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 [FEE REQUIRED]
For The Fiscal Year Ended December 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
Commission file number 0-6547
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below: MCI Communications Corporation
Retirement Savings Plan - Part II of the MCI Communications Corporation
Employee Stock Ownership Plan and 401(k)
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office: MCI Communications
Corporation, 1801 Pennsylvania Avenue, NW, Washington, DC 20006
Page 1
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MCI COMMUNICATIONS CORPORATION
RETIREMENT SAVINGS PLAN
EIN: 52-0886267
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
Page(s)
-------
Report of Independent Accountants 3
Statements of Net Assets Available for Benefits
at December 31, 1994 and 1993 4,5
Statements of Changes in Net Assets Available for
Benefits for the years ended December 31, 1994 and 1993 6,7
Notes to Financial Statements 8-32
Additional Information:
Schedule I.
Schedule of Assets Held for
Investment Purposes at
December 31, 1994 33
Schedule II.
Schedule of Reportable
Transactions for the year
ended December 31, 1994 34
Signature 35
Exhibits:
23. Consent of Independent Accountants 36
99. Certification Regarding Certain
Investment Arrangements 37
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REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and Administrative
Committee of the MCI Communications Corporation
Retirement Savings Plan
In our opinion, the accompanying statements of net assets available for benefits
and related statements of changes in net assets available for benefits present
fairly, in all material respects, the net assets available for benefits of the
MCI Communications Corporation Retirement Savings Plan - Part II of the MCI
Communications Corporation Employee Stock Ownership Plan and 401(k) at December
31, 1994 and 1993, and the changes in net assets available for benefits for the
years then ended, in conformity with generally accepted accounting principles.
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 of these statements in accordance with
generally accepted auditing standards which 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,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information included in
Schedules I and II is presented for purposes of additional analysis and is not a
required part of the basic financial statements, but is additional information
required by the Employee Retirement Income Security Act of 1974 ("ERISA"). Such
information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
/s/ PRICE WATERHOUSE LLP
- ------------------------
PRICE WATERHOUSE LLP
Washington, D. C.
June 16, 1995
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MCI COMMUNICATIONS CORPORATION
RETIREMENT SAVINGS PLAN
EIN: 52-0886267
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1994
Value of interest in master
trust, at fair value $ 347,560,842
-------------
Net assets available for benefits $ 347,560,842
=============
See accompanying notes to the financial statements.
Page 4
<PAGE>
MCI COMMUNICATIONS CORPORATION
RETIREMENT SAVINGS PLAN
EIN: 52-0886267
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1993
Non-interest bearing cash $ 216,871
------------
Receivables:
Employer contribution receivable 352,919
Other receivable 58,963
------------
Total receivables 411,882
------------
General investments:
Loans to participants 6,610,567
Value of interest in collective
investment funds of trustee 6,257,468
Value of interest in registered
investment companies 77,838,417
Value of guaranteed investment
contracts 73,898,683
------------
Total general investments 164,605,135
------------
Employer related investments:
Employer securities 133,186,490
------------
Net assets available for benefits $298,420,378
============
See accompanying notes to the financial statements.
Page 5
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MCI COMMUNICATIONS CORPORATION
RETIREMENT SAVINGS PLAN
EIN: 52-0886267
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1994
ADDITIONS
- ---------
Contributions:
Participants $ 51,907,550
Non-cash employer 28,532,919
Rollovers 12,723,822
Non-cash supplemental 16,658,582
Transfers from ESOP 163,105
-------------
Total contributions 109,985,978
-------------
Earnings on investments:
Interest on participant loans 681,957
Interest on guaranteed investment contracts 5,592,442
Dividends on common stock 303,588
Net (loss) on disposition of assets (1,245,716)
Unrealized (depreciation) (57,412,969)
Net gain from registered investment companies 1,275,342
-------------
Total (losses) earnings on investments (50,805,356)
-------------
Total additions 59,180,622
-------------
DEDUCTIONS
- ----------
Participant benefit payments 13,106,868
-------------
Net increase 46,073,754
Net interfund and interplan transfers 3,079,747
Net loans (13,037)
Net assets available for benefits, at
beginning of year 298,420,378
-------------
Net assets available for benefits, at
end of year $347,560,842
=============
See accompanying notes to the financial statements.
Page 6
<PAGE>
MCI COMMUNICATIONS CORPORATION
RETIREMENT SAVINGS PLAN
EIN: 52-0886267
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1993
ADDITIONS
- ---------
Contributions:
Participants $ 39,402,255
Non-cash employer 17,526,017
Rollovers 5,104,066
Transfers from ESOP 553,020
-------------
Total contributions 62,585,358
-------------
Earnings on investments:
Interest on cash 21,750
Interest on participant loans 411,500
Interest on guaranteed investment contracts 6,045,367
Dividends on common stock 219,111
Net gain on disposition of assets 901,285
Unrealized appreciation of assets 33,404,138
Net gain from collective investment
funds of trustee 2,146,262
Net gain from registered investment
companies 7,423,743
-------------
Total earnings on investments 50,573,156
-------------
Total additions 113,158,514
DEDUCTIONS
- ----------
Participant benefit payments 10,723,992
-------------
Net increase 102,434,522
Transfer of assets to the Plan 44,519
Transfer of assets to MCI Consumer Markets 401(k) (9,348,735)
Net assets available for benefits, at
beginning of year 205,290,072
-------------
Net assets available for benefits, at
end of year $298,420,378
=============
See accompanying notes to the financial statements.
Page 7
<PAGE>
MCI COMMUNICATIONS CORPORATION
RETIREMENT SAVINGS PLAN
EIN: 52-0886267
NOTES TO FINANCIAL STATEMENTS ON FORM 11-K
December 31, 1994 and 1993
NOTE 1 - DESCRIPTION OF THE PLAN
The following brief description of the MCI Communications Corporation Retirement
Savings Plan (the "Plan" or "RSP") is provided for general information purposes
only. Participants should refer to the Plan document for more complete
information. The Plan is subject to the applicable provisions of the Employee
Retirement Income Security Act of 1974 ("ERISA").
Effective July 1, 1988, MCI Communications Corporation (the "Company") added a
401(k) deferral feature, called the Retirement Savings Plan, as Part IV to its
employee stock ownership plan and renamed the combined plan the MCI
Communications Corporation Employee Stock Ownership Plan and 401(k). Effective
October 1, 1993, the Plan was amended and restated to make changes deemed
necessary or advisable to comply with applicable law and make other changes
deemed desirable in order to effectuate the general purpose of the Plan. The MCI
Communications Corporation Employee Stock Ownership Plan and 401(k) is comprised
of two parts: Part I is an employee stock ownership plan, Part II (formerly Part
IV) is the Retirement Savings Plan. The accompanying financial statements are
solely those of Part II, the MCI Communications Corporation Retirement Savings
Plan and are not intended to present the net assets available for benefits or
the changes in net assets available for benefits of the MCI Communications
Corporation Employee Stock Ownership Plan and 401(k) taken as a whole. The
Company separately prepares an annual report on the overall MCI Communications
Corporation Employee Stock Ownership Plan and 401(k) which is submitted to the
Internal Revenue Service ("IRS") on Form 5500 and is made available to all
employees upon request.
Effective January 1, 1994, the assets of the Retirement Savings Plan were
combined with those of the MCI Consumer Markets 401(k) Plan ("401(k)") into the
MCI Communications Corporation Defined Contribution Master Trust. This change
was made to facilitate the modifications set forth in the paragraphs that
follow. Under the terms of the master trust agreement, each plan has a specific
interest in all assets and liabilities of the trust.
The Plan is a defined contribution, deferred savings plan and was
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amended effective January 1, 1994. Under the Plan, employees become eligible to
participate upon completion of one year of service with 1,000 hours of service
and attainment of age 21. Eligible employees may elect to reduce up to 15% of
eligible compensation on a pre-tax basis, to be contributed to the Plan by the
Company on behalf of such employees ("Elective Contributions"). Prior to January
1, 1994, employees could defer up to 10% of eligible compensation under the
Plan. The first 6% of each participant's Elective Contributions is eligible for
a Company matching contribution in the form of MCI Communications Corporation
common stock. Effective January 1, 1994, the Company's matching contributions
were increased from $.50 to $.67 for each eligible dollar of Elective
Contributions made to the Plan. The Company's matching contribution is made
biweekly and is determined by the closing price of MCI Communication Corporation
common stock on the date posted to the participants' accounts. Participants'
Elective Contributions are withheld from their biweekly paychecks and the
Company transfers these contributions to the Plan each pay period. Participants
vest in the Company's matching contributions at a rate of 20% per year of
service and are always 100% vested in their Elective Contributions. Participants
receive a year of service for vesting purposes for each Plan year during which
they complete at least 1,000 hours of service. As of January 1, 1994, the
investment funds available for elective contributions were increased from four
to sixteen funds. Elective Contributions are invested in any of the sixteen
investment funds in accordance with participants' instructions. The available
investment funds are:
- MCI Common Stock Fund
A fund investing in MCI Communications Corporation common stock. These
shares of stock are qualified employer securities as defined by the
Employee Retirement Income Security Act of 1974, as amended.
- EuroPacific Growth Fund
A long term growth fund invested primarily in securities of issuers
domiciled in Europe and the Pacific Basin. The fund's investment
manager is Capital Research and Management Company.
- Putnam Voyager Fund
A long term growth fund invested in a diversified portfolio of two
types of common stocks: emerging growth stocks and opportunity stocks.
The fund is managed by Putnam Investment Management, Inc.
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- Dreyfus S&P 500 Stock Index Portfolio
An equity index mutual fund invested in common stock which is
comparable to the Standard & Poor's 500 Composite Stock Index. All
investment decisions are made by Dreyfus Corporation, an affiliate of
the Plan trustee. The trustee oversees the fund in accordance with the
trust agreement.
- Putnam Actively Managed Balanced Fund
A growth and income fund invested in a blend of three Putnam mutual
funds: Putnam Vista Fund, The Fund for Growth and Income and Putnam
Income Fund. The fund is managed by Putnam Investment Management, Inc.
and is subject to the policies established by the funds' Trustees.
- Scudder Income Fund
An income fund invested primarily in high-grade corporate bonds,
convertible bonds and government securities. The fund's investment
management firm is Scudder, Stevens & Clark, Inc. They manage the
fund's daily investment and business affairs subject to the policies
established by the Board of Trustees of Scudder, Stevens & Clark, Inc.
- Putnam OTC Emerging Growth Fund
A growth and income fund invested primarily in "emerging growth" stocks
traded in the over-the-counter (OTC) market. Putnam Investment
Management, Inc. makes the investment decisions for the fund and is
subject to the policies established by the fund's Trustees.
- Putnam New Opportunities Fund
A growth fund invested primarily in common stock of companies in
economic sectors with above-average prospects for growth. Putnam
Investment Management, Inc. makes the investment decisions for the fund
and is subject to the policies established by the fund's Trustees.
- Putnam Vista Fund
A growth fund invested primarily in well-researched growth stocks of
medium-sized companies. Putnam Investment Management, Inc. makes the
investment decisions for the fund and is subject to the policies
established by the fund's Trustees.
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- Putnam Investors Fund
A growth fund invested primarily in high-quality, domestic, common
stocks. Putnam Investment Management, Inc. makes the investment
decisions for the fund and is subject to the policies established by
the fund's Trustees.
- The Putnam Fund for Growth and Income
A growth and income fund invested primarily in income-producing stocks,
i.e., stocks that pay high dividends. Putnam Investment Management,
Inc. makes the investment decisions for the fund and is subject to the
policies established by the fund's Trustees.
- Putnam Convertible Income-Growth Trust
An income and growth fund invested primarily in convertible bonds and
convertible preferred stocks, but may also invest in common stock and
other nonconvertible securities. Putnam Investment Management, Inc.
makes the investment decisions for the fund and is subject to the
policies established by the fund's Trustees.
- Putnam High Yield Advantage Fund
An income fund invested primarily in lower rated bonds ("junk bonds").
Putnam Investment Management, Inc. makes the investment decisions for
the fund and is subject to the policies established by the fund's
Trustees.
- Putnam Global Government Income Trust
A non-diversified income fund invested principally in debt securities
of foreign or U.S. governmental entities, including supranational
issuers. Putnam Investment Management, Inc. makes the investment
decisions for the fund and is subject to the policies established by
the fund's Trustees.
- Putnam Diversified Income Trust
An income fund invested primarily in U.S. government, high yield and
international fixed income securities. Putnam Investment Management,
Inc. makes the investment decisions for the fund and is subject to the
policies established by the fund's Trustees.
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- Stable Asset Fund
The fund consists primarily of guaranteed investment contracts (GICs)
issued by insurance companies and contracts with other financial
institutions that offer fixed interest rates on investments. This fund
was formerly known as the Long-Term Fixed Income Fund. The fund seeks
to maintain a constant book value of $1.00 per share. The guaranteed
rates of interest range from 5.6% to 9.1% at December 31, 1994.
This fund also includes investment in the Mellon Bank Temporary
Investment Fund (TIF) to satisfy any liquidity needs and also serves as
a temporary account to hold funds from maturing interests.
Each individual's investment in the funds is recorded in their participant
account on a unit value basis with the exception of MCI Common Stock which is
recorded on a per share basis. The Plan is processed on a daily valuation basis.
Prior to January 1, 1994, all funds, with the exception of the MCI Common Stock
fund, were tracked on a dollar valuation basis and were processed on a monthly
valuation basis.
Participants may transfer all or part of the balance in their Elective
Contributions and related earnings in any fund to any other fund once each
calendar month. Participants may reallocate their matching contributions balance
as of the prior year end once per Plan Year for account balances that are 100%
vested. Participants may change the allocation of their future contributions
among funds with unlimited frequency. Participants' allocations are affected by
the last change placed prior to payroll processing.
In accordance with the terms of the Plan, the Company is entitled to make a
supplemental contribution to the Plan, either in cash or shares of the Company's
common stock, in amounts as determined by the Company's Board of Directors. The
supplemental contributions are allocated among Plan participants at the end of
each Plan year based on their eligible compensation. Participants become vested
in their share of the supplemental contribution at the rate of 20% per year of
credited service. During the year ended December 31, 1994, a supplemental
contribution of 1.87% of the eligible compensation of all employees who have
fulfilled the eligibility requirements for the Plan was made. This contribution
in the amount of $16,658,582, was made in the form of 728,244 shares of the
Company's common stock.
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The Plan allows participants to borrow up to one-half of their vested account
balances (or $50,000, whichever is less). The minimum loan amount is $1,000 and
the minimum term of a loan is one year. The maximum term of a loan is five years
for a general purpose loan and fifteen years for a primary residence loan. Only
one loan of each type, general purpose and primary residence, may be outstanding
at any time. Loan proceeds are disbursed pro rata from each of the participants'
investment funds, and are repaid through biweekly payroll deductions. Loan
repayments of principal and interest are invested based on the participants'
current investment elections. Interest rates for new loans are determined
monthly based on the prime rate as published on the first business day of each
month in The Wall Street Journal, plus one percentage point. The interest rate
is fixed for the term of the loan. Loans can be repaid in full by a cashier's or
certified check. During the Plan years ended December 31, 1994 and 1993,
$12,314,062 and $4,846,937 in loans were disbursed and principal repayments of
$4,018,930 and $2,390,698, respectively, were made.
Certain participants have the right to diversify a portion of their account in
the Employee Stock Ownership Plan (ESOP), Part I of the MCI Communications
Corporation Employee Stock Ownership Plan and 401(k) and transfer a portion of
their account to the 401(k). Participants in the ESOP, who have attained at
least 55 years of age and have been a member of the ESOP for at least ten years,
are eligible to diversify under these provisions. During 1994 and 1993, 7,732
and 11,133 shares of MCI Communications Corporation common stock at a fair
market value on the diversification date of $163,105 and $553,020, respectively,
were transferred from the ESOP to the RSP pursuant to these provisions. In
addition to ESOP diversification, during 1994 and 1993, 730 and 1,356 shares of
MCI Communications Corporation common stock at a fair market value on the
diversification date of $16,151 and $66,898, respectively, were transferred from
the Employer Matching Contributions accounts to the Elective Contributions
accounts pursuant to these provisions.
Distribution of the benefits in a participant's Plan account is normally made
only after the participant ceases to be an employee of the Company. However, the
account balance of a participant's Elective Contributions may be withdrawn prior
to termination of employment if the participant is under age 59 1/2 and can
demonstrate an economic hardship (as defined in the Plan). A participant who has
attained age 59 1/2 may withdraw all or any portion of his Elective
Contributions account in accordance with the terms of the Plan. Upon termination
of employment, a participant receives all vested assets in accounts established
on
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his behalf under the Plan. Non-vested portions of a terminated participant's
accounts are forfeited and used to offset future Company matching contributions.
As of December 31, 1994 and 1993, forfeitures included in the Plan were $67,466
and $54,015, respectively, which included 3,229 and 1,311 forfeited shares of
MCI Communications Corporation common stock, at year-end fair market values of
$59,333 and $37,050, respectively.
The Plan is not a defined benefit plan and accordingly, Plan benefits are not
guaranteed by the Pension Benefit Guaranty Corporation. The Company is the plan
administrator and has appointed an Administrative Committee to administer the
Plan. The Administrative Committee is responsible for carrying out the
provisions of the Plan and may employ such experts as deemed necessary. Plan
assets are held by the trustee, Mellon Bank, N.A. of Pittsburgh, Pennsylvania.
The recordkeeper for the Plan is Putnam Investments, Inc. The Company reserves
its rights under the Plan to discontinue its contributions and to terminate the
Plan at any time. Upon such termination, all amounts funded shall become
nonforfeitable and shall be provided for and paid from the Plan's trust in
accordance with the order of priority set forth in Section 4044 of the Employee
Retirement Income Security Act of 1974. The Company has not expressed any
intention to discontinue its contributions nor to terminate the Plan.
The Plan's holdings of MCI Communications Corporation Common Stock, various
Putnam Investment, Inc. mutual funds, and a Mellon Bank mutual fund and
collective trust account are party-in-interest investments.
NOTE 2 - MASTER TRUST
Effective January 1, 1994, MCI Communications Corporation established The MCI
Communications Corporation Defined Contribution Master Trust (the "Master
Trust"), for the purpose of facilitating modifications to the Plan. The Master
Trust is intended to be a tax-exempt trust within the meaning of Section 501(a)
of the Internal Revenue Code. The administration of the Master Trust is the
responsibility of the trustee. All Plan investments are included in the Master
Trust.
The Master Trust consists of a pool of individual investments in which the Plan
and the 401(k) have a shared participation through Master Trust units. Net
assets and net investment gains and losses are allocated to each participating
plan based on units of participation held by the respective plans. Each unit
represents
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a proportionate, specific interest in the Master Trust. The Plan had a specific
interest in the Master Trust of $347,560,842 representing approximately 90% of
the net assets of the Master Trust as of December 31, 1994.
The fund information below presents the percentage interest of each plan in the
Master Trust using specific identification:
Master Trust Percentage Interest
Plan Name Investment Account December 31, 1994
- --------------------- -------------------------------- -------------------
MCI Communications EuroPacific Growth Fund 89.12%
Corporation Putnam Balanced Fund 89.02%
Retirement Savings Scudder Income Fund 89.78%
Plan Dreyfus S&P 500 Stock Index 88.08%
EIN: 52-0886267 Putnam Growth & Income 88.94%
Putnam Investors Fund 92.62%
Putnam Vista Fund 91.62%
Putnam Voyager Fund 92.79%
Putnam Convertible Income-Growth 93.25%
Putnam High Yield Advantage 90.68%
Putnam Global Gov't Income 91.76%
Putnam OTC Emerging Growth 92.09%
Putnam Diversified Income 86.85%
Stable Asset Fund 89.64%
Putnam New Opportunities 91.81%
MCI Common Stock 89.95%
Loan Fund 88.55%
MCI Consumer Markets EuroPacific Growth Fund 10.88%
401(k) Plan Putnam Balanced Fund 10.98%
EIN: 13-2745892 Scudder Income Fund 10.22%
Dreyfus S&P 500 Stock Index 11.92%
Putnam Growth & Income 11.06%
Putnam Investors Fund 7.38%
Putnam Vista Fund 8.38%
Putnam Voyager Fund 7.21%
Putnam Convertible Income-Growth 6.75%
Putnam High Yield Advantage 9.32%
Putnam Global Gov't Income 8.24%
Putnam OTC Emerging Growth 7.91%
Putnam Diversified Income 13.15%
Stable Asset Fund 10.36%
Putnam New Opportunities 8.19%
MCI Common Stock 10.05%
Loan Fund 11.45%
The following pages present the assets and results of operations for the Master
Trust in which the Plan and 401(k) participate.
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<TABLE>
<CAPTION>
MCI COMMUNICATIONS CORPORATION
DEFINED CONTRIBUTION MASTER TRUST
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1994
EuroPacific Putnam Scudder Dreyfus Putnam Putnam
Growth Balanced Income S&P 500 Growth & Investors
Fund Fund Fund Stock Index Income Fund
ASSETS ----------- ----------- ----------- ------------ ----------- ---------
------
<S> <C> <C> <C> <C> <C> <C>
Contributions receivable:
Employee $ 10,921 $ 6,530 $ 3,005 $ 21,810 $ 2,677 $ 640
Employer 0 0 0 0 0 0
----------- ----------- ----------- ------------ ----------- ---------
Total contributions receivable 10,921 6,530 3,005 21,810 2,677 640
Other receivables 8,777 5,944 0 30,605 348 182
Investments, at fair value:
Common stock 0 0 0 0 0 0
Common/collective trusts 0 0 0 125 0 0
Registered investment companies 6,427,590 3,512,185 1,874,242 36,015,159* 1,909,296 430,005
Participant loans 0 0 0 0 0 0
Investments, at contract value:
Value of guaranteed investment contracts 0 0 0 0 0 0
----------- ----------- ----------- ------------ ----------- ---------
Total assets 6,447,288 3,524,659 1,877,247 36,067,699 1,912,321 430,827
----------- ----------- ----------- ------------ ----------- ---------
LIABILITIES
-----------
Operating payables 0 0 5,764 0 0 0
----------- ----------- ----------- ------------ ----------- ---------
Net assets available for benefits $6,447,288 $3,524,659 $1,871,483 $36,067,699 $1,912,321 $430,827
=========== =========== =========== ============ =========== =========
Participating Plan Interests
- ----------------------------
MCI Communications Retirement Savings Plan $5,746,106 $3,137,589 $1,680,310 $31,769,787 $1,700,841 $399,028
MCI Consumer Markets 401(k) Plan 701,182 387,070 191,173 4,297,912 211,480 31,799
----------- ----------- ----------- ------------ ----------- ---------
Total $6,447,288 $3,524,659 $1,871,483 $36,067,699 $1,912,321 $430,827
=========== =========== =========== ============ =========== =========
<FN>
* Investment represents 5% or more of the Trust's net assets.
</FN>
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
MCI COMMUNICATIONS CORPORATION
DEFINED CONTRIBUTION MASTER TRUST
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1994
Putnam Putnam Putnam Putnam Putnam Putnam
Vista Voyager Convertible High Yield Global Gov't OTC Emerging
Fund Fund Income-Growth Advantage Income Growth
ASSETS --------- ------------ ------------- ---------- ------------ ------------
------
<S> <C> <C> <C> <C> <C> <C>
Contributions receivable:
Employee $ 1,016 $ 33,483 $ 916 $ 460 $ 407 $ 3,470
Employer 0 0 0 0 0 0
--------- ------------ ------------- ---------- ------------ ------------
Total contributions receivable 1,016 33,483 916 460 407 3,470
Other receivables 16,940 53,553 3,967 0 492 7,382
Investments, at fair value:
Common stock 0 0 0 0 0 0
Common/collective trusts 0 1,588 0 0 0 0
Registered investment companies 970,118 62,645,356* 709,251 419,598 212,661 3,032,240
Participant loans 0 0 0 0 0 0
Investments, at contract value:
Value of guaranteed investment contracts 0 0 0 0 0 0
--------- ------------ ------------- ---------- ------------ ------------
Total assets 988,074 62,733,980 714,134 420,058 213,560 3,043,092
--------- ------------ ------------- ---------- ------------ ------------
LIABILITIES
-----------
Operating payables 0 0 0 3,944 0 0
--------- ------------ ------------- ---------- ------------ ------------
Net assets available for benefits $988,074 $62,733,980 $ 714,134 $ 416,114 $ 213,560 $ 3,043,092
========= ============ ============= ========== ============ ============
Participating Plan Interests
- ----------------------------
MCI Communications Retirement Savings Plan $905,290 $58,211,117 $ 665,896 $ 377,317 $ 195,954 $ 2,802,380
MCI Consumer Markets 401(k) Plan 82,784 4,522,863 48,238 38,797 17,606 240,712
--------- ------------ ------------- ---------- ------------ ------------
Total $988,074 $62,733,980 $ 714,134 $ 416,114 $ 213,560 $ 3,043,092
========= ============ ============= ========== ============ ============
<FN>
* Investment represents 5% or more of the Trust's net assets.
</FN>
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
MCI COMMUNICATIONS CORPORATION
DEFINED CONTRIBUTION MASTER TRUST
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1994
Putnam Stable Putnam MCI
Diversified Asset New Common Loan
Income Fund Opportunities Stock Fund Total
ASSETS ----------- ------------- ------------- ------------- ------------ -------------
------
<S> <C> <C> <C> <C> <C> <C>
Contributions receivable:
Employee $ 344 $ 50,801 $ 2,896 $ 58,178 $ 0 $ 197,554
Employer 0 0 0 117,255 0 117,255
----------- ------------- ------------- ------------- ------------ -------------
Total contributions receivable 344 50,801 2,896 175,433 0 314,809
Other receivables 3,936 1,893 0 7 0 134,026
Investments, at fair value:
Common stock 0 0 0 146,194,183* 0 146,194,183
Common/collective trusts 0 1,406,194 0 4,390 0 1,412,297
Registered investment companies 359,063 0 4,615,388 0 0 123,132,152
Participant loans 0 0 0 0 15,941,326 15,941,326
Investments, at contract value:
Value of guaranteed investment contracts 0 98,544,375* 0 0 0 98,544,375
----------- ------------- ------------- ------------- ------------ -------------
Total assets 363,343 100,003,263 4,618,284 146,374,013 15,941,326 385,673,168
----------- ------------- ------------- ------------- ------------ -------------
LIABILITIES
-----------
Operating payables 0 0 271 0 0 9,979
----------- ------------- ------------- ------------- ------------ -------------
Net assets available for benefits $ 363,343 $100,003,263 $ 4,618,013 $146,374,013 $15,941,326 $385,663,189
=========== ============= ============= ============= ============ =============
Participating Plan Interests
- ----------------------------
MCI Communications Retirement Savings Plan $ 315,561 $ 89,640,220 $ 4,239,947 $131,656,672 $14,116,827 $347,560,842
MCI Consumer Markets 401(k) Plan 47,782 10,363,043 378,066 14,717,341 1,824,499 38,102,347
----------- ------------- ------------- ------------- ------------ -------------
Total $ 363,343 $100,003,263 $ 4,618,013 $146,374,013 $15,941,326 $385,663,189
=========== ============= ============= ============= ============ =============
<FN>
* Investment represents 5% or more of the Trust's net assets.
</FN>
</TABLE>
Page 18
<PAGE>
<TABLE>
<CAPTION>
MCI COMMUNICATIONS CORPORATION
DEFINED CONTRIBUTION MASTER TRUST
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1994
EuroPacific Putnam Scudder Dreyfus Putnam Putnam
Growth Balanced Income S&P 500 Growth & Investors
Fund Fund Fund Stock Index Income Fund
ADDITIONS ----------- ----------- ----------- ------------ ----------- ---------
- ---------
<S> <C> <C> <C> <C> <C> <C>
Contributions:
Participants $2,783,794 $1,612,533 $ 790,928 $ 8,365,101 $ 675,924 $157,084
Non-cash employer 0 0 0 0 0 0
Rollovers 1,024,708 1,186,247 768,095 662,500 807,794 164,611
Non-cash supplemental 0 0 0 0 0 0
Transfers from ESOP 12,329 11,688 4,728 10,332 9,873 2,130
----------- ----------- ----------- ------------ ----------- ---------
Total contributions 3,820,831 2,810,468 1,563,751 9,037,933 1,493,591 323,825
----------- ----------- ----------- ------------ ----------- ---------
Earnings on investments:
Interest on participant loans 0 0 0 0 0 0
Interest on guaranteed investment contracts 0 0 0 0 0 0
Dividends on common stock 0 0 0 0 0 0
Net (loss) on disposition of assets 0 0 0 0 0 0
Unrealized (depreciation) of assets 0 0 0 0 0 0
Net (loss) gain from registered investment
companies (40,315) 5,979 9,607 457,771 15,906 1,297
----------- ----------- ----------- ------------ ----------- ---------
Total (losses) earnings on investments (40,315) 5,979 9,607 457,771 15,906 1,297
----------- ----------- ----------- ------------ ----------- ---------
Total additions 3,780,516 2,816,447 1,573,358 9,495,704 1,509,497 325,122
DEDUCTIONS
- ----------
Participant benefit payments 78,712 20,896 18,709 1,051,210 13,612 2,227
----------- ----------- ----------- ------------ ----------- ---------
Net increase 3,701,804 2,795,551 1,554,649 8,444,494 1,495,885 322,895
Transfers from (to):
Other master trust investment accounts 2,788,105 813,772 362,821 (3,044,215) 470,858 115,520
Net loans (42,621) (84,664) (45,987) (1,114,907) (54,422) (7,588)
Western Union International Collectively
Bargained Plan 0 0 0 11,486 0 0
Net assets available for benefits, at
beginning of year 0 0 0 31,770,841 0 0
----------- ----------- ----------- ------------ ----------- ---------
Net assets available for benefits, at
end of year $6,447,288 $3,524,659 $1,871,483 $36,067,699 $1,912,321 $430,827
=========== =========== =========== ============ =========== =========
Page 19
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MCI COMMUNICATIONS CORPORATION
DEFINED CONTRIBUTION MASTER TRUST
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1994
Putnam Putnam Putnam Putnam Putnam Putnam
Vista Voyager Convertible High Yield Global Gov't OTC Emerging
Fund Fund Income-Growth Advantage Income Growth
ADDITIONS --------- ------------ ------------- ---------- ------------ ------------
- ---------
<S> <C> <C> <C> <C> <C> <C>
Contributions:
Participants $340,241 $15,026,938 $ 276,157 $ 168,550 $ 88,997 $ 1,288,038
Non-cash employer 0 0 0 0 0 0
Rollovers 437,051 1,549,601 317,076 205,946 74,972 642,623
Non-cash supplemental 0 0 0 0 0 0
Transfers from ESOP 8,388 10,763 1,250 4,509 9,392 5,501
--------- ------------ ------------- ---------- ------------ ------------
Total contributions 785,680 16,587,302 594,483 379,005 173,361 1,936,162
--------- ------------ ------------- ---------- ------------ ------------
Earnings on investments:
Interest on participant loans 0 0 0 0 0 0
Interest on guaranteed investment contracts 0 0 0 0 0 0
Dividends on common stock 0 0 0 0 0 0
Net (loss) on disposition of assets 0 0 0 0 0 0
Unrealized (depreciation) of assets 0 0 0 0 0 0
Net (loss) gain from registered investment
companies 3,250 590,284 (2,103) (10,943) (5,915) 242,285
--------- ------------ ------------- ---------- ------------ ------------
Total (losses) earnings on investments 3,250 590,284 (2,103) (10,943) (5,915) 242,285
--------- ------------ ------------- ---------- ------------ ------------
Total additions 788,930 17,177,586 592,380 368,062 167,446 2,178,447
DEDUCTIONS
- ----------
Participant benefit payments 7,118 1,885,218 3,112 3,332 264 20,806
--------- ------------ ------------- ---------- ------------ ------------
Net increase 781,812 15,292,368 589,268 364,730 167,182 2,157,641
Transfers from (to):
Other master trust investment accounts 237,960 (2,989,223) 137,008 71,319 50,580 914,427
Net loans (31,698) (1,955,198) (12,142) (19,935) (4,202) (28,976)
Western Union International Collectively
Bargained Plan 0 9,774 0 0 0 0
Net assets available for benefits, at
beginning of year 0 52,376,259 0 0 0 0
--------- ------------ ------------- ---------- ------------ ------------
Net assets available for benefits, at
end of year $988,074 $62,733,980 $ 714,134 $ 416,114 $ 213,560 $ 3,043,092
========= ============ ============= ========== ============ ============
Page 20
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MCI COMMUNICATIONS CORPORATION
DEFINED CONTRIBUTION MASTER TRUST
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1994
Putnam Stable Putnam MCI
Diversified Asset New Common Loan
Income Fund Opportunities Stock Fund Total
ADDITIONS ----------- ------------- ------------- ------------- ------------ -------------
- ---------
<S> <C> <C> <C> <C> <C> <C>
Contributions:
Participants $ 109,922 $ 12,963,883 $ 1,669,859 $ 15,866,347 $ 0 $ 62,184,296
Non-cash employer 0 0 0 34,411,079 0 34,411,079
Rollovers 445,952 2,679,107 1,181,940 1,237,619 0 13,385,842
Non-cash supplemental 0 0 0 20,000,002 0 20,000,002
Transfers from ESOP 2,252 11,732 6,156 52,082 0 163,105
----------- ------------- ------------- ------------- ------------ -------------
Total contributions 558,126 15,654,722 2,857,955 71,567,129 0 130,144,324
----------- ------------- ------------- ------------- ------------ -------------
Earnings on investments:
Interest on participant loans 0 0 0 0 761,327 761,327
Interest on guaranteed investment contracts 0 6,131,620 0 0 0 6,131,620
Dividends on common stock 0 0 0 339,260 0 339,260
Net (loss) on disposition of assets 0 0 0 (1,417,410) 0 (1,417,410)
Unrealized (depreciation) of assets 0 0 0 (63,481,865) 0 (63,481,865)
Net (loss) gain from registered investment
companies (6,865) 0 315,778 0 0 1,576,016
----------- ------------- ------------- ------------- ------------ -------------
Total (losses) earnings on investments (6,865) 6,131,620 315,778 (64,560,015) 761,327 (56,091,052)
----------- ------------- ------------- ------------- ------------ -------------
Total additions 551,261 21,786,342 3,173,733 7,007,114 761,327 74,053,272
DEDUCTIONS
- ----------
Participant benefit payments 2,643 4,605,500 32,954 6,509,482 723,204 14,978,999
----------- ------------- ------------- ------------- ------------ -------------
Net increase 548,618 17,180,842 3,140,779 497,632 38,123 59,074,273
Transfers from (to):
Other master trust investment accounts (169,241) (4,322,644) 1,573,958 2,988,995 0 0
Net loans (16,034) (3,204,872) (96,724) (2,069,439) 8,791,674 2,265
Western Union International Collectively
Bargained Plan 0 44,413 0 42,169 3,279 111,121
Net assets available for benefits, at
beginning of year 0 90,305,524 0 144,914,656 7,108,250 326,475,530
----------- ------------- ------------- ------------- ------------ -------------
Net assets available for benefits, at
end of year $ 363,343 $100,003,263 $ 4,618,013 $146,374,013 $15,941,326 $385,663,189
=========== ============= ============= ============= ============ =============
Page 21
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MCI COMMUNICATIONS CORPORATION
RETIREMENT SAVINGS PLAN
EIN: 52-0886267
SCHEDULE OF MASTER TRUST PARTICIPATION
Current Value of Interest Year Ended December 31, 1994
----------------------------- -----------------------------------------------------------------------
Participant Net
December 31, January 1, Benefit (Depreciation)
Investment Account Interest: 1994 1994 Contributions Payments Net Loans Net Transfers Appreciation
-------------- -------------- -------------- -------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
EuroPacific Growth Fund $ 5,746,106 $ 0 $ 3,383,999 $ (66,956) $ (43,993) $ 2,507,160 $ (34,104)
Putnam Balanced Fund 3,137,589 0 2,506,046 (17,886) (75,810) 719,703 5,536
Scudder Income Fund 1,680,310 0 1,374,317 (16,770) (32,796) 353,150 2,409
Dreyfus S&P 500 Stock Index 31,769,787 28,884,446 7,673,987 (906,168) (964,504) (3,271,543) 353,569
Putnam Growth & Income 1,700,841 0 1,354,639 (11,911) (38,577) 380,580 16,110
Putnam Investors Fund 399,028 0 302,795 (2,148) (7,329) 104,529 1,181
Putnam Vista Fund 905,290 0 740,058 (7,014) (28,780) 197,838 3,188
Putnam Voyager Fund 58,211,117 48,983,727 14,420,263 (1,714,809) (1,753,361) (2,156,123) 431,420
Putnam Convertible Income-Growth 665,896 0 551,181 (2,989) (11,806) 131,168 (1,658)
Putnam High Yield Advantage 377,317 0 344,343 (2,677) (15,641) 61,114 (9,822)
Putnam Global Gov't Income 195,954 0 158,669 (238) (4,602) 47,628 (5,503)
Putnam OTC Emerging Growth 2,802,380 0 1,765,900 (20,218) (25,941) 860,580 222,059
Putnam Diversified Income 315,561 0 520,493 (2,618) (7,374) (190,144) (4,796)
Stable Asset Fund 89,640,220 80,402,673 12,912,785 (3,956,517) (2,622,467) (2,688,696) 5,592,442
Putnam New Opportunities 4,239,947 0 2,613,674 (31,588) (94,411) 1,456,519 295,753
MCI Common Stock 131,656,672 133,538,965 59,362,829 (5,683,122) (1,885,783) 4,678,880 (58,355,097)
Loan Fund
(interest rates range 7% - 11%) 14,116,827 6,610,567 0 (663,239) 7,600,138 (112,596) 681,957
-------------- -------------- -------------- -------------- ------------- ------------ --------------
Total $ 347,560,842 $ 298,420,378 $ 109,985,978 $ (13,106,868) $ (13,037) $ 3,079,747 $ (50,805,356)
============== ============== ============== ============== ============= ============ ==============
Page 22
</TABLE>
<PAGE>
NOTE 3 - DESCRIPTION OF ACCOUNTING PRINCIPLES AND PRACTICES
The financial statements for the Plan are prepared on the accrual basis of
accounting.
The Plan's distribution of the Company's common stock to participants is the
fair market value as of the distribution date. The difference between the fair
market value on the date of distribution and the carrying value to the Plan of
the distributed shares is recorded as a net gain or loss on disposition of
assets. Purchase and sales of securities are recorded on the trade date.
The Plan's interest in registered investment companies and employer securities
are stated at fair value, measured by the quoted current market price. Units in
collective trusts are valued at the net asset value as reported by such trusts
at the end of each period. Funds invested in guaranteed investment contracts are
stated at contract value, measured as cost plus earned interest income.
Administrative expenses of the Plan are paid by the Company.
NOTE 4 - NET ASSETS AVAILABLE FOR BENEFITS AND CHANGES IN NET ASSETS AVAILABLE
FOR BENEFITS BY FUND
The allocation of net assets available for benefits and the changes in net
assets among the Plan's investment funds for the years ended December 31, 1994
and 1993 are presented on the following pages. Certain prior year information
has been reclassified to conform with the current year presentation.
Page 23
<PAGE>
<TABLE>
<CAPTION>
MCI COMMUNICATIONS CORPORATION
RETIREMENT SAVINGS PLAN
EIN: 52-0886267
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1994
EuroPacific Putnam Scudder Dreyfus Putnam Putnam
Growth Balanced Income S&P 500 Growth & Investors
Fund Fund Fund Stock Index Income Fund
----------- ----------- ----------- ------------ ----------- ---------
ASSETS
------
<S> <C> <C> <C> <C> <C> <C>
Other receivables $ 5,223 $ 4,926 $ 0 $ 20,569 $ 329 $ 182
Investments, at fair value:
Common stock 0 0 0 0 0 0
Common/collective trusts 0 0 0 110 0 0
Registered investment companies 5,740,883 3,132,663 1,686,122 31,749,108* 1,700,512 398,846
Participant loans 0 0 0 0 0 0
Investments, at contract value:
Value of guaranteed investment contracts 0 0 0 0 0 0
----------- ----------- ----------- ------------ ----------- ---------
Total assets 5,746,106 3,137,589 1,686,122 31,769,787 1,700,841 399,028
----------- ----------- ----------- ------------ ----------- ---------
LIABILITIES
-----------
Operating payables 0 0 5,812 0 0 0
----------- ----------- ----------- ------------ ----------- ---------
Net assets available for benefits $5,746,106 $3,137,589 $1,680,310 $31,769,787 $1,700,841 $399,028
=========== =========== =========== ============ =========== =========
<FN>
* Investment represents 5% or more of the Trust's net assets.
</FN>
</TABLE>
Page 24
<PAGE>
<TABLE>
<CAPTION>
MCI COMMUNICATIONS CORPORATION
RETIREMENT SAVINGS PLAN
EIN: 52-088627
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1994
Putnam Putnam Putnam Putnam Putnam Putnam
Vista Voyager Convertible High Yield Global Gov't OTC Emerging
Fund Fund Income-Growth Advantage Income Growth
--------- ------------ ------------- ---------- ------------ ------------
ASSETS
------
<S> <C> <C> <C> <C> <C> <C>
Other receivables $ 16,940 $ 43,565 $ 3,884 $ 0 $ 492 $ 7,298
Investments, at fair value:
Common stock 0 0 0 0 0 0
Common/collective trusts 0 1,474 0 0 0 0
Registered investment companies 888,350 58,166,078* 662,012 381,318 195,462 2,795,082
Participant loans 0 0 0 0 0 0
Investments, at contract value:
Value of guaranteed investment contracts 0 0 0 0 0 0
--------- ------------ ------------- ---------- ------------ ------------
Total assets 905,290 58,211,117 665,896 381,318 195,954 2,802,380
--------- ------------ ------------- ---------- ------------ ------------
LIABILITIES
-----------
Operating payables 0 0 0 4,001 0 0
--------- ------------ ------------- ---------- ------------ ------------
Net assets available for benefits $905,290 $58,211,117 $ 665,896 $ 377,317 $ 195,954 $ 2,802,380
========= ============ ============= ========== ============ ============
<FN>
* Investment represents 5% or more of the Trust's net assets.
</FN>
</TABLE>
Page 25
<PAGE>
<TABLE>
<CAPTION>
MCI COMMUNICATIONS CORPORATION
RETIREMENT SAVINGS PLAN
EIN: 52-0886267
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1994
Putnam Stable Putnam MCI
Diversified Asset New Common Loan
Income Fund Opportunities Stock Fund Total
----------- ------------- ------------- ------------- ------------ -------------
ASSETS
------
<S> <C> <C> <C> <C> <C> <C>
Other receivables $ 3,936 $ 1,697 $ 3,948 $ 6 $ 0 $ 112,995
Investments, at fair value:
Common stock 0 0 0 131,652,717* 0 131,652,717
Common/collective trusts 0 1,260,512 0 3,949 0 1,266,045
Registered investment companies 311,625 0 4,235,999 0 0 112,044,060
Participant loans 0 0 0 0 14,116,827 14,116,827
Investments, at contract value:
Value of guaranteed investment contracts 0 88,378,011* 0 0 0 88,378,011
----------- ------------- ------------- ------------- ------------ -------------
Total assets 315,561 89,640,220 4,239,947 131,656,672 14,116,827 347,570,655
----------- ------------- ------------- ------------- ------------ -------------
LIABILITIES
-----------
Operating payables 0 0 0 0 0 9,813
----------- ------------- ------------- ------------- ------------ -------------
Net assets available for benefits $ 315,561 $ 89,640,220 $ 4,239,947 $131,656,672 $14,116,827 $347,560,842
=========== ============= ============= ============= ============ =============
<FN>
* Investment represents 5% or more of the Trust's net assets.
</FN>
</TABLE>
Page 26
<PAGE>
<TABLE>
<CAPTION>
MCI COMMUNICATIONS CORPORATION
RETIREMENT SAVINGS PLAN
EIN: 52-0886267
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1993
Putnam Stable Laurel MCI
Voyager Asset S&P 500 Common Loan
Fund Fund Stock Index Stock Fund Total
------------- ------------- ------------- ------------- ----------- -------------
ASSETS
------
<S> <C> <C> <C> <C> <C> <C>
Non-interest bearing cash $ 0 $ 216,871 $ 0 $ 0 $ 0 $ 216,871
------------- ------------- ------------- ------------- ----------- -------------
Receivables:
Employer contribution receivable 0 0 0 352,919 0 352,919
Other receivables 0 29,651 29,756 0 0 59,407
------------- ------------- ------------- ------------- ----------- -------------
Total receivables 0 29,651 29,756 352,919 0 412,326
------------- ------------- ------------- ------------- ----------- -------------
Investments, at fair value:
Common stock 0 0 0 133,186,490* 0 133,186,490
Common/collective trusts 0 6,257,468 0 0 0 6,257,468
Registered investment companies 48,983,727* 0 28,854,690* 0 0 77,838,417
Participant loans 0 0 0 0 6,610,567 6,610,567
Investments, at contract value:
Value of guaranteed investment contracts 0 73,898,683* 0 0 0 73,898,683
------------- ------------- ------------- ------------- ----------- -------------
Total investments, at fair value 48,983,727 80,156,151 28,854,690 133,186,490 6,610,567 297,791,625
------------- ------------- ------------- ------------- ----------- -------------
Total assets 48,983,727 80,402,673 28,884,446 133,539,409 6,610,567 298,420,822
------------- ------------- ------------- ------------- ----------- -------------
LIABILITIES
-----------
Operating payables 0 0 0 444 0 444
------------- ------------- ------------- ------------- ----------- -------------
Net assets available for benefits $ 48,983,727 $ 80,402,673 $ 28,884,446 $133,538,965 $6,610,567 $298,420,378
============= ============= ============= ============= =========== =============
<FN>
* Investment represents 5% or more of the Trust's net assets.
</FN>
</TABLE>
Page 27
<PAGE>
<TABLE>
<CAPTION>
MCI COMMUNICATIONS CORPORATION
RETIREMENT SAVINGS PLAN
EIN: 52-0886267
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1994
EuroPacific Putnam Scudder Dreyfus Putnam Putnam
Growth Balanced Income S&P 500 Growth & Investors
Fund Fund Fund Stock Index Income Fund
ADDITIONS ----------- ----------- ----------- ------------ ----------- ---------
- ---------
<S> <C> <C> <C> <C> <C> <C>
Contributions:
Participants $2,388,772 $1,372,996 $ 675,009 $ 7,024,132 $ 579,611 $136,797
Non-cash employer 0 0 0 0 0 0
Rollovers 982,898 1,121,362 694,580 639,523 765,155 163,868
Non-cash supplemental 0 0 0 0 0 0
Transfers from ESOP 12,329 11,688 4,728 10,332 9,873 2,130
----------- ----------- ----------- ------------ ----------- ---------
Total contributions 3,383,999 2,506,046 1,374,317 7,673,987 1,354,639 302,795
----------- ----------- ----------- ------------ ----------- ---------
Earnings on investments:
Interest on participant loans 0 0 0 0 0 0
Interest on guaranteed investment contracts 0 0 0 0 0 0
Dividends on common stock 0 0 0 0 0 0
Net (loss) on disposition of assets 0 0 0 0 0 0
Unrealized (depreciation) of assets 0 0 0 0 0 0
Net (loss) gain from registered investment
companies (34,104) 5,536 2,409 353,569 16,110 1,181
----------- ----------- ----------- ------------ ----------- ---------
Total (losses) earnings on investments (34,104) 5,536 2,409 353,569 16,110 1,181
----------- ----------- ----------- ------------ ----------- ---------
Total additions 3,349,895 2,511,582 1,376,726 8,027,556 1,370,749 303,976
DEDUCTIONS
- ----------
Participant benefit payments 66,956 17,886 16,770 906,168 11,911 2,148
----------- ----------- ----------- ------------ ----------- ---------
Net increase 3,282,939 2,493,696 1,359,956 7,121,388 1,358,838 301,828
Transfers from (to):
Other master trust investment accounts 2,513,525 745,505 354,770 (2,788,011) 390,183 104,664
Net loans (43,993) (75,810) (32,796) (964,504) (38,577) (7,329)
MCI Consumer Markets 401(k) Plan (6,365) (25,802) (1,620) (495,018) (9,603) (135)
Western Union International Collectively
Bargained Plan 0 0 0 11,486 0 0
Net assets available for benefits, at
beginning of year 0 0 0 28,884,446 0 0
----------- ----------- ----------- ------------ ----------- ---------
Net assets available for benefits, at
end of year $5,746,106 $3,137,589 $1,680,310 $31,769,787 $1,700,841 $399,028
=========== =========== =========== ============ =========== =========
Page 28
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MCI COMMUNICATIONS CORPORATION
RETIREMENT SAVINGS PLAN
EIN: 52-0886267
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1994
Putnam Putnam Putnam Putnam Putnam Putnam
Vista Voyager Convertible High Yield Global Gov't OTC Emerging
Fund Fund Income-Growth Advantage Income Growth
ADDITIONS --------- ------------ ------------- ---------- ------------ ------------
- ---------
<S> <C> <C> <C> <C> <C> <C>
Contributions:
Participants $304,668 $12,917,402 $ 241,138 $ 145,403 $ 74,926 $ 1,135,202
Non-cash employer 0 0 0 0 0 0
Rollovers 427,002 1,492,098 308,793 194,431 74,351 625,197
Non-cash supplemental 0 0 0 0 0 0
Transfers from ESOP 8,388 10,763 1,250 4,509 9,392 5,501
--------- ------------ ------------- ---------- ------------ ------------
Total contributions 740,058 14,420,263 551,181 344,343 158,669 1,765,900
--------- ------------ ------------- ---------- ------------ ------------
Earnings on investments:
Interest on participant loans 0 0 0 0 0 0
Interest on guaranteed investment contracts 0 0 0 0 0 0
Dividends on common stock 0 0 0 0 0 0
Net (loss) on disposition of assets 0 0 0 0 0 0
Unrealized (depreciation) of assets 0 0 0 0 0 0
Net (loss) gain from registered investment
companies 3,188 431,420 (1,658) (9,822) (5,503) 222,059
--------- ------------ ------------- ---------- ------------ ------------
Total (losses) earnings on investments 3,188 431,420 (1,658) (9,822) (5,503) 222,059
--------- ------------ ------------- ---------- ------------ ------------
Total additions 743,246 14,851,683 549,523 334,521 153,166 1,987,959
DEDUCTIONS
- ----------
Participant benefit payments 7,014 1,714,809 2,989 2,677 238 20,218
--------- ------------ ------------- ---------- ------------ ------------
Net increase 736,232 13,136,874 546,534 331,844 152,928 1,967,741
Transfers from (to):
Other master trust investment accounts 208,464 (2,902,048) 133,034 64,341 47,554 871,881
Net loans (28,780) (1,753,361) (11,806) (15,641) (4,602) (25,941)
MCI Consumer Markets 401(k) Plan (10,626) 736,151 (1,866) (3,227) 74 (11,301)
Western Union International Collectively
Bargained Plan 0 9,774 0 0 0 0
Net assets available for benefits, at
beginning of year 0 48,983,727 0 0 0 0
--------- ------------ ------------- ---------- ------------ ------------
Net assets available for benefits, at
end of year $905,290 $58,211,117 $ 665,896 $ 377,317 $ 195,954 $ 2,802,380
========= ============ ============= ========== ============ ============
Page 29
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MCI COMMUNICATIONS CORPORATION
RETIREMENT SAVINGS PLAN
EIN: 52-0886267
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1994
Putnam Stable Putnam MCI
Diversified Asset New Common Loan
Income Fund Opportunities Stock Fund Total
ADDITIONS ----------- ------------- ------------- ------------- ------------ -------------
- ---------
<S> <C> <C> <C> <C> <C> <C>
Contributions:
Participants $ 94,224 $ 10,430,454 $ 1,458,693 $ 12,928,123 $ 0 $ 51,907,550
Non-cash employer 0 0 0 28,532,919 0 28,532,919
Rollovers 424,017 2,470,599 1,148,825 1,191,123 0 12,723,822
Non-cash supplemental 0 0 0 16,658,582 0 16,658,582
Transfers from ESOP 2,252 11,732 6,156 52,082 0 163,105
----------- ------------- ------------- ------------- ------------ -------------
Total contributions 520,493 12,912,785 2,613,674 59,362,829 0 109,985,978
----------- ------------- ------------- ------------- ------------ -------------
Earnings on investments:
Interest on participant loans 0 0 0 0 681,957 681,957
Interest on guaranteed investment contracts 0 5,592,442 0 0 0 5,592,442
Dividends on common stock 0 0 0 303,588 0 303,588
Net (loss) on disposition of assets 0 0 0 (1,245,716) 0 (1,245,716)
Unrealized (depreciation) of assets 0 0 0 (57,412,969) 0 (57,412,969)
Net (loss) gain from registered investment
companies (4,796) 0 295,753 0 0 1,275,342
----------- ------------- ------------- ------------- ------------ -------------
Total (losses) earnings on investments (4,796) 5,592,442 295,753 (58,355,097) 681,957 (50,805,356)
----------- ------------- ------------- ------------- ------------ -------------
Total additions 515,697 18,505,227 2,909,427 1,007,732 681,957 59,180,622
DEDUCTIONS
- ----------
Participant benefit payments 2,618 3,956,517 31,588 5,683,122 663,239 13,106,868
----------- ------------- ------------- ------------- ------------ -------------
Net increase 513,079 14,548,710 2,877,839 (4,675,390) 18,718 46,073,754
Transfers from (to):
Other master trust investment accounts 189,659) (3,837,644) 1,472,958 2,810,483 0 0
Net loans (7,374) (2,622,467) (94,411) (1,885,783) 7,600,138 (13,037)
MCI Consumer Markets 401(k) Plan (485) 1,104,535 (16,439) 1,826,228 (115,875) 2,968,626
Western Union International Collectively
Bargained Plan 0 44,413 0 42,169 3,279 111,121
Net assets available for benefits, at
beginning of year 0 80,402,673 0 133,538,965 6,610,567 298,420,378
----------- ------------- ------------- ------------- ------------ -------------
Net assets available for benefits, at
end of year $ 315,561 $ 89,640,220 $ 4,239,947 $131,656,672 $14,116,827 $347,560,842
=========== ============= ============= ============= ============ =============
Page 30
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MCI COMMUNICATIONS CORPORATION
RETIREMENT SAVINGS PLAN
EIN: 52-0886267
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1993
Putnam Stable Laurel MCI
Voyager Asset S&P 500 Common Loan
Fund Fund Stock Index Stock Fund Total
ADDITIONS ------------ ------------- ------------- ------------- ---------- -------------
- ---------
<S> <C> <C> <C> <C> <C> <C>
Contributions:
Participants $11,451,586 $ 11,608,896 $ 7,304,281 $ 9,037,492 $ 0 $ 39,402,255
Non-cash employer 0 0 0 17,526,017 0 17,526,017
Rollovers 513,912 4,006,727 197,751 385,676 0 5,104,066
Transfers from ESOP 110,656 293,592 148,304 468 0 553,020
------------ ------------- ------------- ------------- ----------- -------------
Total contributions 12,076,154 15,909,215 7,650,336 26,949,653 0 62,585,358
------------ ------------- ------------- ------------- ----------- -------------
Earnings on investments:
Interest on cash 1,568 5,989 11,044 3,149 0 21,750
Interest on participant loans 0 0 0 0 411,500 411,500
Interest on guaranteed investment contracts 0 6,045,367 0 0 0 6,045,367
Dividends on common stock 0 0 0 219,111 0 219,111
Net gain on disposition of assets 0 0 0 901,285 0 901,285
Unrealized appreciation 0 0 0 33,404,138 0 33,404,138
Net gain from collective investment
funds of trustee 57 0 2,146,205 0 0 2,146,262
Net gain from registered investment
companies 7,423,743 0 0 0 0 7,423,743
------------ ------------- ------------- ------------- ----------- -------------
Total earnings on investments 7,425,368 6,051,356 2,157,249 34,527,683 411,500 50,573,156
------------ ------------- ------------- ------------- ----------- -------------
Total additions 19,501,522 21,960,571 9,807,585 61,477,336 411,500 113,158,514
DEDUCTIONS
- ----------
Participant benefit payments 1,389,738 3,715,219 862,044 4,473,244 283,747 10,723,992
------------ ------------- ------------- ------------- ----------- -------------
Net increase 18,111,784 18,245,352 8,945,541 57,004,092 127,753 102,434,522
Transfers (to) from:
Other investment accounts (1,316,962) 463,876 (1,116,415) 1,969,501 0 0
Net loans (358,338) (924,259) (242,795) (519,346) 2,044,738 0
MCI Consumer Markets 401(k) Plan (1,524,476) (2,842,128) (877,776) (3,848,004) (256,351) (9,348,735)
Western Union International Collectively
Bargained Plan 4,743 7,072 19,279 13,425 0 44,519
Net assets available for benefits, at
beginning of year 34,066,976 65,452,760 22,156,612 78,919,297 4,694,427 205,290,072
------------ ------------- ------------- ------------- ----------- -------------
Net assets available for benefits, at
end of year $48,983,727 $ 80,402,673 $ 28,884,446 $133,538,965 $6,610,567 $298,420,378
============ ============= ============= ============= =========== =============
Page 31
</TABLE>
<PAGE>
NOTE 5 - PARTICIPANTS' ACCOUNTS
As of December 31, 1994 and 1993, the Plan held 7,163,019 and 4,714,566 shares,
respectively, of MCI Communications Corporation common stock at fair market
values of $131,620,474 and $133,186,490, respectively. Of these shares,
1,222,644 and 501,306 were contributed by the Company during the Plan years
ended December 31, 1994 and 1993, respectively, as the Company's matching
contributions. As of December 31, 1994 and 1993, the Plan's benefit claims
payable was $33,925,640 and $10,098,348, which includes 583,087 and 191,270
shares of MCI Communications Corporation common stock at fair market values of
$10,714,224 and $5,403,378, respectively. Net assets include account balances of
participants who have terminated from the Company and have not received a
distribution as of year end.
NOTE 6 - FEDERAL INCOME TAX STATUS
As described in Note 1, the Plan is Part II of the MCI Communications
Corporation Employee Stock Ownership Plan and 401(k), which, as amended through
December 12, 1986, has been determined by the IRS to be qualified under Section
401 of the Internal Revenue Code. As allowed by the IRS, the Company filed for a
determination letter from the IRS during March 1995 covering amendments adopted
subsequent to December 12, 1986. The Plan Administrator anticipates receiving a
favorable determination from the IRS on these amendments.
NOTE 7 - SUBSEQUENT EVENTS
Effective January 1, 1995, the Plan will charge a $30 origination fee for loans
and a $20 annual account maintenance fee for participants who terminate
employment and elect to keep their funds in the Plan.
Effective January 24, 1995, the Plan will distribute in a lump sum terminated
participant accounts with a vested balance of less than $3,500. The distribution
will occur no sooner than six months after the participant's termination date.
Effective July 1, 1995, the Plan will decrease the investment options to seven
funds. The investment options will be: EuroPacific Growth Fund, Dreyfus S&P 500
Stock Index Portfolio, Putnam Voyager Fund, Putnam New Opportunities Fund,
Stable Asset Fund, Putnam Balanced Retirement Fund, and MCI Communications
Corporation Common Stock Fund. Participants with balances in the funds to be
eliminated will have opportunities during June 1995 to reallocate their fund
balances into the seven remaining funds.
Page 32
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE I
MCI COMMUNICATIONS CORPORATION
DEFINED CONTRIBUTION MASTER TRUST
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1994
CURRENT
NUMBER VALUE AT
DESCRIPTION/ISSUER OF SHARES COST 12/31/94
- ------------------ --------- ------------ ------------
<S> <C> <C> <C>
LOANS TO PARTICIPANTS
Participant loan accounts (rates range 7% - 11%) $ 0 $ 15,941,326
------------
INTEREST IN COLLECTIVE INVESTMENT
FUNDS OF TRUSTEE
* Mellon Bank Temporary
Investment Fund 1,412,297 1,412,297
------------
INTEREST IN REGISTERED INVESTMENT
COMPANIES
EuroPacific Growth Fund 304,193 6,680,397 6,427,590
* Putnam Growth & Income 260,791 3,455,550 3,317,256
* Putnam Income Fund 108,315 725,473 700,797
* Putnam Vista Fund 330,577 2,384,019 2,373,546
Scudder Income Fund 152,130 1,945,207 1,874,242
* Dreyfus S&P 500 Stock Index 3,590,744 36,626,706 36,015,159
* Putnam Investors Fund 60,225 466,084 430,005
* Putnam Voyager Fund 5,437,965 53,330,297 62,645,356
* Putnam Convertible Income-Growth 41,404 775,610 709,251
* Putnam High Yield Advantage 46,622 447,135 419,598
* Putnam Global Gov't Income 16,460 225,387 212,661
* Putnam OTC Emerging Growth 280,763 3,008,463 3,032,240
* Putnam Diversified Income 31,974 376,981 359,063
* Putnam New Opportunities 182,643 4,338,093 4,615,388
------------
Total investment in registered
investment companies 123,132,152
------------
GUARANTEED INVESTMENT CONTRACTS
Aetna Life Insurance (6.63% Matures 6/30/00) 17,859,506 17,859,506
Allstate Life Insurance Company (5.90% Matures 7/1/98) 5,772,945 5,772,945
John Hancock Mutual Life Insurance (8.05% Matures 6/30/99) 12,215,389 12,215,389
Metropolitan Life Insurance (8.96% Matures 6/30/96) 12,503,446 12,503,446
New York Life Insurance (6.82% Matures 3/31/98) 7,753,634 7,753,634
Peoples Security Insurance Company (5.72% Matures 12/31/98) 7,318,368 7,318,368
Peoples Security Insurance Company (5.86% Matures 3/31/98) 5,242,046 5,242,046
Principal Mutual Life Insurance (9.10% Matures 12/31/96) 19,764,398 19,764,398
Prudential Life Insurance (7.00% Matures 9/30/98) 4,975,399 4,975,399
TransAmerica Life Insurance (5.60% Matures 6/30/95) 5,139,244 5,139,244
------------
Total guaranteed investment contracts 98,544,375
------------
COMMON STOCK
* MCI Communications Corporation 7,956,146 159,866,687 146,194,183
------------
TOTAL INVESTMENTS $385,224,333
============
<FN>
* Denotes a party-in-interest
</FN>
</TABLE>
Page 33
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE II
MCI COMMUNICATIONS CORPORATION
DEFINED CONTRIBUTION MASTER TRUST
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1994
Transactions or series of transactions exceeding 5% of the beginning fair values
of master trust assets for the plan year January 1, 1994 to December 31, 1994
are considered reportable transactions. Fair value at January 1, 1994 is
$326,475,530. Five percent (5%) of fair value is $16,323,777.
Identity Expense Current
of incurred value of asset
party Purchase Selling Lease with Cost of on transaction Net gain
involved Description of asset price price rental transaction asset date or (loss)
- -------- ----------------------- -------------- ------------- ------ ----------- -------------- -------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
* Putnam Voyager Fund $ 16,798,906 $ 16,798,906 $ 16,798,906 $ 0
(108 purchases)
* Mellon Bank Temporary $ 41,248,437 $ 41,248,437 $ 41,248,437 $ 0
Investment Fund (487 purchases)
* Mellon Bank Temporary $ 39,836,235 $ 39,836,235 $ 39,836,235 $ 0
Investment Fund (532 sales)
<FN>
* Denotes a party-in-interest
</FN>
</TABLE>
Page 34
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan
sponsor of the MCI Communications Corporation Employee Stock Ownership Plan and
401(k) has duly caused this annual report to be signed on its behalf by the
undersigned, thereunto duly authorized.
MCI COMMUNICATIONS CORPORATION
RETIREMENT SAVINGS PLAN - PART
II OF THE MCI COMMUNICATIONS
CORPORATION EMPLOYEE STOCK
OWNERSHIP AND 401(k)
Date: June 30, 1995 BY /s/ Douglas L. Maine
------------------------------
Douglas L. Maine
Chief Financial Officer and
Executive Vice President
MCI Communications Corporation
Page 35
Exhibit 23
----------
MCI COMMUNICATIONS CORPORATION
RETIREMENT SAVINGS PLAN
EIN: 52-0886267
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
We hereby consent to the incorporation by reference in the Prospectus
constituting part of the Registration Statement of Form S-8 (No. 33-21740) of
MCI Communications Corporation of our report dated June 16, 1995, appearing on
page 3 of this Form 11-K.
/s/ PRICE WATERHOUSE LLP
- ------------------------
PRICE WATERHOUSE LLP
Washington, D.C.
June 30, 1995
Page 36
Exhibit 99
DOL Filing Confirmation ----------
I certify that the Plan Administrator of the MCI Communications Corporation
Employee Stock Ownership Plan and 401(k) has received a Statement of Assets and
Liabilities and also that the statement has been filed directly with the United
States Department of Labor by Mellon Bank, N.A. (EIN # 25-0659206) for the
following investment arrangements:
EIN #
--------------
Mellon Bank Temporary Investment Fund 25-6078903-980
MCI COMMUNICATIONS CORPORATION
RETIREMENT SAVINGS PLAN - PART
II OF THE MCI COMMUNICATIONS
CORPORATION EMPLOYEE STOCK
OWNERSHIP AND 401(k)
Date: June 30, 1995 BY /s/ Douglas L. Maine
------------------------------
Douglas L. Maine
Chief Financial Officer and
Executive Vice President
MCI Communications Corporation
Page 37
