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, 1996
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: Western Union International, Inc. 401(k) Plan
for Collectively Bargained Employees, 201 Centennial Avenue, Piscataway, NJ
08854
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>
WESTERN UNION INTERNATIONAL, INC.
401(k) PLAN FOR COLLECTIVELY BARGAINED EMPLOYEES
EIN: 13-1989550
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
Page(s)
-------
Report of Independent Accountants 3
Statements of Net Assets Available for Benefits at
December 31, 1996 and 1995 4
Statements of Changes in Net Assets Available for
Benefits for the years ended December 31, 1996 and 1995 5
Notes to Financial Statements 6-20
Additional Information:
Schedule I. Schedule of Assets Held for Investment
Purposes at December 31, 1996 21
Schedule II. Schedule of Reportable Transactions
For the year ended December 31, 1996 22
Signature 23
Exhibits:
23. Consent of Independent Accountants 24
99. DOL Filing Confirmation 25
Page 2
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and Administrative
Committee of the Western Union International, Inc.
401(k) Plan for Collectively Bargained Employees
In our opinion, the accompanying statements of net assets available for
benefits, and the related statements of changes in net assets available for
benefits present fairly, in all material respects, the net assets available for
benefits of the Western Union International, Inc. 401(k) Plan for Collectively
Bargained Employees at December 31, 1996 and 1995, 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 performed 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, as amended.
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.
PRICE WATERHOUSE LLP
- --------------------
PRICE WATERHOUSE LLP
Washington, D.C.
June 11, 1997
Page 3
<PAGE>
WESTERN UNION INTERNATIONAL, INC.
401(k) PLAN FOR COLLECTIVELY BARGAINED EMPLOYEES
EIN: 13-1989550
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31,
--------------------------------
1996 1995
------------ ------------
Assets
- ------
Non-interest bearing cash $ 64 $ 79,177
------------ ------------
Contributions receivable:
Employee 30,302 0
Employer 9,452 40
------------ ------------
Total contributions receivable 39,754 40
------------ ------------
Cash-in-transit 51,245 0
Other receivables 17 0
------------ ------------
Total receivables 91,016 40
------------ ------------
General investments:
Participant loans 624,892 390,896
Value of interest in collective
investment funds of trustee 3,090,301 1,810,640
Value of interest in registered
investment companies 5,427,745 3,752,425
Value of guaranteed investment
contracts 1,682,434 2,883,276
------------ ------------
Total general investments 10,825,372 8,837,237
------------ ------------
Employer related investments:
Employer securities 6,172,278 4,168,087
------------ ------------
Total assets 17,088,730 13,084,541
------------ ------------
Liabilities
- -----------
Operating payables (51,264) (3,392)
------------ ------------
Net assets available for benefits $ 17,037,466 $ 13,081,149
============ ============
The accompanying notes are an integral part of these financial statements.
Page 4
<PAGE>
WESTERN UNION INTERNATIONAL, INC.
401(k) PLAN FOR COLLECTIVELY BARGAINED EMPLOYEES
EIN: 13-1989550
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year Ended December 31,
--------------------------------
1996 1995
------------ ----------
ADDITIONS
- ---------
Contributions:
Participant $1,616,571 $1,586,820
Non-cash employer 518,284 504,446
Rollovers 33,220 173,336
---------- ----------
Total contributions 2,168,075 2,264,602
---------- ----------
Earnings on investments:
Interest on participant loans 36,065 25,748
Interest on guaranteed investment
contracts 169,330 212,599
Interest on collective investment
funds of the trustee 158,183 90,752
Dividends on employer securities 8,563 7,660
Net gain from registered
investment companies 686,881 949,219
Net gain on sale of employer securities 25,264 0
Unrealized appreciation of assets 1,112,566 1,059,467
---------- ----------
Total earnings on investments 2,196,852 2,345,445
---------- ----------
Total additions 4,364,927 4,610,047
DEDUCTIONS
- ----------
Participant benefit payments (190,153) (241,341)
Participant account fees (780) 0
---------- ----------
Net increase 4,173,994 4,368,706
Transfers to:
MCI Exempt 401(k) Plan (209,933) (128,838)
MCI Non-Exempt 401(k) Plan (7,744) 0
Net assets available for benefits,
beginning of year 13,081,149 8,841,281
---------- ----------
Net assets available for benefits,
end of year $17,037,466 $13,081,149
=========== ===========
The accompanying notes are an integral part of these financial statements.
Page 5
<PAGE>
WESTERN UNION INTERNATIONAL, INC.
401(k) PLAN FOR COLLECTIVELY BARGAINED EMPLOYEES
EIN: 13-1989550
NOTES TO FINANCIAL STATEMENTS ON FORM 11-K
DECEMBER 31, 1996 and 1995
NOTE 1 - DESCRIPTION OF THE PLAN
The following brief description of the Western Union International, Inc.
401(k) Plan for Collectively Bargained Employees (the "Plan") 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, as amended ("ERISA").
Effective July 1, 1990, Western Union International, Inc. (the "Company")
established a defined contribution, deferred savings plan called the
Western Union International, Inc. 401(k) Plan for Collectively Bargained
Employees. The Plan sponsor is Western Union International, Inc., a wholly
owned subsidiary of MCI International, Inc., which is a wholly owned
subsidiary of MCI Communications Corporation. Employees of the Company who
are represented by American Communications Association Locals 9 or 111 and
the Communications Trade Division affiliated with the International
Brotherhood of Teamsters are generally eligible to participate in the Plan.
Effective July 1, 1996, the Company amended and restated the Plan.
Page 6
<PAGE>
Contributions
- -------------
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
(age 18 prior to July 1, 1996). Eligible employees may elect to defer 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").
The first 6% of each participant's Elective Contributions is eligible for a
Company matching contribution in the form of cash or MCI Communications
Corporation Common Stock ("MCI Common Stock") at a rate of $.50 for each
eligible dollar of Elective Contributions made to the Plan. The Company's
matching contribution is made weekly and, when made in the form of MCI
Communications Corporation Common Stock, is determined by the closing price
of MCI Communications Corporation Common Stock on the date posted to the
participants' accounts. Prior to July 1, 1996, the Company's matching
contribution was made monthly and, when made in the form of MCI
Communications Corporation Common Stock, was determined by the closing
price of MCI Communications Corporation Common Stock on the last trading
day of the month. Participants' Elective Contributions are withheld from
their weekly 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. Participants also receive credit for years
of service for each calendar year prior to July 1, 1990 during which they
completed 1,000 hours of service.
As of July 1, 1996, the investment funds available for Elective
Contributions were increased from four to seven funds. Elective
Contributions are invested in any of the seven 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 ERISA.
- EuroPacific Growth Fund
A long-term growth fund invested primarily in securities of issuers
domiciled in Europe and the Pacific Basin. The fund is a member of The
American Funds Group and is managed by Capital Research and Management
Company.
- Dreyfus S&P 500 Stock Index Portfolio (formerly the Equity
Index Fund)
An equity index mutual fund invested in common stock that is comparable to
the Standard & Poor's 500 Composite 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.
Page 7
<PAGE>
- Putnam Voyager Fund (formerly the Aggressive Equity 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.
- 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 Balanced Retirement Fund
A growth and income fund invested in a diversified portfolio of equity and
debt securities. Putnam Investment Management, Inc. makes the
investment decisions for the fund and is subject to the policies
established by the fund's trustees.
- Stable Value Fund
This fund was formerly known as the Long-Term Fixed Income Fund. The fund
consists of investments in the Putnam Stable Value Fund and individually
held guaranteed investment contracts (GICs) issued by insurance companies
that offer fixed interest rates on investments. The fund seeks to maintain
a constant book value of $1.00 per share. The Putnam Stable Value
Fund is a collective investment trust created and maintained by Putnam
Fiduciary Trust Company. The fund is invested primarily in guaranteed
investment contracts or funding agreements, synthetic guaranteed
investment contracts or separate accounts issued or wrapped by
insurance companies, banks, or other financial institutions.
Page 8
<PAGE>
The following guaranteed investment contracts were held individually by the
Plan as of December 31:
Contract Value
--------------
Contract
1996 1995 Rate
------- ------- ----
Allstate Life Insurance $ 735,981 $ 694,977 5.90%
John Hancock Mutual Life Insurance 946,453 875,940 8.05%
Metropolitan Life Insurance 835,784 8.96%
Principal Mutual Life Insurance 476,576 9.10%
Participant Accounts
- --------------------
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 Fund
which is recorded on a per share basis. The Plan is processed on a daily
valuation basis. Prior to July 1, 1996, all investments except the MCI
Common Stock Fund were valued on a dollar value basis with each fund's
activity allocated to participants' accounts on a pro rata basis.
Participants may transfer all or part of the balance in their Elective
Contributions and related earnings from one fund to another once each
calendar month. For plan years beginning on or after January 1, 1997,
participants may reallocate their matching contributions balance that is
100% vested as of the prior year end once per Plan Year. Participants may
change the allocation of their future contributions among the funds with
unlimited frequency. Participants' allocations are affected by the last
change placed prior to payroll processing.
Page 9
<PAGE>
Participant Loans
- -----------------
A loan feature allows participants to borrow up to one-half of the vested
account balance (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. Effective July 1, 1996,
the Plan charges a $30 origination fee to participants for loans. Loan
proceeds are disbursed pro rata from each of the participants' investment
funds, and are repaid through weekly payroll deductions. Loans can be
repaid in full by a cashier's or certified check. 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. During Plan years ended December
31, 1996 and 1995, $439,910 and $157,780 in loans were disbursed and
principal repayments of $171,797 and $99,684, respectively, were made.
Participant Benefit Payments
- ----------------------------
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 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 his behalf under the Plan.
Non-vested portions of a terminated participant's accounts are forfeited
and used to offset future Company matching contributions. Effective July 1,
1996 participants who terminate employment and elect to keep their funds in
the Plan are charged a $20 annual account maintenance fee. The Plan was
amended effective July 1, 1996, to provide for the distribution in a lump
sum of terminated participant accounts with a vested balance of less than
$3,500. This distribution generally occurs no sooner than six months after
the participant's termination of employment date. As of December 31, 1996
and 1995, forfeitures included in the Plan were $5,385 and $4,293,
respectively.
Page 10
<PAGE>
Plan Administration
- -------------------
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. Prior to June 1, 1996, the recordkeeper for the Plan was
Buck Consultants, 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 ERISA. The Company has not expressed any intent to
discontinue its contributions nor to terminate the Plan.
The Plan's holdings of MCI Communications Corporation Common Stock, various
Putnam Investments, Inc. mutual funds, a collective investment trust
created and maintained by Putnam Fiduciary Trust Company, a Mellon Bank
mutual fund and collective trust account, and loans to participants are
party-in-interest investments.
NOTE 2 - DESCRIPTION OF ACCOUNTING PRINCIPLES AND PRACTICES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of changes in net assets available for benefits during the
reporting period, such as those regarding fair value. Actual results could
differ from those estimates.
The financial statements for the Plan are prepared on the accrual basis of
accounting.
Page 11
<PAGE>
The Plan's distribution of MCI Communications Corporation Common Stock to
participants is at 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. Purchases 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. During
1995, the Plan adopted American Institute of Certified Public Accountants
Statement of Position 94-4, "Reporting of Investment Contracts Held by Health
and Welfare Benefit Plans and Defined Contribution Pension Plans" (SOP 94-4).
SOP 94-4 states that defined contribution plans should report fully-benefit
responsive investment contracts at contract value, which may or may not be equal
to fair value, and all other investment contracts at fair value. All guaranteed
investment contracts held by the Plan at December 31, 1996 were fully-benefit
responsive, and therefore are stated at contract value.
Participant loans are valued at cost, which approximates fair value.
Administrative expenses of the Plan are paid by MCI Communications Corporation.
Certain amounts in the 1995 financial statements have been reclassified to
conform to the 1996 presentation.
NOTE 3 - NET ASSETS AVAILABLE FOR BENEFITS AND CHANGES IN NET ASSETS AVAILABLE
FOR BENEFITS BY FUND
The net assets available for benefits and the changes in net assets among the
Plan's investment funds for the years ended December 31, 1996 and 1995 are
presented on the following pages.
Page 12
<PAGE>
NOTE 3 - Continued
WESTERN UNION INTERNATIONAL, INC.
401(k) PLAN FOR COLLECTIVELY BARGAINED EMPLOYEES
EIN: 13-1989550
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1996
EuroPacific Dreyfus Putnam Stable
Growth S&P 500 Voyager Value
Fund Stock Index Fund Fund
------- ----------- ----------- -----------
ASSETS
- ------
Non-interest bearing cash $ 0 $ 0 $ 0 $ 64
------- ----------- ----------- -----------
Contributions receivable:
Participant ................. 670 3,616 7,942 9,575
Employer .................... 0 0 0 0
------- ----------- ----------- -----------
Total contributions receivable 670 3,616 7,942 9,575
Cash-in-transit ............... 0 12,051 21,859 11,641
Other receivables ............. 0 4 0 0
Investments, at fair value:
Participant loans ........... 0 0 0 0
Employer securities ......... 0 0 0 0
Common/collective trusts .... 0 2,555 58 3,078,966*
Registered investment
companies .................. 46,512 1,936,795* 2,807,491* 0
Investments, at contract value:
Value of guaranteed investment
contracts .................. 0 0 0 1,682,434
------- ----------- ----------- -----------
Total assets .................. 47,182 1,955,021 2,837,350 4,782,680
------- ----------- ----------- -----------
LIABILITIES
- -----------
Operating payables ............ 0 (12,051) (21,859) (11,641)
------- ----------- ----------- -----------
Net assets available
for benefits ............... $47,182 $ 1,942,970 $ 2,815,491 $ 4,771,039
======= =========== =========== ===========
* Investment represents 5% or more of the Plan's net assets.
Page 13
<PAGE>
NOTE 3 - Continued
WESTERN UNION INTERNATIONAL, INC.
401(k) PLAN FOR COLLECTIVELY BARGAINED EMPLOYEES
EIN: 13-1989550
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1996
Putnam Putnam MCI
New Balanced Common Participant
Opportunities Retirement Stock Loans Total
-------- -------- ---------- -------- ------------
ASSETS
- ------
Non-interest
bearing cash .. $ 0 $ 0 $ 0 $ 0 $ 64
--------- -------- ---------- -------- ------------
Contributions receivable:
Participant ... 1,514 862 6,123 0 30,302
Employer ...... 0 0 9,452 0 9,452
--------- -------- ---------- -------- ------------
Total
contributions
receivable .. 1,514 862 15,575 0 39,754
Cash-in-transit . 5,694 0 0 0 51,245
Other receivables 0 0 13 0 17
Investments, at fair value:
Participant
loans ........ 0 0 0 624,892 624,892
Employer
securities ... 0 0 6,172,278* 0 6,172,278
Common/
collective
trusts ....... 7 0 8,715 0 3,090,301
Registered
investment
companies .... 381,773 255,174 0 0 5,427,745
Investments, at contract value:
Value of guaranteed
investment
contracts .... 0 0 0 0 1,682,434
--------- -------- ---------- -------- ------------
Total assets .... 388,988 256,036 6,196,581 624,892 17,088,730
--------- -------- ---------- -------- ------------
LIABILITIES
- ------------
Operating payables (5,713) 0 0 0 (51,264)
--------- -------- ---------- -------- ------------
Net assets available
for benefits .... $ 383,275 $256,036 $6,196,581 $624,892 $ 17,037,466
========= ======== ========== ======== ============
* Investment represents 5% or more of the Plan's net assets.
Page 14
<PAGE>
NOTE 3 - Continued
WESTERN UNION INTERNATIONAL, INC.
401(k) PLAN FOR COLLECTIVELY BARGAINED EMPLOYEES
EIN: 13-1989550
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1995
Long-Term
Putnam MCI Common Dreyfus Fixed
Voyager Stock S&P Stock Income Participant Total
Fund Fund Index Fund Fund Loans Funds
---------- ---------- ---------- ----------- -------- -----------
Assets
- ------
Non-interest
bearing
cash $ 50,460 $ 1,167 $ 27,550 $ 0 $ 0 $ 79,177
Contributions receivable:
Participant
Employer 0 40 0 0 0 40
---------- ---------- ---------- ----------- -------- -----------
Total
contributions
receivable 0 40 0 0 0 40
--------- ---------- ---------- ----------- -------- -----------
Investments, at fair value:
Employer
securities 0 4,168,087* 0 0 0 4,168,087
Common/
collective
Trusts 806 43,792 0 1,766,042* 0 1,810,640
Registered
investment
companies 2,199,148* 0 1,553,277* 0 0 3,752,425
Participant
loans 0 0 0 0 390,896 390,896
Investments, at contract value:
Value of guaranteed
investment
contracts 0 0 0 2,883,276* 0 2,883,276
---------- ---------- ---------- ----------- -------- -----------
Total assets 2,250,414 4,213,086 1,580,827 4,649,318 390,896 13,084,541
---------- ---------- ---------- ----------- -------- -----------
Liabilities
- ------------
Operating
payables 0 0 0 (3,392) 0 (3,392)
---------- ---------- ---------- ----------- -------- -----------
Net assets
available for
benefits $2,250,414 $4,213,086 $1,580,827 $4,645,926 $390,896 $13,081,149
========== ========== ========== =========== ======== ===========
* Investment represents 5% or more of the Plan's net assets.
Page 15
<PAGE>
NOTE 3 -Continued
WESTERN UNION INTERNATIONAL, INC.
401(k) PLAN FOR COLLECTIVELY BARGAINED EMPLOYEES
EIN: 13-1989550
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1996
EuroPacific Dreyfus Putnam Stable
Growth S&P 500 Voyager Value
Fund Stock Index Fund Fund
ADDITIONS --------- ----------- ----------- -----------
- ---------
Contributions:
Participant ..........$ 12,178 $ 247,943 $ 530,588 $ 587,841
Non-cash employer .... 0 0 0 0
Rollovers ............ 0 3,149 23,448 163
------- ----------- ----------- -----------
Total contributions 12,178 251,092 554,036 588,004
------- ----------- ----------- -----------
Earnings on investments
Interest on participant
loans ............... 0 0 0 0
Interest on guaranteed
investment contracts 0 0 0 169,330
Interest on common/
collective trusts ... 0 322 635 157,226
Dividends on employer
securities .......... 0 0 0 0
Net gain(loss) from
registered investment
companies 3,251 380,301 295,392 0
Net gain on sale of
employer securities . 0 0 0 0
Unrealized appreciation
of assets ........... 0 0 0 0
------ ----------- ----------- -----------
Total earnings
on investments ....... 3,251 380,623 296,027 326,556
------- ----------- ----------- -----------
Total additions ........ 15,429 631,715 850,063 914,560
------- ----------- ----------- -----------
DEDUCTIONS
- ----------
Participant benefit payments 0 (5,546) (5,194) (67,977)
Participant account fees (7) (129) (175) (360)
------- ----------- ----------- -----------
Net increase ........... 15,422 626,040 844,694 846,223
------- ----------- ----------- -----------
Transfers (to)/from:
Other trust accounts . 31,640 (194,089) (209,100) (567,150)
Net loans ............ 335 (31,282) (29,392) (111,891)
MCI Exempt 401(k) Plan (164) (36,136) (38,925) (41,454)
MCI Non-Exempt 401(k)
Plan ................ (51) (2,390) (2,200) (615)
Net assets available for
benefits, beginning
of year ............... 0 1,580,827 2,250,414 4,645,926
-------- ----------- ----------- -----------
Net assets available for
benefits, end of year . $ 47,182 $ 1,942,970 $ 2,815,491 $ 4,771,039
======== =========== =========== ===========
Page 16
<PAGE>
NOTE 3 - Continued
WESTERN UNION INTERNATIONAL, INC.
401(k) PLAN FOR COLLECTIVELY BARGAINED EMPLOYEES
EIN: 13-1989550
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1996
Putnam Putnam MCI
New Balanced Common Participant
Opportunities Retirement Stock Loans Total
---------- ---------- ----------- ---------- ------------
ADDITIONS
- ---------
Contributions:
Participant $ 32,491 $ 8,885 $ 196,645 $ 0 $ 1,616,571
Non-cash
employer 0 0 518,284 0 518,284
Rollovers 6,297 0 163 0 33,220
--------- --------- ----------- --------- ------------
Total
contributions 38,788 8,885 715,092 0 2,168,075
Earnings on investments
Interest on
participant
loans 0 0 0 36,065 36,065
Interest on
guaranteed
investment
contracts 0 0 0 0 169,330
Interest on
common/collective
trusts 0 0 0 0 158,183
Dividends on
employer
securities 0 0 8,563 0 8,563
Net gain/(loss)
from registered
investment
companies (3,536) 11,473 0 0 686,881
Net gain on
sale of employer
securities 0 0 25,264 0 25,264
Unrealized
appreciation
of assets 0 0 1,112,566 0 1,112,566
--------- --------- ----------- --------- ------------
Total earnings
on
investments (3,536) 11,473 1,146,393 36,065 2,196,852
--------- --------- ----------- --------- ------------
Total
additions 35,252 20,358 1,861,485 36,065 4,364,927
--------- --------- ----------- --------- ------------
DEDUCTIONS
- ----------
Participant
benefit
payments 0 0 (88,134) (23,302) (190,153)
Participant
account fees 0 0 (109) 0 (780)
--------- --------- ----------- --------- ------------
Net increase 35,252 20,358 1,773,242 12,763 4,173,994
--------- --------- ----------- --------- ------------
Transfers (to)/from:
Other trust
accounts 350,773 234,752 353,174 0 0
Net loans (2,662) 955 (58,082) 232,019 0
MCI Exempt
401(k) Plan 0 0 (82,468) (10,786) (209,933)
MCI Non-Exempt
401(k) Plan (88) (29) (2,371) 0 (7,744)
Net assets
available for
benefits,
beginning of
year 0 0 4,213,086 390,896 13,081,149
--------- --------- ----------- --------- ------------
Net assets
available for
benefits, end
of year $ 383,275 $ 256,036 $ 6,196,581 $ 624,892 $ 17,037,466
========= ========= =========== ========= ============
Page 17
<PAGE>
NOTE 3 - Continued
WESTERN UNION INTERNATIONAL, INC.
401(k) PLAN FOR COLLECTIVELY BARGAINED EMPLOYEES
EIN: 13-1989550
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
FOR THE YEAR ENDED: DECEMBER 31, 1995
Putnam Dreyfus Long-Term
Voyager MCI Common S&P 500 Fixed Participant
Fund Stock Stock Index Income Loans Total
---------- ---------- --------- --------- --------- ---------
ADDITIONS
- ---------
Contributions:
Non-cash
employer $ 0 $ 504,446 $ 0 $ 0 $ 0 $ 504,446
Participants 432,232 269,860 238,867 645,861 0 1,586,820
Rollovers 30,000 0 0 143,336 0 173,336
---------- ---------- --------- --------- --------- ---------
Total
contributions 462,232 774,306 238,867 789,197 0 2,264,602
---------- ---------- --------- --------- --------- ---------
Earnings on investments:
Interest on
guaranteed
investment
contracts 0 0 0 212,599 0 212,599
Interest on
participant
loans 0 0 0 0 25,748 25,748
Dividends on
employer
securities 0 7,660 0 0 0 7,660
Unrealized
appreciation 0 1,059,467 0 0 0 1,059,467
Net investment
gain from
collective
investment
funds of
trustee 116 2,333 4,695 83,608 0 90,752
Net investment
gain from
registered
investment
company 568,779 0 380,440 0 0 949,219
---------- ---------- --------- --------- --------- ---------
Total earnings
on
investments 568,895 1,069,460 385,135 296,207 25,748 2,345,445
---------- ---------- --------- --------- --------- ---------
Total
additions 1,031,127 1,843,766 624,002 1,085,404 25,748 4,610,047
DEDUCTIONS
- ----------
Participant
Benefit
Payments (29,470) (74,946) ( 21,261) (115,664) 0 (241,341)
---------- ---------- --------- --------- --------- ---------
Net Increase 1,001,657 1,768,820 602,741 969,740 25,748 4,368,706
Transfers (to) from:
MCI Retirement
Savings Plan (31,562) (39,706) ( 7,922) ( 40,298) ( 9,350) (128,838)
Other trust
accounts 64,453 27,138 31,746 (123,337) 0 0
Net loans ( 9,137) ( 11,574) ( 9,574) ( 2,062) 32,347 0
Net assets
available for
benefits,
beginning of
year 1,225,003 2,468,408 963,836 3,841,883 342,151 8,841,281
---------- ---------- ---------- ---------- --------- -----------
Net assets
available for
benefits, end
of year $2,250,414 $4,213,086 $1,580,827 $4,645,926 $ 390,896 $13,081,149
========== ========== ========== ========== ========= ===========
Page 18
<PAGE>
NOTE 4 - PARTICIPANTS' ACCOUNTS
As of December 31, 1996 and 1995, the Plan held 188,824 and 159,544 shares,
respectively, of MCI Communications Corporation Common Stock at fair market
values of $6,172,278 and $4,168,087, respectively. Of these shares, 18,484 and
22,163 were contributed by the Company during the Plan years ended December 31,
1996 and 1995, respectively, as the Company's matching contributions. During the
Plan years ended December 31, 1996 and 1995, 3,060 and 4,045 shares,
respectively, of MCI Communications Corporation Common Stock were distributed to
participants. As of December 31, 1996 and 1995, the Plan's benefit claims
payable was $565,907 and $571,858, which includes 5,782 and 7,230 shares of MCI
Communications Corporation Common Stock at fair market values of $188,999 and
$188,884, 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 5 - TRANSFER OF ASSETS (FROM) THE PLAN
During the year ended December 31, 1996 and 1995, certain participants
transferred between the Plan and the MCI Communications Corporation 401(k) Plan
for Exempt Employees (formerly the MCI Communications Corporation Retirement
Savings Plan). During the years ended December 31, 1996 and 1995, assets valued
at $209,933 and $128,838, respectively, including 3,012 and 2,101 shares of MCI
Communications Corporation Common Stock at a fair value of $82,468 and $39,706,
respectively, were transferred from the Plan.
During the year ended December 31, 1996, certain participants transferred
between the Plan and the MCI Communications Corporation 401(k) Plan for
Non-Exempt Employees (formerly the MCI Communications Corporation Consumer
Markets 401(k) Plan). During the year ended December 31, 1996, assets valued at
$7,744, including 85 shares of MCI Communications Corporation Common Stock at a
fair value of $2,371 were transferred from the Plan.
Page 19
<PAGE>
NOTE 6 - FEDERAL INCOME TAX STATUS
The Plan Administrator has received a favorable determination letter, dated
September 3, 1992, from the Internal Revenue Service covering the Plan as
amended through February 1, 1990 stating that the Plan, as designed is a
qualified plan in accordance with Section 401(a) of the Internal Revenue Code
("Code"), and its corresponding trust is exempt from taxation under Section
501(a) of the Code. The Plan has been amended and restated; however, the Plan
Administrator believes the Plan is being operated in a manner designed to
maintain its tax-qualified status. In addition, the Company will apply for a new
determination letter covering the Plan, as restated, and expects to receive a
favorable determination.
NOTE 7 - MERGER AGREEMENT
Effective November 3, 1996, MCI Communications Corporation ("MCI") and British
Telecommunications, plc ("BT") entered into an Agreement and Plan of Merger
("the Merger"). As a result of the proposed merger, the stockholders of MCI and
BT will become the owners of a combined company, renamed Concert plc (Concert).
Under the terms of the Merger, each outstanding share of the MCI's common stock
(other than treasury shares and shares owned by BT including the shares of Class
A common stock) will be converted into the right to receive (i) .54 American
Depository Share (ADS) of Concert, each ADS representing ten ordinary shares of
25 pence each of Concert (with cash being paid in lieu of fractional ADSs), and
(ii) $6.00 in cash.
The shareholders of the respective companies approved the Merger at meetings
held on April 2, 1997 and April 15, 1997, respectively. Completion of the Merger
is subject to certain conditions, including the receipt of required regulatory
approvals. MCI expects to complete the Merger in the fall of 1997.
Page 20
<PAGE>
SCHEDULE I
WESTERN UNION INTERNATIONAL, INC.
401(k) PLAN FOR COLLECTIVELY BARGAINED EMPLOYEES
EIN: 13-1989550
ITEM 27a SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1996
NUMBER CURRENT
OF VALUE AT
SHARES COST 12/31/96
-------- ------ ----------
DESCRIPTION/ISSUER
- -------------------
LOANS TO PARTICIPANTS
*Participant loan accounts
(rates range 7%-10%)
(maturities range 1997-2011) $ 0 $ 624,892
-----------
INTEREST IN COLLECTIVE INVESTMENT FUNDS
*Putnam Stable Value Fund 3,078,966 3,078,966
*Mellon Bank Temporary
Investment Fund 11,335 $ 11,335
-----------
Total interest in collective
investment funds $ 3,090,301
-----------
INTEREST IN REGISTERED INVESTMENT COMPANIES
EuroPacific Growth Fund 1,786 44,614 46,512
Dreyfus S&P 500 Stock Index 121,734 1,368,591 1,936,795
*Putnam Voyager Fund 174,161 2,230,029 2,807,491
*Putnam New Opportunities Fund 9,396 388,417 381,773
*Putnam Balanced Retirement Fund 24,678 255,671 255,174
-----------
Total interest in registered
investment companies 5,427,745
-----------
GUARANTEED INVESTMENT CONTRACTS**
Allstate Life Insurance
(5.90% matures 7/1/98) 735,981 735,981
John Hancock Mutual Life
(8.05% matures 6/30/99) 946,453 946,453
-----------
Total guaranteed investment contracts 1,682,434
-----------
COMMON STOCK
* MCI Communications Corporation 188,824 3,958,885 6,172,278
-----------
TOTAL ASSETS HELD FOR INVESTMENT PURPOSES $16,997,650
===========
* Denotes a party-in-interest
** Current value is considered to be contract value
<TABLE>
<CAPTION>
Page 21
<PAGE>
SCHEDULE II
WESTERN UNION INTERNATIONAL, INC.
401(k) PLAN FOR COLLECTIVELY BARGAINED EMPLOYEES
EIN: 13-1989550
ITEM 27d SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
Transaction or series of transactions exceeding 5% of beginning fair value
of plan assets for the plan year January 1, 1996 to December 31, 1996 are
considered reportable transactions. Fair value at January 1, 1996 is
$13,084,541. Five percent (5%) of fair value is $654,227.
<CAPTION>
Current
Identity Expense Value Of
of Description Incurred Asset on
Party Of Purchase Selling Lease With Cost of Transaction Net
Involved Asset Price Price Rental Transaction Asset Date Gain/(Loss)
- -------- ----- ----- ----- ------ ----- ----- ---- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
*Mellon Trust EB
Temporary $2,234,850 $2,269,331 $4,504,181 $4,504,181
Investment Fund 486 Purchases 188 Sales
Metropolitan Life
GIC Contract 0 872,258 872,258 872,258
GAC #12529-169 0 Purchases 3 Sales
*Putnam 773,139 438,615 1,089,832 1,211,754 $ 121,922
Voyager Fund 64 Purchases 28 Sales
*Putnam Stable 2,050,663 890,446 2,941,109 2,941,109
Value Fund 62 Purchases 54 Sales
*MCI Communications
Corporation 964,020 220,923 1,183,531 1,184,943 1,412
Common Stock 53 Purchases 26 Sales
<FN>
*Denotes a Party-in-Interest
</FN>
</TABLE>
Page 22
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Plan sponsor of the Western Union International, Inc. 401(k) Plan
for Collectively Bargained Employees has duly caused this annual report
to be signed on its behalf by the undersigned, thereunto duly
authorized.
WESTERN UNION INTERNATIONAL, INC.
401(k) PLAN FOR COLLECTIVELY
BARGAINED EMPLOYEES
Date: June 27, 1997
By: Frank R. Conrad
---------------------------------
Frank R. Conrad
Controller
Western Union International, Inc.
Page 23
<PAGE>
Exhibit 23
WESTERN UNION INTERNATIONAL, INC.
401(k) PLAN FOR COLLECTIVELY BARGAINED EMPLOYEES
EIN: 13-1989550
CONSENT OF INDEPENDENT ACCOUNTANTS
-----------------------------------
We hereby consent to the incorporation by reference in the Prospectus
constituting part of the Registration Statement on Form S-8 (No.
333-12849) of MCI Communications Corporation of our report dated June
11, 1997, appearing on page 3 of this Form 11-K.
PRICE WATERHOUSE LLP
--------------------
PRICE WATERHOUSE LLP
Washington, D.C.
June 27, 1997
Page 24
<PAGE>
Exhibit 99
DOL FILING CONFIRMATION
I certify that the Plan Administrator of the Western Union
International, Inc. 401(k) Plan for Collectively Bargained Employees
has received a Statement of Assets and Liabilities and also that this
statement has been filed directly with the United States Department of
Labor by:
1) Mellon Bank, N.A. (EIN # 25-0659206) for the following
investment arrangement(s):
EIN#
-------------
Mellon Bank Temporary Investment Fund 25-078093-980
And
2) Putnam Fiduciary Trust Company (EIN # 04-2777224) for the
following investment arrangement(s):
EIN#
-------------
Putnam Stable Value Fund 04-3159710
WESTERN UNION INTERNATIONAL, INC.
401(k) PLAN FOR COLLECTIVELY
BARGAINED EMPLOYEES
Date: June 27, 1997
By: Frank R. Conrad
---------------------------------
Frank R. Conrad
Controller
Western Union International, Inc.
Page 25
<PAGE>
