<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 11-K
Annual Report Pursuant to Section 15 (d) of the
Securities Exchange Act of 1934
(Mark One)
Annual Report pursuant to Section 15 (d) of the Securities Exchange Act of
1934 X (No Fee Required)
-----
For the fiscal year ended December 31, 1998
- --------------------------------------------------------------------------------
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 1-1105
- --------------------------------------------------------------------------------
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
NCR SAVINGS PLAN
B. Name and issuer of the securities held pursuant to the plan and the address
of its principal executive office:
NCR CORPORATION
1700 South Patterson Boulevard, Dayton, OH 45479
<PAGE>
NCR Savings Plan
Financial Statements and
Supplemental Schedules
December 31, 1998 and 1997
<PAGE>
NCR Savings Plan
Index to Financial Statements
and Supplemental Schedules
--------------------------
<TABLE>
<CAPTION>
Pages
-----
<S> <C>
Report of Independent Accountants............................... 2
Financial Statements:
Statements of Net Assets Available for Benefits
as of December 31, 1998 and 1997 (with fund information)... 3
Statement of Changes in Net Assets Available for
Benefits for the year ended December 31, 1998
(with fund information).................................... 4
Notes to Financial Statements................................. 5-13
Supplemental Schedules:......................................... 14
Line 27a - Schedule of Assets Held for Investment Purposes
as of December 31, 1998.................................... 15
Line 27d - Schedule of Reportable Transactions
for the year ended December 31, 1998....................... 16
</TABLE>
1
<PAGE>
[LOGO OF PRICEWATERHOUSECOOPERS APPEARS HERE]
[LETTERHEAD OF PRICEWATERHOUSECOOPERS APPEARS HERE]
Report of Independent Accountants
To the Participants, Beneficiaries and
Administrators of the NCR Savings Plan
In our opinion, the accompanying statements of net assets available for benefits
and the related statement of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of the NCR Savings Plan (the Plan) at December 31, 1998 and 1997, and the
changes in net assets available for benefits for the year ended December 31,
1998, 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 27a and 27d is presented for purposes of additional analysis and is
not a required part of the basic financial statements but is additional
information required by ERISA. The fund information in the statement of net
assets available for benefits and the statement of changes in net assets
available for benefits is presented for purposes of additional analysis rather
than to present the net assets available for plan benefits and changes in net
assets available for benefits of each fund. Schedules 27a and 27d and the fund
information have been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, are fairly stated in all
material respects.
/s/ PriceWaterhouseCoopers
Dayton, Ohio
June 11, 1999
2
<PAGE>
NCR Savings Plan
Statements of Net Assets Available for Benefits (with fund information)
December 31, 1998 and 1997
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
December 31, 1998
---------------------------------------------------------------------------------------------
Very Moderately Moderately
Conservative Conservative Cautious Moderate Aggressive Aggressive
Option Strategy Strategy strategy Strategy Strategy
------------- ------------ ----------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Assets
Investment at fair value $ 87,014,273 $ 90,585,940 $90,390,421 $ 136,188,981 $ 166,482,245 $ 554,309,685
Receivables 650,316 756,632 558,808 357,243 389,697 1,066,496
------------- ------------ ----------- ------------- ------------- -------------
Total assets 87,664,589 91,342,572 90,949,229 136,546,224 166,871,942 555,376,181
Liabilities
Payables (196,318) (368,694) (143,665) (76,379) (211,129) (910,952)
------------- ------------ ----------- ------------- ------------- -------------
Net assets available
for benefits $ 87,468,271 $ 90,973,879 $90,805,564 $ 136,469,845 $ 166,660,813 $ 554,465,229
============= ============ =========== ============= ============= =============
December 31, 1998
<CAPTION>
Participant-Directed
--------------------------------------------------------------------------------------------------
Very Market Index Options
--------------------------------------------
Aggressive Style Fixed Income S&P 500 International Participant
Strategy Options Index Index Equity Index Loans
--------------- -------------- ------------- ------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Assets
Investment at fair value $ 10,096,433 $ 351,664,334 $ 5,419,403 $ 14,038,031 $ 874,788 $22,223,759
Receivables 159,011 211,193 1,887,376 178,383 1,883 -
--------------- -------------- ------------- ------------- ---------------- -----------
Total assets 10,255,444 351,875,527 7,306,779 14,216,414 876,671 22,223,759
Liabilities
Payables (54,849) (26,515) (124,971) (1,380) (381) -
--------------- -------------- ------------- ------------- ----------------- -----------
Net assets available
for benefits $ 10,200,595 $ 351,849,012 $ 7,181,808 $ 14,215,034 $ 876,290 $22,223,759
=============== ============== ============= ============= ================= ===========
December 31, 1998
<CAPTION>
Non-Participant
Directed
---------------------------------------------------- ---------------
See Note 4
----------------------------------------------------
AT&T Lucent NCR
Unitized Unitized Unitized Short-Term
Stock Fund Stock Fund Stock Fund Investments Total
------------- -------------- ------------ ------------- -------------
<C> <C> <C> <C> <C>
Assets
Investment at fair value $ - $ - $58,404,562 $ - $ 1,587,692,855
Receivables - - 341,727 - 6,558,765
------------- ------------- ----------- ------------- ---------------
Total assets - - 58,746,289 - 1,594,251,620
Liabilities
Payables - - (118,471) - (2,233,704)
------------- ------------- ----------- ------------- ---------------
Net assets available
for benefits $ - $ - $58,627,818 $ - $ 1,592,017,917
============= ============= =========== ============= ===============
</TABLE>
December 31, 1997
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
Very Moderately Moderately
Conservative Conservative Cautious Moderate Aggressive Aggressive
Option Strategy Strategy Strategy Strategy Strategy
------------- ------------ ----------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Assets
Investment at fair value $ 41,691,328 $84,483,783 $79,542,193 $ 123,953,506 $ 143,389,344 $ 478,687,753
Receivables 535,240 403,147 223,066 402,727 1,395,449 3,200,311
------------- ------------ ----------- ------------- ------------- -------------
Total assets 42,226,568 84,886,930 79,765,259 124,356,233 144,784,793 481,888,064
Liabilities
Payables (151,047) (234,966) (211,168) (149,367) (288,734) (167,198)
------------- ------------ ----------- ------------- ------------- -------------
Net assets available
for benefits $ 42,075,521 $84,651,964 $79,554,091 $ 124,206,866 $ 144,496,059 $ 481,720,866
============= ============ =========== ============= ============= =============
December 31, 1997
<CAPTION>
Participant-Directed
------------------------------------------------------------------------------------------------
Very Mutual Market Index Options
--------------------------------------------
Aggressive Fund Fixed Income S&P 500 International Participant
strategy Window Index Index Equity Index Loans
------------- -------------- ------------- ----------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Assets
Investment at fair value $ - $ 243,408,389 $ - $ - $ - $ 23,011,264
Receivables - - - - - -
------------ -------------- -------------- ------------ ------------- -----------
Total assets - 243,408,389 - - - 23,011,264
Liabilities
Payables - - - - -
------------ -------------- -------------- ------------ ------------- -----------
Net assets available
for benefits $ - $ 243,408,389 $ - $ - $ - $23,011,264
============ ============== ============== ============ ============= ===========
December 31, 1997
<CAPTION>
Non-Participant
Directed
---------------------------------------------- ----------------------
See Note 4
----------------------------------------------
AT&T Lucent NCR
Unitized Unitized Unitized Short-Term
Stock Fund Stock Fund Stock Fund Investments Total
-------------- ------------- ----------- ------------ --------------
<S> <C> <C> <C> <C> <C>
Assets
Investment at fair value $ 47,799,366 $ 26,023,008 $29,082,479 $ 1,508,989 $1,322,581,402
Receivables 2,827,988 1,364,452 1,262,043 (6,066,457) 5,547,966
-------------- ------------ ----------- ------------ --------------
Total assets 50,627,354 27,387,460 30,344,522 (4,557,468) 1,328,129,368
Liabilities
Payables (6,789,779) (4,169,575) (1,056,412) 6,066,456 (7,151,790)
-------------- ------------ ----------- ------------ --------------
Net assets available
for benefits $ 43,837,574 $ 23,217,885 $29,288,110 $ 1,508,988 $1,320,977,578
============== ============ =========== ============ ==============
</TABLE>
<PAGE>
NCR SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS (WITH FUND
INFORMATION) FOR THE YEAR ENDED DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
----------------------------------------------------------------------------
Very Moderately Moderately
Conservative Conservative Cautious Moderate Aggressive
Option Strategy Strategy Strategy Strategy
------------ ------------ ---------- -------- -----------
<S> <C> <C> <C> <C> <C>
Additions
Additions to net assets attributed to:
Contributions:
Company $ 184,118 $ 1,397,006 $ 1,356,805 $ 2,533,157 $ 3,666,689
Participants 2,501,899 3,029,057 3,077,999 5,647,924 8,704,993
Principal loan payments 700,384 887,893 685,848 1,049,765 1,429,191
------------ ------------ ------------ ------------- -------------
3,386,401 5,313,956 5,120,652 9,230,846 13,800,873
------------ ------------ ------------ ------------- -------------
Investment income:
Interest 4,713,838 4,778,671 925,236 20,026 28,232
Dividends - - - - -
Interest on loan
repayments 50,421 62,540 46,670 77,714 102,065
Net realized
and unrealized
gains (losses) - 869,610 9,424,145 18,483,030 29,330,290
------------ ------------ ------------ ------------- -------------
4,764,259 5,710,821 10,396,051 18,580,770 29,460,587
------------ ------------ ------------ ------------- -------------
Net forfeitures 669,570 (21,406) (24,121) (58,492) (124,263)
------------ ------------ ------------ ------------- -------------
Deductions
Deductions from net assets attributed to:
Benefit payments (11,557,557) (7,879,405) (6,199,661) (8,096,701) (10,113,965)
Investment
management fees (12,350) (122,552) (56,111) (95,833) (168,269)
------------ ------------ ------------ ------------- -------------
(11,569,907) (8,001,957) (6,255,772) (8,192,534) (10,282,234)
------------ ------------ ------------ ------------- -------------
Other transactions:
Participant loans (894,636) (1,067,539) (869,177) (1,305,899) (1,705,417)
Net interfund transfers 48,975,625 4,374,367 2,873,899 (6,005,438) (9,002,403)
Other 61,438 13,673 9,941 13,726 17,611
------------ ------------ ------------ ------------- -------------
48,142,427 3,320,501 2,014,663 (7,297,611) (10,690,209)
------------ ------------ ------------ ------------- -------------
Net increase (decrease) 45,392,750 6,321,915 11,251,473 12,262,979 22,164,754
Net assets available for benefits:
Beginning of year 42,075,521 84,651,964 79,554,091 124,206,866 144,496,059
------------ ------------ ------------ ------------- -------------
End of year $ 87,468,271 $ 90,973,879 $ 90,805,564 $ 136,469,845 $ 166,660,813
============ ============ ============ ============= =============
<CAPTION>
Participant-Directed
-----------------------------------------------------------------------------------
Very Market Index Options
----------------------------
Aggressive Aggressive Style Fixed Income S&P 500
Strategy Strategy Options Index Index
-------------- ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Additions
Additions to net assets attributed to:
Contributions:
Company $ 9,701,954 $ 343,906 $ 6,836,414 $ 75,651 $ 282,156
Participants 22,644,565 910,676 17,902,451 198,512 842,274
Principal loan payments 4,661,704 146,961 2,298,510 24,888 52,407
-------------- ------------ ------------- ------------ ------------
37,008,223 1,401,543 27,037,375 299,051 1,176,837
-------------- ------------ ------------- ------------ ------------
Investment income:
Interest 82,904 680 - 202 490
Dividends 6,960,637 50,208 20,881,737 - -
Interest on loan
repayments 364,148 7,663 165,119 2,108 4,241
Net realized
and unrealized
gains (losses) 105,106,769 1,052,315 52,746,135 156,281 2,156,924
-------------- ------------ ------------- ------------ ------------
112,514,458 1,110,866 73,792,991 158,591 2,161,655
-------------- ------------ ------------- ------------ ------------
Net forfeitures (234,432) (4,109) (184,917) (28) (3,430)
-------------- ------------ ------------- ------------ ------------
Deductions
Deductions from net assets
attributed to:
Benefit payments (31,401,820) (436,048) (20,034,171) (286,192) (346,164)
Investment
management fees (922,468) (14,719) (3,312) (615) (3,185)
-------------- ------------ ------------- ------------ ------------
(32,324,288) (450,767) (20,037,483) (286,807) (349,349)
-------------- ------------ ------------- ------------ ------------
Other transactions:
Participant loans (5,068,757) (98,367) (2,496,019) (6,671) (124,765)
Net interfund transfers (39,236,796) 8,240,710 30,262,716 7,017,532 11,353,764
Other 85,955 719 65,960 140 322
-------------- ------------ ------------- ------------ ------------
(44,219,598) 8,143,062 27,832,657 7,011,001 11,229,321
-------------- ------------ ------------- ------------ ------------
Net increase (decrease) 72,744,363 10,200,595 108,440,623 7,181,808 14,215,034
Net assets available for benefits:
-------------- ------------ ------------- ------------ ------------
Beginning of year 481,720,866 - 243,408,389 - -
-------------- ------------ ------------- ------------ ------------
End of year $ 554,465,229 $ 10,200,595 $ 351,849,012 $ 7,181,808 $ 14,215,034
============== ============ ============= ============ ============
<CAPTION>
See Note 4
----------------------------------------------
AT&T Lucent NCR
International Participant Unitized Unitized Unitized
Equity Index Loans Stock Fund Stock Fund Stock Fund
-------------- ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Additions
Additions to net assets attributed to:
Contributions:
Company $ 15,094 $ - $ - $ - $ 2,076,361
Participants 39,865 - - - 4,479,660
Principal loan payments 3,922 (13,420,708) 111 - 1,479,124
----------- --------------- -------------- ------------ ------------
58,881 (13,420,708) 111 - 8,035,145
----------- --------------- -------------- ------------ ------------
Investment income:
Interest 24 - - - 38,176
Dividends - - 320,758 - -
Interest on loan
repayments 361 - (111) - 103,924
Net realized
and unrealized
gains (losses) 87,819 - (2,130,861) 23,380 18,522,923
----------- --------------- -------------- ------------ ------------
88,204 - (1,810,214) 23,380 18,665,023
----------- --------------- -------------- ------------ ------------
Net forfeitures - - - - (14,372)
----------- --------------- -------------- ------------ ------------
Deductions
Deductions from net assets
attributed to:
Benefit payments (31,480) (2,034,697) - - (1,695,640)
Investment
management fees (794) - - - (22,867)
----------- --------------- -------------- ------------ ------------
(32,274) (2,034,697) - - (1,718,507)
----------- --------------- -------------- ------------ ------------
Other transactions:
Participant loans (4,434) 14,667,900 - - (1,026,219)
Net interfund transfers 765,910 - (41,706,713) (23,241,265) 5,328,092
Other 3 - (320,758) - 70,546
----------- --------------- -------------- ------------ ------------
761,479 14,667,900 (42,027,471) (23,241,265) 4,372,419
----------- --------------- -------------- ------------ ------------
Net increase (decrease) 876,290 (787,505) (43,837,574) (23,217,885) 29,339,708
Net assets available for benefits:
Beginning of year - 23,011,264 43,837,574 23,217,885 29,288,110
----------- --------------- -------------- ------------ ------------
End of year $ 876,290 $ 22,223,759 $ - $ - $ 58,627,818
=========== =============== ============== ============ ============
<CAPTION>
Non-Participant
Directed
---------------
Short-Term
Investments Total
-------------- ----------------
<S> <C> <C>
Additions
Additions to net assets attributed to:
Contributions:
Company $ (1,508,989) $ 26,960,322
Participants - 69,979,875
Principal loan payments - -
-------------- ----------------
(1,508,989) 96,940,197
-------------- ----------------
Investment income:
Interest - 10,588,479
Dividends - 28,213,340
Interest on loan
repayments - 986,863
Net realized
and unrealized
gains (losses) - 235,828,760
-------------- ----------------
- 275,617,442
-------------- ----------------
Net forfeitures - -
-------------- ----------------
Deductions
Deductions from net assets
attributed to:
Benefit payments - (100,113,501)
Investment
management fees - (1,423,075)
-------------- ----------------
- (101,536,576)
-------------- ----------------
Other transactions:
Participant loans - -
Net interfund transfers - -
Other - 19,276
-------------- ----------------
- 19,276
-------------- ----------------
Net increase (decrease) (1,508,989) 271,040,339
Net assets available for benefits:
Beginning of year 1,508,989 1,320,977,578
-------------- ----------------
End of year $ - $ 1,592,017,917
============== ================
</TABLE>
The accompanying notes are an integral part of these financial statements
4
<PAGE>
NCR Savings Plan
Notes to Financial Statements
1. Description of the Plan
General
The NCR Savings Plan ("the Plan") is a defined contribution plan established
May 1, 1985 by NCR Corporation (the "Company") to give the Company's
employees more control over, and participation in, the accumulation of
capital for their retirement. As discussed further in Note 4, until December
31, 1996, the Company was a wholly-owned subsidiary of AT&T Corp. (AT&T).
The Plan is designed to qualify as a profit-sharing plan with a qualified
cash or deferred arrangement under Section 401(k) of the Internal Revenue
Code of 1986, as amended. It is subject to the provisions of the Employee
Retirement Income Security Act of 1974, as amended.
The Plan covers all eligible U.S. employees of the Company (other than
certain categories of part-time, temporary and intern employees) and its
domestic subsidiaries, except for employees covered by a collective
bargaining agreement.
Contributions and Funding
All eligible employees of the Company may defer a portion of their
compensation by making tax-deferred contributions, as well as after-tax
contributions to the Plan. Participants may elect to contribute up to twenty
percent of their eligible compensation; however, tax-deferred contributions
are limited to sixteen percent of eligible compensation. The maximum
contribution percentage limits vary based upon the participant's base salary.
Annual tax-deferred contributions per participant for the 1998 and 1997 Plan
years were limited to $10,000 and $9,500, respectively.
For each dollar contributed by a participant up to six percent of
compensation, the Company funds an additional matching amount. The Company's
matching contributions are seventy-five percent of the first three percent of
pay contributed by a participant and fifty percent of the next three percent
of pay contributed by a participant whether on a tax-deferred or after-tax
basis.
Vesting
Participants are immediately vested in their contributions plus actual
earnings thereon. Company matching contributions vest in increments of one-
fifth each year, over a five-year period beginning with the participant's
hire date.
5
<PAGE>
A participant becomes fully vested in their account (i) upon attainment of
age 65, (ii) upon retirement, (iii) upon termination of employment due to a
"reduction in force", (iv) in the event of death, or (v) in the event of
total and permanent disability. Upon termination of employment, a participant
is entitled to full distribution of their contributions and all vested
Company match contributions; all non-vested Company match contributions will
be forfeited. These forfeitures are reallocated to the Plan's Very
Conservative Option and used to reduce future Company contributions.
Participant Accounts
A participant may withdraw any employee tax-deferred contributions during
their employment in the case of a "hardship" (as defined by the Plan), and a
participant may withdraw after-tax employee contributions for any reason. The
participant may not withdraw any Company match contributions or any earnings
on Company match or employee contributions until they terminate employment
with the Company.
Participant Loans
Participants may borrow from the Plan, limited by restrictions set forth in
the Plan document. A fixed interest rate is applied to the loan based on the
prime rate (as reported by the Wall Street Journal) in effect on the
twentieth business day of the month, prior to the month of the transaction.
The term of the loan may be between 12 to 56 months. Upon default,
participants are considered to have received a distribution and are subject
to income taxes on the distribution amount.
Termination of the Plan
It is the present intention of the Company to continue the Plan indefinitely.
However, the Company reserves the right to terminate the Plan at any time by
action of the board of directors. No amendment or termination of the Plan may
adversely affect a participant's accrued benefit on the date of the amendment
or termination. No amendment may change the requirement that the assets of
the Savings Plan Trust (the Trust) must be used for the exclusive benefit of
the participants, the former participants and the beneficiaries.
Upon termination of the Plan, the Company may, at its option, continue the
Trust in existence or cause the Trust to be liquidated. If the Trust is
liquidated, distributions will be made to the various participants, former
participants and beneficiaries in a single lump sum promptly after
liquidation is effective. If the Trust is not liquidated, distributions will
be made to the various participants when they cease employment.
For a complete description of the Plan, participants should refer to the Plan
Prospectus.
6
<PAGE>
2. Summary of Significant Accounting Policies
Basis of Accounting
The financial statements of the Plan are prepared under the accrual basis of
accounting.
Investment Valuation and Income Recognition
All of the Plan's investments are stated at fair value, except for guaranteed
investment contracts included in the Plan's Conservative Strategy which, in
accordance with generally accepted accounting principles, are stated at
contract value. Fair values have been estimated based on quoted market
amounts of the underlying investments.
Purchases and sales of securities are recorded on a trade-date basis.
Realized gains and losses from security transactions are reported on the
average cost method.
Plan Expenses
All initial and ongoing administrative costs of the Plan are paid by the
Company (the Plan Administrator) except for a $50 participant loan
application fee, brokerage fees and commissions which are included in the
cost of investments when purchased and in determining the net proceeds on
sales of investments, and investment management fees which will be paid from
the respective assets of the investment option.
The Plan's primary investment manager is Fidelity Investments ("Fidelity").
An affiliate of Fidelity serves as the record keeper for the Plan's
participant data. Another affiliate of Fidelity serves as the trustee of the
Plan.
Payments to Withdrawing Participants
The Plan records payments to withdrawing participants at the time of
disbursement.
Rollover Contributions and Transfers
Participant rollover contributions and transfers from other defined
contribution plans are included as participant contributions in the Statement
of Changes in Net Assets Available for Benefits.
7
<PAGE>
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period.
Actual results could differ from those estimates.
Reclassifications
Certain reclassifications have been made to the 1997 financial statements to
conform with the 1998 presentation.
3. Taxes
The Company received its latest favorable determination letter dated November
6, 1995, from the Internal Revenue Service as to the qualified status of the
Plan under Section 401(a) of the Internal Revenue Code (the Code). Therefore,
the Plan's Administrator believes that the Plan was qualified and the related
Trust is exempt from federal income taxes under Section 501(a) of the Code.
Accordingly, income taxes are not provided for in the accompanying financial
statements. Participant contributions, except for those contributions which
participants elect to be tax-deferred under Section 401(k), are taxable to
the participants in the year their contributions are made.
Participants are liable for federal income taxes relative to their Section
401(k) contributions, the Company match contributions, and the earnings of
the Plan when the contributions are distributed to them.
The Plan has been amended since receiving the determination letter. However,
the Plan's Administrator and the Plan's tax counsel believe that the Plan is
designed and currently being operated in compliance with the applicable
requirements of the Internal Revenue Code.
4. Description of AT&T, Lucent and NCR Unitized Stock Funds
Prior to January 1, 1997, the Plan offered a stock fund that invested in
common stock of NCR's then parent company, AT&T. In October 1996, shares of
Lucent Technologies, Inc. ("Lucent") were distributed to shareholders of
AT&T. On December 31, 1996, shares of NCR were distributed to shareholders of
AT&T. The Plan established the Lucent and NCR Unitized Stock Funds to hold
the respective shares distributed to the Plan.
8
<PAGE>
During 1997, no new contributions were directed to the Lucent or the AT&T
Unitized Stock Funds. Amounts invested in these two funds were to be directed
into the other investment options offered under the Plan until December 31,
1997, at which time these funds were to be discontinued and any remaining
balances were to be transferred to the Very Conservative Option. The Plan
transferred the remaining balances into the Very Conservative Option on
January 3, 1998. The NCR Unitized Stock Fund continues to be a Plan
investment option.
5. Description of Investment Strategies and Other Options
The Plan offers participants a Very Conservative Option, six Investment
Strategies, Style Options (consisting of nine mutual funds), three Market
Index Options, and the NCR Unitized Stock Fund. The investment composition of
the strategies, options, and NCR Unitized Stock Fund are described below, but
the exact mix, or percentage invested in each of the underlying investments
or strategies, will vary from time to time.
Very Conservative Option
Offers a portfolio of two funds managed by Fidelity Investments; the Fidelity
Retirement Money Market Fund and the Fidelity Institutional Cash Portfolio.
Conservative Strategy
Offers a portfolio consisting of investment contracts issued by insurance
companies and banks, institutionally investable government and corporate
bonds and mortgage-backed securities, and U.S. dollar denominated money
market securities of domestic and foreign issuers. Investments include the
Fidelity Managed Investment Contract Portfolio, The BGI U.S. Debt Index Fund,
and the Fidelity Institutional Cash Portfolio. For the years ended December
31, 1998 and 1997, contracts with insurance companies held in the
Conservative Strategy had average yields of 6.84% and 6.76%, respectively.
Moderately Cautious Strategy
Offers a broad range of investment grade, interest-bearing securities issued
by the U.S. Government and its agencies, and by domestic and foreign
corporations. In addition, a portion of the portfolio will be invested in
common stocks traded in the U.S. and in the Standard & Poor's Composite Index
500 stocks. Investments include the BGI U.S. Debt Index Fund, BGI Index Fund,
the BGI Money Market Fund and the Fidelity Institutional Cash Portfolio.
9
<PAGE>
Moderate Strategy
Offers a portfolio consisting of thirty-five to fifty-five percent in common
stocks publicly traded in the U.S., five percent in securities issued on
international equity markets, with the remainder invested in a broad rage of
investment grade, fixed income securities. Investments include Fidelity U.S.
Equity Index Portfolio, BGI U.S. Debt Index Fund, BGI Russell 2000 Index
Fund, and the BGI EAFE Equity Index Fund.
Moderately Aggressive Strategy
Offers a portfolio of approximately seventy to eighty percent in U.S. and
internationally traded common stocks with the remainder consisting of a broad
range of investment grade, interest-bearing securities issued by the U.S.
Government and its agencies, and by corporations. Investments include the
Fidelity Select Market Index Fund, BGI EAFE Equity Fund, Columbus Circle
Small Cap Fund, Axe-Houghton Small Capitalization Growth Fund, and the
Fidelity Targeted Active Management - Broad Duration Fund.
Aggressive Strategy
Offers a portfolio primarily of common stocks diversified across sectors of
domestic and foreign markets. Investments include the Fidelity Magellan Fund,
Fidelity Select Market Index Fund, Fidelity Select International EAFE Index
Fund, Fidelity Aggressive Equity Portfolio, Alliance Small Capitalization
Equity Fund, Legg Mason Value Equity Fund, and the Axe-Houghton Small
Capitalization Growth Fund.
Very Aggressive Strategy
Offers a portfolio consisting entirely of stock of large corporations and
smaller companies, both domestic and foreign. Investments include Fidelity
Magellan Fund, Legg Mason Value Equity Fund, Axe-Houghton Small
Capitalization Growth Fund, Alliance Small Capitalization Equity Fund,
Fidelity Select Market Index Portfolio, and the Fidelity Select International
EAFE Index Portfolio.
Style Options
Offers a choice of the following nine retail mutual funds: Fidelity Growth
and Income Fund, Fidelity Contrafund, American Century Ultra Investors Fund,
Fidelity Puritan Fund, Fidelity Magellan Fund, Fidelity Diversified
International Fund, Alliance Quasar Fund, Janus Worldwide Fund, and Legg
Mason Value Trust. The funds are presented in the aggregate in the
accompanying financial statements. See Note 6 regarding changes in investment
strategies.
Market Index Options
Offers a choice of three index funds invested in stocks or bonds that are
represented by a published investment index. The Fixed Income Index Fund (BGI
U.S. Debt Index Fund) is composed of 55% U.S. Treasury and agency bonds, 20%
corporate bonds, and 25% in high-quality mortgages - GNMAs, FNMAs, FHLMCs,
conventional pass-through and FHA projects.
10
<PAGE>
The S&P 500 Index Fund (BGI Equity Index Fund) invests in all S&P Index
issues in their appropriate capitalization and industry weights. The
International Equity Index Fund (BGI EAFE Equity Index Fund) invests in all
of the securities in the MSCI EAFE Index - over 1,000 securities across 21
countries.
NCR Unitized Stock Fund
Offers a fund invested primarily in the shares of the Company. Portions of
the Fund may be invested by Fidelity, the manager, in short-term obligations
and money market instruments for administrative purposes.
Other
The Plan had invested in an Executive Life contract which represented a
separate account whose balance was frozen as of April 1991 due to the Chapter
11 bankruptcy filing of Executive Life's parent, First Executive Corporation.
As a result, participants could not withdraw or transfer the segregated
amounts from their accounts until the court-supervised reorganization of
Executive Life progressed.
During 1994, the Company obtained approval from the Department of Labor to
loan to the Plan the amount necessary to liquidate the participants' frozen
investment in the contract, including earnings at a reasonable interest rate
during the frozen period. Accordingly, the Company made a loan to the Plan of
approximately $3,400,000 consisting of $2,100,000 of principal and $1,300,000
of interest. Prior to the loan, Executive Life paid to the Plan $2,800,000
toward the frozen contract. All subsequent payments received from Executive
Life will be used as credit against future Company contributions.
Approximately $560,000 of payments were received by the Plan during 1995. No
payments were received in 1996, 1997 or 1998. The loan has not been recorded
in the December 31, 1998 or 1997 financial statements of the Plan, as it will
be forgiven by the Company to the extent the ultimate recovery on the
contract is less than the amount of the loan.
As of December 31, 1998, the Fidelity Select Equity Fund, Fidelity Magellan
Fund, BGI U.S. Debt Index Fund, Fidelity Growth & Income Fund, Fidelity
Contrafund, Legg Mason Small Cap Fund, and the Fidelity Institutional Cash
Portfolio, which are held as investments by some of the above investment
strategies and other options accounted for 14%, 10%, 9%, 7% , 6%, 6% and 5%,
respectively, of the total net assets available for benefits.
As of December 31, 1997, the Fidelity Select Equity Fund, Fidelity Magellan
Fund, Fidelity Broad Market Fund, Fidelity Growth & Income Fund, and the
Fidelity Contrafund, which are held as investments by some of the above
investment strategies and other options accounted for 15%, 10%, 9%, 6% and
6%, respectively, of the total net assets available for benefits.
11
<PAGE>
6. Changes in Investment Strategies
During 1997, the Plan offered a Mutual Fund Window containing six retail
mutual funds. Three of these funds - Fidelity Growth and Income Fund,
Fidelity Contrafund and American Century Ultra Investors Fund - continued to
be offered in the Plan as part of the Style Options (a new investment option
offered in 1998 containing nine mutual funds).
The remaining three mutual funds under the Mutual Fund Window - Columbia
Fixed Income Securities Fund, Fidelity Balanced Fund and Templeton Foreign
Fund -were discontinued on December 31, 1998. Amounts invested within these
funds could be directed into the other investment options offered under the
Plan until December 31, 1998, at which time, any remaining balances within
the Columbia Fixed Income Securities Fund, Fidelity Balanced Fund and
Templeton Foreign Fund were transferred to the Fixed Income Index Fund
(within the Market Index Options), Fidelity Puritan Fund and Fidelity
Diversified International Fund, respectively.
12
<PAGE>
NCR SAVINGS PLAN
Notes to Financial Statements
- --------------------------------------------------------------------------------
7. COST AND FAIR MARKET VALUES OF INVESTMENT STRATEGIES AND OTHER OPTIONS
<TABLE>
<CAPTION>
December 31, 1998
-------------------------------------------------------------------------------
Number of Price Fair Market
Investments Cost Units Per Unit Value
- ----------------------------------------------- -------------------- ----------------- --------------- --------------------
<S> <C> <C> <C> <C>
Very conservative option $ 87,014,273 87,014,273 $ 1.00 $ 87,014,273
Conservative strategy 88,800,630 5,615,991 $ 16.13 90,585,940
Moderately cautious strategy 65,057,637 3,518,506 $ 25.69 90,390,421
Moderate strategy 113,544,531 4,056,866 $ 33.57 136,188,981
Moderately aggressive strategy 107,313,252 3,980,924 $ 41.82 166,482,245
Aggressive strategy 428,469,331 10,009,203 $ 55.38 554,309,685
Very aggressive strategy 9,297,131 854,182 $ 11.82 10,096,433
Style Options:
Alliance Quasar Fund 3,269,287 119,795 $ 25.00 2,994,868
American Century Ultra Investors Fund 56,042,958 1,901,101 $ 33.41 63,515,770
Columbia Fixed Income Fund - - $ - -
Fidelity Contrafund 73,636,451 1,620,358 $ 56.79 92,020,115
Fidelity Diversifed International 11,805,023 667,130 $ 17.72 11,821,541
Fidelity Growth & Income Fund 87,158,989 2,477,210 $ 45.84 113,555,310
Fidelity Balanced Fund - - $ - -
Fidelity Magellan Fund 11,994,081 112,459 $ 120.82 13,587,330
Fidelity Puritan Fund 9,061,670 454,665 $ 20.07 9,125,124
Janus Worldwide Fund 15,204,161 347,475 $ 47.36 16,456,432
Legg Mason Value Trust 22,586,474 1,936,846 $ 14.76 28,587,844
Templeton Foreign Fund - - $ - -
Market Index Options:
Fixed Income Index 5,322,507 499,945 $ 10.84 5,419,403
S&P 500 Index 12,021,760 1,097,579 $ 12.79 14,038,031
International Equity Index 815,498 72,717 $ 12.03 874,788
AT&T Unitized Stock Fund - - $ - -
Lucent Unitized Stock Fund - - $ - -
NCR Unitized Stock Fund 44,292,952 2,504,484 $ 23.32 58,404,562
Short-term investments - - $ - -
Participant loans 22,223,759 N/A N/A 22,223,759
-------------------- --------------------
Total Investments $ 1,274,932,355 N/A N/A $ 1,587,692,855
-------------------- --------------------
<CAPTION>
December 31, 1997
--------------------------------------------------------------------------------
Number of Price Fair Market
Investments Cost Units Per Unit Value
- ----------------------------------------------- ---------------------- ----------------- ------------- --------------------
<S> <C> <C> <C> <C>
Very conservative option $ 41,691,328 41,691,328 $ 1.00 $ 41,691,328
Conservative strategy 75,125,162 5,572,809 $ 15.16 84,483,783
Moderately cautious strategy 49,230,795 3,497,898 $ 22.74 79,542,193
Moderate strategy 72,373,983 4,252,264 $ 29.15 123,953,506
Moderately aggressive strategy 96,382,908 4,145,399 $ 34.59 143,389,344
Aggressive strategy 422,942,171 10,747,368 $ 44.54 478,687,753
Very aggressive strategy - - $ - -
Style Options:
Alliance Quasar Fund - - $ - -
American Century Ultra Investors Fund 48,803,929 1,716,281 $ 27.30 46,854,477
Columbia Fixed Income Fund 4,037,119 306,498 $ 13.41 4,110,143
Fidelity Contrafund 70,808,765 1,663,401 $ 46.63 77,564,375
Fidelity Diversifed International - - $ - -
Fidelity Growth & Income Fund 71,958,333 2,220,020 $ 38.10 84,582,746
Fidelity Balanced Fund 6,833,746 461,840 $ 15.27 7,052,301
Fidelity Magellan Fund - - $ - -
Fidelity Puritan Fund - - $ - -
Janus Worldwide Fund - - $ - -
Legg Mason Value Trust - - $ - -
Templeton Foreign Fund 23,790,654 2,336,115 $ 9.95 23,244,347
Market Index Options:
Fixed Income Index - - $ - -
S&P 500 Index - - $ - -
International Equity Index - - $ - -
AT&T Unitized Stock Fund 25,585,048 1,399,279 $ 34.16 47,799,366
Lucent Unitized Stock Fund 13,415,015 582,040 $ 44.71 26,023,008
NCR Unitized Stock Fund 32,430,937 1,858,305 $ 15.65 29,082,479
Short-term investments 1,500,453 1,508,989 $ 1.00 1,508,989
Participant loans 23,011,264 N/A N/A 23,011,264
---------------------- --------------------
Total Investments $ 1,079,921,610 N/A N/A $ 1,322,581,402
---------------------- --------------------
</TABLE>
13
<PAGE>
NCR Savings Plan
Supplemental Schedules
14
<PAGE>
NCR Savings Plan
Line 27a - Schedule of Assets Held for Investment Purposes
December 31, 1998
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
Fair Market
Identity of Issue Cost Value
-------------------------------------------------------------- --------------- ---------------
<S> <C> <C>
Common/Collective Trusts:
BGI Equity Index $ 19,919,113 $ 36,404,538
BGI EAFE Index 18,176,413 24,296,695
BGI Russell 2000 14,159,677 13,970,053
BGI U.S. Debt Index Fund 125,800,066 143,733,917
Registered Investment Companies:
Alliance Quasar 3,269,287 2,994,868
Alliance Small Cap Fund 44,751,985 44,760,341
American Century Ultra Invests Fund 56,042,958 63,515,770
Axe Houghton Small Cap Fund 65,744,693 67,171,678
Columbus Circle Small Cap Fund 10,735,835 17,100,465
Fidelity Aggressive Equity Fund (a) 43,381,200 55,275,301
Fidelity Broad Market Management (a) 34,823,898 41,523,137
Fidelity Contrafund (a) 73,636,451 92,020,115
Fidelity Diversified International (a) 11,805,023 11,821,541
Fidelity Growth & Income Portfolio (a) 87,158,989 113,555,310
Fidelity Inst. Cash Portfolio (a) 94,359,795 94,359,795
Fidelity Magellan Fund Inc. (a) 101,517,916 152,432,571
Fidelity Managed Inv. Contract Portfolio (GIC's) (a) 25,089,654 25,089,654
Fidelity Puritan Fund (a) 9,061,670 9,125,124
Fidelity Retirement Money Market (a) 56,559,277 56,559,277
Fidelity Select Equity Portfolio (a) 146,357,081 220,386,885
Fidelity Select International Portfolio (a) 55,862,285 71,218,889
Fidelity U.S. Equity Index Portfolio (a) 30,783,838 47,314,789
Janus Worldwide 15,204,161 16,456,432
Legg Mason Small Cap Fund 64,791,934 86,554,944
Employer Related Investments
NCR Common Stock 43,715,397 57,827,007
Participant Loans (b) 22,223,759 22,223,759
--------------- ---------------
$1,274,932,355 $1,587,692,855
=============== ===============
</TABLE>
(a) Separate affiliates of Fidelity (party in interest) act as the trustee and
record keeper of the Plan.
(b) The participant loan interest rates are between 6% - 9%. The loan terms are
between 12 to 56 months.
15
<PAGE>
NCR Savings Plan
Line 27d - Schedule of Reportable Transactions
For the Year Ended December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(f) Expense
(a) Identity of Party (b) Description Number of (c) Purchase (d) Selling (e) Lease Incurred with
Involved of Assets Transactions Price Price Rental Transaction
<S> <C> <C> <C> <C> <C> <C>
Fidelity Investments Very Conservative 256 $ 134,642,733 - - -
Option 252 $ 89,250,345 - -
Fidelity Investments Conservative Strategy 252 52,246,409 - - -
252 51,458,422 - -
Fidelity Investments Aggressive Strategy 252 70,234,592 - - -
252 108,733,616 - -
Fidelity Investments NCR Stock Fund 252 46,334,902 - - -
252 35,536,015 - -
Fidelity Investments Fidelity Growth & Income 252 46,586,920 - - -
252 36,224,867 - -
------------- --------------- -------------- ---------- --------------
2,524 $ 350,045,556 $ 321,203,265 - -
============= =============== ============== ========== ==============
<CAPTION>
(h) Current Value
(a) Identity of Party (b) Description (g) Cost of of Assets on
Involved of Assets Assets Transaction Date (i) Net Gain
<S> <C> <C> <C> <C>
Fidelity Investments Very Conservative - $ 134,642,733 -
Option $ 89,250,345 89,250,345 -
Fidelity Investments Conservative Strategy - 52,246,409 -
47,485,425 51,458,422 $ 3,972,997
Fidelity Investments Aggressive Strategy - 70,234,592 -
70,350,589 108,733,616 38,383,027
Fidelity Investments NCR Stock Fund - 46,334,902 -
33,767,640 35,536,015 1,768,375
Fidelity Investments Fidelity Growth & Income - 46,586,920 -
31,397,521 36,224,867 4,827,346
-------------- --------------- -------------
$ 272,251,520 $ 671,248,821 $ 48,951,745
============== =============== =============
</TABLE>
16
<PAGE>
NCR Savings Plan. Pursuant to the requirements of the Securities Exchange Act of
- -----------------
1934, the NCR Corporation has duly caused this annual report to be signed by the
undersigned thereunto duly authorized.
NCR SAVINGS PLAN
By: /s/Craig Brooks
NCR Savings Plan Administrator
Date: June 28, 1999
<PAGE>
Exhibit Index
Exhibit No.
- -----------
23 Consent of PricewaterhouseCoopers LLP
<PAGE>
Exhibit 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 of the NCR Savings Plan (Registration No. 333-18803) of
our report dated June 11, 1999 appearing in this Annual Report on Form 11-K for
the years ended December 31, 1998 and 1997.
PricewaterhouseCoopers LLP
Dayton, Ohio
June 11, 1999
