<PAGE>
____________________________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(MARK ONE)
[x] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the 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 . . . . . . . . . . . . . . . . . .. . . . 1-5964
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below: IKON OFFICE SOLUTIONS, INC. RETIREMENT SAVINGS
PLAN
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office: IKON OFFICE SOLUTIONS, INC., P.O. BOX
834, VALLEY FORGE, PA 19482-0834.
____________________________
<PAGE>
REQUIRED INFORMATION
--------------------
a. Financial Statements. The following financial statements are furnished for
--------------------
the Plan.
1. Audited Statements of Net Assets Available for Benefits -
December 31, 1997 and December 31, 1996.
2. Audited Statements of Changes in Net Assets Available for Benefits -
for the years ended December 31, 1997 and December 31, 1996.
3. Notes to Financial Statements
4. Schedules
(a) Assets Held for Investment Purposes
(b) Reportable Transactions
b. Exhibits
--------
Exhibit 23 Consent of Independent Auditors
<PAGE>
Financial Statements
and Schedules
IKON Office Solutions, Inc.
Retirement Savings Plan
Years ended December 31, 1997 and 1996
with Report of Independent Auditors
<PAGE>
IKON Office Solutions, Inc. Retirement Savings Plan
Financial Statements
and Schedules
Years ended December 31, 1997 and 1996
CONTENTS
<TABLE>
<CAPTION>
<S> <C>
Report of Independent Auditors.............................. 1
Financial Statements
Statements of Net Assets Available for Benefits............. 2
Statements of Changes in Net Assets Available for Benefits.. 3
Notes to Financial Statements............................... 4
Schedules
Assets Held for Investment Purposes......................... 17
Reportable Transactions..................................... 18
</TABLE>
<PAGE>
Report of Independent Auditors
Trustees
IKON Office Solutions, Inc.
Retirement Savings Plan
We have audited the accompanying statements of net assets available for benefits
of the IKON Office Solutions, Inc. Retirement Savings Plan (formerly the Alco
Standard Corporation Retirement Savings Plan) as of December 31, 1997 and 1996,
and the related statements of changes in net assets available for benefits for
the years then ended. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the IKON Office
Solutions, Inc. Retirement Savings Plan at December 31, 1997 and 1996, and the
changes in its 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 financial
statements taken as a whole. The accompanying supplemental schedules of assets
held for investment purposes as of December 31, 1997 and reportable transactions
for the year then ended, are presented for purposes of complying with the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974, and are not a required part
of the financial statements. The supplemental schedules have been subjected to
the auditing procedures applied in our audit of the financial statements and, in
our opinion, are fairly stated in all material respects in relation to the
financial statements taken as a whole.
May 15, 1998
/s/ Ernst & Young LLP
1
<PAGE>
IKON Office Solutions, Inc. Retirement Savings Plan
Statements of Net Assets Available for Benefits
<TABLE>
<CAPTION>
DECEMBER 31
1997 1996
--------------------------------
<S> <C> <C>
ASSETS
Investments:
Cash and cash equivalents $ 7,245,288 $ 26,775,350
IKON Office Solutions, Inc. common stock 219,457,013 --
Unisource Worldwide, Inc. common stock 32,728,816 --
Alco Standard Corporation common stock -- 592,395,791
Investment funds 131,255,930 175,286,757
Participant loans 16,634,250 24,476,213
--------------------------------
407,321,297 818,934,111
Transfers receivable from merged plans 1,239,156 1,444,397
Investment income receivable 711,517 1,384,535
--------------------------------
409,271,970 821,763,043
LIABILITIES
Accrued administrative expenses 817,966 527,294
--------------------------------
Net assets available for benefits $408,454,004 $821,235,749
================================
</TABLE>
See accompanying notes.
2
<PAGE>
IKON Office Solutions, Inc. Retirement Savings Plan
Statements of Changes in Net Assets Available for Benefits
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
1997 1996
--------------------------------
<S> <C> <C>
Additions:
Employee contributions $ 46,451,328 $ 54,007,081
Employer contributions 23,243,261 26,328,149
Assets transferred or receivable from
merged plans 32,579,543 55,671,620
Dividend income 4,315,323 8,023,702
Interest income 4,529,701 6,896,749
---------------------------------
Total additions 111,119,156 150,927,301
Deductions:
Benefits paid to participants 59,778,762 85,485,849
Administrative expenses 3,381,996 4,269,789
Assets transferred to Unisource Worldwide, Inc.
Retirement Savings Plan 361,438,780 --
---------------------------------
Total deductions 424,599,538 89,755,638
---------------------------------
(313,480,382) 61,171,663
Realized and unrealized (loss) gain on
investments (99,301,363) 78,032,205
---------------------------------
Net (decrease) increase for the year (412,781,745) 139,203,868
Net assets available for benefits at
beginning of year 821,235,749 682,031,881
---------------------------------
Net assets available for benefits at
end of year $ 408,454,004 $821,235,749
=================================
</TABLE>
See accompanying notes.
3
<PAGE>
IKON Office Solutions, Inc. Retirement Savings Plan
Notes to Financial Statements
December 31, 1997
1. SIGNIFICANT ACCOUNTING POLICIES
Employee contributions and related employer required matching contributions are
recognized when employee contributions are withheld from the employees' pay.
The market value of the Alco Standard Corporation, IKON Office Solutions, Inc.
and Unisource Worldwide, Inc. common stock is determined by use of the last
reported sales price on the last business day of the year, as reported on a
national securities exchange.
Cash equivalents are valued at cost which is equal to market value. All highly
liquid investments with maturities of three months or less when purchased are
considered to be cash equivalents.
Investment funds consist of the Stable Value Fund, Vanguard Institutional Index
Fund, Balanced Fund, PBHG Growth Fund, and American Funds' EuroPacific Growth
Fund.
Guaranteed investment contracts held in the Stable Value Fund are valued at fair
value. Investments in the Vanguard Institutional Index Fund, Balanced Fund, PBHG
Growth Fund, and American Funds' EuroPacific Growth Fund are stated at fair
market value which is determined on the last day of the plan year based on the
portfolio of investments owned by the particular funds on that date.
Realized and unrealized gain or loss on investments represents the sum of the
change in the difference between December 31 market value and cost of
investments and the difference between the proceeds received and the cost of
investments sold.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
2. DESCRIPTION OF PLAN
The IKON Office Solutions, Inc. Retirement Savings Plan (formerly the Alco
Standard Corporation Retirement Savings Plan) (the "Plan") is a defined
contribution plan. Participation is limited to full-time and part-time nonunion
employees of IKON Office Solutions, Inc. and its domestic subsidiaries which
adopt the Plan.
4
<PAGE>
IKON Office Solutions, Inc. Retirement Savings Plan
Notes to Financial Statements (continued)
2. DESCRIPTION OF PLAN (CONTINUED)
The Plan allows participants to contribute 1% to 16% of annual salaries or
wages. Contributions are limited by the maximum amount allowable under the
Internal Revenue Code. Participants are immediately vested in their
contributions.
Sponsoring units of IKON Office Solutions, Inc. (employers) contribute an amount
equal to two-thirds of the first 6% of annual regular salaries or wages that a
participant contributes to the Plan. The employers' contribution vests with the
participant at 25% per year beginning with the participant's second year of
service so that full vesting occurs after five years of service. The participant
is also fully vested in the employers' contributions upon retirement, position
termination due to permanent shutdown of plant or department, total and
permanent disability, or death.
The Plan allows participant contributions (and any investment income earned
thereon) to be allocated between investments in IKON Office Solutions, Inc.
common stock or any of the available investment funds. Additional investments in
Unisource Worldwide, Inc. common stock (which resulted from the spin-off of
Unisource Worldwide, Inc.) are not permitted. Participants may change investment
allocations at any time. Employer matching contributions are invested in IKON
Office Solutions, Inc. common stock and may not be redirected to any of the
other available investment options until the attainment of age 55.
The following is a brief description of the investment funds in which
participants may direct their contributions.
Stable Value Fund - Funds are invested in fixed income investments. The fund is
managed by The Vanguard Group.
Vanguard Institutional Index Fund - Funds are invested solely in the 500
publicly traded stocks in the Standard & Poor's Composite Stock Price Index.
The fund is managed by The Vanguard Group.
Balanced Fund - Funds are invested equally in the Stable Value Fund and
Vanguard Institutional Index Fund.
5
<PAGE>
IKON Office Solutions, Inc. Retirement Savings Plan
Notes to Financial Statements (continued)
2. DESCRIPTION OF PLAN (CONTINUED)
PBHG Growth Fund - Funds are invested primarily in the common stocks of
companies with small to mid capitalization and a potential for strong earnings'
growth. The fund is managed by Pilgrim Baxter & Associates.
American Funds' EuroPacific Growth Fund - Funds are invested in companies
located primarily in Europe and the Pacific Basin. The objective of the fund,
which is managed by Capital Research and Management Company, is long-term
growth of capital.
Participants may borrow from their fund accounts a minimum of $1,000 up to a
maximum of $50,000 or 50% of their account balance, whichever is less. Loan
terms range from 1-5 years or up to 15 years for the purchase of a primary
residence. The loans are secured by the balance in the participant's account and
bear interest at a rate equal to 1% over the prime lending rate.
The Company has the right to amend or terminate the Plan at any time. In the
event of Plan termination, the rights of affected participants shall be 100%
vested.
Administrative expenses of the Plan are paid by the Plan.
The following plans were merged into the Plan on the effective dates indicated.
<TABLE>
<CAPTION>
EFFECTIVE DATE
PLAN OF MERGER
- -----------------------------------------------------------------------------
<S> <C>
Creative Graphic Services, Inc. Profit Sharing Plan March 1, 1996
Service Packaging Corporation Profit Sharing Plan March 1, 1996
Adrian-Lewis, Inc. Profit Sharing Plan April 1, 1996
Business Products, Inc. 401(k) Plan April 1, 1996
Carousel Computer Solutions Thrift Plan April 1, 1996
The R3 Group 401(k) Plan April 1, 1996
RBPI Retirement Plan April 1, 1996
Reprotech Document Services, Inc. 401(k) Profit Sharing
Plan April 1, 1996
Select Office Systems, Inc. 401(k) Plan April 1, 1996
Allstate Business Products, Inc. Integrated Defined
Contribution Plan May 1, 1996
Basetec 401(k) Profit Sharing Plan May 1, 1996
Cash Lewis Company 401(k) Plan May 1, 1996
The Clark Group Ltd. Profit Sharing Plan May 1, 1996
Cyberstar Corporation Employee Stock Ownership Plan May 1, 1996
</TABLE>
6
<PAGE>
IKON Office Solutions, Inc. Retirement Savings Plan
Notes to Financial Statements (continued)
2. DESCRIPTION OF PLAN (CONTINUED)
<TABLE>
<CAPTION>
EFFECTIVE DATE
PLAN OF MERGER
- -----------------------------------------------------------------------------
<S> <C>
Cyberstar Corporation 401(k) Plan May 1, 1996
Decker's Inc. 401(k) Retirement Plan May 1, 1996
Diversified Business Products, Inc. Retirement Savings
Plan May 1, 1996
Inlander-Steinler Paper Company Profit Sharing Plan May 1, 1996
Mankato Business Products, Inc. 401(k) Profit Sharing Plan May 1, 1996
Miami Valley Office Products, Inc. 401(k) Profit Sharing
Plan May 1, 1996
Packaging Consultants & Supply Co., Inc. Profit Sharing
and Incentive Savings Plan May 1, 1996
SOS Office Systems, Inc. Profit Sharing Plan May 1, 1996
Spiral Recycling, Inc. Profit Sharing Plan May 1, 1996
Western Paper Distributors, Inc. Profit Sharing Plan May 1, 1996
Business Services Company of Utica, Inc. Profit Sharing
Plan June 1, 1996
Camadon, Inc. 401(k) Profit Sharing Plan June 1, 1996
Coordinated Business Systems Ltd. Savings Plan June 1, 1996
Corporate Graphics, Inc. Tax Deferred Retirement Plan June 1, 1996
Jack Davenport Typewriter Company Profit Sharing 401(k)
Plan June 1, 1996
D&D Office Products, Inc. 401(k) Plan June 1, 1996
Document Services, Inc. Profit Sharing Retirement Plan June 1, 1996
Quorum Corporation Profit Sharing Retirement Plan June 1, 1996
Atlanta Legal Copies, Inc. 401(k) Retirement Savings Plan July 1, 1996
Complete Business Systems, Inc. Thrift and Profit Sharing
Plan July 1, 1996
Copy Data of Lafayette, Inc. Profit Sharing 401(k) Plan July 1, 1996
CDP Imaging Systems 401(k) Plan July 1, 1996
DeGroot Office Machine Company Profit Sharing Plan July 1, 1996
Marwyck 401(k) Plan July 1, 1996
MBS Business Systems, Inc. 401(k) Profit Sharing Plan July 1, 1996
More Copy Systems, Inc. 401(k) Profit Sharing Plan July 1, 1996
Raban Supply, Inc. 401(k) Profit Sharing Plan July 1, 1996
RMA/Kolko Corporation Profit Sharing/401(k) Plan July 1, 1996
Richards & Simmons, Inc. Profit Sharing Savings Plan July 1, 1996
Scot Business Systems, Inc. 401(k) Plan July 1, 1996
Set Point Paper 401(k) Pension and Savings Plan July 1, 1996
Source One Corporation, Inc. Profit Sharing Savings Plan July 1, 1996
Source One Supply of Ft. Wayne, Inc. Profit Sharing
Savings Plan July 1, 1996
</TABLE>
7
<PAGE>
IKON Office Solutions, Inc. Retirement Savings Plan
Notes to Financial Statements (continued)
2. DESCRIPTION OF PLAN (CONTINUED)
<TABLE>
<CAPTION>
EFFECTIVE DATE
PLAN OF MERGER
- -----------------------------------------------------------------------------
<S> <C>
Standard Copy, Inc. 401(k) Plan July 1, 1996
Systems, Inc. Pension Plan July 1, 1996
West Coast Information Systems, Inc. Employees' 401(k)
and Profit Sharing Plan July 1, 1996
Carr Paper Company 401(k) Profit Sharing Plan October 1, 1996
Central Office Products, Inc. 401(k) Plan October 1, 1996
Conifer Crent Company Salary Savings Plan October 1, 1996
Copy Systems of Savannah, Inc. 401(k) Retirement Plan October 1, 1996
Engineered Packaging Systems, Inc. Retirement Plan October 1, 1996
Engineered Packaging Systems Indiana, Inc. Retirement Plan October 1, 1996
Graham Copy Products, Inc. Profit Sharing Plan October 1, 1996
BCS Integration 401(k) Plan January 1, 1997
Blue-Prints, Inc. 401(k) Profit Sharing Plan January 1, 1997
Cleo's Products & Services, Inc. 401(k) Plan January 1, 1997
The Computer Group, Inc. 401(k) Plan January 1, 1997
Data-Image Systems Corp. 401(k) Profit Sharing Plan January 1, 1997
Executive Automation Consultants, Inc./Network Institute
of America, Inc. Profit Sharing 401(k) Plan January 1, 1997
Global Services, Inc. Employee Savings Plan January 1, 1997
Graphic Management & Services Group, Inc. Profit Sharing
Plan January 1, 1997
Integra Technology International, Inc. 401(k) Profit
Sharing Plan January 1, 1997
Lasergraphics 401(k) Profit Sharing Plan January 1, 1997
Legal One, Inc. 401(k) Plan January 1, 1997
Mount Auburn Press, Inc. 401(k) Plan January 1, 1997
Prounis Consulting Group, Inc. 401(k) Plan January 1, 1997
Real World Systems, Inc. 401(k) Plan January 1, 1997
Sunrise Computer Systems, Inc. 401(k) Profit Sharing Plan January 1, 1997
Universal Network, Inc. Savings and Profit Sharing Plan January 1, 1997
The Woodhull Corporation Profit Sharing and Savings Plan January 1, 1997
Zachary Jackson, Inc. Profit Sharing Plan January 1, 1997
Zachary Jackson, Inc. 401(k) Plan January 1, 1997
Hotel Copy Centers of NYC, Inc., (Imagetech) 401(k) Profit
Sharing Plan January 1, 1997
Employees' 401(k) Plan of Winson Olson Co, Inc. February 1, 1997
</TABLE>
8
<PAGE>
IKON Office Solutions, Inc. Retirement Savings Plan
Notes to Financial Statements (continued)
2. DESCRIPTION OF PLAN (CONTINUED)
<TABLE>
<CAPTION>
EFFECTIVE DATE
PLAN OF MERGER
- -----------------------------------------------------------------------------
<S> <C>
Southern Copy Products 401(k) Plan February 1, 1997
City Business Machines, Inc. 401(k) Plan April 1, 1997
HBM Technology Services, Inc. 401(k) Profit Sharing Plan April 1, 1997
Larry Smith Office Equipment, Inc. 401(k) Profit Sharing
Plan March 1, 1997
Kenwood Associates 401(k) Plan April 1, 1997
Key Business Systems, Inc. Profit Sharing Plan April 1, 1997
IBEC Profit Sharing Plan April 1, 1997
Double D Press, Inc. 401(k) Plan May 1, 1997
The Waldec Group 401(k) Plan June 1, 1997
Riverbend Group, Inc. 401(k) Profit Sharing Plan June 1, 1997
Carlson Group, Inc. 401(k) Plan June 1, 1997
Plain Paper Solutions, Inc. 401(k) Profit Sharing Plan June 1, 1997
Duplicating Products, Inc. 401(k) Savings Plan June 1, 1997
Tech Doc Pub., Inc. 401(k) Retirement Plan June 1, 1997
Legal Copy Specialists, Inc. Profit Sharing Plan June 1, 1997
OA Systems, Inc. Retirement Savings Plan July 1, 1997
Micro Information Services, Inc. 401(k) Plan July 1, 1997
Document Technology, Inc. Retirement Savings Plan July 1, 1997
The Intec Group, Inc. (Mida University) 401(k) Plan August 1, 1997
E. N. Dunlap, Inc. 401(k) Savings Plan August 1, 1997
Integrated Management Systems, Inc. Retirement Plan August 1, 1997
Professional Computing, Inc. 401(k) Plan September 1, 1997
MicroAge of Mesa 401(k) Profit Sharing Plan October 1, 1997
Legal Copy of Hartford Specialists, Inc. Profit Sharing
Plan October 1, 1997
Information Marketing, Inc. Profit Sharing Plan December 1, 1997
The Eagle Copy Service Profit Sharing Plan December 1, 1997
</TABLE>
The above mergers resulted in transfers of net assets to the Plan of $32,579,543
and $55,671,620 during the plan years ended December 31, 1997 and 1996,
respectively.
Information about the Plan, including vesting, withdrawal provisions and special
provisions related to the merged plans, is contained in the Summary Plan
Description, which is available from the Plan Administrator.
9
<PAGE>
IKON Office Solutions, Inc. Retirement Savings Plan
Notes to Financial Statements (continued)
3. UNISOURCE SPIN-OFF
On June 19, 1996, Alco Standard Corporation (Alco) announced that it would
separate Unisource, its printing and imaging and supply systems distribution
business from IKON, its office solutions business, with each business operating
as a stand-alone, publicly traded company. In order to effect the separation of
these businesses, Alco declared a dividend payable to shareholders of record of
Alco common stock at the close of business on December 13, 1996 of one share of
common stock, $.001 par value, of Unisource for every two shares of Alco stock.
The distribution resulted in 100% of the outstanding shares of Unisource common
stock being distributed to Alco shareholders on January 2, 1997. As a result of
this distribution, the Plan received 5,737,490 shares of Unisource stock with a
market value of $115,466,976 on January 2, 1997.
The spin-off was completed on December 31, 1996 and Alco changed its name to
IKON Office Solutions, Inc. on January 23, 1997. The Benefits Agreement entered
into by Alco and Unisource at the time of the spin-off called for Unisource to
establish a new plan identical to the Plan. The net assets, totaling
$361,438,780, of the Plan attributable to the account balances in the Plan of
participants who were actively employed by, or not actively employed but
receiving wages for reasons other than illness or injury from, Unisource
Worldwide, Inc. were transferred to the Unisource plan on January 2, 1997.
4. INCOME TAX STATUS
The Internal Revenue Service has ruled that the Plan qualifies under section
401(a) of the Internal Revenue Code (IRC) and, therefore, the related trust is
not subject to tax under present income tax laws. Once qualified, the Plan is
required to operate in conformity with the IRC to maintain its qualification.
The Trustees are not aware of any course of action or series of events that have
occurred that might adversely affect the Plan's qualified status.
10
<PAGE>
IKON Office Solutions, Inc. Retirement Savings Plan
Notes to Financial Statements (continued)
5. INVESTMENTS
Individual investments that represent 5% or more of the fair value of net assets
available for benefits are as follows:
<TABLE>
<CAPTION>
SHARES OR
IDENTITY OF INVESTMENTS PAR VALUE COST MARKET VALUE
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
DECEMBER 31, 1997:
IKON Office Solutions,
Inc.
Common Stock 7,802,916 shares $224,021,266 $219,457,013
Unisource Worldwide, Inc.
Common Stock 2,296,759 shares 47,977,370 32,728,816
Vanguard Institutional
Index Fund 505,603 units 37,023,828 45,281,695
PBHG Growth Fund 957,630 units 24,239,188 24,314,241
DECEMBER 31, 1996:
Alco Standard Corporation
Common Stock 11,474,979 shares $283,543,051 $592,395,791
Vanguard Institutional
Index Fund 704,064 units 42,317,379 48,481,810
</TABLE>
11
<PAGE>
IKON Office Solutions, Inc. Retirement Savings Plan
Notes to Financial Statements (continued)
5. INVESTMENTS (CONTINUED)
Information about the net assets available for benefits by separate investment
programs at December 31, 1997 and 1996 is as follows:
<TABLE>
<CAPTION>
Vanguard
IKON Common Stable Value Institutional PBHG Growth
Stock Fund Index Fund Balanced Fund Fund
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1997
ASSETS
Investments:
Cash and cash equivalents $ 4,361,969 $ 1 $ 289 $ 658,245 $ 347
IKON Office Solutions, Inc. common stock 219,457,013
Unisource Worldwide, Inc. common stock
Investment funds 45,346,526 38,151,406 12,827,397 24,314,241
Participant loans
Investment income receivable 23,143 69,397 501,545 103,818
Transfer receivable from merged plans
----------------------------------------------------------------------------------
Total assets 223,842,125 45,415,924 38,653,240 13,589,460 24,314,588
LIABILITIES
Accrued administrative expenses 285,889 51,751 41,916 15,970 27,082
----------------------------------------------------------------------------------
Net assets available for benefits $223,556,236 $45,364,173 $38,611,324 $13,573,490 $24,287,506
==================================================================================
1996
ASSETS
Investments:
Cash and cash equivalents $10,842,575 $10,011,270 $ - $ 990,232 $ -
Alco Standard Corporation common stock 592,395,791
Investment funds 69,050,098 40,322,117 14,910,688 37,482,182
Participant loans
Transfer receivable from merged plans
Investment income receivable 59,499 44,857 1,041,100 214,891
----------------------------------------------------------------------------------
Total assets 603,297,865 79,106,225 41,363,217 16,115,811 37,482,182
LIABILITIES
Accrued administrative expenses
----------------------------------------------------------------------------------
Net assets available for benefits $603,297,865 $79,106,225 $41,363,217 $16,115,811 $37,482,182
===================================================================================
American Funds'
EuroPacific Unisource Participants
Growth Fund Common Stock Loans Other Assets Total
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1997
ASSETS
Investments:
Cash and cash equivalents $ - $ 782,499 $ 1,007 $ 1,440,931 $ 7,245,288
IKON Office Solutions, Inc. common stock 219,457,013
Unisource Worldwide, Inc. common stock 32,728,816 32,728,816
Investment funds 10,616,360 131,255,930
Participant loans 16,634,250 16,634,250
Investment income receivable 3,587 10,027 711,517
Transfer receivable from merged plans 1,239,156 1,239,156
----------------------------------------------------------------------------------
Total assets $ 10,616,360 $33,514,902 $16,635,257 $ 2,690,114 $409,271,970
LIABILITIES
Accrued administrative expenses 12,352 44,474 338,532 817,966
----------------------------------------------------------------------------------
Net assets available for benefits $ 10,604,008 $33,470,428 $16,635,257 $ 2,351,582 $408,454,004
==================================================================================
1996
ASSETS
Investments:
Cash and cash equivalents $ - $ - $ 348 $ 4,930,925 $ 26,775,350
Alco Standard Corporation common stock 592,395,791
Investment funds 13,521,672 175,286,757
Participant loans 24,476,213 24,476,213
Transfer receivable from merged plans 1,444,397 1,444,397
Investment income receivable 24,188 1,384,535
----------------------------------------------------------------------------------
Total assets 13,521,672 - 24,476,561 6,399,510 821,763,043
LIABILITIES
Accrued administrative expenses 527,294 527,294
----------------------------------------------------------------------------------
Net assets available for benefits $ 13,521,672 $ - $24,476,561 $ 5,872,216 $821,235,749
==================================================================================
</TABLE>
12
<PAGE>
IKON Office Solutions, Inc. Retirement Savings Plan
Notes to Financial Statements (continued)
5. INVESTMENTS (CONTINUED)
The changes in net assets available for benefits by separate investment programs
for the years ended December 31, 1997 and 1996 are as follows:
<TABLE>
<CAPTION>
Vanguard AMERICAN FUNDS'
IKON Stable VALUE Institutional BALANCED PBHG EUROPACIFIC
COMMON STOCK FUND Index FUND FUND GROWTH FUND Growth FUND
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net assets available for benefits at
January 1, 1996 $534,260,621 $70,473,219 $25,457,169 $9,689,477 $10,087,306 $ 3,653,507
Employee contributions 43,929,005 962,790 2,278,511 1,047,304 4,224,837 1,564,634
Employer contributions 26,158,465 41,763 39,838 29,482 37,393 21,208
Investment income 6,919,153 4,187,453 1,102,416 221,056 559,510
Assets transferred or receivable
from merged plans 4,518,838 42,178,906 760,877 822,446 1,310,825 475,152
Benefit payments (56,021,674) (22,304,429) (3,067,332) (1,659,181) (1,639,349) (694,833)
Administrative expenses
Realized and unrealized gain
(loss) on investments 68,734,437 5,484,869 1,491,217 1,336,287 962,574
Interfund transfers (25,200,980) (16,433,477) 9,306,869 4,474,010 22,124,883 6,979,920
----------------------------------------------------------------------------------------
Net assets available for benefits at
December 31, 1996 603,297,865 79,106,225 41,363,217 16,115,811 37,482,182 13,521,672
Employee contributions 29,958,142 2,856,812 4,147,438 1,686,982 5,395,263 2,406,624
Employer contributions 23,292,684 37,832 42,546 27,064 35,738 16,617
Investment income 1,469,804 2,385,320 365,505 73,351 347 841,539
Assets transferred to Unisource
Worldwide, Inc. Retirement
Savings Plan (255,661,786) (40,026,608) (23,224,595) (7,763,161) (18,340,456) (7,589,586)
Assets transferred or receivable
from merged plans 2,464,845 25,756,772 1,289,282 915,942 1,242,891 746,319
Benefit payments (26,841,142) (13,990,971) (4,713,730) (3,339,876) (4,010,167) (1,530,520)
Administrative expenses (285,889) (51,751) (41,916) (15,970) (27,082) (12,352)
Realized and unrealized gain
(loss) on investments (91,489,532) 6,717,100 1,845,585 (827,433) (285,948)
Interfund transfers (62,648,755) (10,709,458) 12,666,477 4,027,762 3,336,223 2,489,643
----------------------------------------------------------------------------------------
Net assets available for benefits at
December 31, 1997 $223,556,236 $45,364,173 $38,611,324 $13,573,490 $24,287,506 $10,604,008
========================================================================================
UNISOURCE GEORGIA-PACIFIC PARTICIPANT OTHER
COMMON STOCK COMMON STOCK LOANS ASSETS TOTAL
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net assets available for benefits at
January 1, 1996 $ - $3,267,765 $10,964,688 $14,178,129 $682,031,881
Employee contributions 54,007,081
Employer contributions 26,328,149
Investment income 1,473 1,544,694 384,696 14,920,451
Assets transferred or receivable
from merged plans 236,743 5,367,833 55,671,620
Benefit payments (99,051) (85,485,849)
Administrative expenses (4,269,789) (4,269,789)
Realized and unrealized gain
(loss) on investments 22,821 78,032,205
Interfund transfers (3,193,008) 11,730,436 (9,788,653) -
----------------------------------------------------------------------------------------
Net assets available for benefits at
December 31, 1996 - - 24,476,561 5,872,216 821,235,749
Employee contributions 67 46,451,328
Employer contributions (209,220) 23,243,261
Investment income 2,071,663 1,386,862 250,633 8,845,024
Assets transferred to Unisource
Worldwide, Inc. Retirement
Savings Plan (8,832,588) (361,438,780)
Assets transferred or receivable
from merged plans 21,210 9,896 132,386 32,579,543
Benefit payments (5,352,356) (59,778,762)
Administrative expenses (44,474) (2,902,562) (3,381,996)
Realized and unrealized gain
(loss) on investments (15,261,135) (99,301,363)
Interfund transfers 52,244,673 (405,474) (1,001,091) -
----------------------------------------------------------------------------------------
Net assets available for benefits at
December 31, 1997 $33,470,428 $ - $16,635,257 $2,351,582 $408,454,004
========================================================================================
</TABLE>
13
<PAGE>
IKON Office Solutions, Inc. Retirement Savings Plan
Notes to Financial Statements (continued)
6. TRANSACTIONS WITH PARTIES-IN-INTEREST
During 1997, the Plan purchased from IKON Office Solutions, Inc. 1,855,897
shares (cost $52,174,789) of its common stock. During 1996, the Plan purchased
840,331 shares (cost $39,456,849) of Alco Standard Corporation common stock. In
1997, these shares were purchased at fair market value on the date of purchase.
In 1996, amounts paid for these shares approximated the average market price in
the month of purchase.
7. DIFFERENCES BETWEEN FINANCIAL STATEMENTS AND FORM 5500
The following is a reconciliation of net assets available for benefits per the
financial statements to the Form 5500:
<TABLE>
<CAPTION>
DECEMBER 31
1997 1996
----------------------------------
<S> <C> <C>
Net assets available for benefits per the
financial statements $408,454,004 $821,235,749
Amounts allocated to withdrawn participants (154,296) (829,831)
----------------------------------
Net assets available for benefits per the
Form 5500 $408,299,708 $820,405,918
==================================
</TABLE>
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500:
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1997
------------------
<S> <C>
Benefits paid to participants per the financial
statements $59,778,762
Add: amounts allocated to withdrawn participants at
December 31, 1997 154,296
Less: amounts allocated to withdrawn participants
at December 31, 1996 (829,831)
------------------
Benefits paid to participants per the Form 5500 $59,103,227
==================
</TABLE>
Amounts allocated to withdrawn participants are recorded on the Form 5500 for
benefit claims that have been processed and approved for payment prior to year
end but not yet paid.
14
<PAGE>
IKON Office Solutions, Inc. Retirement Savings Plan
Notes to Financial Statements (continued)
8. SUBSEQUENT EVENTS
The Plan has experienced a material decline in net assets available for benefits
subsequent to December 31, 1997 due to declines in the market values of IKON and
Unisource common stock from $28.125 and $14.25 per share, respectively, at
December 31, 1997 to $21.50 and $13.0625, respectively, at May 15, 1998.
Assets related to the mergers in 1998 will be transferred to the Plan as soon as
administratively possible.
<TABLE>
<CAPTION>
EFFECTIVE DATE
PLAN OF MERGER
- ---------------------------------------------------------------------------
<S> <C>
3D Communications, Inc. 401(k) Profit Sharing Plan January 1, 1998
Foto Beam, Inc. Profit Sharing Plan February 1, 1998
Percomco, Inc. Employees' Profit Sharing Plan February 1, 1998
American Business Systems 401(k) Profit Sharing Plan February 1, 1998
Copifax, Inc. 401(k) Plan March 1, 1998
Virtual Networks, Inc. 401(k) Profit Sharing Plan April 1, 1998
</TABLE>
15
<PAGE>
Schedules
16
<PAGE>
IKON Office Solutions, Inc. Retirement Savings Plan
Assets Held for Investment Purposes
December 31, 1997
<TABLE>
<CAPTION>
IDENTITY OF ISSUE DESCRIPTION OF INVESTMENT COST CURRENT VALUE
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Collective Short-Term Investment Short-term fixed income
Fund of the Northern Trust investments - 7,245,288 units
Company* $ 7,245,288 $ 7,245,288
IKON Office Solutions, Inc.* Common Stock - 7,802,916 shares 224,021,266 219,457,013
Unisource Worldwide, Inc. Common Stock - 2,296,759 47,977,370 32,728,816
Vanguard Institutional Index Fund Equity investments - 505,603 units 37,023,828 45,281,695
PBHG Growth Fund Equity investments - 957,630 units 24,239,188 24,314,241
American Funds' EuroPacific Equity investments - 408,008 units
Growth Fund 10,729,256 10,616,360
Deutsche Bank Guaranteed investment contracts -
13,958,637 units 13,958,637 13,958,637
United Bank of Switzerland Guaranteed investment contracts -
5,517,832 units 5,517,832 5,517,832
Vanguard Investment Contract Guaranteed investment contracts -
Trust 15,929,381 units 15,929,381 15,929,381
Principal Mutual Guaranteed investment contracts -
3,827,998 units 3,827,998 3,827,998
Bayerische Landesbank Guaranteed investment contracts -
5,194,786 units 5,194,786 5,194,786
Metropolitan Life Insurance Company Guaranteed investment contracts -
2,589,745 units 2,589,745 2,589,745
Caisse des Depots et Consignations Guaranteed investment contracts -
4,025,255 units 4,025,255 4,025,255
Participant loans Participant loans, at various
interest rates ranging between
6% and 11.5% 16,634,250
----------------------------------------
$402,279,830 $407,321,297
========================================
</TABLE>
*Party-in-interest
17
<PAGE>
IKON Office Solutions, Inc. Retirement Savings Plan
Reportable Transactions
Year ended December 31, 1997
<TABLE>
<CAPTION>
SELLING PRICE
OR MATURITY NET GAIN
IDENTIFY OF PARTY INVOLVED DESCRIPTION OF ASSETS PURCHASE PRICE VALUE COST OR (LOSS)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Category III--A series of transactions in a security issue aggregating 5% of plan assets
- ----------------------------------------------------------------------------------------
IKON Office Solutions, Inc.* Common stock--purchased
1,855,897 shares and sold
662,701 shares in
multiple transactions $ 52,174,789 $ 18,710,969 $ 14,246,104 $4,464,865
Collective Short-Term Investment Short-term fixed income
Fund of The Northern investments--purchased
Trust Company* 417,545,980 units and
sold 398,015,912 shares
in multiple transactions 417,545,980 398,015,912 398,015,912 --
</TABLE>
Pursuant to Department of Labor Regulation Section 2520.103-6, there were no
Category I, II, or IV reportable transactions during the year ended December 31,
1997.
*Party-in-interest
18
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan
Administrator has duly caused this annual report to be signed by the undersigned
thereunto duly authorized.
IKON OFFICE SOLUTIONS, INC.
RETIREMENT SAVINGS PLAN
By: /s/ Nancy J. Heiden Dated: June 26, 1998
------------------------------------
Nancy J. Heiden
Plan Administrator
<PAGE>
FORM 11-K
IKON OFFICE SOLUTIONS, INC. RETIREMENT SAVINGS PLAN
FISCAL YEAR ENDED DECEMBER 31, 1997
INDEX TO EXHIBITS
-----------------
Exhibit Number Description
- -------------- -----------
Exhibit 23 Consent of Independent Auditors
<PAGE>
Exhibit 23
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 333-47765) pertaining to the IKON Office Solutions, Inc. Retirement
Savings Plan of our report dated May 15, 1998, with respect to the financial
statements and schedules of the IKON Office Solutions, Inc. Retirement Savings
Plan included in this Annual Report (Form 11-K) for the year ended December 31,
1997.
/s/ Ernst & Young LLP
Philadelphia, Pennsylvania
June 26, 1998
