSBC Holdings PLC 1.43 BP 1.42 Novartis AG 1.4 Royal Dutch Shell PLC 1.4 Roche Holding AG 1.25 GlaxoSmithKline PLC 1.22 BHP Billiton LTD 1.19 Total SA 1.14 Top Five Countries 12/31/ % Japan 2.77% United Kingdom 9.39% Australia 9.33% Germany Dollars Fund % France Estimated annual expenses: Fund management fees:.6% 15

18 Money Market Fund Fund #314 Investment objective/approach: The Money Market Fund consists of an investment in the Vanguard Prime Money Market Fund. This fund is designed for investors who seek a stable share price, interest income, and liquidity. This is an actively managed fund that seeks to provide current income to investors while also maintaining liquidity and a stable share price of $1. The fund will invest in high-quality, short-term money market instruments, including certificates of deposit, banker s acceptances, commercial paper, and other money market securities. The fund may invest more than 25% of assets in securities that are issued by companies in the financial services industry. Investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. 211 recap: The fund returned approximately.3% for the fourth quarter and.13% for 211, nearly matching its benchmark, the U.S. 9 Day Treasury Bill Index. The returns of the fund and index were led by the Federal Reserve s interest rate policy, which over the past year has consistently been to maintain historically low interest rates in order to encourage borrowing and provide a boost to the stagnant U.S. economy. Fund manager: The Vanguard Group, founded in 1975, is well known as a broad-based low-cost provider of investment solutions. The current portfolio manager of the fund is David R. Glocke, principal. David has been managing the fund since 23 and has been working in the investment management industry since Volatility: Fund performance: Fund % Best Year: % Worst Year: % Periods Ending 12/31/11 Average Annual One Year.13% Three Years.34 Five Years Years 2.17 Please remember: Past performance is no guarantee of future results. The volatility graph above and the returns shown on this page are based on the historical 8-year standard deviation of monthly returns annualized as of 12/31/11, and annual returns, respectively. Where to find the fund: Daily price information is available at vanguard.com. Estimated annual expenses: Fund expense ratio:.9% Growth of a dollar through 12/31/11: Indicates what one dollar invested in the fund at 1/1/2 would have been worth at the end of each year through 12/31/11. Dollars Fund

19 Appendix: Funds Offered in 211 and No Longer Available 17

20 Fixed Income Fund Fund #562 Investment objective/approach: The fund is designed to provide a relatively stable level of interest income with low risk of losing capital. The fund invests in traditional guaranteed investment contracts (GICs) and synthetic GICs that invest in a diversified portfolio of investment-grade bonds. With respect to both kinds of investments, highly rated financial institutions guarantee participants principal and accrued interest. The combination of traditional GICs and the synthetic GICs offers broader diversification to the Fixed Income Fund than traditional GICs alone while still maintaining competitive and stable returns. As of early January 212, the fund had synthetic GICs (the Synthetic GIC Global Wrap, * made up of five diversified investment-grade bond portfolios and contracts with four wrap providers), and a money market fund to provide liquidity to participants. 211 recap: The Fixed Income Fund returned.8% for the fourth quarter and 3.49% for the year. Both returns outpaced the returns of the Ryan Labs 3-Year GIC Index. (Due to the book value nature of the Fixed Income Fund, the Ryan Labs 3-Year GIC Index has been chosen for comparison to best represent the Fixed Income Fund s higher-quality nature, duration, and return characteristics.) As of January 3, 212, the underlying annual yield on the fund was 3.1%. Fund manager: The Savings and Investment Plan Committee (SIPCO), a committee of Kodak managers that helps to administer SIP, Rochester, New York; NISA Investment Advisors, L.L.C., St. Louis, Missouri; BlackRock Capital Management, Inc., Wilmington, Delaware; Merganser Capital Management JP, Boston, Massachusetts; BNY Mellon Cash Investment Strategies, Pittsburgh, PA. Where to find the fund: This is a proprietary fund managed solely for SIP. Daily price information is available by calling the SIP-Line at 1-8-SIP-4YOU. Volatility: 5 Fund performance: Total return 4 figures below are net of SIP administrative expenses and other fees. 3 Fund % / ' '7 '8 25 Fund Dollars Best Year: % Worst Year: % 1.5 Periods Ending 12/31/11 Average Annual One 1. Year 3.49% Three Years Five Years 4.55 Fund Years 5.52 Please remember: Past performance is no guarantee of future results. Dollars 3. The volatility graph above and the returns shown on this page are based on the historical 8-year standard deviation of monthly returns annualized as of 12/31/11, and annual returns, respectively. Growth 4. of a dollar through 12/31/11: Indicates 3.5 what one dollar invested in the fund at 1/1/2 would have been worth at the end of each year through 12/31/11. Fi Synthetic GIC Global Wrap Target Asset Allocation as of 12/31/11 Issuers of Contracts to the Fixed Income Fund as of 12/31/11 (with credit ratings) Dollars % U.S. Goverment Bonds 38% Corporate Bonds 1% Asset Backed Securities Due to rounding, total may not equal 1%. Estimated annual expenses: Fund expense ratio:.26% 32% Monumental Life (AEGON) (rated A) 25% Pacific Life (rated A) 24% JP Morgan Chase (rated AA) 19% State Street Bank & Trust (rated A) Fixed Income Fund Contracts (estimates as of 12/31/11) Market Value (millions) Carrier Name Fund 562 Interest Rates $3,999 Synthetic GIC Global Wrap* 3.61% $381 EBTIF (money market fund).5% $4,38 Maturities *Issuers: Monumental Life Insurance (AEGON), JP Morgan Chase, Pacific Life, and State Street Bank & Trust. A synthetic GIC combines an investment-grade bond portfolio with an insurance contract (e.g., wrapper) that stabilizes fund returns and provides principal plus accrued interest for participant withdrawals. 18