United States
Securities and Exchange Commission
Washington, D.C. 20549
Form 11-K
( X ) Annual Report Pursuant To Section 15(d) Of The Securities and Exchange
Act of 1934
For the year ended December 31, 1996.
or
( ) Transition Report Pursuant to Section 15(d) Of The Securities Exchange
Act of 1934
Commission File Number 0-15405 or 33-50412
DATA TRANSMISSION NETWORK CORPORATION
401(k) PLAN
-------------------------------------
Full Title of the Plan
DATA TRANSMISSION NETWORK CORPORATION
9110 W. Dodge Road, Suite 200
Omaha, NE 68114
----------------------------------------
Name of Issuer of Securities and Address
of Principal Executive Office
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this annual report to be signed on its behalf by the undersigned hereunto
duly authorized.
Date: June 25, 1997 Name of Plan: Data Transmission Network
Corporation 401(k) Plan
Signature: /s/ Greg T. Sloma
---------------------------
Greg T. Sloma
Plan Administrator
-1-
<PAGE>
DATA TRANSMISSION NETWORK CORPORATION 401(k) PLAN
TABLE OF CONTENTS
(a) Financial Statements:
Independent Auditors' Report 3
Statements of Net Assets Available for
Benefits as of December 31, 1996 and 1995 4 - 5
Statements of Changes in Net Assets Available for Benefits
for the Years Ended December 31, 1996 and 1995 6 - 7
Notes to Financial Statements 8 - 11
(b) Supplemental Schedules:
Item 27a - Schedule of Assets Held for Investment
Purposes - December 31, 1996 12
Item 27d - Schedule of Reportable Transactions - For The
Year Ended December 31, 1996 13
(c) Exhibits:
Exhibit A - Independent Auditors' Consent 14
REQUIRED INFORMATION
The Plan financial statements and schedules are prepared in accordance with the
financial reporting requirements of ERISA and are included herein as listed in
the Table of Contents shown above.
-2-
<PAGE>
INDEPENDENT AUDITORS' REPORT
Data Transmission Network Corporation 401(k) Plan
Data Transmission Network Corporation
Omaha, Nebraska
We have audited the accompanying statements of net assets available for benefits
of the Data Transmission Network Corporation 401(k) Plan as of December 31, 1996
and 1995, and the related statement of changes in net assets available for
benefits for the years then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Data Transmission Network
Corporation 401(k) Plan as of 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.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of Assets Held
for Investment Purposes at December 31, 1996 and Reportable Transactions for the
year ended December 31, 1996, are presented for purposes of additional analysis
and are not a required part of the basic financial statements, but are
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The supplemental information by fund in the statements of
net assets available for benefits and the statements of changes in net assets
available for benefits is presented for the purpose of additional analysis
rather than to present the net assets available for benefits and changes in net
assets available for benefits of the individual funds. The supplemental
schedules and supplemental information by fund are the responsibility of the
Plan's management. Such supplemental schedules and supplemental information by
fund have been subjected to the auditing procedures applied in our audits of the
basic financial statements and, in our opinion, are fairly stated in all
material respects when considered in relation to the basic financial statements
taken as a whole.
Deloitte & Touche LLP
June 5, 1997
Omaha, Nebraska
-3-
<PAGE>
<TABLE>
<CAPTION>
DATA TRANSMISSION NETWORK CORPORATION 401(k) PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1996
Supplemental Information By Fund
------------------------------------------------------------------------------------
DTN Short Term Intermediate Cash
Common Government Term Bond Fixed Income Equity Stock Transfer
Stock Fund Securities Mutual Fund Mutual Fund Mutual Fund Account Total
----------- ---------- ------------ ------------ ------------ -------- -----------
Investments, At
Fair Value (Note 5):
<S> <C> <C> <C> <C> <C> <C> <C>
DTN Common
Stock $ 5,729,618 $ - $ - $ - $ - $ - $ 5,729,618
U.S. Treasury
Bills/Notes - 387,850 - - - - 387,850
Intermediate Term
Bond Mutual Fund - - 332,805 - - - 332,805
Fixed Income
Mutual Fund - - - 323,371 - - 323,371
Equity Stock
Mutual Fund - - - - 1,864,948 - 1,864,948
Money Market Fund 63,167 236,351 - - - - 299,518
----------- --------- --------- --------- ----------- -------- -----------
Total Investments 5,792,785 624,201 332,805 323,371 1,864,948 - 8,938,110
Contributions Receivable 127,860 127,860
Cash & Cash
Equivalents - 1,208 - - - 69,986 71,194
----------- --------- --------- --------- ----------- -------- -----------
Net Assets Available
For Benefits $ 5,792,785 $753,269 $ 332,805 $ 323,371 $ 1,864,948 $ 69,986 $ 9,137,164
=========== ========= ========= ========= =========== ======== ===========
</TABLE>
See Notes To Financial Statements.
-4-
<PAGE>
<TABLE>
<CAPTION>
DATA TRANSMISSION NETWORK CORPORATION 401 (k) PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1995
Supplemental Information By Fund
-------------------------------------------------------------------------------------
DTN Short Term Intermediate Cash
Common Government Term Bond Fixed Income Equity Stock Transfer
Stock Fund Securities Mutual Fund Mutual Fund Mutual Fund Account Total
----------- ---------- ------------ ------------ ------------ -------- -----------
Investments, At
Fair Value (Note 5):
<S> <C> <C> <C> <C> <C> <C> <C>
DTN Common
Stock $ 3,890,750 $ - $ - $ - $ - $ - $ 3,890,750
U.S. Treasury
Bills/Notes - 394,182 - - - - 394,182
Intermediate Term
Bond Mutual Fund - - 193,516 - - - 193,516
Fixed Income
Mutual Fund - - - 239,770 - - 239,770
Equity Stock
Mutual Fund - - - - 858,285 - 858,285
Money Market Fund 138,197 185,385 - - - - 323,582
----------- ---------- --------- --------- ----------- -------- -----------
Total Investments 4,028,947 579,567 193,516 239,770 858,285 - 5,900,085
Contributions Receivable 120,776 120,776
Cash & Cash
Equivalents 15,835 - - - 15,835 34,382 66,052
----------- ---------- --------- --------- ----------- -------- -----------
Net Assets Available
For Benefits $ 4,044,782 $ 700,343 $ 193,516 $ 239,770 $ 874,120 $ 34,382 $ 6,086,913
=========== ========= ========= ========= =========== ======== ===========
</TABLE>
See Notes To Financial Statements.
-5-
<PAGE>
<TABLE>
<CAPTION>
DATA TRANSMISSION NETWORK CORPORATION 401(k) PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 1996
Supplemental Information By Fund
---------------------------------------------------------------------------------------
DTN Short Term Intermediate Cash
Common Government Term Bond Fixed Income Equity Stock Transfer
Stock Fund Securities Mutual Fund Mutual Fund Mutual Fund Account Total
----------- ----------- ------------ ------------ ------------ --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Assets Available
for Benefits,
Beginning of Period $4,044,782 $700,343 $193,516 $ 239,770 $ 874,120 $ 34,382 $ 6,086,913
Additions:
Investment Income:
Net Appreciation
(Depreciation) in
Fair Value of
Investments 1,465,830 4,681 (3,699) (13,645) 81,080 346 1,534,593
Interest 5,665 28,852 97 136 237 728 35,715
Dividends - - 12,284 14,570 164,902 - 191,756
----------- --------- --------- ---------- ----------- --------- -----------
Total Investment
Income 1,471,495 33,533 8,682 1,061 246,219 1,074 1,762,064
Contributions:
Employer 323,990 54,771 31,786 42,249 217,182 - 669,978
Employee 563,957 95,370 44,673 66,819 384,339 - 1,155,158
----------- --------- --------- ---------- ----------- --------- -----------
Total Contributions 887,947 150,141 76,459 109,068 601,521 - 1,825,136
----------- --------- --------- ---------- ----------- --------- -----------
Total Additions 2,359,442 183,674 85,141 110,129 847,740 1,074 3,587,200
Distributions to Plan
Participants (186,170) (26,745) (21,774) (58,379) (143,041) (67,547) (503,656)
Fees and Expenses (15,833) (6,210) (1,150) (1,598) (8,364) (138) (33,293)
Transfer of Assets (To)
From Other Funds (409,436) (97,793) 77,072 33,449 294,493 102,215 -
----------- --------- --------- ---------- ----------- --------- -----------
Net Increase 1,748,003 52,926 139,289 83,601 990,828 35,604 3,050,251
----------- --------- --------- ---------- ----------- --------- -----------
Net Assets Available
for Benefits, End of
Period $5,792,785 $753,269 $332,805 $ 323,371 $1,864,948 $ 69,986 $9,137,164
=========== ========= ========= ========== =========== ========= ===========
</TABLE>
See Notes To Financial Statements.
-6-
<PAGE>
<TABLE>
<CAPTION>
DATA TRANSMISSION NETWORK CORPORATION 401(k) PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 1995
Supplemental Information By Fund
--------------------------------------------------------------------------------------
DTN Short Term Intermediate Cash
Common Government Term Bond Fixed Income Equity Stock Transfer
Stock Fund Securities Mutual Fund Mutual Fund Mutual Fund Account Total
----------- ----------- ------------ ------------ ------------ -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Assets Available
for Benefits,
Beginning of Period $1,127,573 $368,284 $133,757 $ 186,459 $ 453,345 $207,759 $2,477,177
Additions:
Investment Income:
Net Appreciation
(Depreciation) in
Fair Value of
Investments 2,420,000 7,228 10,163 23,754 92,793 - 2,553,938
Interest 11,292 12,491 6 3 16 3,149 26,957
Dividends - - 9,474 12,525 58,714 26,957 80,920
----------- --------- --------- ---------- ----------- --------- -----------
Total Investment
Income 2,431,292 19,719 19,643 36,282 151,523 3,356 2,661,815
Contributions:
Employer 235,915 58,158 25,605 26,165 138,992 3,263 488,098
Employee 368,205 85,804 36,194 42,280 246,472 5,251 784,206
----------- --------- --------- ---------- ----------- --------- -----------
Total Contributions 604,120 143,962 61,799 68,445 385,464 8,514 1,272,304
----------- --------- --------- ---------- ----------- --------- -----------
Total Additions 3,035,412 163,681 81,442 104,727 536,987 11,870 3,934,119
Distributions to Plan
Participants (24,122) (148) (303) (6,239) (18,842) (274,729) (324,383)
Transfer of Assets (To)
From Other Funds (94,081) 168,526 (21,380) (45,177) (97,370) 89,482 -
----------- --------- --------- ---------- ----------- --------- -----------
Net Increase
(Decrease) 2,917,209 332,059 59,759 53,311 420,775 (173,377) 3,609,736
----------- --------- --------- ---------- ----------- --------- -----------
Net Assets Available
for Benefits, End of
Period $4,044,782 $700,343 $193,516 $ 239,770 $ 874,120 $ 34,382 $6,086,913
=========== ========= ========= ========== =========== ========= ===========
</TABLE>
See Notes To Financial Statements.
-7-
<PAGE>
DATA TRANSMISSION NETWORK CORPORATION 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996 AND 1995
1. Description of the Plan
The following brief description of the Data Transmission Network
Corporation 401(k) Plan (the Plan) is provided for general information
only. Participants should refer to the Plan Agreement for more complete
information.
General - The Plan, which first became effective on July 1, 1988, was
established to provide certain employees of Data Transmission Network
Corporation (the Company or DTN) a formal plan to save for retirement.
All full-time employees who have completed one year of service are
eligible to participate in the Plan, although participation by eligible
employees is voluntary. The Plan is administered by the Company. The
Trustee for the Plan is First National Bank of Omaha. The Plan is
subject to the provisions of the Employee Retirement Income Security
Act of 1974, as amended (ERISA).
Contributions - Each participant may, subject to the maximum
limitations under ERISA, authorize the Company to reduce their
compensation by a percentage between 1/2% and 15%, and have such amount
contributed to the Plan on their behalf as a basic contribution.
Currently, the Company will make a matching contribution equal to 100%
of the participant's basic contribution, but such matching contribution
shall not exceed 4% of the participant's compensation. The Company may
make discretionary contributions in addition to the matching
contributions mentioned above. The Company has elected not to make any
discretionary contributions since the Plan's inception. The Company
forwards all participant basic contributions and matching contributions
to the Trustee at the end of each calendar month.
The Plan permits participants to rollover qualified contributions from
other qualified plans into the Plan.
Contributions are invested at the participant's discretion in one or
more of five funds: a DTN Common Stock Fund consisting of common stock
of the Company; a Short Term Government Securities Fund consisting of
U.S. Treasury Bills and other money market type investments; an
Intermediate Term Bond Mutual Fund investing primarily in government
and corporate bonds; a Fixed Income Mutual Fund investing in
longer-term corporate bonds; and an Equity Stock Mutual Fund investing
in common stock and other equity investments.
A participant's basic contributions are made on a pre-tax basis, i.e.,
excluded from gross income for the participant's personal tax purposes.
Such contributions are subject to social security taxes. Amounts
contributed by the Company are deductible currently by the Company. A
participant does not become subject to federal income taxes on basic
contributions or on the amount of Company contributions and Plan
earnings until such amounts are withdrawn or distributed. The tax
consequences of distributions to participants will vary depending on
the circumstances at the time of distribution. If a participant does
not direct his distribution at termination to another qualified plan,
the distribution will be subject to a 20% tax/penalty.
Vesting - All participants are 100% vested in their basic, matching and
rollover contributions at all times.
Distributions - The normal form of benefit for a participant who is
terminating or retiring is a lump sum payment in Company common stock,
cash or both. Retiring participants may elect installment payments
generally over their assumed life expectancy.
-8-
<PAGE>
Plan Participation - The number of employees participating in the
various investment funds at December 31, 1996 and 1995 were as follows:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
DTN Common Stock Fund 399 267
Short Term Government Securities Fund 101 80
Intermediate Term Bond Mutual Fund 118 78
Fixed Income Mutual Fund 158 88
Equity Stock Mutual Fund 356 233
Cash Transfer Account 12 6
</TABLE>
Plan Termination - Although it has not expressed any intent to do so,
the Company has the right under the Plan to discontinue it's matching
contributions at any time and to terminate the Plan subject to the
provisions of ERISA. In the event of plan termination, participants
will remain 100 percent vested in their accounts.
2. Summary of Significant Accounting Policies
Investments in common stock of DTN are recorded at fair value as
determined by the closing bid price quoted on the National Association
of Securities Dealers Automated Quotation System (NASDAQ- NMS) on the
last business day of the year.
Investments in U.S. Treasury Bills within the Short Term Government
Securities Fund are recorded at fair market value based on quoted bond
prices. Investments in the Intermediate Term Bond Mutual Fund, Fixed
Income Mutual Fund and Equity Stock Mutual Fund are recorded at the net
asset value of the mutual fund as quoted by each mutual fund on the
last business day of the year, which approximates fair value.
Net appreciation (depreciation) in the fair value of investments is
based upon the fair value of the investments at the beginning of the
year or cost, if purchased during the year.
Interest and dividend income are recorded on the accrual basis.
The Plan's policy is to record benefit payments upon distribution of
balances to participants. Benefits due and unpaid to terminated
participants were $69,986 and $34,382 at December 31, 1996 and 1995,
respectively.
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 revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
3. Fees and Expenses
Beginning in 1996, all administrative expenses of the Plan are being
paid out of the Plan assets. Expenses of the Plan were paid by the
Company for 1995.
4. Income Tax Status
The Plan obtained its latest determination letter on October 20, 1992,
in which the Internal Revenue Service stated that the Plan, as then
designed, was in compliance with the applicable requirements of the
Internal Revenue Code. The Plan has been amended since receiving the
determination letter. However, the plan administrator believes that the
Plan is currently designed and being operated in compliance with the
applicable requirements of the Internal Revenue Code. Therefore, no
provision for income taxes has been included in the Plan's financial
statements.
-9-
<PAGE>
5. Investments
The following table presents the fair value of investments at December
31, 1996 and 1995. Investments that represent five percent or more of
the Plan's net assets are separately identified:
<TABLE>
<CAPTION>
1996 1995
---------------------------------- -----------------------------------
Investments At Number of Number of
Fair Value As Shares/Units Shares/Units
Determined By or Principal or Principal
Quoted Market Price Amount Fair Value Amount Fair Value
- ------------------------- ------------ ---------- ------------ -------------
<S> <C> <C> <C> <C>
Data Transmission Network
Corporation Common Stock 257,500 $ 5,729,618 237,000 (1) $ 3,890,750
Mutual Funds:
First Omaha Intermediate
Term Bond Mutual Fund 33,688.237 332,805 19,255.335 193,516
First Omaha Equity Market Fund 137,795.466 1,864,948 67,211.077 858,285
First Omaha Fixed Income Fund 31,948.711 323,371 22,856.983 239,770
U. S. Treasury Bills/Notes:
$50,000 face value dated 01-12-95,
due 01-11-96 49,926
$50,000 face value dated 03-09-95,
due 03-07-96 49,528
$100,000 face value dated 11-09-95,
due 05-09-96 98,170
$100,000 face value dated 10-19-95,
due 10-17-96 95,963
$100,000 face value dated 08-31-94,
due 08-31-96 100,594
$100,000 face value dated 03-07-96,
due 03-06-97 99,100
$100,000 face value dated 06-27-96,
due 06-26-97 97,490
$100,000 face value dated 09-19-96,
due 09-18-97 96,270
$100,000 face value dated 12-12-96,
due 12-11-97 94,990
Money Market Fund
299,518 323,583
---------- ----------
$8,938,110 $5,900,085
========== ==========
<FN>
(1) Adjusted for 3-for-1 stock split effectuated on June 28, 1996 for shares of record June 14, 1996.
</FN>
</TABLE>
-10-
<PAGE>
6. Reconciliation of Financial Statements to Form 5500
The following is a reconciliation of net assets available for benefits
per the financial statements to the Form 5500.
<TABLE>
<CAPTION>
December 31,
1996 1995
----------- ------------
<S> <C> <C>
Net Assets Available For Benefits Per
The Financial Statements $9,137,164 $ 6,086,913
Amounts Allocated to Withdrawing Participants (69,986) (34,382)
----------- ------------
Net Assets Available for Benefits Per
the Form 5500 $9,067,178 $ 6,052,531
=========== ============
</TABLE>
The following is a reconciliation of distributions to plan participants
per the financial statements to the Form 5500.
<TABLE>
<CAPTION>
Year Ended
December 31,
1996
<S> <C>
Distributions to Plan Participants Per The Financial Statements $ 503,656
Add: Amounts Allocated To Withdrawing Participants At
December 31, 1996 69,986
Less: Amounts Allocated to Withdrawing Participants At
December 31, 1995 (34,382)
----------
Distributions to Plan Participants Per the Form 5500 $ 539,260
==========
</TABLE>
Amounts allocated to withdrawing participants are recorded on the Form
5500 for benefit claims that have been approved for payment at December
31 but not yet paid as of that date.
7. Related Party Transactions
Certain Plan investments are shares of mutual funds managed by First
National Bank of Omaha. First National Bank of Omaha is the trustee as
defined by the Plan and, therefore, these transactions qualify as
party-in-interest.
The Plan has an investment in DTN common stock. DTN is the Plan sponsor
and, therefore, these transactions qualify as party-in-interest.
-11-
<PAGE>
<TABLE>
<CAPTION>
DATA TRANSMISSION NETWORK CORPORATION 401(k) PLAN
SUPPLEMENTAL SCHEDULES
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1996
Column B Column C Column D Column E
Description of Investment Including
Identity of Issue, Borrower, Collateral, Rate of Interest, Maturity Current
Lessor or Similar Party Date, par or Maturity Value Cost Value
- ---------------------------- ------------------------------------------------ ----------- -----------
<S> <C> <C> <C>
Data Transmission Network
Corporation Common Stock* 257,500 shares $ 1,905,692 $ 5,729,618
U.S. Treasury Bill $100,000 face value dated 03-07-96, due 03-06-97 94,921 99,100
U.S. Treasury Bill $100,000 face value dated 06-27-96, due 06-26-97 95,589 97,490
U.S. Treasury Bill $100,000 face value dated 09-19-96, due 09-18-97 94,368 96,270
U.S. Treasury Bill $100,000 face value dated 12-12-96, due 12-11-97 94,863 94,990
First Omaha Intermediate Term 33,688.237 units 330,953 332,805
Bond Mutual Fund*
First Omaha Equity Mutual Fund* 137,795.466 units 1,751,475 1,864,948
First Omaha Fixed Income Fund* 31,948.711 units 323,374 323,371
Money Market Fund Short-Term Investment Fund 299,517 299,518
---------- ----------
Total Investments $4,990,752 8,938,110
========== ==========
<FN>
*Represents a Party-In-Interest
</FN>
</TABLE>
-12-
<PAGE>
<TABLE>
<CAPTION>
DATA TRANSMISSION NETWORK CORPORATION 401(k) PLAN
SUPPLEMENTAL SCHEDULES
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1996
Series Transactions, When Aggregated, Involving an Amount in
Excess of Five Percent of the Current Value of Plan Assets
Column A Column C Column D Column E Column F Column G
Number of Number Total Dollar Total Dollar Realized Gain
Identity of Party Involved Purchases of Sales Value of Purchase Value of Sales or (Loss)
- --------------------------------------------------- --------- -------- ----------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
Data Transmission Network Corporation Common Stock* 13 8 $ 505,958 $ 131,958 $(2,958)
U.S. Treasury Bills/Notes:
First Omaha Equity Mutual Fund* 40 22 1,201,139 264,002 11,555
First Omaha Fixed Income Mutual Fund* 31 14 262,714 174,675 (9,209)
<FN>
*Represents Party-In-Interest
</FN>
</TABLE>
-13-
<PAGE>
Exhibit A
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement 33-50412
on Form S-8 of our report dated June 5, 1997, appearing in this Annual Report on
Form 11-K of the Data Transmission Network Corporation 401(k) Plan for the year
ended December 31, 1996.
DELOITTE & TOUCHE LLP
Omaha, Nebraska
June 5, 1997
-14-
