ELECTRONIC DATA SYSTEMS CORPORATION
EDS DEFERRED COMPENSATION PLAN
FORM 11-K
ANNUAL REPORT
FOR THE YEAR ENDED DECEMBER 31, 1997
FILED PURSUANT TO SECTION 15(d)
OF THE
SECURITIES EXCHANGE ACT OF 1934
<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549-1004
FORM 11-K
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 TO SECTION 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
- ---
For the transition period from ________ to ________
Commission file number 1-11779
EDS DEFERRED COMPENSATION PLAN
(Full title of the plan)
Electronic Data Systems Corporation
5400 Legacy Drive
Plano, Texas 75024-3105
(Name of issuer of the securities held pursuant to
the plan and the address of its principal
executive offices)
Registrant's telephone number, including area code: (972) 604-6000
Notices and communications from the Securities and the Exchange Commission
relative to this report should be forwarded to:
H. Paulett Eberhart
Controller
Electronic Data Systems Corporation
5400 Legacy Drive
Plano, Texas 75024-3105
<PAGE>
FINANCIAL STATEMENTS AND EXHIBIT
- --------------------------------
(a) FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES Page No.
----------------------------------------------- --------
EDS Deferred Compensation Plan:
Independent Auditor's Report........................... 3
Basic Financial Statements:
Statements of Net Assets Available for Benefits,
December 31, 1997 and 1996.................. 4
Statements of Changes in Net Assets Available for
Benefits for the Years Ended December 31,
1997 and 1996............................... 5
Notes to Financial Statements, December 31,
1997 and 1996................................ 6
Supplemental schedules:
Line 27(a)-Schedules of Assets Held for
Investment Purposes, December 31, 1997...... 16
Line 27(d)-Schedule of Reportable Transactions
for the Year Ended December 31, 1997........ 18
Supplemental schedules not listed above are omitted as the required
information is not applicable or the information is presented in the financial
statements or related notes.
(b) EXHIBIT
Exhibit 23 Consent of Independent Auditors............... 19
SIGNATURE
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the Trustees of the EDS Deferred Compensation Plan have duly caused this
annual report to be signed on its behalf by the undersigned hereunto duly
authorized.
EDS DEFERRED COMPENSATION PLAN
------------------------------
(Name of plan)
Electronic Data Systems Corporation
Plan Administrator
Date: June 29, 1998 By: /s/ Lester M. Alberthal, Jr.
---------------------------------
(Lester M. Alberthal, Jr.,
Chairman of the Board
and Chief Executive Officer)
2
<PAGE>
INDEPENDENT AUDITORS' REPORT
----------------------------
The Trustees
EDS Deferred Compensation Plan:
We have audited the accompanying statements of net assets available for benefits
of the EDS Deferred Compensation Plan as of December 31, 1997 and 1996, and the
related statements of changes in net assets available for benefits for the years
then ended. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the EDS Deferred
Compensation Plan as of December 31, 1997 and 1996, and the changes in net
assets available for 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 and reportable transactions 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 audits of the
basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
KPMG Peat Marwick LLP
Dallas, Texas
June 5, 1998
3
<PAGE>
<TABLE>
<CAPTION>
EDS DEFERRED COMPENSATION PLAN
Statements of Net Assets Available for Benefits
December 31, 1997 and 1996
1997 1996
--------------------- ----------------------
<S> <C> <C>
Assets:
Investments (note 4):
Income Fund, primarily at contract value
(cost, 1997 - $203,595,182, 1996 - $201,674,073) $ 203,595,182 $ 201,674,073
EDS Stock Fund, at fair value
(cost, 1997 - $266,859,817, 1996 - $283,781,900) 341,022,519 356,437,009
Vanguard Wellington Fund, at fair value
(cost, 1997 - $310,817,582, 1996 - $253,593,460) 398,771,147 312,459,577
Vanguard U.S. Growth Portfolio, at fair value
(cost, 1997 - $159,377,556, 1996 - $110,056,282) 206,372,797 134,238,092
Vanguard International Growth Portfolio, at fair value
(cost, 1997 - $94,026,517, 1996 - $75,665,294) 102,299,832 88,355,311
Vanguard Growth and Income Portfolio, at fair value
(cost, 1997 - $149,718,682, 1996 - $82,301,799) 178,808,681 96,959,940
Vanguard Explorer Fund, at fair value
(cost, 1997 - $35,338,693, 1996 - $20,752,082) 35,313,463 21,070,953
Vanguard Bond Index Fund, at fair value
(cost, 1997 - $9,238,431, 1996 - $4,177,965) 9,407,134 4,171,090
Vanguard Money Market Reserves-Prime Portfolio,
at fair value
(cost, 1997 - $67,965,231, 1996 - $51,785,328) 67,965,231 51,785,328
Loan Fund, at unpaid principal balance, which
approximates fair value 54,628,090 54,061,580
------------- -------------
Total assets 1,598,184,076 1,321,212,953
Contribution receivable 2,132,002 --
------------- -------------
Net assets available for benefits $1,600,316,078 $1,321,212,953
============= =============
See accompanying notes to financial statements.
</TABLE>
4
<PAGE>
EDS DEFERRED COMPENSATION PLAN
Statements of Changes in Net Assets Available for Benefits
For the Years Ended December 31, 1997 and 1996
1997 1996
-------------- --------------
Additions to net assets attributed to:
Investment income:
Net appreciation (depreciation)
in fair value
of investments (note 8) $ 97,554,925 $ (14,696,042)
Interest 19,941,958 18,876,088
Dividends 75,205,660 53,920,601
------------- -------------
Total investment income 192,702,543 58,100,647
Contributions 164,546,512 167,552,384
Net assets transferred from
other plans (note 1) 17,778,773 4,840,286
------------- -------------
Total additions 375,027,828 230,493,317
Deductions from net assets attributed
to withdrawals (95,924,703) (89,645,983)
------------- -------------
Net increase 279,103,125 140,847,334
Net assets available for benefits at:
Beginning of year 1,321,212,953 1,180,365,619
------------- -------------
End of year $1,600,316,078 $1,321,212,953
============= =============
See accompanying notes to financial statements.
5
<PAGE>
EDS DEFERRED COMPENSATION PLAN
Notes to Financial Statements
December 31, 1997 and 1996
(1) Description of Plan
The EDS Deferred Compensation Plan (the Plan) became effective July 1,
1983, with employees admitted to the Plan October 1, 1983. As used
herein, the terms "EDS", "the Company", and "Employer" refer to
Electronic Data Systems Corporation and its adopting subsidiaries which
participate in the Plan. On June 7, 1996, General Motors Corporation (GM)
effected a split-off (the "Split-Off") of the Company. As a result of the
Split-Off, (i) the Company became an independent, publicly held company
and (ii) each outstanding share of Class E common stock of GM was
converted into one share of common stock of the Company. The Plan was
amended to reflect the changes in EDS' ownership and the conversion of
its stock. The following description of the Plan reflects all Plan
amendments as of December 31, 1997 and is provided for general purposes
only. Participants should refer to the Plan document, as amended, for
more complete information.
(a) General
The Plan is a defined contribution plan covering eligible
employees of the Company. An employee becomes eligible to
participate in the Plan upon the commencement of service with the
Employer.
During 1996, net assets totaling $4,840,286 were transferred into
the Plan. The only significant transfer related to the transition
of employees from the Kellwood Co., which totaled $1,291,645 in
net assets. During 1997, net assets totaling $17,778,773 were
transferred into the Plan. Significant transfers related to the
transition of employees during 1997 were Blue Cross Blue Shield
of Massachusetts, Blue Shield-Chico, Genicom, and Sterling
Diagnostic with $8,228,280, $2,404,729, $1,314,282, and
$1,222,012 of net assets transferred, respectively. For financial
statement purposes, the fair values of the assets transferred
from or to the plans are reflected as of the dates of transfer.
The Vanguard Fiduciary Trust Company (Vanguard) is the asset
custodian and trustee for the Plan. The Vanguard Group of
Investment Companies is the record-keeper and manages the plan's
investment activities. The Plan's Investment Committee has
responsibility for selecting the investment funds available for
employee directed investments.
The Plan is subject to the provisions of the Employee Retirement
Income Security Act of 1974 (ERISA), as amended and the Internal
Revenue Code (IRC), as amended. The Plan was created to provide
additional incentive and retirement security for eligible
employees. The Plan allows for nine active investment funds
available for participant investment: the Income Fund, which is a
fixed income fund; the EDS Stock Fund, which consists of EDS
common stock; the Vanguard Money Market Reserves-Prime Portfolio
(Vanguard Money Market), a short-term investment fixed income
fund; the Vanguard Wellington Fund (Vanguard Wellington), a stock
and bond mutual fund; the Vanguard Growth and Income Portfolio
(Vanguard Growth and Income), formerly the Vanguard Quantitative
Portfolios, a growth and income stock mutual fund; the Vanguard
U.S. Growth Portfolio (Vanguard U.S.), a growth stock mutual
fund; the Vanguard International Growth Portfolio (Vanguard
International), a growth stock mutual fund investing in foreign
companies; the Vanguard Explorer Fund, an aggressive growth stock
fund; and the Vanguard Bond Index Fund, which is an
intermediate-term bond fund. During 1991 to 1996, the guaranteed
annuity contract with Executive Life Insurance Company (Executive
Life) was accounted for as its own investment fund, hereafter
referred to as the Executive Life Fund (see note 4).
All of the administrative expenses of the Plan are paid by the
Company with the exception of loan application fees. All
investment expenses are paid from the investment funds.
6
<PAGE>
EDS DEFERRED COMPENSATION PLAN
Notes to Financial Statements
In order to preserve any protected benefits, rights or features
under any plans which are transferred or merged into the EDS
Deferred Compensation Plan, the Plan was amended, effective
December 30, 1988, to specifically prohibit the reduction or
elimination of any benefit, right or feature protected under IRC
Section 411 (d) (6).
(b) Contributions
Each year, contributions to the Plan are made on a pre-tax basis.
Participants may elect to defer between one percent and twenty
percent of their total compensation subject to: (1) a maximum
annual contribution of $9,500 in 1997 and 1996, (2) a maximum
annual eligible compensation of $160,000 per participant beginning
January 1, 1994, and (3) limitations imposed to ensure a fair mix
of participation among employees. The total annual additions to a
participant's individual account may not exceed the lesser of
$30,000 or 25 percent of the participant's total compensation as
defined in the Plan. Annual additions for purposes of this test
are defined as contributions less any rollover contributions made
during the year. If the participant is enrolled in other Company
employee benefit plans sponsored by the Company, the annual
additions are subject to other limitation tests. A participant may
elect, up to four times annually, to change his/her designated
percentage of compensation deferred.
(c) Withdrawals
Withdrawals may be made from the Plan in certain circumstances.
Hardship withdrawals may be made once a participant has exhausted
all other available financial resources, including Plan loans,
and upon the approval of the Plan Administrator. A participant
may then withdraw an amount equal to but not in excess of the
expense of the hardship in accordance with requirements of the
regulations established under the IRC. In order to obtain such
approval from the Plan Administrator, a participant must
demonstrate immediate and heavy financial need. In addition,
participants age 59 1/2 or above may obtain an in-service
withdrawal without being subject to an additional 10 percent tax
penalty. The amount of a participant's withdrawals may not be
repaid to the Plan.
(d) Participant's Individual Account
The participant's individual account is credited with the
participant's contributions (including rollovers) and the amounts
of participant earnings dictated by the number of units held in
each investment fund. The benefit to which a participant is
entitled is limited to the amount of the participant's individual
account.
The participant determines the percentage of the investment
contributed to one or more of the investment funds. The
percentages may be in any whole percentage increment.
(e) Vesting
Participants are always 100 percent vested in their individual
accounts and in the earnings received thereon.
7
<PAGE>
EDS DEFERRED COMPENSATION PLAN
Notes to Financial Statements
(f) Payments of Benefits
On termination of service, age 59 1/2, death, retirement, or
total and permanent disability, a participant may elect to
receive either a cash distribution for all or part of the value
of his/her account, EDS common stock (for any amount so
invested), or a non-transferable annuity contract purchased on
his/her behalf from an insurance company. A participant may elect
to receive periodic payments in monthly, quarterly, or
semi-annual installments or elect to have all or part of his/her
account rolled over to another qualified plan or to an individual
retirement account.
(g) Loans
Upon written application of a participant, the Plan Administrator
may direct the trustee to make a loan to the participant. The
amount of any such loan is limited to fifty percent (50%) of the
amount of accumulated contributions to which the participant
would be entitled if employment was terminated as of the date the
loan is made. No loan may be granted for less than $500. The
maximum amount of loans available to a participant is $50,000
reduced by the highest outstanding loan balances from the Plan
during the preceding year minus the outstanding loan balances on
the date a loan is made. Plan loans and interest must be repaid
within five years or upon termination of employment, whichever is
earlier. If the outstanding loan is not transferred, rolled over,
or repaid in full prior to the end of the quarter during which
the participant separates, the amount outstanding will be
reported to the Internal Revenue Service as income for that
calendar year. Effective July 1, 1991, the Plan was amended to
allow no more than four outstanding loans at any one time. No
more than two Plan loans may be granted in any plan year. At
December 31, 1997 and 1996, the interest rate on new loans was
eight and one-half percent (8.5%) and eight and one-quarter
percent (8.25%), respectively.
(2) Summary of Significant Accounting Policies
The Plan is accounted for under the accrual method of accounting.
(a) Investments
The Plan's investments are stated at fair value based on quoted
market prices except for its investment contracts with insurance
companies which are stated at contract value, which approximates
market value. The average cost method is used to calculate gains
and losses on the sale of investments. Purchases and sales of
investments are recorded on a trade date basis. Participant loans
are presented in the accompanying financial statements at unpaid
principal balance which approximates fair value.
(b) Investment Income
Income from investments is recorded as it is earned. Dividends are
recorded on the ex-dividend date.
(c) Benefits
Benefits are recorded when paid.
8
<PAGE>
EDS DEFERRED COMPENSATION PLAN
Notes to Financial Statements
(d) Use of Estimates
The preparation of the 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 date of the financial statements and the
reported amounts of additions and deductions during the reporting
period. Because of the use of estimates inherent in the financial
reporting process, actual results could differ from those
estimates.
(e) Contributions Receivable
At December 31, 1997, contributions receivable were allocated as
follows: $275,120 - Income Fund; $266,131 - EDS Stock Fund;
$426,710 - Vanguard Wellington Fund; $323,883 - Vanguard U.S.
Growth Portfolio Fund; $185,030 - Vanguard International Growth
Portfolio Fund; $405,931 - Vanguard Growth and Income Portfolio;
$119,322 - Vanguard Explorer; $92,448 - Vanguard Money Market
Reserves - Prime Portfolio Fund; and $37,427 - Vanguard Total Bond
Market Portfolio Fund.
(3) Plan Termination
While it has not expressed any intention to do so, the Company has the
right to terminate the Plan at any time by majority vote of the Company's
Board of Directors subject to the provisions of the IRC and ERISA.
(4) Investments
The trustee of the Plan holds the investments of the Plan in trust on
behalf of the participants. Consistent with the fiduciary standards of
ERISA, safeguards are adhered to in protecting the interests of Plan
participants and their beneficiaries.
The Income Fund also invests in structured investment contracts. Under
these arrangements, the Plan enters into a wrap agreement with a
financial institution at a stated yield on fixed income securities
purchased by the Plan. The wrap agreements are stated at fair value based
on fluctuations in the fair value of the underlying fixed income
securities.
9
<PAGE>
EDS DEFERRED COMPENSATION PLAN
Notes to Financial Statements
The following table presents the fair value/contract value of the Plan's
investments at December 31, 1997 and 1996. Investments that represent five
percent or more of the Plan's net assets are separately identified.
<TABLE>
<CAPTION>
1997 1996
------------------------------- --------------------------------
Number of Fair value/ Number Fair value/
shares or contract of shares contract
units value or units value
------------ -------------- ----------- ----------------
<S> <C> <C> <C> <C>
Income Fund* -- $ 203,595,182 -- $ 201,674,073
EDS Stock Fund (cost, 1997 -
$266,859,817, 1996 - $283,781,900)* 7,761,537 341,022,519 8,171,622 356,437,009
Vanguard Wellington (cost, 1997 -
$310,817,582, 1996 - $253,593,460)* 13,540,616 398,771,147 11,948,750 312,459,577
Vanguard U.S. (cost, 1997 -
$159,377,556, 1996 - $110,056,282)* 7,190,690 206,372,797 5,654,516 134,238,092
Vanguard International (cost, 1997 -
$94,026,517, 1996 - $75,665,294)* 6,241,600 102,299,832 5,367,886 88,355,311
Vanguard Growth and Income (cost, 1997 -
$149,718,682, 1996 - $82,301,799)* 6,827,365 178,808,681 4,361,682 96,959,940
Vanguard Explorer Fund (cost, 1997 -
$35,338,693, 1996 - $20,752,082) 638,580 35,313,463 391,437 21,070,953
Vanguard Bond Index Fund (cost, 1997 -
$9,238,431, 1996 - $4,177,965) 932,322 9,407,134 423,891 4,171,090
Vanguard Money Market 67,965,231 67,965,231 51,785,328 51,785,328
Loan Fund (12,225 and 14,677 loans in
1997 and 1996, respectively, loans
outstanding from $29 to $47,439
and $6 to $44,460 in 1997 and 1996,
respectively, with interest rates
from 6.0% to 11.75% and 6.0% to 13.0%
in 1997 and 1996, respectively) -- 54,628,090 -- 54,061,580
------------- -------------
$1,598,184,076 $1,321,212,953
============= =============
* Represents 5% or more of Plan assets.
</TABLE>
10
<PAGE>
EDS DEFERRED COMPENSATION PLAN
Notes to Financial Statements
On April 1, 1991, the Plan received $1.8 million for interest accrued
from inception to March 31, 1991 on the group annuity contract with
Executive Life. On April 11, 1991, the California State Board of
Insurance placed Executive Life into conservatorship due to Executive
Life's financial condition. The California Superior Court approved the
purchase of Executive Life by a French investment group headed by Altus
Finance and Mutuelle Assurance des Artisanale de France. The new company
is called Aurora National Life Assurance Company (Aurora). As of November
4, 1996, Aurora had transferred $10,707,071 to Vanguard for settlement of
the contract. This settlement was transferred to the eligible
participant's accounts on November 11, 1996.
To hedge against adverse foreign currency movements, the Vanguard
International Growth Portfolio may enter into contracts for the purchase
or sale of a specific foreign currency at a fixed price at a future date.
The forward foreign currency rate of the underlying currency and any
gains and losses are recorded for financial statement purposes at fair
value and as unrealized until the contract settlement date, at which
point they are realized. To hedge against anticipated future changes in
interest or security prices, the Vanguard Growth and Income Portfolio may
utilize futures contracts to a limited extent. Vanguard Growth and Income
receives from or pays to brokers amounts equal to the daily fluctuations
in the values of the contracts. These receipts and payments are recorded
as unrealized gains and losses until the contract settlement dates, at
which point they are realized. The underlying risk to participants is
proportional to each participant's number of shares relative to the total
number of shares issued by each mutual fund.
(5) Related Party Transactions
As stated previously in note 1, the EDS Stock Fund consists of EDS common
stock.
(6) Income Tax Status
The Plan obtained its latest determination letter on July 18, 1995, in
which the Internal Revenue Service stated that the Plan, as then
designed, was in compliance with the applicable requirements of the IRC.
The Plan has been amended, since receiving the determination letter, to
allow for investments in the EDS Stock Fund as well as other amendments
pertaining to the Split-Off. However, the Plan Administrator believes
that the Plan is designed and is currently being operated in compliance
with the applicable requirements of the IRC.
(7) Subsequent Event
Effective July 1, 1998, the Company will match 25% of employee
contributions up to 6% of an employee's salary. The matching
contributions will be made in EDS stock which is restricted from trade
for two-years, based on the trade date. Matching contributions vest 40%
after two years and in 20% increments each year thereafter.
11
<PAGE>
EDS DEFERRED COMPENSATION PLAN
Notes to Financial Statements
(8) Allocation of Changes in Plan Assets and Liabilities to Investment
------------------------------------------------------------------
Programs
--------
The following table presents the allocation of changes in net assets
available for benefits to investment programs for the year ended December 31,
1997:
<TABLE>
<CAPTION>
Vanguard
Vanguard U.S. International
Vanguard Growth Portfolio Growth
Income Fund EDS Stock Fund Wellington Fund Fund Portfolio Fund
----------- -------------- --------------- ---------------- --------------
<S> <C> <C> <C> <C> <C>
Additions to net assets
attributed to
investment income:
Net appreciation
(depreciation) in fair
value of investments $ -- $ 9,651,380 $ 40,295,468 $ 30,219,406 $(1,352,350)
Interest 12,261,069 -- -- -- --
Dividends -- 4,774,474 33,574,035 7,973,775 4,362,207
----------- ----------- ------------ ----------- -----------
Total 12,261,069 14,425,854 73,869,503 38,193,181 3,009,857
Employee contributions 16,930,974 29,364,685 34,634,867 30,246,631 17,109,219
Net assets transferred
from other plans 45,879 4,287 22,715 25,652 13,383
----------- ----------- ------------ ----------- -----------
Total additions 29,237,922 43,794,826 108,527,085 68,465,464 20,132,459
Deductions from net
assets attributed to
withdrawals (13,820,354) (14,953,765) (21,165,110) (12,655,272) (7,323,968)
Interfund transfers (13,221,339) (43,989,420) (623,695) 16,648,396 1,321,060
----------- ----------- ------------ ----------- -----------
Net increase
(decrease) 2,196,229 (15,148,359) 86,738,280 72,458,588 14,129,551
Net assets available for
benefits at:
Beginning of year 201,674,073 356,437,009 312,459,577 134,238,092 88,355,311
----------- ----------- ------------ ----------- -----------
End of year $203,870,302 $341,288,650 $399,197,857 $206,696,680 $102,484,862
=========== =========== =========== =========== ===========
</TABLE>
12
<PAGE>
EDS DEFERRED COMPENSATION PLAN
Notes to Financial Statements
(8) Allocation of Changes in Plan Assets and Liabilities to Investment
------------------------------------------------------------------
Programs (continued)
--------------------
The following table presents the allocation of changes in net assets
available for benefits to investment programs for the year ended December 31,
1997:
<TABLE>
<CAPTION>
Vanguard Growth Vanguard Vanguard Money
and Income Vanguard Bond Market Reserves-
Portfolio Explorer Index Prime Portfolio Loan
Fund Fund Fund Fund Fund Total
--------------- ------------ ---------- --------------- ------------ -------
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets
attributed to
investment income:
Net appreciation
(depreciation)
in fair value
of investments $ 18,549,721 $ 12,996 $ 178,304 $ -- $ -- $ 97,554,925
Dividends 20,691,384 3,437,770 392,015 -- -- 75,205,660
Interest -- -- -- 3,272,335 4,408,554 19,941,958
----------- ---------- --------- ---------- --------- ------------
Total 39,241,105 3,450,766 570,319 3,272,335 4,408,554 192,702,543
Employee contributions 21,142,593 7,646,001 1,650,241 5,709,911 111,390 164,546,512
Net assets transferred
from other plans 4,053 -- -- 16,520,129 1,142,675 17,778,773
----------- ---------- --------- ---------- --------- ------------
Total additions 60,387,751 11,096,767 2,220,560 25,502,375 5,662,619 375,027,828
Deductions from net
assets attributed to
withdrawals (9,245,876) (1,973,085) (500,458) (10,561,617) (3,725,198) (95,924,703)
Interfund transfers 31,112,797 5,238,150 3,553,369 1,331,593 (1,370,911) --
----------- ---------- --------- ---------- --------- ------------
Net increase
(decrease) 82,254,672 14,361,832 5,273,471 16,272,351 566,510 279,103,125
Net assets available for
benefits at:
Beginning of year 96,959,940 21,070,953 4,171,090 51,785,328 54,061,580 1,321,212,953
----------- ---------- ---------- ---------- --------- ------------
End of year $179,214,612 $35,432,785 $9,444,561 $68,057,679 $54,628,090 $1,600,316,078
=========== ========== ========== ========== ========== =============
</TABLE>
13
<PAGE>
EDS DEFERRED COMPENSATION PLAN
Notes to Financial Statements
(8) Allocation of Changes in Plan Assets and Liabilities to Investment
------------------------------------------------------------------
Programs (continued)
--------------------
The following table presents the allocation of changes in net assets
available for benefits to investment programs for the year ended December 31,
1996:
<TABLE>
<CAPTION>
Vanguard
Vanguard Vanguard International
Income Executive EDS Wellington U.S. Growth Growth
Fund Life Fund Stock Fund Fund Portfolio Fund Portfolio Fund
------ ---------- ---------- ------------ -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets
attributed to investment
income:
Net appreciation
(depreciation)
in fair value of
investments $ -- $ -- $(64,830,021) $ 19,606,546 $14,596,716 $ 7,100,874
Interest 12,481,873 -- -- -- -- --
Dividends -- 1,067,454 4,576,154 24,520,964 9,847,755 3,819,098
----------- ---------- ----------- ----------- ---------- -----------
Total 12,481,873 1,067,454 (60,253,867) 44,127,510 24,444,471 10,919,972
Employee contributions 20,193,559 -- 38,309,012 37,161,452 24,722,826 16,755,425
Net assets transferred
from other plans 45 -- 11,543 106 377 11,127
----------- ---------- ----------- ----------- ---------- -----------
Total additions 32,675,477 1,067,454 (21,933,312) 81,289,068 49,167,674 27,686,524
Deductions from net
assets attributed to
withdrawals (15,572,102) -- (21,172,614) (20,142,112) (8,178,342) (5,302,887)
Interfund transfers (27,536,640) (10,707,071) 30,219,283 (17,637,242) 14,411,683 (2,752,216)
----------- ---------- ----------- ----------- ---------- -----------
Net increase
(decrease) (10,433,265) (9,639,617) (12,886,643) 43,509,714 55,401,015 19,631,421
Net assets available for
benefits at:
Beginning of year 212,107,338 9,639,617 369,323,652 268,949,863 78,837,077 68,723,890
----------- ---------- ----------- ----------- ---------- -----------
End of year $201,674,073 $ -- $356,437,009 $312,459,577 $134,238,092 $88,355,311
=========== ========== =========== =========== =========== ===========
</TABLE>
14
<PAGE>
EDS DEFERRED COMPENSATION PLAN
Notes to Financial Statements
(8) Allocation of Changes in Plan Assets and Liabilities to Investment
------------------------------------------------------------------
Programs (continued)
--------------------
The following table presents the allocation of changes in net assets
available for benefits to investment programs for the year ended December 31,
1996:
<TABLE>
<CAPTION>
Vanguard Vanguard Money
Growth and Vanguard Market Reserves-
Income Vanguard Bond Prime
Portfolio Fund Explorer Fund Index Fund Portfolio Fund Loan Fund Total
----------------- ------------- ---------- -------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets
attributed to
investment income:
Net appreciation
(depreciation) in
fair value of
investments $ 8,407,033 $ 487,334 $ (64,524) $ -- $ -- $ (14,696,042)
Interest -- -- -- 2,274,573 4,119,642 18,876,088
Dividends 8,755,528 1,126,699 206,949 -- -- 53,920,601
---------- ---------- --------- ---------- ---------- -------------
Total 17,162,561 1,614,033 142,425 2,274,573 4,119,642 58,100,647
Employee contributions 16,829,070 6,042,161 1,350,570 6,188,309 -- 167,552,384
Net assets transferred
from other plans 2,467 88 54 4,550,839 263,640 4,840,286
---------- ---------- --------- ---------- ---------- -------------
Total additions 33,994,098 7,656,282 1,493,049 13,013,721 4,383,282 230,493,317
Deductions from net
assets attributed to
withdrawals (6,237,639) (908,732) (228,046) (8,142,993) (3,760,516) (89,645,983)
Interfund transfers 2,597,464 5,207,948 817,476 2,427,526 2,951,789 --
---------- ---------- --------- ---------- ---------- -------------
Net increase
(decrease) 30,353,923 11,955,498 2,082,479 7,298,254 3,574,555 140,847,334
Net assets available for
benefits at:
Beginning of year 66,606,017 9,115,455 2,088,611 44,487,074 50,487,025 1,180,365,619
---------- ---------- --------- ---------- ---------- -------------
End of year $96,959,940 $21,070,953 $4,171,090 $51,785,328 $54,061,580 $1,321,212,953
========== ========== ========= ========== ========== =============
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
EDS DEFERRED COMPENSATION PLAN
Item 27a-Schedule of Assets Held for Investment Purposes
December 31, 1997
Description of Investment
Rate of Number of Current
Identity of Party Maturity Date Interest Shares or Units Cost Value
- ------------------------------------ ------------- --------- --------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Income Fund:
Synthetic investment contracts:
AIG Financial Products -- 6.54% -- $ 16,344,840 $ 16,779,555
Bankers Trust
#93-621 (1) 3/31/00 6.02% -- 32,340,598 32,543,287
#94-791 (1) 6/30/00 7.37% -- 18,611,245 19,097,937
Cassie des Depots et Consignations
#338-01 7/31/02 6.23% -- 10,153,499 10,046,578
#338-02 12/31/02 5.96% -- 10,601,398 10,667,711
Rabobank
#089501 -- 6.13% -- 17,121,223 17,435,527
#069701 12/31/00 6.42% -- 5,167,444 5,226,895
State Street Bank -- 5.84% -- 11,153,512 11,261,521
Union Bank of Switzerland
#2081 -- 6.28% -- 30,860,913 31,775,746
#2107 -- 6.42% -- 17,720,017 18,190,926
West Landesbank -- 6.18% -- 15,802,859 16,076,749
Wrap agreements -- Various -- 289,671 (2,935,213)
Other investment contracts:
John Hancock Mutual Life Ins. 6/30/99 6.98% -- 10,144,944 10,144,944
Vanguard Money Market
Reserves - Prime Portfolio (no
guaranteed rate) (2) -- -- -- 7,283,019 7,283,019
----------- -----------
Total Income Fund $203,595,182 $203,595,182
(1) The interest rate will be adjusted quarterly.
(2) The interest rate was 5.33% at December 31, 1997.
See accompanying independent auditors' report. (continued)
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
EDS DEFERRED COMPENSATION PLAN
Description of Investment
Rate of Number of
Identity of Party Maturity Date Interest Shares or Units Cost Current Value
- -------------------------------- ------------- -------- --------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
EDS Stock Fund (3) -- -- 7,761,537 266,859,817 341,022,519
Vanguard Wellington Fund (3) -- -- 13,540,616 310,817,582 398,771,147
Vanguard U.S. Growth Portfolio (3) -- -- 7,190,690 159,377,556 206,372,797
Vanguard International Growth
Portfolio (3) -- -- 6,241,600 94,026,517 102,299,832
Vanguard Growth and Income
Portfolio (3) -- -- 6,827,365 149,718,682 178,808,681
Vanguard Explorer Fund (3) -- -- 638,580 35,338,693 35,313,463
Vanguard Bond Index Fund (3) -- -- 932,322 9,238,431 9,407,134
Vanguard Money Market
Reserves - Prime Portfolio (3) -- -- 67,965,231 67,965,231 67,965,231
Loan Fund (3) -- 6.0% -- 54,628,090 54,628,090
to
11.75%
------------- -------------
Total Assets Held
for Investment Purposes $1,351,565,781 $1,598,184,076
============= =============
(3) Parties In Interest
See accompanying independent auditors' report.
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
EDS DEFERRED COMPENSATION PLAN
Item 27d - Schedule of Reportable Transactions
For the Year Ended December 31, 1997
Expense Current Value
Identity of Number Incurred of Asset on Net
Party of Purchase Selling Lease with Cost of Transaction Gain or
Involved Description of Asset Transactions Price Price Rental Transaction Asset Date (Loss)
- ---------- -------------------- ------------ ----------- ----------- ------ ----------- ---------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
EDS* Company Stock Fund:
EDS Stock Fund
(EDS Common Stock) 253 $131,156,936 $ -- -- -- $131,156,936 $131,156,936 $ --
EDS Stock Fund
(EDS Common Stock) 253 -- 156,034,312 -- -- 148,166,399 156,034,312 7,867,913
Various Fixed Principal
Investment Fund:
Income Fund 256 56,471,968 -- -- -- 56,471,968 56,471,968 --
Income Fund 253 -- 54,227,268 -- -- 54,227,268 54,227,268 --
Mutual Funds:
Vanguard* Vanguard Wellington Fund
(Stock and Bond Fund) 253 103,287,271 -- -- -- 103,287,271 103,287,271 --
Vanguard Wellington Fund
(Stock and Bond Fund) 253 -- 57,078,289 -- -- 46,066,769 57,078,289 11,011,520
Vanguard* Vanguard Money Market
Reserves - Prime
Portfolio
(Money Market Fund) 256 108,445,807 -- -- -- 108,445,807 108,445,807 --
Vanguard Money Market
Reserves - Prime
Portfolio
(Money Market Fund) 253 -- 93,207,096 -- -- 93,207,096 93,207,096 --
Vanguard* Vanguard U.S. Growth
Portfolio (Stock
Fund) 253 88,835,472 -- -- -- 88,835,472 88,835,472 --
Vanguard U.S. Growth
Portfolio (Stock
Fund) 253 -- 46,911,725 -- -- 39,536,227 46,911,725 7,375,498
Vanguard* Vanguard International
Growth Portfolio
(Stock Fund) 253 43,732,834 -- -- -- 43,732,834 43,732,834 --
Vanguard International
Growth Portfolio
(Stock Fund) 253 -- 28,413,770 -- -- 25,371,900 28,413,770 3,041,870
Vanguard* Vanguard Growth and
Income Portfolio
(Stock Fund) 253 95,177,807 -- -- -- 95,177,807 95,177,807 --
Vanguard Growth and
Income Portfolio
(Stock Fund) 253 -- 31,818,914 -- -- 27,735,392 31,818,914 4,083,522
*Parties in interest
See accompanying independent auditors' report.
</TABLE>
18
Exhibit 23
----------
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Electronic Data Systems Corporation:
We consent to incorporation by reference in the Registration Statement (Nos.
33-64681 and 33-36443) on Form S-8 of Electronic Data systems Corporation of our
report dated June 5, 1998 relating to the statements of net assets available for
benefits of the EDS Deferred Compensation Plan as of December 31, 1997 and 1996,
and the related statements of changes in net assets available for benefits for
the years then ended, and the related supplemental schedules, which report
appears in the December 31, 1997 annual report on Form 11-K of the EDS Deferred
Compensation Plan.
/s/ KPMG Peat Marwick LLP
Dallas, Texas
June 25, 1998
19
