SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT
Pursuant to Section 15(d) of the
Securities and 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 1-14050
A. Full title of the Plan and the address of the Plan, if
different from that of the issuer
named below:
Lexmark Savings Plan
B. Name of issuer of securities held pursuant to the Plan and the
address of its principal executive office:
Lexmark International Group, Inc.
One Lexmark Centre Drive
740 New Circle Road NW
Lexington, Kentucky 40550
1
<PAGE>
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act
of 1934, the Plan Administrator of the Plan has duly caused this annual report
to be signed on its behalf by the undersigned hereunto duly authorized.
LEXMARK SAVINGS PLAN
Date: June 24, 1997 By: /s/Gary E. Morin
---------------------------------
Gary E. Morin
Acting Treasurer
Lexmark International Group, Inc.
2
<PAGE>
Form 11-K
Lexmark Savings Plan
December 31, 1997
--------
Pages
Report of Independent Accountants 1
Financial Statements:
Statements of Net Assets Available for Plan Benefits
as of December 31, 1997 and 1996 2
Statements of Changes in Net Assets Available for Plan Benefits
for the years ended December 31, 1997 and 1996 3
Notes to Financial Statements 4-16
Supplemental Schedules:
Item 27(a) Schedule of Assets Held for Investment Purposes
as of December 31, 1997 17
Item 27(d) Schedule of Reportable Transactions for the year
ended December 31, 1997 18-19
Exhibit:
Consent of Independent Accountants
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Plan Administrator of
the Lexmark Savings Plan
Lexington, Kentucky
We have audited the accompanying statements of net assets available for plan
benefits of the Lexmark Savings Plan (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. 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 plan benefits as of December
31, 1997 and 1996 and the changes in net assets available for plan benefits for
the years then ended in conformity with generally accepted accounting
principles.
Our audits were performed 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 as of December 31, 1997 and reportable transactions for
the year ended December 31, 1997 included on pages 17 through 19 are presented
for the purpose 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 audit 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/ Coopers & Lybrand L.L.P.
Lexington, Kentucky
June 8, 1998
1
<PAGE>
LEXMARK SAVINGS PLAN
Statements of Net Assets Available for Plan Benefits
December 31, 1997 and 1996
<TABLE>
<CAPTION>
1997 1996
---------------- ----------------
ASSETS
Investments, at fair market value:
<S> <C> <C>
Common trust funds $ 136,218,657 $ 92,235,822
Participant loans 5,483,771 6,072,413
Lexmark Class A common stock 26,198,598 18,305,872
Guaranteed investment contracts
(GICs) and Synthetic GICs,
at contract value 64,138,444 69,526,648
------------- -------------
Total investments 232,039,470 186,140,755
Interest receivable - 426,656
Receivable for sale of investment - 65,000
Employer contribution receivable 533,378 1,074,147
------------- -------------
Total assets 232,572,848 187,706,558
Payable for purchase of
investment - 459,555
------------- -------------
NET ASSETS AVAILABLE FOR
PLAN BENEFITS $ 232,572,848 $ 187,247,003
============= =============
</TABLE>
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
LEXMARK SAVINGS PLAN
Statements of Changes in Net Assets Available for Plan Benefits
for the years ended December 31, 1997 and 1996
<TABLE>
<CAPTION>
1997 1996
---- ----
Investment income:
<S> <C> <C>
Dividend and interest income $ 10,989,784 $ 5,603,656
Net appreciation in value of
investments 27,132,262 20,574,445
Contributions:
Employer 2,991,567 3,356,082
Participants 13,912,655 12,553,249
Distributions to withdrawing
participants (9,268,164) (10,554,467)
Administrative expenses (432,259) (617,105)
------------- -------------
Net increase (decrease) in
plan equity 45,325,845 30,915,860
NET ASSETS AVAILABLE FOR
PLAN BENEFITS:
Beginning of year 187,247,003 156,331,143
------------- -------------
End of year $ 232,572,848 $ 187,247,003
============= =============
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. Plan Description:
The Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974 ("ERISA"). The following description of the Lexmark
Savings Plan (the "Plan") provides only general information.
(a) General
-------
The Plan is a defined contribution plan that covers all regular
full-time employees of the U.S. subsidiaries of Lexmark International
Group, Inc. (the "Company"). To be eligible to participate in the
Plan, employees must have one year and 1,000 hours of service.
Effective January 1, 1998, employees are eligible to participate on
the day one hour of service is performed.
The Plan was amended and restated on July 1, 1997. Significant changes
to the Plan have been disclosed herein. Effective July 1, 1997, the
trustee was changed from Bankers Trust Company (the "predecessor
trustee") to Fidelity Management Trust Company (the "successor
trustee"). The Plan assets held by the predecessor trustee were
invested by the successor trustee into the following investment
options:
Bankers Trust Company Fidelity Management Trust Company
--------------------- ---------------------------------
Money Market Fund Fidelity Retirement Government
Money Market Portfolio
Large Company Index Fund Fidelity Equity Income Fund
Small Company Index Fund Fidelity Low-Priced Stock Fund
Balanced Asset Fund Fidelity Freedom 2000 Fund
International Index Fund Fidelity Diversified International Fund
The successor trustee offers additional investment funds which
include: Fidelity Growth & Income Portfolio, Fidelity Intermediate
Bond Fund, Fidelity Contrafund, Fidelity Freedom Income Fund, Fidelity
Freedom 2010 Fund, Fidelity Freedom 2020 Fund, Fidelity Freedom 2030
Fund and Spartan U.S. Equity Index Fund.
Record keeping responsibilities for the Lexmark Stock Fund and the
Dwight Fixed Income Fund were also transferred from the predecessor
trustee to the successor trustee; however, invested assets remained
consistent at the time of transfer.
4
<PAGE>
NOTES TO FINANCIAL STATEMENTS, Continued
1. Plan Description, continued:
(b) Investment Funds
----------------
Prior to July 1, 1997, the Plan's participant-directed options were
as follows: Money Market, Large Company Index, Small Company Index,
Balanced Asset, International Index, Dwight Fixed Income, and
Lexmark Stock Funds. The Money Market Fund was represented by a
diversified portfolio of high-quality, short-term money market
securities whose return follows current market interest rates. The
Large Company Index Fund was represented principally by a common
trust fund comprised of investments in common stocks that are
expected to produce results that approximate the performance of the
Standard & Poor's 500 Index. The Small Company Index Fund was
represented principally by investments in common stocks that are
expected to produce results that approximate the performance of the
medium and small-company common stocks generally not included in the
Standard & Poor's 500 Index. The Balanced Asset Fund was represented
by a diversified portfolio of stocks, bonds, and money market
instruments. The International Index Fund was represented
principally by securities in major stock markets in Europe,
Australia, Latin America and the Far East to provide growth
potential and diversification. The Dwight Fixed Income Fund was and
continues to be a stable value, commingled pool of money with
Company employees that invests in high quality investment contracts
offered by major insurance companies and other approved financial
institutions and short-term investments to provide for liquidity
needs. The Lexmark Stock Fund was and continues to be a commingled
pool of money with Company employees that buys shares of Lexmark
Class A common stock with a small amount of short-term investments
to provide for liquidity needs.
Effective July 1, 1997, the Plan's active participant-directed
options are as follows:
The Fidelity Retirement Government Money Market Portfolio is a money
market fund that invests in high quality, short-term money market
securities of the U.S. Treasury and government agencies. The
Fidelity Equity-Income Fund is a growth and income mutual fund that
invests primarily in income-producing stocks, but may also invest in
bonds for income. The Fidelity Low-Priced Stock Fund is a growth
mutual fund that invests primarily in stocks of companies that the
fund's manager believes are undervalued or out of favor and could
offer the potential for significant capital appreciation. The
Fidelity Diversified International Fund is an international, growth
mutual fund that invests primarily in stocks of relatively
undervalued larger companies located outside the U.S. that are
included in the Morgan Stanley EAFE Index. The Fidelity Growth &
Income Portfolio is a growth and income mutual fund that invests
mainly in U.S. and foreign stocks of companies currently paying
dividends and carrying the potential for increased earnings, but may
also invest in bonds. The Fidelity Intermediate Bond Fund is an
income mutual fund that invests in all types of investment-grade
bonds, including foreign, U.S. government and corporate issues, with
5
<PAGE>
NOTES TO FINANCIAL STATEMENTS, Continued
1. Plan Description, continued:
(b) Investment Funds
----------------
intermediate maturities. The Fidelity Contrafund is a growth mutual
fund that invests primarily in U.S. and foreign common stocks of
unpopular companies that the fund's manager believes are undervalued
or out of favor. The Fidelity Freedom Funds are asset allocation
mutual funds investing in other Fidelity stock, bond and money
market mutual funds. The allocation strategy for each Freedom Fund
with a target retirement date is based on the number of years until
anticipated retirement, gradually adopting a more conservative asset
allocation over time. The Freedom Income Fund, however, is designed
for those already in retirement. The Spartan U.S. Equity Index Fund
is a growth and income fund that invests primarily in the companies
that comprise the S&P 500 Index. The Dwight Fixed Income Fund is a
stable value, commingled pool of money with Company employees that
invests in high quality investment contracts offered by major
insurance companies and other approved financial institutions and
short-term investments to provide for liquidity needs. The Lexmark
Stock Fund is a commingled pool of money with Company employees that
buys shares of Lexmark Class A common stock with a small amount of
short-term investments to provide for liquidity needs.
The number of participants in each fund as of December 31, 1997 and
1996 is as follows:
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Money Market Fund 1,206
Large Company Index Fund 2,009
Small Company Index Fund 1,593
Balanced Asset Fund 594
International Index Fund 593
Fidelity Retirement Government Money Market Portfolio 1,076
Fidelity Equity Income Fund 2,110
Fidelity Low-Priced Stock Fund 1,720
Fidelity Diversified International Fund 706
Fidelity Growth & Income Portfolio 480
Fidelity Intermediate Bond Fund 150
Fidelity Contrafund 434
Fidelity Freedom Income Fund 40
Fidelity Freedom 2000 Fund 459
Fidelity Freedom 2010 Fund 95
Fidelity Freedom 2020 Fund 92
Fidelity Freedom 2030 Fund 99
Spartan U.S. Equity Index Fund 473
Dwight Fixed Income Fund 1,869 2,091
Lexmark Stock Fund 3,611 2,547
</TABLE>
6
<PAGE>
NOTES TO FINANCIAL STATEMENTS, Continued
1. Plan Description, continued:
(c) Contributions
-------------
The Plan is funded by voluntary employee pre-tax contributions up to
a maximum of 12% of total annual eligible compensation. Effective
January 1, 1998, the maximum voluntary pre-tax contribution is 20%.
The contributions for a participant are made by payroll deductions
and are determined each pay period by multiplying the participant
contribution rate then in effect by his/her eligible compensation
for such period.
A participant can designate and change the proportions in which
his/her pretax contributions are allocated among the Plan's active
investment funds. Prior to July 1, 1997, the minimum allocation to
each fund was 5%. Effective July 1, 1997, the minimum allocation to
each Fund is 1%.
The Company matches employee pretax contributions in an amount equal
to 30% of up to the first 5% the employee contributes per pay
period. Matching contributions are invested in the same investment
funds and in the same proportions as designated by the participant.
However, the participant can elect to have all or a portion of
matching contributions invested in the Lexmark Stock Fund.
The Company contributes an additional matching contribution if the
Company achieves certain business results each fiscal year, with
payout, if any, as soon as practicable in the following year. The
additional matching contribution is allocated to a participant based
on his/her aggregate contributions to the Plan for that year and is
invested in the Lexmark Stock Fund. A participant is not permitted
to transfer amounts attributable to such allocation, including any
earnings thereon, from the Lexmark Stock Fund to another investment
fund. An additional matching contribution of $533,378 and $1,074,147
for 1997 and 1996, respectively, has been accrued in the financial
statements.
(d) Allocations to Participants
---------------------------
Prior to July 1, 1997, contributions and earnings of the Plan were
allocated to the accounts of the participants on a semi-monthly
basis. Each participant's value in the net assets of the investment
funds was based upon the assignment of units. The number of units
and the net asset value per unit in the funds as of December 31,
1996 is as follows:
<TABLE>
<CAPTION>
1996
-----------------------------
Net Asset
Units Value Per Unit
--------- --------------
<S> <C> <C>
Money Market Fund 4,641,077 $1.30
Large Company Index Fund 21,264,926 $2.30
Small Company Index Fund 11,114,734 $2.28
Balanced Asset Fund 5,398,858 $1.39
International Index Fund 3,144,674 $1.31
Dwight Fixed Income Fund 46,335,971 $1.50
Lexmark Stock Fund 12,107,358 $1.63
</TABLE>
7
<PAGE>
NOTES TO FINANCIAL STATEMENTS, Continued
1. Plan Description, continued:
(d) Allocations to Participants, continued
---------------------------
Effective July 1, 1997, contributions continue to be allocated on a
semi-monthly basis and earnings are allocated to the accounts of the
participants on a daily basis. The investment fund options provided
by the successor trustee are mutual funds that do not assign units
for contributions and earnings allocation, except for the Lexmark
Stock Fund, which has 2,114,495 units with a $12.49 net asset value
per unit as of December 31, 1997.
(e) Vesting
-------
Employees who were eligible to participate in the Plan prior to July
1, 1994 vest immediately in their contributions and matching
contributions made on their behalf by the Company. Employees hired
on or after July 1, 1994 and who were not participants in the Plan
as of June 30, 1995 become fully vested in the employer matching
contributions upon completing five years of continuous service or
upon death, disability or attainment of normal retirement age as an
employee, whichever occurs first.
(f) Withdrawals
-----------
A participant who has attained age 59 1/2 may withdraw in cash all
or part of his/her contributions and matching contributions provided
that a participant may make only one such withdrawal in any Plan
year.
Hardship withdrawals are available according to provisions of the
Plan if approved by the Plan administrator but are limited to the
value of the participant's contributions and the participant's
immediate financial need. Earnings and matching contributions are
not eligible for hardship withdrawals. After receipt of a hardship
withdrawal, a participant is suspended for twelve months from making
contributions to the Plan.
In the case of a partial withdrawal made by a participant with an
interest in more than one investment fund, the amount withdrawn from
each of the participant's investment funds is in the same proportion
as the value of his/her interest in each investment fund.
(g) Distributions
-------------
In the event of normal retirement or permanent disability, and
provided the value of the participant's account is in excess of
$3,500 ($5,000, effective January 1, 1998), the participant may
elect one of two options or may defer either election to a later
date. The two options available are (1) receive a lump sum
distribution or (2) receive a specified number of annual
installments, over a period of generally up to ten years.
In the event that a participant dies before the balance of his/her
account has been distributed, the remaining balance of his/her
account shall be distributed to the participant's beneficiaries in a
lump sum distribution.
8
<PAGE>
NOTES TO FINANCIAL STATEMENTS, Continued
1. Plan Description, continued:
(g) Distributions, continued
-------------
Upon termination of employment for any reason other than retirement,
permanent disability, or death, and the value of the participant's
account is in excess of (or at the time of any prior distribution
was in excess of) $3,500 ($5,000, effective January 1, 1998), the
participant may elect one of two options or may defer either
election to a later date. The two options available are (1) receive
a lump sum distribution or (2) receive a specified number of annual
installments, over a period of generally up to ten years.
If upon a participant's normal retirement, permanent disability,
death, or termination of employment and the value of the
participant's account in not in excess of $3,500 ($5,000, effective
January 1, 1998), such participant receives an immediate
distribution.
Distributions are generally cash distributions; however, a
participant who is entitled to a distribution and who has
investments in whole or in part in the Lexmark Stock Fund may elect,
in writing, to have the value of his/her investment in the Lexmark
Stock Fund distributed in whole shares of the Company's Class A
common stock. Fractional shares are distributed in cash.
(h) Participant Loans
-----------------
Participants may borrow funds from their Plan account subject to the
provisions of the Plan. A participant is eligible to have up to two
outstanding loans at a given time and may borrow up to half the
value of his/her Plan account (including any current loan balance),
but no more than $50,000 less his/her highest outstanding loan
balance during the preceding 12-month period. No loan will be made
while any other loan is in default. An administrative fee is charged
for the origination of the loan and is deducted from the
participant's account in proportion to the funds held for
investment. Loans are granted for a minimum term of one year, and
thereafter in monthly increments up to a maximum of five years;
however, the participant may pre-pay the loan at any time. Each loan
bears a fixed rate of interest determined at the inception of the
loan by the plan administrator based upon comparable rates offered
by commercial lending institutions, prime plus 1.5% for the years
ended December 31, 1997 and 1996. Payment of the loan is made
through payroll deductions. Payments of principal and interest are
allocated to the investment funds elected for current contributions.
A participant may continue to contribute to the Plan while he/she
has an outstanding loan balance, provided the loan is not in
default.
9
<PAGE>
NOTES TO FINANCIAL STATEMENTS, Continued
1. Plan Description, continued:
(i) Forfeitures
-----------
Any portion of a participant's account balance in which the
participant is not vested upon termination constitutes a forfeiture
at the time the participant receives a distribution unless the
participant has no vested interest in which case such forfeiture
occurs at his/her termination of employment. Forfeitures occurring
in a Plan year are applied equally on a per participant basis to
reduce administrative fees that would otherwise be assessed against
the participant's account or may be utilized by the Plan
administrator, if certain criteria are satisfied, to restore
forfeited amounts of previously terminated employees returning to
the Plan. Any remaining forfeitures are remitted to the Company and
customarily applied against its matching contribution obligation.
2. Summary of Significant Accounting Policies:
The following are significant accounting policies followed by the Plan:
(a) Valuation of Investments
------------------------
Shares in common trust funds are stated at fair market value as
quoted.
Investments in guaranteed investment contracts (GICs) are stated at
contract value, which represents deposits received and interest
earned at guaranteed rates. The fair market value of these contracts
approximates the contract value at December 31, 1997 and 1996. Fair
market value is determined by discounting the contracts using
current market rates. A penalty or adjustment may be imposed for
early withdrawal or termination of certain GICs.
The Plan enters into arrangements known as synthetic GICs which are
investment contracts that simulate the performance of traditional
GICs through the use of financial instruments. The Plan purchases a
security such as a government security, private or public
mortgage-backed or other asset-backed security or an investment
grade corporation obligation which is held in trust for the Plan.
The Plan then enters into a benefit responsive "wrapper" contract
with a third-party such as a financial institution or an insurance
company which guarantees the Plan a specific value and rate of
return for the security held in trust. The underlying security held
in trust and the wrapper contract are presented together in the
financial statements at contract value. The contract value of the
synthetic GICs approximates the fair market value (determined by
discounting the contracts using current market rates) of the
contracts at December 31, 1997 and 1996.
The Lexmark Class A common stock is stated at fair market value as
quoted by the New York Stock Exchange.
Participant loans are stated at cost which approximates fair market
value.
10
<PAGE>
NOTES TO FINANCIAL STATEMENTS, Continued
2. Summary of Significant Accounting Policies, continued
(a) Valuation of Investments, continued
------------------------
Fair market value of investments, as quoted, is based on various
factors including the current interest rate environment and the
general strength of the economy. Changes in the fair market value
could significantly affect the Plan's net assets available for plan
benefits.
(b) Net Appreciation (Depreciation)
-------------------------------
The Plan presents in the statement of changes in net assets
available for Plan benefits the net appreciation (depreciation) in
the fair value of its investments which consists of the realized
gains or losses and the unrealized appreciation (depreciation) on
those investments.
(c) Distributions to Withdrawing Participants
-----------------------------------------
Distributions to withdrawing participants are recorded when paid.
(d) Use of Estimates
----------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at
the dates of the financial statements and the changes in net assets
available for Plan benefits during the reporting periods. Actual
results could differ from those estimates.
11
<PAGE>
NOTES TO FINANCIAL STATEMENTS, Continued
3. Investments:
The investments that represent 5% or more of the Plan's net assets at
December 31, 1997 and 1996 are as follows:
<TABLE>
<CAPTION>
1997 1996
---------------- ----------------
Investments at Fair Value:
Lexmark Class A common stock 689,646 and
<S> <C> <C> <C>
662,656 shares, respectively $ 26,198,598 $ 18,305,872
Bankers Trust Company
Pyramid Equity Index Fund, 28,610 shares 48,631,930
Pyramid Russell 2500 Index Fund, 99,977
shares 25,236,829
Fidelity Management and Research Company
Equity Income Fund, 1,206,473 shares 63,231,224
Low Priced Stock Fund, 1,199,223 shares 30,136,486
Other investments less than 5% of net
assets 46,245,987 24,439,476
Investments at Contract Value:
Participation in Group Annuity Contract
#G-26156.01 with Pacific Mutual Insurance
Company 11,076,307
Synthetic GIC including FHLMC mortgages
1404-D (CUSIP: 312912VTA) and Group
Annuity Contract #ADA00024 with
Commonwealth Life Insurance Company 10,102,533
Participation in Group Annuity Contract
#214760 with Citibank 9,766,406
Other investments less than 5% of net
assets 66,227,175 38,581,402
------------- -------------
Total Investments $ 232,039,470 $ 186,140,755
============= =============
</TABLE>
12
<PAGE>
NOTES TO FINANCIAL STATEMENTS, Continued
3. Investments, continued:
The crediting interest rates as of December 31, 1997 and 1996 and the
average yields for the years then ended for each guaranteed investment
contract and synthetic guaranteed investment contract are as follows:
<TABLE>
<CAPTION>
Average annual yield/
Crediting interest rate
Guaranteed Investment Contracts 1997 1996
------ ------
Participation in Group Annuity Contract #5150
<S> <C> <C>
with Allstate Life Insurance Company 8.5% 8.5%
New York Life Placement Contract #30034 with
New York Life Insurance Company 7.4% 7.4%
Commonwealth Placement Contract #ADA00558FR
with Commonwealth Life Insurance Company 5.9% 5.9%
Participation in Group Annuity Contract
#G-26156.01 with Pacific Mutual Life
Insurance Company 7.5% 7.5%
Participation in Group Annuity Contract
#214760 with Citibank 6.5% 6.5%
Participation in Group Annuity Contract #8617
with John Hancock Mutual Life Insurance
Company 6.9% 6.9%
Participation in Group Annuity Contract #51365
with TransAmerica Occidental Life Insurance
Company 6.3%
Synthetic Guaranteed Investment Contracts
Synthetic GIC including FHLMC mortgages 14044-D
(CUSIP: 312912VTA) (fair market value of
$10,115,625) and Group Annuity Contract
#ADA00024 with Commonwealth Life Insurance
Company at 6.85% with maturity on June 15, 2001.
Excess of the fair market value of the
underlying asset over contract value is $31,302. 6.8% 6.7%
Synthetic GIC including AAA bond ATTMT 1997-1A
(CUSIP: 00206LAN5) (fair market value of
$4,995,313) and Group Annuity Contract #76678
with Transamerica Life Insurance Company at 6.5%
with maturity on December 17, 2001. Wrapper
fair market value of $494,594. 6.4%
Synthetic GIC including FNMA seven year balloon
mortgage pass-through securities FN313526
(CUSIP: 313746HB6) (fair market value of
$5,015,625) Wrap Agreement contract #97037
with State Street Bank and Trust Company at
7.0% with maturity on March 25, 2003.
Wrapper fair market value of $569,724. 7.0%
</TABLE>
These rates are net of investment manager fees, if any, which are
automatically deducted from the fund's interest income according to the
terms of the Investment Management Agreement.
13
<PAGE>
NOTES TO FINANCIAL STATEMENTS, Continued
4. Administrative Expenses:
Expenses for administration of the Plan are paid jointly by participants
and the Company. Participants pay an annual participant fee; operating
and management fees of the investment funds; and any applicable loan,
distribution and withdrawal fees. All other fees are paid by forfeitures,
to the extent available, and thereafter by the Company. Certain
administrative services are provided at no cost to the Plan by the
Company.
5. Income Tax Status:
The Plan qualifies within the meaning of Section 401(a) and 401(k) of the
Internal Revenue Code of 1986, (the "Code"), as amended, and the trust is
exempt from tax under Section 501(a) of the Code. The Plan was amended
and restated effective July 1, 1997, and has received a favorable
determination letter dated January 28, 1998 in which the Internal Revenue
Service stated that the Plan and related trust are in compliance with the
applicable requirements of the Code.
Participants will not be subject to income tax withholding for deferred
compensation, unless required by state or local authority.
A participant will not be subject to federal income tax on employer
contributions made to a participant's account, or on income accruing to
the account, until distribution or withdrawal of the account, in whole or
in part.
6. Plan Termination:
The Company has the right under the Plan to discontinue its contribution
at any time and to terminate the Plan subject to the provisions set forth
in ERISA. In the event of Plan termination, participants will become 100%
vested in their accounts and the Plan assets will be distributed in
accordance with the provisions of the Plan.
7. Concentration of Credit Risk:
Plan assets are invested in various financial instruments that contain
some degree of credit risk. There is a concentration of credit risk as
11% of Plan assets are invested in Lexmark Class A common stock as of
December 31, 1997.
8. Fund Information
Net assets available for benefits and changes in net assets available for
benefits by participant-directed investment funds for the years ended
December 31, 1997 and 1996 are as follows:
14
<PAGE>
NOTES TO FINANCIAL STATEMENTS, Continued
8. Fund Information, continued
<TABLE>
<CAPTION>
Money Large Small Balanced
Market Company Company Asset International
Fund Index Fund Index Fund Fund Index Fund
------ ---------- ---------- -------- -------------
Net Assets Available for Plan Benefits with
Fund Information December 31, 1997
ASSETS
Investments, at fair market value:
<S> <C> <C> <C> <C> <C>
Common trust funds
Participant loans
Lexmark Class A common stock
Guaranteed investment contracts
(GICs) and Synthetic GICs,
at contract value
------------- ------------- ------------- ------------- -------------
Total investments
Employer contribution receivable
------------- ------------- ------------- ------------- -------------
Net assets available for fund/plan
benefits at December 31, 1997 $ - $ - $ - $ - $ -
============= ============= ============= ============= =============
Changes in Net Assets Available for
Plan Benefits with Fund information
for the year ended December 31, 1997
Interfund transfers $ (6,612,014) $(61,005,456) $(28,799,587) $ (8,585,810) $ (4,845,633)
Investment income:
Dividend and interest income 167,600 2,124 1,088 456 325
Net appreciation (depreciation) in
value of investments 10,424,093 2,449,994 875,337 500,495
Contributions:
Employer 169,819 381,850 238,224 79,473 52,679
Participants 806,392 2,184,913 1,415,841 463,738 323,622
Participant loan activity:
Participant loans (67,314) (337,229) (117,995) (29,650) (7,361)
Participant loan payments 55,655 464,319 230,341 95,401 53,462
Distributions to withdrawing
participants (516,532) (834,332) (700,123) (339,668) (169,346)
Administrative expenses (15,166) (115,354) (73,565) (41,567) (15,616)
------------- ------------- ------------- ------------- -------------
Net increase (decrease) in
fund/plan equity (6,011,560) (48,835,072) (25,355,782) (7,482,290) (4,107,373)
Net assets available for fund/plan
benefits at December 31, 1996 6,011,560 48,835,072 25,355,782 7,482,290 4,107,373
------------- ------------- ------------- ------------- -------------
Net assets available for fund/plan
benefits at December 31, 1997 $ - $ - $ - $ - $ -
============= ============= ============= ============= =============
(continued)
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS, Continued
8. Fund Information, continued
<TABLE>
<CAPTION>
Fidelity
Retirement Fidelity Fidelity Fidelity
Govt. Money Equity Fidelity Diversified Growth &
Market Income Low-Priced International Income
Portfolio Fund Stock Fund Fund Portfolio
----------- ---------- ---------- ------------- -------------
Net Assets Available for Plan Benefits with
Fund Information December 31, 1997
ASSETS
Investments, at fair market value:
<S> <C> <C> <C> <C> <C>
Common trust funds $ 5,931,989 $ 63,231,224 $ 30,136,486 $ 5,235,580 $ 6,010,631
Participant loans
Lexmark Class A common stock
Guaranteed investment contracts
(GICs) and Synthetic GICs,
at contract value
------------- ------------- ------------- ------------- -------------
Total Investments 5,931,989 63,231,224 30,136,486 5,235,580 6,010,631
Employer contribution receivable
------------- ------------- ------------- ------------- -------------
Net assets available for fund/plan
benefits at December 31, 1997 $ 5,931,989 $ 63,231,224 $ 30,136,486 $ 5,235,580 $ 6,010,631
============= ============= ============= ============= =============
Changes in Net Assets Available for
Plan Benefits with Fund information
for the year ended December 31, 1997
Interfund transfers $ 5,110,068 $ 56,229,019 $ 25,941,663 $ 4,984,466 $ 5,449,331
Investment income:
Dividend and interest income 173,928 2,385,743 2,107,310 196,614 192,163
Net appreciation (depreciation) in
value of investments 3,569,719 1,380,388 (263,013) 61,020
Contributions:
Employer 124,240 290,780 175,711 43,439 35,699
Participants 681,302 1,663,934 1,039,337 263,534 250,138
Participant loan activity:
Participant loans (116,611) (524,270) (209,524) (38,225) (25,625)
Participant loan payments 44,744 435,002 225,467 57,306 56,481
Distributions to withdrawing
participants (85,682) (818,703) (519,080) (8,541) (8,576)
Administrative expenses (4,786)
------------- ------------- ------------- ------------- -------------
Net increase (decrease) in
fund/plan equity 5,931,989 63,231,224 30,136,486 5,235,580 6,010,631
Net assets available for fund/plan
benefits at December 31, 1996
------------- ------------- ------------- ------------- -------------
Net assets available for fund/plan
benefits at December 31, 1997 $ 5,931,989 $ 63,231,224 $ 30,136,486 $ 5,235,580 $ 6,010,631
============= ============= ============= ============== =============
(continued)
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS, Continued
8. Fund Information, continued
<TABLE>
<CAPTION>
Fidelity
Fidelity Freedom Fidelity Fidelity
Intermediate Fidelity Income Freedom Freedom
Bond Fund Contrafund Fund 2000 Fund 2010 Fund
------------ ---------- -------- --------- ---------
Net Assets Available for Plan Benefits with
Fund Information December 31, 1997
ASSETS
Investments, at fair market value:
<S> <C> <C> <C> <C> <C>
Common trust funds $ 1,208,762 $ 4,169,830 $ 237,060 $ 6,947,413 $ 1,755,655
Participant loans
Lexmark Class A common stock
Guaranteed investment contracts
(GICs) and Synthetic GICs,
at contract value
------------- ------------- ------------- ------------- -------------
Total Investments 1,208,762 4,169,830 237,060 6,947,413 1,755,655
Employer contribution receivable
------------- ------------- ------------- ------------- -------------
Net assets available for fund/plan
benefits at December 31, 1997 $ 1,208,762 $ 4,169,830 $ 237,060 $ 6,947,413 $ 1,755,655
============= ============= ============= ============== =============
Changes in Net Assets Available for
Plan Benefits with Fund information
for the year ended December 31, 1997
Interfund transfers $ 1,101,679 $ 3,826,205 $ 206,687 $ 6,467,114 $ 1,665,727
Investment income:
Dividend and interest income 24,320 338,523 6,500 237,179 60,423
Net appreciation (depreciation) in
value of investments 7,768 (246,386) (349) 256,746 (33,924)
Contributions:
Employer 6,695 30,626 4,583 43,976 10,101
Participants 83,785 213,926 20,361 258,166 64,022
Participant loan activity:
Participant loans (23,710) (13,102) (904) (61,401) (18,304)
Participant loan payments 8,225 29,136 407 66,540 7,610
Distributions to withdrawing
participants (9,098) (225) (320,907)
Administrative expenses
------------- ------------- ------------- ------------- -------------
Net increase (decrease) in
fund/plan equity 1,208,762 4,169,830 237,060 6,947,413 1,755,655
Net assets available for fund/plan
benefits at December 31, 1996
------------- ------------- ------------- -------------- -------------
Net assets available for fund/plan
benefits at December 31, 1997 $ 1,208,762 $ 4,169,830 $ 237,060 $ 6,947,413 $ 1,755,655
============= ============= ============= ============== =============
(continued)
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS, Continued
8. Fund Information, continued
<TABLE>
<CAPTION>
Dwight
Fidelity Fidelity Spartan U.S. Fixed
Freedom Freedom Equity Index Income Lexmark
2020 Fund 2030 Fund Fund Fund Stock Fund
------------ ---------- ------------ ------- ----------
Net Assets Available for Plan Benefits with
Fund Information December 31, 1997
ASSETS
Investments, at fair market value:
<S> <C> <C> <C> <C>
Common trust funds $ 724,022 $ 745,020 $ 7,796,253 $ 2,088,732
Participant loans
Lexmark Class A common stock $ 26,198,598
Guaranteed investment contracts
(GICs) and Synthetic GICs,
at contract value 64,138,444
------------- ------------- ------------- ------------- -------------
Total Investments 724,022 745,020 7,796,253 66,227,176 26,198,598
Employer contribution receivable 533,378
------------- ------------- ------------- -------------- -------------
Net assets available for fund/plan
benefits at December 31, 1997 $ 724,022 $ 745,020 $ 7,796,253 $ 66,227,176 $ 26,731,976
============= ============= ============= ============== =============
Changes in Net Assets Available for
Plan Benefits with Fund information
for the year ended December 31, 1997
Interfund transfers $ 610,651 $ 666,368 $ 7,221,457 $ (8,524,368) $ (1,107,567)
Investment income:
Dividend and interest income 25,023 24,506 85,310 4,642,380 21,500
Net appreciation (depreciation) in
value of investments (12,091) (11,261) 217,376 7,956,350
Contributions:
Employer 6,145 8,398 36,636 635,742 616,751
Participants 91,941 51,526 232,260 3,411,203 392,714
Participant loan activity:
Participant loans (592) (95) (4,887) (1,181,215) (245,160)
Participant loan payments 2,975 5,908 16,262 1,414,274 138,721
Distributions to withdrawing
participants (30) (330) (8,161) (3,729,188) (699,293)
Administrative expenses (129,242) (36,963)
------------- ------------- ------------- ------------- ------------
Net increase (decrease) in
fund/plan equity 724,022 745,020 7,796,253 (3,460,414) 7,037,053
Net assets available for fund/plan
benefits at December 31, 1996 69,687,590 19,694,923
------------- ------------- ------------- -------------- -------------
Net assets available for fund/plan
benefits at December 31, 1997 $ 724,022 $ 745,020 $ 7,796,253 $ 66,227,176 $ 26,731,976
============= ============= ============= ============== =============
(continued)
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS, Continued
8. Fund Information, continued
<TABLE>
<CAPTION>
Participant
Fund Total Loans Total
---------- ----------- ------------
Net Assets Available for Plan Benefits with
Fund Information December 31, 1997
ASSETS
Investments, at fair market value:
<S> <C> <C> <C>
Common trust funds $136,218,657 $136,218,657
Participant loans $ 5,483,771 5,483,771
Lexmark Class A common stock 26,198,598 26,198,598
Guaranteed investment contracts
(GICs) and Synthetic GICs,
at contract value 64,138,444 64,138,444
------------- ------------- -------------
Total Investments 226,555,699 5,483,771 232,039,470
Employer contribution receivable 533,378 533,378
------------- ------------- -------------
Net assets available for fund/plan
benefits at December 31, 1997 $227,089,077 $ 5,483,771 $232,572,848
============= ============= =============
Changes in Net Assets Available for
Plan Benefits with Fund information
for the year ended December 31, 1997
Interfund transfers - -
Investment income:
Dividend and interest income 10,693,015 296,769 10,989,784
Net appreciation (depreciation) in
value of investments 27,132,262 27,132,262
Contributions:
Employer 2,991,567 2,991,567
Participants 13,912,655 13,912,655
Participant loan activity:
Participant loans (3,023,174) 3,023,174 -
Participant loan payments 3,408,236 (3,408,236) -
Distributions to withdrawing
participants (8,767,815) (500,349) 9,268,164)
Administrative expenses (432,259) (432,259)
------------- ------------- -------------
Net increase (decrease) in
fund/plan equity 45,914,487 (588,642) 45,325,845
Net assets available for fund/plan
benefits at December 31, 1996 181,174,590 6,072,413 187,247,003
------------- ------------- -------------
Net assets available for fund/plan
benefits at December 31, 1997 $227,089,077 $ 5,483,771 $232,572,848
============= ============= =============
(concluded)
</TABLE>
15
<PAGE>
NOTES TO FINANCIAL STATEMENTS, Continued
8. Fund Information, continued
<TABLE>
<CAPTION>
Large Dwight Small
Money Company Fixed Company
Market Fund Index Fund Income Fund Index Fund
----------- ---------- ----------- ----------
Net Assets Available for Plan Benefits
with Fund Information December 31, 1996
ASSETS
Investments, at fair market value:
<S> <C> <C> <C> <C>
Common trust funds $ 5,984,279 $ 48,834,392 $ 158,545 $ 25,355,514
Participant loans
Lexmark Class A common stock
Guaranteed investment contracts
(GICs) and Synthetic GICs,
at contract value 69,526,648
----------- ------------ ------------ ------------
Total investments 5,984,279 48,834,392 69,685,193 25,355,514
Interest receivable 27,281 680 396,952 268
Receivable for sale of investment
Employer contribution receivable
----------- ------------ ------------ ------------
Total assets 6,011,560 48,835,072 70,082,145 25,355,782
LIABILITIES
Payable for purchase of investments 394,555
----------- ------------ ------------ ------------
Net assets available for fund/plan
benefits at December 31, 1996 $ 6,011,560 $ 48,835,072 $ 69,687,590 $ 25,355,782
=========== ============ ============ ============
Changes in Net Assets Available for Plan
Benefits with Fund information for the
year ended December 31, 1996
Interfund transfers $ (929,000) $ 2,803,456 $ (5,255,844) $ 1,115,792
Investment income:
Dividend and interest income 301,903 3,556 4,716,523 2,192
Net appreciation (depreciation) in
value of investments 8,673,642 3,661,281
Contributions:
Employer 277,682 594,993 752,194 388,289
Participants 1,348,063 3,406,544 3,980,611 2,333,171
Participant loan activity:
Participant loans (160,078) (650,643) (1,491,843) (394,379)
Participant loan payments 103,108 806,062 1,325,607 469,072
Distributions to withdrawing
participants (480,390) (1,576,209) (5,223,951) (789,214)
Administrative expenses (24,729) (159,708) (207,816) (109,736)
----------- ------------ ------------ ------------
Net increase (decrease) in
fund/plan equity 436,559 13,901,693 (1,404,519) 6,676,468
Net assets available for fund/plan
benefits at December 31, 1995 5,575,001 34,933,379 71,092,109 18,679,314
----------- ------------ ------------ ------------
Net assets available for fund/plan
benefits at December 31, 1996 $ 6,011,560 $ 48,835,072 $ 69,687,590 $ 25,355,782
=========== ============ ============ ============
(continued)
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS, Continued
8. Fund Information, continued
<TABLE>
<CAPTION>
Lexmark
Junior
Balanced International Lexmark Preferred
Asset Fund Index Fund Stock Fund Stock Fund
----------- ------------- ---------- ----------
Net Assets Available for Plan Benefits
with Fund Information December 31, 1996
ASSETS
Investments, at fair market value:
<S> <C> <C> <C> <C>
Common trust funds $ 7,482,198 $ 4,107,328 $ 313,566
Participant loans
Lexmark Class A common stock 18,305,872
Guaranteed investment contracts
(GICs) and Synthetic GICs,
at contract value
----------- ------------ ------------ ------------
Total investments 7,482,198 4,107,328 18,619,438
Interest receivable 92 45 1,338
Receivable for sale of investment 65,000
Employer contribution receivable 1,074,147
----------- ------------ ------------ ------------
Total assets 7,482,290 4,172,373 19,694,923 -
LIABILITIES
Payable for purchase of investments 65,000
----------- ------------ ------------ ------------
Net assets available for fund/plan
benefits at December 31, 1996 $ 7,482,290 $ 4,107,373 $ 19,694,923 $ -
=========== ============ ============ ============
Changes in Net Assets Available for Plan
Benefits with Fund information for the
year ended December 31, 1996
Interfund transfers $ 1,815,195 $ 1,013,318 $ 14,717,921 $(15,280,838)
Investment income:
Dividend and interest income 952 812 104,618 280
Net appreciation (depreciation) in
value of investments 922,395 379,031 4,134,672 2,803,424
Contributions:
Employer 132,315 90,634 1,119,975
Participants 746,963 569,214 168,683
Participant loan activity:
Participant loans (132,095) (51,922) (55,015)
Participant loan payments 209,754 117,387 94,452
Distributions to withdrawing
participants (361,757) (125,294) (552,473) (1,212,040)
Administrative expenses (55,452) (21,754) (37,910)
----------- ------------ ------------ ------------
Net increase (decrease) in
fund/plan equity 3,278,270 1,971,426 19,694,923 (13,689,194)
Net assets available for fund/plan
benefits at December 31, 1995 4,204,020 2,135,947 13,689,194
----------- ------------ ------------ ------------
Net assets available for fund/plan
benefits at December 31, 1996 $ 7,482,290 $ 4,107,373 $ 19,694,923 $ -
=========== ============ ============ ============
(continued)
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS, Continued
8. Fund Information, continued
<TABLE>
<CAPTION>
Participant
Fund Total Loans Total
---------- ----------- -----
Net Assets Available for Plan Benefits
with Fund Information December 31, 1996
ASSETS
Investments, at fair market value:
<S> <C> <C> <C>
Common trust funds $ 92,235,822 $ 92,235,822
Participant loans $ 6,072,413 6,072,413
Lexmark Class A common stock 18,305,872 18,305,872
Guaranteed investment contracts
(GICs) and Synthetic GICs,
at contract value 69,526,648 69,526,648
------------- ------------ ------------
Total investments 180,068,342 6,072,413 186,140,755
Interest receivable 426,656 426,656
Receivable for sale of investment 65,000 65,000
Employer contribution receivable 1,074,147 1,074,147
------------- ------------ ------------
Total assets 181,634,145 6,072,413 187,706,558
LIABILITIES
Payable for purchase of investments 459,555 459,555
------------- ------------ ------------
Net assets available for fund/plan
benefits at December 31, 1996 $ 181,174,590 $ 6,072,413 $187,247,003
============= ============ ============
Changes in Net Assets Available for Plan
Benefits with Fund information for the
year ended December 31, 1996
Interfund transfers - -
Investment income:
Dividend and interest income $ 5,130,816 $ 472,840 $ 5,603,656
Net appreciation (depreciation) in
value of investments 20,574,445 20,574,445
Contributions:
Employer 3,356,082 3,356,082
Participants 12,553,249 12,553,249
Participant loan activity:
Participant loans (2,935,975) 2,935,975 -
Participant loan payments 3,125,442 (3,125,442) -
Distributions to withdrawing
participants (10,321,328) (233,139) (10,554,467)
Administrative expenses (617,105) (617,105)
------------- ------------ ------------
Net increase (decrease) in
fund/plan equity 30,865,626 50,234 30,915,860
Net assets available for fund/plan
benefits at December 31, 1995 150,308,964 6,022,179 156,331,143
------------- ------------ ------------
Net assets available for fund/plan
benefits at December 31, 1996 $ 181,174,590 $ 6,072,413 $187,247,003
============= ============ ============
(concluded)
</TABLE>
16
<PAGE>
SUPPLEMENTAL SCHEDULES
----------
<PAGE>
LEXMARK SAVINGS PLAN
PLAN #002 EIN #22-3074422
Item 27(a) Schedule of Assets Held for Investment Purposes
December 31, 1997
<TABLE>
<CAPTION>
Par or
Maturity Value/
Identity of Issuer, Borrower, Number of Current
Lessor or Similar Party Description of Investment Shares Cost Value
---------------------------------- --------------------------------------- --------------- --------------- ---------
<S> <C> <C> <C>
*Lexmark Lexmark Stock Fund 689,646 $ 10,916,469 $ 26,198,598
*Fidelity Management and Research Co. Contrafund 89,424 4,421,691 4,169,830
*Fidelity Management and Research Co. Equity Income Fund 1,206,473 60,259,051 63,231,224
*Fidelity Management and Research Co. Growth & Income Portfolio 157,759 5,938,311 6,010,631
*Fidelity Management and Research Co. Intermediate Bond Fund 118,856 1,201,009 1,208,762
*Fidelity Management and Research Co. Low-Priced Stock Fund 1,199,223 29,033,535 30,136,486
*Fidelity Management and Research Co. Diversified International Fund 324,586 5,489,260 5,235,580
*Fidelity Management and Research Co. Freedom Income Fund 22,322 237,377 237,060
*Fidelity Management and Research Co. Freedom 2000 Fund 618,097 6,834,090 6,947,413
*Fidelity Management and Research Co. Freedom 2010 Fund 150,184 1,786,012 1,755,655
*Fidelity Management and Research Co. Freedom 2020 Fund 60,689 738,267 724,022
*Fidelity Management and Research Co. Freedom 2030 Fund 62,137 755,358 745,020
*Fidelity Management and Research Co. Retirement Govt. Money Market Portfolio 5,931,989 5,931,989 5,931,989
*Fidelity Management and Research Co. Spartan U.S. Equity Index Fund 222,877 7,570,873 7,796,253
*Participant Loans Participant Loans at Prime plus 1.5% $ 5,483,771 0 5,483,771
Citibank Participation in Group Annuity
Contract #214760 at 6.6% with maturity
on March 31, 1998. $ 10,396,339 10,396,339 10,396,339
Allstate Life Insurance Participation in Group Annuity Contract
Company #5150 at 8.6% with maturity on
December 15, 1998. $ 2,856,012 2,856,012 2,856,012
Commonwealth Life Insurance Synthetic GIC including FLMC mortgages
Company 1404-D (CUSIP: 312912VTA) (fair market
value of $10,115,652) and Group Annuity
Contract #ADA00024 with Commonwealth
Life Insurance Company at 6.85% with
maturity on June 15, 2001. Excess of
the fair market value of the underlying
asset over contract value is $31,302. $ 10,084,324 10,084,324 10,084,324
New York Life Insurance New York Life Placement Contract
Company #30034 at 7.8% with maturity on
August 15, 2001. $ 8,803,765 8,803,765 8,803,765
Commonwealth Life Insurance Commonwealth Placement Contract
Company #ADA00558FR at 6.0% with
maturity on December 14, 2000. $ 8,691,683 8,691,683 8,691,683
Pacific Mutual Life Insurance Participation in Group Annuity Contract
Company #G-25156.01 at 7.55% with maturity
on June 20, 2000. $ 8,927,244 8,927,244 8,927,244
John Hancock Mutual Life Participation in Group Annuity Contract
Insurance Company #8617 at 6.95% with maturity on
December 20, 1999. $ 3,303,822 3,303,822 3,303,822
TransAmerica Life Insurance & Synthetic GIC including AAA bond
Annuity Company ATTMT 1997-A (CUSIP: 00206LAN5) (fair
market value of $4,995,313) and
Group Annuity Contract #76678 at 6.5%
with maturity on December 17, 2001.
Wrapper fair market value of $494,594. $ 5,489,907 5,489,907 5,489,907
State Street Bank & Trust Synthetic GIC including FNMA seven
Company year balloon mortgage pass-through
securities FN313526 (CUSIP: 313746HB6)
(fair market value of $5,015,625) and
Wrap Agreement Contract #97037 at 7.0%
with maturity on March 25, 2003.
Wrapper fair market value of $569,724. $ 5,585,349 5,585,349 5,585,349
*Fidelity Management and Research Co. Short-Term Interest Bearing Funds at
5.6%. $ 2,088,731 2,088,731 2,088,731
------------ ------------
$207,340,468 $232,039,470
============ ============
</TABLE>
*Party-in-interest to the plan.
17
<PAGE>
LEXMARK SAVINGS PLAN
PLAN #002 EIN #22-3074422
Item 27(d) Schedule of Reportable Transactions*
for the year ended December 31, 1997
<TABLE>
<CAPTION>
Fair Value of
Asset on Gain
Purchase Selling Cost of Transaction (Loss)
Identify of Party Description of Asset Price Price Asset Date on Sale
--------------------- --------------------------------- --------- ------- ------- ----------- -------
<S> <C> <C> <C> <C> <C>
** Bankers Trust Company Pyramid Discretionary Cash Fund $ 8,439,159 $ 8,439,159 $ 8,439,159
** Bankers Trust Company Pyramid Discretionary Cash Fund $14,806,575 $14,806,575 $14,806,575
** Bankers Trust Company Pyramid Directed Account Cash
Fund $21,267,751 $21,267,751 $21,267,751
** Bankers Trust Company Pyramid Directed Account Cash
Fund $21,739,861 $21,739,861 $21,739,861
** Bankers Trust Company Pyramid Equity Index Fund $ 5,810,153 $ 5,810,153 $ 5,810,153
** Bankers Trust Company Pyramid Equity Index Fund $64,752,471 $31,907,638 $64,752,471 $32,644,833
** Bankers Trust Company Pyramid Russell 2500 Index Fund $ 2,100,855 $ 2,100,855 $ 2,100,855
** Bankers Trust Company Pyramid Russell 2500 Index Fund $29,787,678 $18,971,436 $28,787,678 $10,816,242
** Fidelity Management and
Research Co. Equity Income Fund $74,248,097 $74,248,097 $74,248,097
** Fidelity Management and
Research Co. Equity Income Fund $14,586,591 $13,989,046 $14,586,591 $ 597,545
** Fidelity Management and
Research Co. Low-Priced Stock Fund $34,143,860 $34,143,860 $34,143,860
** Fidelity Management and
Research Co. Low-Priced Stock Fund $ 5,387,762 $ 5,110,324 $ 5,387,762 $ 277,438
** Fidelity Management and
Research Co. Freedom 2000 Fund $10,997,653 $10,997,653 $10,997,653
** Fidelity Management and
Research Co. Freedom 2000 Fund $ 4,306,986 $ 4,163,564 $ 4,306,986 $ 143,422
** Fidelity Management and Retirement Government Money
Research Co. Market Portfolio $ 8,111,309 $ 8,111,309 $ 8,111,309
** Fidelity Management and Retirement Government Money
Research Co. Market Portfolio $ 2,179,320 $ 2,179,320 $ 2,179,320
** Fidelity Management and
Research Co. Spartan U.S. Equity Index Fund $ 8,705,295 $ 8,705,295 $ 8,705,295
** Fidelity Management and
Research Co. Spartan U.S. Equity Index Fund $ 1,126,419 $ 1,134,423 $ 1,126,419 $ (8,004)
** Lexmark Class A common stock $ 4,749,114 $ 4,749,114 $ 4,749,114
** Lexmark Class A common stock $17,242,870 $12,962,220 $17,242,870 $ 4,280,650
</TABLE>
* All individual transactions or series of transactions, which, when aggregated,
exceed 5% of plan assets at January 1, 1997.
** Party-in-interest to the Plan
18
<PAGE>
LEXMARK SAVINGS PLAN
PLAN #002 EIN #22-3074422
Item 27(d) Schedule of Reportable Transactions*, continued
for the year ended December 31, 1997
<TABLE>
<CAPTION>
Fair Value of
Asset on Gain
Purchase Selling Cost of Transaction (Loss)
Identify of Party Description of Asset Price Price Asset Date on Sale
-------------------- --------------------------------- --------- ------- ------- ----------- -------
State Street Bank Synthetic GIC including FNMA seven
& Trust Company year balloon mortgage pass-through
securities FN313526 (CUSIP: 313746HB6)
(fair market value of $5,015,625) and
Wrap Agreement Contract #97037 at
7.0% with maturity on March 25, 2003.
<S> <C> <C> <C> <C>
Wrapper fair market value of $569,724. $12,080,959 $12,080,959 $12,080,959
State Street Bank Synthetic GIC including FNMA seven
& Trust Company year balloon mortgage pass-through
securities FN313526 (CUSIP: 313746HB6)
(fair market value of $5,015,625) and
Wrap Agreement Contract #97037 at
7.0% with maturity on March 25, 2003.
Wrapper fair market value of $569,724. $ 6,565,888 $ 6,565,888 $ 6,565,888
** Fidelity Management Short-Term Interest Bearing Funds
and Research Co. at 5.6%. $25,783,814 $25,783,814 $25,783,814
** Fidelity Management Short-Term Interest Bearing Funds
and Research Co. at 5.6%. $23,741,316 $23,741,316 $23,741,316
</TABLE>
* All individual transactions or series of transactions, which, when aggregated,
exceed 5% of plan assets at January 1, 1997.
** Party-in-interest to the Plan.
19
EXHIBIT
CONSENT OF INDEPENDENT ACCOUNTANTS
--------
We consent to the incorporation by reference in the Registration Statement on
Form S-8 of Lexmark International Group, Inc. of our report dated June 8, 1998
on our audits of the statements of net assets available for plan benefits of the
Lexmark Savings 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 is included in this Form 11-K.
/s/Coopers & Lybrand L.L.P.
Lexington, Kentucky
June 19, 1998
