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, 1998.
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, 1999 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, 1998 and 1997 4 - 8
Statements of Changes in Net Assets Available for Benefits
for the Years Ended December 31, 1998 and 1997 9 - 13
Notes to Financial Statements 14 - 17
(b) Supplemental Schedules:
Item 27a - Schedule of Assets Held for Investment
Purposes - December 31, 1998 18
Item 27d - Schedule of Reportable Transactions - For The
Year Ended December 31, 1998 19
(c) Exhibits:
Exhibit A - Independent Auditors' Consent 20
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, 1998
and 1997, and the related statements of changes in net assets available for
benefits for the years then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, 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, 1998 and 1997, 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, 1998 and Reportable Transactions for the
year ended December 31, 1998, are presented for the purpose 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 16, 1999
Omaha, Nebraska
3
<PAGE>
<TABLE>
<CAPTION>
DATA TRANSMISSION NETWORK CORPORATION 401(k) PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1998
Supplemental Information By Fund
----------------------------------------------------------------------------------------
DTN Short Term Intermediate Fixed Income Equity Stock
Common Stock Government Term Bond Mutual Fund Mutual Fund
Fund Securities Mutual Fund
----------------------------------------------------------------------------------------
Investments, At Fair
Value (Note 4):
<S> <C> <C> <C> <C> <C>
DTN Common Stock $8,626,406 $ - $ - $ - $ -
Intermediate Term Bond
Mutual Fund - - 360,699 - -
Fixed Income Mutual Fund - - - 477,817 -
Equity Stock Mutual Fund - - - - 3,042,140
Balanced Mutual Fund - - - - -
Small Cap Mutual Fund - - - - -
Templeton Foreign Fund - - - - -
Vanguard Index 500 Fund - - - - -
Vanguard US Growth Fund - - - - -
Money Market Fund 521,615 606,043 16 6,548 -
----------------------------------------------------------------------------------------
Total Investments 9,148,021 606,043 360,715 484,365 3,042,140
Cash & Cash Equivalents 1,873 2,323 1 26 9,163
----------------------------------------------------------------------------------------
Net Assets Available For
Benefits $9,149,894 $608,366 $360,716 $484,391 $3,051,303
========================================================================================
See notes to financial statements.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
DATA TRANSMISSION NETWORK CORPORATION 401(k) PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1998
(continued)
Supplemental Information By Fund
----------------------------------------------------------------------------------
Balanced Small Cap Mutual Templeton Vanguard Index
Mutual Fund Fund Foreign Fund 500 Fund
----------------------------------------------------------------------------------
Investments, At Fair
Value (Note 4):
<S> <C> <C> <C> <C>
DTN Common Stock $ - $ - $ - $ -
Intermediate Term Bond
Mutual Fund - - - -
Fixed Income Mutual Fund - - - -
Equity Stock Mutual Fund - - - -
Balanced Mutual Fund 378,825 - - -
Small Cap Mutual Fund - 346,309 - -
Templeton Foreign Fund - - 251,955 -
Vanguard Index 500 Fund - - - 449,171
Vanguard US Growth Fund - - - -
Money Market Fund 33 53 420 89
----------------------------------------------------------------------------
Total Investments 378,858 346,362 252,375 449,260
Cash & Cash Equivalents - 1 2,535 3,641
----------------------------------------------------------------------------
Net Assets Available For
Benefits $378,858 $346,363 $254,910 $452,901
============================================================================
See notes to financial statements.
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
DATA TRANSMISSION NETWORK CORPORATION 401(k) PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1998
(continued)
Supplemental Information By Fund
-----------------------------------------------------
Vanguard US Cash Transfer
Growth Fund Fund Total
------------------------------------------------------
Investments, At Fair
Value (Note 4):
<S> <C> <C> <C>
DTN Common Stock $ - $ - $ 8,626,406
Intermediate Term Bond
Mutual Fund - - 360,699
Fixed Income Mutual Fund - - 477,817
Equity Stock Mutual Fund - - 3,042,140
Balanced Mutual Fund - - 378,825
Small Cap Mutual Fund - - 346,309
Templeton Foreign Fund - - 251,955
Vanguard Index 500 Fund - - 449,171
Vanguard US Growth Fund 418,910 - 418,910
Money Market Fund 104 - 1,134,921
------------------------------------------------------
Total Investments 419,014 - 15,487,153
Cash & Cash Equivalents 7,753 (227) 27,089
======================================================
Net Assets Available For
Benefits $426,767 ($227) $15,514,242
======================================================
See notes to financial statements.
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
DATA TRANSMISSION NETWORK CORPORATION 401(k) PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1997
Supplemental Information By Fund
----------------------------------------------------------------------------------------
DTN Short Term Intermediate Fixed Income Equity Stock
Common Stock Government Term Bond Mutual Fund Mutual Fund
Fund Securities Mutual Fund
----------------------------------------------------------------------------------------
Investments, At Fair
Value (Note 4):
<S> <C> <C> <C> <C> <C>
DTN Common Stock $8,652,000 $ - $ - $ - $ -
Intermediate Term Bond
Mutual Fund - - 269,838 - -
Fixed Income Mutual Fund
- - - 320,942 -
Equity Stock Mutual Fund
- - - - 2,646,795
Balanced Mutual Fund
- - - - -
Small Cap Mutual Fund
- - - - -
Templeton Foreign Fund
- - - - -
Money Market Fund 143,067 563,653 - - 1,496
----------------------------------------------------------------------------------------
Total Investments 8,795,067 563,653 269,838 320,942 2,648,291
Contributions Receivable - - - - -
Cash & Cash Equivalents 632 2,348 297 425 4,917
----------------------------------------------------------------------------------------
Net Assets Available For
Benefits $8,795,699 $566,001 $270,135 $321,367 $2,653,208
========================================================================================
See notes to financial statements.
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
DATA TRANSMISSION NETWORK CORPORATION 401(k) PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1997
(continued)
Supplemental Information By Fund
---------------------------------------------------------------------------------------
Balanced Small Cap Mutual Templeton Cash Transfer
Mutual Fund Fund Foreign Fund Account Total
---------------------------------------------------------------------------------------
Investments, At Fair
Value (Note 4):
<S> <C> <C> <C> <C> <C>
DTN Common Stock $ - $ - $ - $ - $ 8,652,000
Intermediate Term Bond
Mutual Fund - - - - 269,838
Fixed Income Mutual Fund - - - - 320,942
Equity Stock Mutual Fund - - - - 2,646,795
Balanced Mutual Fund 81,002 - - - 81,002
Small Cap Mutual Fund - 203,868 - - 203,868
Templeton Foreign Fund - - 136,180 - 136,180
Money Market Fund - - - - 708,216
---------------------------------------------------------------------------------------
Total Investments 81,002 203,868 136,180 - 13,018,841
Contributions Receivable - - - 104,532 104,532
Cash & Cash Equivalents 66 141 1,762 277 10,865
=======================================================================================
Net Assets Available For
Benefits $81,068 $204,009 $137,942 $104,809 $13,134,238
=======================================================================================
See notes to financial statements.
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
DATA TRANSMISSION NETWORK CORPORATION 401(k) PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 1998
Supplemental Information By Fund
-------------------------------------------------------------------------------
DTN Short Term Intermediate Fixed Equity Stock
Common Stock Government Term Bond Income Mutual Fund
Fund Securities Mutual Fund Mutual Fund
-------------------------------------------------------------------------------
Net Assets Available for
Benefits, Beginning of
<S> <C> <C> <C> <C> <C>
Period $8,795,699 $566,001 $270,135 $321,367 $2,653,208
Additions:
Investment Income:
Net Appreciation
(Depreciation) in Fair
Value of Investments 452,864 (24) 6,826 10,828 (110,319)
Interest 10,623 33,291 2 43 40
Dividends 3 - 19,529 26,338 299,656
-------------------------------------------------------------------------------
Total Investment 463,490 33,267 26,357 37,209 189,377
Income (Loss)
Contributions
Employer 479,296 45,032 36,743 42,517 288,852
Employee 979,370 86,020 77,547 79,065 646,860
-------------------------------------------------------------------------------
Total Contributions 1,458,666 131,052 114,290 121,582 935,712
-------------------------------------------------------------------------------
Total Additions 1,922,156 164,319 140,647 158,791 1,125,089
Deductions:
Distributions to Plan
Participants (1,235,645) (41,833) (29,720) (23,772) (372,357)
Fees and Expenses (18,744) (3,021) (1,540) (1,716) (13,995)
Transfer of Assets (To)
From Other Funds (313,572) (77,100) (18,806) 29,721 (340,642)
-------------------------------------------------------------------------------
Net Increase (Decrease) 354,195 42,365 90,581 163,024 398,095
-------------------------------------------------------------------------------
Net Assets Available for
Benefits, End of Period $9,149,894 $608,366 $360,716 $484,391 $3,051,303
===============================================================================
See notes to financial statements.
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
DATA TRANSMISSION NETWORK CORPORATION 401(k) PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 1998
(Continued)
Supplemental Information By Fund
----------------------------------------------------------------------
Balanced Mutual Small Cap Templeton Vanguard Index
Fund Mutual Fund Foreign Fund 500 Fund
----------------------------------------------------------------------
Net Assets Available for
Benefits, Beginning of
<S> <C> <C> <C> <C>
Period $ 81,068 $204,009 $137,942 $ -
Additions:
Investment Income:
Net Appreciation
(Depreciation) in Fair
Value of Investments (8,511) (59,906) (63,254) 77,502
Interest 3 8 22 45
Dividends 20,502 17,148 28,103 -
----------------------------------------------------------------------
Total Investment Income 11,994 (42,750) (35,129) 77,547
(Loss)
Contributions
Employer 49,962 68,276 43,956 14,318
Employee 149,414 177,426 109,534 33,976
----------------------------------------------------------------------
Total Contributions 199,376 245,702 153,490 48,294
----------------------------------------------------------------------
Total Additions 211,370 202,952 118,361 125,841
Deductions:
Distributions to Plan
Participants (16,582) (47,928) (21,436) (3,192)
Fees and Expenses (957) (1,600) (208) -
Transfer of Assets (To)
From Other Funds 103,959 (11,070) 20,251 330,252
----------------------------------------------------------------------
Net Increase (Decrease) 297,790 142,354 116,968 452,901
======================================================================
Net Assets Available for
Benefits, End of Period $378,858 $346,363 $254,910 $452,901
======================================================================
See notes to financial statements.
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
DATA TRANSMISSION NETWORK CORPORATION 401(k) PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 1998
(Continued)
Supplemental Information By Fund
---------------------------------------------------
Vanguard US Cash Transfer
Growth Fund Fund Total
---------------------------------------------------
Net Assets Available for
Benefits, Beginning of
<S> <C> <C> <C>
Period $ - $104,809 $13,134,238
Additions:
Investment Income:
Net Appreciation
(Depreciation) in Fair
Value of Investments 65,179 (506) 370,679
Interest 38 - 44,115
Dividends 25,004 - 436,283
---------------------------------------------------
Total Investment Income 90,221 (506) 851,077
(Loss)
Contributions
Employer 17,766 (61,781) 1,024,937
Employee 44,982 (42,750) 2,341,444
---------------------------------------------------
Total Contributions 62,748 (104,531) 3,366,381
---------------------------------------------------
Total Additions 152,969 (105,037) 4,217,458
Deductions:
Distributions to Plan
Participants (3,208) - (1,795,673)
Fees and Expenses - - (41,781)
Transfer of Assets (To)
From Other Funds 277,006 1 -
---------------------------------------------------
Net Increase (Decrease) 426,767 (105,036) 2,380,004
===================================================
Net Assets Available for
Benefits, End of Period $426,767 ($227) $15,514,242
===================================================
See notes to financial statements.
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
DATA TRANSMISSION NETWORK CORPORATION 401(k) PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 1997
Supplemental Information By Fund
--------------------------------------------------------------------------
DTN Short Term Intermediate Fixed Equity Stock
Common Stock Government Term Bond Income Mutual Fund
Fund Securities Mutual Fund Mutual Fund
--------------------------------------------------------------------------
Net Assets Available for
Benefits, Beginning of
<S> <C> <C> <C> <C> <C>
Period $5,792,785 $625,409 $332,805 $323,371 $1,864,948
Additions:
Investment Income:
Net Appreciation
(Depreciation) in Fair
Value of Investments 1,527,463 (6,969) 2,720 10,419 147,560
Interest 11,719 34,773 17 16 89
Dividends - - 16,491 19,125 236,109
--------------------------------------------------------------------------
Total Investment Income 1,539,182 27,804 19,228 29,560 383,758
(Loss)
Contributions
Employer 439,256 58,834 37,620 43,376 284,935
Employee 792,955 94,294 58,219 80,623 580,813
--------------------------------------------------------------------------
Total Contributions 1,232,211 153,128 95,839 123,999 865,748
--------------------------------------------------------------------------
Total Additions 2,771,393 180,932 115,067 153,559 1,249,506
Deductions:
Distributions to Plan
Participants (245,855) (28,208) (21,050) (24,621) (208,472)
Fees and Expenses (21,433) (3,623) (1,971) (2,068) (14,220)
Transfer of Assets (To)
From Other Funds 498,809 (208,509) (154,716) (128,874) (238,554)
--------------------------------------------------------------------------
Net Increase (Decrease) 3,002,914 (59,408) (62,670) (2,004) 788,260
--------------------------------------------------------------------------
Net Assets Available for
Benefits, End of Period $8,795,699 $566,001 $270,135 $321,367 $2,653,208
==========================================================================
See notes to financial statements.
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
DATA TRANSMISSION NETWORK CORPORATION 401(k) PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 1997
(Continued)
Supplemental Information By Fund
--------------------------------------------------------------------------------------
Balanced Mutual Small Cap Templeton Cash Transfer
Fund Mutual Fund Foreign Fund Account Total
--------------------------------------------------------------------------------------
Net Assets Available for
Benefits, Beginning of
<S> <C> <C> <C> <C> <C>
Period $ - $ - $ - $197,846 $9,137,164
Additions:
Investment Income:
Net Appreciation
(Depreciation) in Fair
Value of Investments 3,925 13,351 (22,946) - 1,675,523
Interest 6 9 3 256 46,888
Dividends 2,339 9,272 10,383 - 293,719
--------------------------------------------------------------------------------------
Total Investment Income 6,270 22,632 (12,560) 256 2,016,130
(Loss)
Contributions
Employer 19,767 30,494 15,984 (9,510) 920,756
Employee 36,677 65,767 33,450 (13,818) 1,728,980
--------------------------------------------------------------------------------------
Total Contributions 56,444 96,261 49,434 (23,328) 2,649,736
--------------------------------------------------------------------------------------
Total Additions 62,714 118,893 36,874 (23,072) 4,665,866
Deductions:
Distributions to Plan
Participants (8,236) (11,462) (6,805) (69,859) (624,568)
Fees and Expenses (247) (532) (24) (106) (44,224)
Transfer of Assets (To)
From Other Funds 26,837 97,110 107,897 - -
--------------------------------------------------------------------------------------
Net Increase (Decrease) 81,068 204,009 137,942 (93,037) 3,997,074
======================================================================================
Net Assets Available for
Benefits, End of Period $81,068 $204,009 $137,942 $104,809 $13,134,238
======================================================================================
See notes to financial statements.
</TABLE>
13
<PAGE>
DATA TRANSMISSION NETWORK CORPORATION 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998 AND 1997
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.
Effective January 1, 1998, all full-time employees who have completed
90 days 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 after the participant has
completed one year of service, 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 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 ten 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; an Equity Stock Mutual Fund investing in
common stock and other equity investments; a Balanced Mutual Fund
investing in common stocks and investment grade fixed income
securities; a Small Cap Mutual Fund investing primarily in common stock
of small capitalization companies; a Templeton Foreign Fund investing
in stocks and debt obligations of companies and governments outside the
United States; a Vanguard Index 500 Fund investing in stocks that make
up the Standard & Poor's 500 Composite Stock Price Index; and a
Vanguard US Growth Fund investing in large, high-quality, seasoned U.S.
companies with records of exceptional growth and above-average
prospects for future growth.
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.
14
<PAGE>
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.
Fees and Expenses
All administrative expenses of the Plan are paid out of the Plan
assets.
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, Equity Stock Mutual Fund, Balanced Mutual Fund,
Small Cap Mutual Fund, Templeton Foreign Fund, Vanguard Index 500 Fund,
and Vanguard US Growth 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 $0 and $277 at December 31, 1998 and 1997,
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. 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.
15
<PAGE>
4. Investments
The following table presents the fair value of investments at December
31, 1998 and 1997. Investments that represent five percent or more of
the Plan's net assets are separately identified:
<TABLE>
<CAPTION>
1998 1997
-----------------------------------------------------------------------
Investments at Fair Value as Determined by Number of Number of
Quoted Market Price Shares/Units or Fair Value Shares/Units or Fair Value
Principal Amount Principal Amount
--------------------------------------------------------------------------------------------------------------------
Data Transmission Network
<S> <C> <C> <C> <C>
Corporation Common Stock 298,750.000 $8,626,406 309,000.000 $8,652,000
Mutual Funds:
First Omaha Balanced Mutual Fund 32,461.470 378,825 7,013.145 81,002
First Omaha Equity Stock Mutual Fund 211,113.147 3,042,140 179,809.439 2,646,795
First Omaha Fixed Income Mutual Fund 44,489.454 477,817 30,741.600 320,942
First Omaha Intermediate Term Bond
Mutual Fund 35,362.683 360,699 27,092.196 269,838
First Omaha Small Cap Mutual Fund 30,538.741 346,309 16,574.640 203,868
Templeton Foreign Fund 30,030.364 251,955 13,686.404 136,180
Vanguard Index 500 Fund 3,941.829 449,171 - -
Vanguard US Growth Fund 11,173.920 418,910 - -
Money Market Fund - 1,134,921 - 708,216
----------- -----------
$15,487,153 $13,018,841
=========== ===========
</TABLE>
5. 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,
1998 1997
--------------------------------
Net Assets Available For Benefits Per
<S> <C> <C>
The Financial Statements $15,514,242 $13,134,238
Amounts Allocated to Withdrawing Participants 0 (277)
--------------------------------
Net Assets Available for Benefits Per
the Form 5500 $15,514,242 $13,133,961
================================
</TABLE>
16
<PAGE>
The following is a reconciliation of distributions to plan participants per
the financial statements to the Form 5500.
Year Ended
December 31, 1998
------------------
Distributions to Plan Participants Per The Financial
Statements $1,795,673
Add: Amounts Allocated To Withdrawing Participants At
Current Year End 0
Less: Amounts Allocated to Withdrawing
Participants At Prior Year End (277)
===========
Distributions to Plan Participants Per the Form 5500 $1,795,396
===========
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.
6. 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.
17
<PAGE>
<TABLE>
<CAPTION>
DATA TRANSMISSION NETWORK CORPORATION 401(k) PLAN
SUPPLEMENTAL SCHEDULES
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1998
Column B Column C Column D Column E
Identity of Issue, Borrower, Lessor or Description of Investment Including Collateral, Rate of Cost Current Value
Similar Party Interest, Maturity Date, Par or Maturity Value
- ------------------------------------------------------------------------------------------------------------------------------------
Data Transmission Network
<S> <C> <C> <C>
Corporation Common Stock* 298,750.000 shares $3,446,850 $8,626,406
First Omaha Balance Mutual Fund* 32,461.47 units 387,755 378,825
First Omaha Equity Stock Mutual Fund* 211,113.147 units 3,122,792 3,042,140
First Omaha Fixed Income Mutual Fund* 44,489.454 units 457,514 477,817
First Omaha Intermediate Term Bond
Mutual Fund* 35,362.683 units 353,219 360,699
First Omaha Small Cap Mutual Fund* 30,538.741 units 366,032 346,309
Templeton Foreign Fund 30,030.364 units 295,606 251,955
Vanguard Index 500 Fund 3,941.829 units 375,670 449,171
Vanguard US Growth Fund 11,173.92 units 358,907 418,910
Money Market Fund Short-term Investment Fund 1,134,921 1,134,921
========== ==========
Total Investments $10,299,266 $15,487,153
=========== ===========
*Represents a Party-In-Interest
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
DATA TRANSMISSION NETWORK CORPORATION 401(k) PLAN
SUPPLEMENTAL SCHEDULES
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1998
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 of Sales Total Dollar Value Total Dollar Realized
Identity of Party Involved Purchases of Purchases Value of Sales Gain or
(Loss)
- ------------------------------------------------------------------------------------------------------------------------------------
Data Transmission Network Corporation
<S> <C> <C> <C> <C> <C>
Common Stock* 8 31 $ 221,125 $ 698,289 $622,772
First Omaha Equity Stock Mutual Fund* 63 38 1,474,527 973,776 131,107
First Omaha Money Market Fund* - - 3,727,227 3,300,518 -
*Represents a Party-In-Interest
</TABLE>
19
<PAGE>
Exhibit A
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Post-Effective Amendment No. 1
to Registration Statement No. 33-50412 and Registration Statement No. 333-37999
on Forms S-8 of our report dated June 16, 1999, appearing in this Annual Report
on Form 11-K of the Data Transmission Network Corporation 401(k) Plan for the
year ended December 31, 1998.
DELOITTE & TOUCHE LLP
Omaha, Nebraska
June 16, 1999
20
