<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 (NO FEE REQUIRED).
For the fiscal year ended DECEMBER 30, 1996
----------------------------
OR
[_] TRANSITION REPORT PURSUANT TO 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
(NO FEE REQUIRED).
For the transition period from _________________ to _________________
Commission file number 33-47234, 33-48578, 33-82826, 33-87338,
----------------------------------------
33-90992, 33-62921, 33-98724, 33-99882, 33-74568, 33-66656
----------------------------------------------------------
FIRST DATA CORPORATION
----------------------------------------------------
(Exact name of registrant as specified in its charter)
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
FIRST DATA CORPORATION INCENTIVE SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
FIRST DATA CORPORATION
401 HACKENSACK AVENUE
HACKENSACK, NEW JERSEY 07601
<PAGE>
FIRST DATA CORPORATION
INCENTIVE SAVINGS PLAN
ANNUAL REPORT ON FORM 11-K
INDEX
The following financial statements and supplemental schedules of the First Data
Corporation Incentive Savings Plan, together with the independent auditors'
report thereon, are filed herewith:
<TABLE>
<CAPTION>
PAGE
NUMBER
------
<S> <C>
FINANCIAL STATEMENTS
- --------------------
Independent Auditors' Report 1
Statements of Net Assets Available for Plan Benefits at
December 30, 1996 and 1995 2
Statements of Changes in Net Assets Available for Plan
Benefits for the years ended December 30, 1996 4
Notes to Financial Statements 6
Financial Statement Schedules
- -----------------------------
All schedules under Rule 6A-05 of Regulation S-X are omitted
because the information is presented in the financial statements
or notes thereto.
Schedules of Assets Held for Investment Purposes as of
December 30, 1996, as required under the Employee Retirement
Income Security Act of 1974 ("ERISA") 13
Schedules of Reportable Transactions for the year ended
December 30, 1996, as required by ERISA 15
THE FOLLOWING EXHIBIT IS FILED HEREWITH:
EXHIBIT
- -------
23.1 Independent Auditors' Consent 18
</TABLE>
ii
<PAGE>
First Data Corporation Incentive Savings Plan
Financial Statements and Supplemental Information
Year ended December 30, 1996
and as of December 30, 1995
CONTENTS
<TABLE>
<CAPTION>
<S> <C>
Report of Independent Auditors............................................... 1
Financial Statements
Statement of Net Assets Available for Plan Benefits as of December 30, 1996.. 2
Statement of Net Assets Available for Plan Benefits as of December 30, 1995.. 3
Statement of Changes in Net Assets Available for Plan Benefits for the
Year Ended December 30, 1996................................................ 4
Notes to Financial Statements................................................ 6
Supplemental Information
Schedule of Assets Held for Investment as of December 30, 1996............... 13
Schedule of Reportable Transactions.......................................... 15
</TABLE>
Schedules of party-in-interest transactions for the year ended December 30,
1996 have not been presented because there were no party-in-interest
transactions which were prohibited by the Employee Retirement Income
Security Act of 1974 Section 406 and for which there are no statutory or
administrative exemptions.
<PAGE>
Report of Independent Auditors
Employee Benefits Administration
and Investment Committee
First Data Corporation
We have audited the accompanying statements of net assets available for plan
benefits of the First Data Corporation Incentive Savings Plan as of December 30,
1996 and 1995, and the related statement of changes in net assets available for
plan benefits for the year ended December 30, 1996. 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, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the First
Data Corporation Incentive Savings Plan at December 30, 1996 and 1995, and the
change in its net assets available for plan benefits for the year ended December
30, 1996, in conformity with generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedules
of Assets Held for Investment as of December 30, 1996 and Reportable
Transactions for the year then ended, are presented for purposes of complying
with the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974, and are
not a required part of the basic financial statements. The Fund Information in
the statements of net assets available for plan benefits and the statement of
changes in net assets available for plan 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 plan benefits of each fund.
The supplemental schedules and Fund Information 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 in relation to the
basic financial statements taken as a whole.
/s/ Ernst & Young LLP
Ernst & Young LLP
New York, New York
June 23, 1997
<PAGE>
First Data Corporation Incentive Savings Plan
Statement of Net Assets Available for Plan Benefits
December 30, 1996
<TABLE>
<CAPTION>
Cash AIM Templeton
Management Balanced Index Growth Constellation Foreign Bond
Fund Fund Fund Fund Fund Fund Fund
------------ ------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Investments at Fair Value:
Money market fund $ 974,650 $ 7,477 $ 5,480 $ -- $ -- $ -- $ --
Shares in registered
investment companies 101,846,662 59,102,524 79,799,544 9,023,614 7,909,106 4,815,856 2,159,512
Common Collective Trusts 35,793,310 -- -- -- -- -- --
Annuity contracts, at
contract value 2,122,404 -- -- -- -- -- --
First Data Corporation
common shares -- -- -- -- -- -- --
Promissory notes from
participants -- -- -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------ ------------
Total investments 140,737,026 59,110,001 79,805,024 9,023,614 7,909,106 4,815,856 2,159,512
Receivables:
Employer contributions
receivable 433,196 223,382 303,713 109,552 80,383 47,284 22,697
Participant contributions
receivable 443,932 186,070 292,559 149,985 104,762 61,683 30,646
Dividends and other
receivables 209,513 1,797 -- -- -- -- 100,000
------------ ------------ ------------ ------------ ------------ ------------ ------------
Total Receivables 1,086,641 411,249 596,272 259,537 185,145 108,967 153,343
Liabilities:
Accrued liabilities -- -- 18,526 95,083 33,794 25,107 126,202
Net assets available for ------------ ------------ ------------ ------------ ------------ ------------ ------------
plan benefits $141,823,667 $ 59,521,250 $ 80,382,770 $ 9,188,068 $ 8,060,457 $ 4,899,716 $ 2,186,653
============ ============ ============ ============ ============ ============ ============
<CAPTION>
Company
Stock Loan
Fund Fund Total
------------ ------------ ------------
<S> <C> <C> <C>
Investments at Fair Value:
Money market fund $ -- $ 1,077 $ 988,684
Shares in registered
investment companies -- -- 264,656,818
Common Collective Trusts -- -- 35,793,310
Annuity contracts, at
contract value -- -- 2,122,404
First Data Corporation
common shares 126,320,043 -- 126,320,043
Promissory notes from
participants -- 25,119,966 25,119,966
------------ ------------ ------------
Total investments 126,320,043 25,121,043 455,001,225
Receivables:
Employer contributions
receivable 388,206 -- 1,608,413
Participant contributions
receivable 434,798 -- 1,704,435
Dividends and other
receivables 170,450 -- 481,760
------------ ------------ ------------
Total Receivables 993,454 -- 3,794,608
Liabilities:
Accrued liabilities 299,525 -- 598,237
Net assets available for ------------ ------------ ------------
plan benefits $127,013,972 $ 25,121,043 $458,197,596
============ ============ ============
</TABLE>
See notes to financial statements.
2
<PAGE>
First Data Corporation Incentive Savings Plan
Statement of Net Assets Available for Plan Benefits
December 30, 1995
<TABLE>
<CAPTION>
Dreyfus-
Cash Wilshire Company
Management Balanced Index Target Stock
Fund Fund Fund Fund Fund
------------- ------------ ------------- ---------- --------------
<S> <C> <C> <C> <C> <C>
Investments at Fair Value:
Money market fund $ -- $ -- $ -- $ -- $ 374,429
Shares in registered investment companies -- 50,147,148 45,163,246 6,241,855 --
Common Collective Trusts 41,368,990 -- -- -- --
Annuity contracts, at contract value 4,876,606 -- -- -- --
American Express Company common shares -- -- -- -- --
Lehman Brothers Holding, Inc. common shares -- -- -- -- --
First Data Corporation common shares -- -- -- -- 32,608,718
Mellon Bank Corporation common shares -- -- -- -- --
Promissory notes from participants -- -- -- -- --
------------ ----------- ----------- ---------- ----------
Total investments 46,245,596 50,147,148 45,163,246 6,241,855 32,983,147
Receivables:
Participant contributions receivable 136,328 110,046 109,109 45,437 88,987
Dividends receivable -- -- -- -- 14,628
------------ ----------- ----------- ---------- ----------
Total Receivables 136,328 110,046 109,109 45,437 103,615
------------ ----------- ----------- ---------- ----------
------------ ----------- ----------- ---------- ----------
Net assets available for plan benefits $ 46,381,924 $ 50,257,194 $ 45,272,355 $ 6,287,292 $ 33,086,762
============ =========== =========== ========== ==========
<CAPTION>
American Lehman Mellon
Express Brothers Bank
Company Stock Stock Loan
Stock Fund Fund Fund Fund Total
------------ ----------- --------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
Investments at Fair Value:
Money market fund $ 125,540 $ 65 $ 12 $ -- $ 500,046
Shares in registered investment companies -- -- -- -- 101,552,249
Common Collective Trusts -- -- -- -- 41,368,990
Annuity contracts, at contract value -- -- -- -- 4,876,606
American Express Company common shares 14,084,464 -- -- -- 14,084,464
Lehman Brothers Holding, Inc. common shares -- 1,412,360 -- -- 1,412,360
First Data Corporation common shares -- -- -- -- 32,608,718
Mellon Bank Corporation common shares -- -- 282,241 -- 282,241
Promissory notes from participants -- -- -- 13,250,421 13,250,421
------------ ----------- --------- ------------ -------------
Total investments 14,210,004 1,412,425 282,253 13,250,421 209,936,095
Receivables:
Participant contributions receivable -- -- -- -- 489,907
Dividends receivable -- -- -- -- 14,628
------------ ---------- --------- ------------ -------------
Total Receivables -- -- -- -- 504,535
------------ ----------- --------- ------------ -------------
------------ ----------- --------- ------------ -------------
Net assets available for plan benefits $ 14,210,004 $ 1,412,425 $ 282,253 $ 13,250,421 $ 210,440,630
============ =========== ========= ============ =============
</TABLE>
See notes to financial statements.
3
<PAGE>
First Data Corporation Incentive Savings Plan
Statement of Changes in Net Assets Available for Plan Benefits
December 30, 1996
<TABLE>
<CAPTION>
Cash
Management Balanced Index
Fund Fund Fund
------------ ------------ ------------
<S> <C> <C> <C>
Contributions:
Employer $ 8,157,212 $ 5,943,924 $ 6,607,362
Participant 7,024,389 5,871,422 7,087,114
---------- ---------- -----------
Total contributions 15,181,601 11,815,346 13,694,476
Interest and dividends 1,103,351 3,716,956 3,455,138
Net realized and unrealized appreciation/(depreciation) 654,558 2,688,685 11,010,205
---------- ---------- -----------
Total income 1,757,909 6,405,641 14,465,343
Withdrawal payments, including terminations
and transfers to other plans (9,909,640) (5,657,681) (5,330,099)
Net repayments from (loans to) participants (2,210,364) (636,479) (876,573)
Transfers from other plans 95,537,181 1,317,233 7,187,016
Interfund transfers (4,914,944) (3,980,004) 5,970,252
----------- ---------- -----------
Net increase/(decrease) in net assets available
for plan benefits 95,441,743 9,264,056 35,110,415
Net assets available for plan benefits
at beginning of year 46,381,924 50,257,194 45,272,355
Net assets available for plan benefits
----------- ---------- -----------
at end of year $ 141,823,667 $ 59,521,250 $ 80,382,770
=========== ========== ===========
<CAPTION>
AIM Templeton
Growth Constellation Foreign Bond
Fund Fund Fund Fund
------------- ------------- ----------- ---------
<S> <C> <C> <C> <C>
Contributions: $ 633,210 $ 458,354 $ 279,095 $ 128,542
Employer 1,001,806 645,847 449,053 215,114
Participant --------- --------- --------- ---------
1,635,016 1,104,201 728,148 343,656
Total contributions
6,968 256,435 72,115 25,521
Interest and dividends 56,023 (240,406) 125,430 9,839
Net realized and unrealized appreciation/ --------- --------- --------- ---------
(depreciation)
Total income 62,991 16,029 197,545 35,360
Withdrawal payments, including terminations
and transfers to other plans (14,229) (22,796) (10,311) (2,869)
Net repayments from (loans to) participants 28,195 29,260 13,625 24,504
Transfers from other plans -- -- -- --
Interfund transfers 7,476,095 6,933,763 3,970,709 1,786,002
--------- --------- --------- ---------
Net increase/(decrease) in net assets available
for plan benefits 9,188,068 8,060,457 4,899,716 2,186,653
Net assets available for plan benefits -- -- -- --
at beginning of year
Net assets available for plan benefits
--------- --------- --------- ---------
at end of year $ 9,188,068 $ 8,060,457 $ 4,899,716 $ 2,186,653
========= ========= ========= =========
</TABLE>
See notes to financial statements
<PAGE>
First Data Corporation Incentive Savings Plan
Statement of Changes in Net Assets Available for Plan Benefits
December 30, 1996
<TABLE>
<CAPTION>
Dreyfus- American Lehman Mellon
Wilshire Company Express Brothers Bank
Target Stock Company Stock Stock
Fund Fund Stock Fund Fund Fund
------------ ------------ ------------ ----------- ----------
<S> <C> <C> <C> <C> <C>
Contributions:
Employer $ 1,286,601 $ 6,660,564 $ -- $ -- $ --
Participant 1,808,483 8,689,130 -- -- --
------------ ------------ ------------ ----------- ----------
Total contributions 3,095,084 15,349,694 -- -- --
Interest and dividends -- 1,013,151 336,704 7,812 10,730
Net realized and unrealized appreciation/(depreciation) 474,870 (1,720,350) 1,631,958 218,592 42,367
------------ ------------ ------------ ----------- ----------
Total income 474,870 (707,199) 1,968,662 226,404 53,097
Withdrawal payments, including terminations
and transfers to other plans (516,599) (5,747,920) (1,342,342) (125,963) (42,560)
Net repayments from (loans to) participants (83,660) (617,318) (421,839) (46,205) --
Transfers from other plans 836,299 76,624,604 -- -- --
Interfund transfers (10,093,286) 9,025,349 (14,414,485) (1,466,661) (292,790)
------------ ------------ ------------ ----------- ----------
Net increase/(decrease) in net assets available
for plan benefits (6,287,292) 93,927,210 (14,210,004) (1,412,425) (282,253)
Net assets available for plan benefits
at beginning of year 6,287,292 33,086,762 14,210,004 1,412,425 282,253
Net assets available for plan benefits
------------ ------------ ------------ ----------- ----------
at end of year $ -- $ 127,013,972 $ -- $ -- $ --
============ ============ ============ =========== ==========
<CAPTION>
Loan
Fund Total
------------ -------------
<S> <C> <C>
Contributions:
Employer $ -- $ 30,154,864
Participant -- 32,792,358
------------ -------------
Total contributions -- 62,947,222
Interest and dividends 1,108,118 11,112,999
Net realized and unrealized appreciation/(depreciation) -- 14,951,771
------------ -------------
Total income 1,108,118 26,064,770
Withdrawal payments, including terminations
and transfers to other plans (878,612) (29,601,621)
Net repayments from (loans to) participants 4,796,854 --
Transfers from other plans 6,844,262 188,346,595
Interfund transfers -- --
------------ -------------
Net increase/(decrease) in net assets available
for plan benefits 11,870,622 247,756,966
Net assets available for plan benefits
at beginning of year 13,250,421 210,440,630
Net assets available for plan benefits
------------ -------------
at end of year $ 25,121,043 $ 458,197,596
============ =============
</TABLE>
See notes to financial statements
<PAGE>
FIRST CORPORATION INCENTIVE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 30, 1996
1. PLAN DESCRIPTION
The following description of the First Data Corporation Incentive Savings
Plan (the "Plan") is provided for general information purposes only.
Participants should refer to the Plan document or Summary Plan Description
("SPD") for a more complete description of the Plan's provisions. Copies of
these documents are available from the Plan administrator.
General
The Plan (as amended) was established, effective July 1, 1990 as a defined
contribution plan to provide retirement, disability and death benefits for
certain employees of First Data Corporation and its subsidiaries ("FDC" or
the "Company"), the Plan sponsor. Regular full time and part time employees
of the Company and its participating subsidiaries are eligible to
participate in the Plan after completing one year of service.
Administration
The Plan is administered by the Company's Employee Benefits Administration
and Investment Committee (the "EBAIC"), which is appointed by the
Compensation and Benefits Committee of the Company's Board of Directors.
The Dreyfus Trust Company and the Dreyfus Service Corporation ("Dreyfus")
are the "full service" providers of administrative services to the Plan.
Under this arrangement Dreyfus provides trustee (the "Trustee"),
recordkeeping, investment management for certain funds and other
administrative services. Administrative expenses of the Plan are borne by
the Company.
Contributions and Vesting
Participants may contribute before-tax dollars to the Plan of up to 15% of
their eligible compensation, subject to certain limitations imposed by
Section 401(k) of the Internal Revenue Code of 1986 (the "Code").
Participants may also rollover qualified distributions into the Plan.
Participants are always fully vested in their elective and rollover
contributions under the Plan.
The Company matches 100% of participants' before-tax contributions up to 3%
of the participant's eligible compensation. Rollover contributions are not
subject to Company matching contributions. Employees with five, but less
than ten years of service, whether or not otherwise enrolled in the Plan,
will receive service-related contributions to their Plan accounts equal to
1.5% of their eligible compensation per year. For employees with ten or
more years of service, the Company will make a service-related contribution
of 3% of their eligible compensation per year. Employees
6
<PAGE>
FIRST DATA CORPORATION INCENTIVE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
1. PLAN DESCRIPTION (CONTINUED)
are always fully vested in any service-related contributions made to their
accounts under the Plan. Certain employees who participated, or were
eligible to participate, in the FDC Retirement Plan (a defined benefit
plan) and elected not to accrue benefits under or participate in the FDC
Retirement Plan receive additional employer contributions equal to 3.4% of
their eligible compensation per year, which become vested after five years
of service. Forfeitures are used to reduce Company matching contributions.
Participants entering the Plan after October 1, 1996 become fully vested in
their matching contributions over a four year period: 25% after 1 year, 50%
after 2 years, 75% after 3 years, and 100% after 4 years. Prior to October
1, 1996, participants became vested in their matching contributions at the
earlier of completion of two years of participation in the Plan or five
years of service. The vesting of participants enrolled in the Plan prior to
October 1, 1996 will be based on whichever of the vesting methodologies
results in the greatest amount being vested at the time they leave the
Company. In addition, Company contributions become fully vested at the
employee's retirement, disability or death.
The Company may make a special contribution to participants' accounts and
to all other employees who are eligible, but are not participating in the
Plan. Any special contributions will be made in the form of Company common
stock to the Company Stock Account. No special contributions were made
during the year.
Participant Loans
Participants may borrow up to 50% of their vested account balance, subject
to certain limitations. Loans made under the Plan bear interest at those
rates determined by the EBAIC (generally one percentage point above the
prime rate) in accordance with the terms of the Plan. The rate is fixed for
the term of the loan, which can range from 12 months to five years, or up
to 15 years for primary residential loans, subject to certain exceptions.
Repayments of the loan, including interest, are allocated to the
participant's investment accounts in accordance with the election in effect
at the time of repayment. If the participant leaves the Company or dies
before the loan is repaid, the unpaid balance is due immediately. If the
loan is not repaid within 60 days, the loan is canceled and the outstanding
balance is treated as a distribution from the Plan.
Participant Accounts
Separate accounts are maintained for each participant, whereby the
participant's account is credited for contributions and investment income
and credited or charged, as appropriate, for investment appreciation or
depreciation. Participant accounts are charged for withdrawals and
forfeitures. The periodic allocation of investment income
7
<PAGE>
FIRST DATA CORPORATION INCENTIVE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
1. PLAN DESCRIPTION (CONTINUED)
and investment appreciation or depreciation is based upon the participant's
beneficial interest in each of the investment funds at the valuation date.
The benefit to which a participant is entitled is the benefit that can be
provided from the participant's vested account.
Payment of Benefits
Upon retirement, termination of employment with the Company, reaching age
59 1/2, becoming permanently and totally disabled or death, the balance in
the participant's account is available to the participant or designated
beneficiaries. Payout options include lump-sum, installment, single life
annuity, a 50% or 100% joint and survivor annuity, a single life annuity
for 5, 10, 15 or 20 years or a combination of a lump sum and any one of the
other forms. If, upon leaving the Company a participant has less than
$3,500 of vested contributions in the Plan, the vested account balance will
be paid in cash. In addition, upon severe financial hardship a participant
may request a hardship withdrawal under the terms of the Plan.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Investment Valuation and Income Recognition
Investments are stated at fair market value, based upon published market
quotations. The shares of registered investment companies are valued at
quoted market prices which represent the net asset values of shares held by
the Plan at year-end. The common collective trusts are reflected at the net
asset value of units of participation and the amount that would be realized
upon the disposition of the Plan's interest in the common collective
trusts. The money market fund is stated at cost, which approximates fair
value. Investments in annuity contracts are valued at contract value.
Participant loans are valued at cost, which approximates fair value.
Purchases and sales of securities are recorded on a trade-date basis. The
average cost method is used to compute the cost of securities sold.
Dividends and interest income are accounted for on the accrual basis.
Dividends are recorded on the ex-dividend date.
Accounting Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements
and accompanying notes. Actual results could differ from those estimates.
8
<PAGE>
FIRST DATA CORPORATION INCENTIVE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. INVESTMENT OPTIONS
Investment vehicles made available to employees in connection with the Plan
are selected by the EBAIC, which may select from time to time the
investment funds which will be available for investment of the Plan's
assets. The EBAIC may also decide at any time to direct the Trustee to
change the manner in which any or all of the investment funds are invested.
The Plan does not require approval by or advance notice to participants of
any such change.
Participants may elect to invest in one or more investment funds in 1%
increments. The following is a brief description of the investment funds
available at December 30, 1996.
Cash Management Fund: Funds are invested in a portfolio of common
collective trusts, registered investment companies and annuity contracts,
with the objective of providing as high a level of current income as is
consistent with the preservation of capital and the maintenance of
liquidity.
Balanced Fund: Funds are invested in shares of a registered investment
company (Dreyfus Balanced Fund, Inc.) that invests in equity and debt
securities with the objective of obtaining long-term capital growth and
current income, consistent with reasonable investment risk.
Index Fund: Funds are invested in shares of a registered investment company
(Dreyfus S&P 500 Index Fund) that invests in the common stocks of entities
that compose the Standard & Poor's 500 Composite Stock Price Index (the
"Index") and stock-index futures. The objective is to provide results that
correspond to the price and yield performance of publicly-traded common
stocks in the aggregate, as represented by the Index.
Growth Fund: Funds are invested in shares of a registered investment
company (Founders Growth Fund) that invests in equity securities of
established mid and large-cap companies with a goal of obtaining long-term
growth of capital.
AIM Constellation Fund: Funds are invested in shares of a registered
investment company (AIM Constellation Fund) that invests in equity
securities of small and medium-sized emerging growth companies with a goal
of aggressive capital growth.
Templeton Foreign Fund: Funds are invested in shares of a registered
investment company (Templeton Foreign Fund) that invests in equity and debt
securities of companies and governments outside the United States with a
goal of long-term capital growth.
9
<PAGE>
FIRST DATA CORPORATION INCENTIVE SAVING PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. INVESTMENT OPTIONS (CONTINUED)
Bond Fund: Funds are invested in shares of a registered investment company
(Dreyfus A Bonds Plus, Inc.) that invests primarily in debt securities
issued by corporations that are rated A or better. The investment objective
is to provide the maximum amount of current income to the extent consistent
with the preservation of capital and the maintenance of liquidity. The
Fund's net asset value and yield fluctuate.
Company Stock Fund: Funds are invested in common shares of the Company.
Common shares of the Company have been purchased by the Trustee on the open
market, however, such common shares may be purchased directly from the
Company.
The following investment funds were maintained by the Plan during the year,
but were closed and all investments liquidated and transferred to other
investment funds prior to December 30, 1996:
Dreyfus-Wilshire Target Fund: Funds were invested in equity securities of
issuers within the universe of companies identified by Wilshire as small
capitalization, value companies.
American Express Company Stock Fund: Funds were invested in common shares
of American Express Company ("American Express"). This investment account
option was not available for contributions or rollovers, but participants
were allowed to retain existing investments in this account and to transfer
assets from this account to other accounts.
Lehman Brothers Stock Fund: Funds were invested in common shares of Lehman
Brothers Holdings, Inc. ("Lehman"). This resulted from a distribution of
Lehman shares by American Express to its shareholders in 1994. This
investment account option was not available for contributions or rollovers,
but participants were allowed to retain existing investments in this
account and to transfer assets from this account to other accounts.
Mellon Bank Stock Fund: Represented the investment in common shares of
Mellon Bank Corporation ("Mellon") of former employees of certain Mellon
affiliates, whose holdings in Mellon common stock were transferred to the
Plan in 1995. This investment account option was not available for
contributions or rollovers, but participants were allowed to retain
existing investments in this account and to transfer assets from this
account to other accounts.
10
<PAGE>
FIRST DATA CORPORATION INCENTIVE SAVING PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. INVESTMENT OPTIONS (CONTINUED)
The fair values of individual investments not separately disclosed on the
statement of net assets available for plan benefits that represent 5% or
more of the Plan's net assets are as follows:
<TABLE>
<CAPTION>
DECEMBER 30
1996 1995
--------------------------
<S> <C> <C>
REGISTERED INVESTMENT COMPANIES
Dreyfus Cash Management $91,707,017 $ --
COMMON COLLECTIVE TRUSTS
Signet Stable Value Fund 24,507,396 --
American Express Trust Federal Income Fund -- 21,053,954
American Express Trust Income Fund I 11,285,914 20,315,036
</TABLE>
4. INCOME TAX STATUS AND PLAN AMENDMENTS
The Internal Revenue Service ("IRS") ruled on June 13, 1996 that the Plan
qualified under Section 401(a) and 401(k) of the Code and that the Trust
established thereunder is exempt from tax pursuant to Section 501(a) of the
Code. The Plan is required to operate in conformity with the Code to
maintain its qualification.
Subsequent to the June 13, 1996 ruling by the IRS, certain amendments were
adopted by the Plan, including an amendment to provide that effective
January 1, 1997, the Plan year-end shall be December 31. Accordingly, the
Plan administrator intends to submit an Application for Determination with
the IRS as to the continued qualification of the Plan. The Plan
administrator is not aware of any action or series of events which have
occurred that might adversely affect the tax-exempt status of the Trust.
5. PLAN MERGERS AND DIVESTITURES
FDC merged with First Financial Management Corporation ("FFMC") in October
1995. Former employees of FFMC and its subsidiaries participated in several
defined contribution retirement plans, including the FFMC Savings Plus Plan
and the Western Union Retirement Savings Plan (collectively, the "FFMC
Plans"). The FFMC Plans were merged into the Plan effective October 1996,
and approximately $ 181 million in FFMC Plan assets were transferred into
the Plan at that time.
11
<PAGE>
FIRST DATA CORPORATION INCENTIVE SAVING PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
5. PLAN MERGERS AND DIVESTITURES (CONTINUED)
In addition, approximately $ 7 million of net assets were transferred into
the Plan from benefit plans of several other businesses previously acquired
by the Company.
6. SUBSEQUENT EVENTS
Subsequent to December 30, 1996, approximately $ 24 million of net assets
were transferred into the Plan from the benefit plans of businesses
previously acquired by the Company, including approximately $ 21 million
from the benefit plan of Donnelley Marketing, Inc.
On May 23, 1997, FDC announced the divestiture of its FIRST HEALTH Services
and FIRST HEALTH Strategies business units. As a result, approximately $ 38
million of Plan net assets related to employees of these business units is
expected to transfer to the purchaser's employee benefit plan in the third
quarter of 1997.
12
<PAGE>
FIRST DATA CORPORATION INCENTIVE SAVING PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT
DECEMBER 30, 1996
<TABLE>
<CAPTION>
NUMBER OF
SHARES OR
PRINCIPAL FAIR OR CONTRACT
DESCRIPTION AMOUNT COST VALUE
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MONEY MARKET FUND
* Dreyfus Liquid Assets 93,871 $ 93,871 $ 93,871
TBC, Inc. Daily Liquidity Fund 894,813 894,813 894,813
----------------------------
988,684 988,684
COMMON COLLECTIVE TRUSTS
American Express Trust Income Fund I 265,813 10,275,576 11,285,914
Signet Stable Value Fund 24,507,396 24,507,396 24,507,396
----------------------------
34,782,972 35,793,310
SHARES IN REGISTERED INVESTMENT COMPANIES
* Dreyfus Balanced Fund, Inc. 3,666,410 53,529,798 59,102,524
* Dreyfus S&P 500 Index Fund 3,529,392 65,218,228 79,799,544
* Dreyfus A Bonds Plus, Inc. 148,829 2,150,471 2,159,512
AIM Constellation Fund 312,860 8,149,344 7,909,106
Capital Preservation Fund 10,139,645 10,139,645 10,139,645
Founders Growth Fund 566,099 9,590,979 9,023,614
Templeton Foreign Fund 467,559 4,726,904 4,815,856
* Dreyfus Cash Management 91,707,017 91,707,017 91,707,017
----------------------------
245,212,386 264,656,818
ANNUITY CONTRACTS
Fidelity & Guarantee Insurance Company, 718,119 718,119 718,119
9.00%, due 1/16/97
Integrity Life Insurance Company, 319,161 319,161 319,161
9.00%, due 11/30/97
Integrity Life Insurance Company, 231,810 231,810 231,810
9.25%, due 11/01/97
First Capital Life Insurance, 351,049 351,049 351,049
6.13%, due 12/31/2021
First Capital Life Insurance, 303,615 303,615 303,615
5.77%, due 12/31/2021
First Capital Life Insurance, 198,650 198,650 198,650
5.77%, due 12/31/2021
----------------------------
2,122,404 2,122,404
</TABLE>
13
<PAGE>
FIRST DATA CORPORATION INCENTIVE SAVINGS PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT
DECEMBER 30,1996
<TABLE>
<CAPTION>
NUMBER OF
SHARES OR
PRINCIPAL FAIR OR CONTRACT
DESCRIPTION AMOUNT COST VALUE
- -----------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCK
* First Data Corporation 3,368,172 78,318,640 126,320,043
PROMISSORY NOTES FROM PARTICIPANTS
* Various, 5.83%-13.33%, due 1/97-11/12 -- 25,119,966
----------------------------
$361,425,086 $455,001,225
============================
</TABLE>
* Indicates party-in-interest to the Plan
14
<PAGE>
FIRST DATA CORPORATION INCENTIVE SAVINGS PLAN
SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 30, 1996
<TABLE>
<CAPTION>
NUMBER OF TOTAL NUMBER OF TOTAL
PURCHASE PURCHASE SELLING COST SELLING NET
DESCRIPTION TRANSACTIONS PRICE TRANSACTIONS OF ASSETS PRICE GAIN
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Category (iii) - series of transactions in excess of 5% of plan assets
MONEY MARKET FUND
* Dreyfus Liquid Assets 1,672 $ 39,466,451 473 $ 39,852,626 $ 39,852,626 $ --
TBC Inc. Daily Liquidity 3 37,746,246 4 36,851,433 36,851,433 --
Fund
SHARES IN REGISTERED
INVESTMENT COMPANIES
* Dreyfus Balanced Fund, Inc. 540 19,782,582 501 12,254,104 13,515,891 1,261,787
* Dreyfus S&P 500 Index Fund 864 28,311,953 459 8,366,737 10,628,922 2,262,185
* Dreyfus-Wilshire Target Fund 312 5,052,546 305 10,983,191 11,769,271 786,080
* Dreyfus Cash Management 441 122,239,826 1,153 30,532,809 30,532,809 --
COMMON COLLECTIVE TRUSTS
American Express Trust 310 5,566,940 281 24,980,943 27,231,546 2,250,603
Federal Income Fund
American Express Trust 311 5,610,246 284 14,668,482 14,683,274 14,792
Income Fund I
COMMON STOCK
* First Data Corporation 194 29,238,021 126 6,994,234 9,820,697 2,826,463
American Express Company 11 220,660 105 8,706,952 15,937,082 7,230,130
</TABLE>
There were no category (i), (ii) or (iv) reportable transactions during 1996.
* Indicates party-in-interest to the Plan.
15
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Trustees (or persons who administer the employee benefit plan) have duly caused
this annual report to be signed on its behalf by the undersigned thereunto duly
authorized.
FIRST DATA CORPORATION INCENTIVE SAVINGS PLAN
FIRST DATA CORPORATION, as Plan Administrator
Date: June 26, 1997 By /s/ Patricia A. Winchell
---------------------- ---------------------------------
Patricia A. Winchell
Senior Vice President
Human Resources
<PAGE>
FIRST DATA CORPORATION
INCENTIVE SAVINGS PLAN
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION PAGE
- ----------- ------------------------------ ----
23.1 Consent of Independent Auditor 18
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 33-48578) pertaining to the Incentive Savings Plan of First Data
Corporation of our report dated June 23, 1997 with respect to the financial
statements and schedules of the First Data Corporation Incentive Savings Plan
included in this Annual Report (Form 11-K) for the year ended December 30, 1996.
/s/ Ernst & Young LLP
Ernst & Young LLP
New York, New York
June 25, 1997
