<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] Quarterly report pursuant to Section 13 or 15 (d)
of the Securities Exchange Act of 1934
for the quarterly period ended April 30, 1997.
---------------
[ ] Transition report pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Commission file number 1-4003
------
DRESSER INDUSTRIES, INC.
- -------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware C 75-0813641
- ------------------------------- -------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
P. O. Box 718
2001 Ross 75221 (P. O. Box)
Dallas, Texas 75201
- ------------------------------- -------------------
(Address of principal executive (Zip Code)
offices)
Registrant's telephone number, including area code - 214-740-6000
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days. Yes X . No .
----- -----
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at May 31, 1997
- ---------------------------- ---------------------------
Common Stock, par value $.25 175,098,668
1
<PAGE>
INDEX
Page
Number
------
Part I. Financial Information
Management's Representation 3
Condensed Consolidated Statements of Earnings
for the three months and six months ended
April 30, 1997 and 1996 4
Condensed Consolidated Balance Sheets
as of April 30, 1997 and October 31, 1996 5
Condensed Consolidated Statements of Cash Flows
for the six months ended April 30, 1997 and 1996 6
Notes to Condensed Consolidated Financial Statements 7-11
Management's Discussion and Analysis of Financial
Condition and Results of Operations 12-15
Part II. Other Information 16
Signature 17
Exhibit Index
Exhibit 27 Financial Data Schedule
2
<PAGE>
MANAGEMENT'S REPRESENTATION
The condensed consolidated financial statements included herein have been
prepared by the Company pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations. The Company believes that the
disclosures are adequate to make the information presented not misleading.
These condensed consolidated financial statements should be read in
conjunction with the consolidated financial statements, the notes to
consolidated financial statements and management's discussion and analysis
included in the Company's 1996 Annual Report on Form 10-K.
In the opinion of the Company, all adjustments have been included that were
necessary to present fairly the financial position of Dresser Industries,
Inc. and subsidiaries as of April 30, 1997 and October 31, 1996, the results
of operations for the three months and the six months ended April 30, 1997
and 1996, and cash flows for the six months ended April 30, 1997 and 1996.
These adjustments consisted of normal recurring adjustments. The results of
operations for such interim periods do not necessarily indicate the results
for the full year.
3
<PAGE>
DRESSER INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(In Millions Except Per Share Data)
Three Months Ended Six Months Ended
April 30, April 30,
-------------------- --------------------
1997 1996 1997 1996
--------- --------- --------- ---------
(Unaudited) (Unaudited)
Revenues $ 1,771.3 $ 1,629.6 $ 3,475.8 $ 3,092.5
Cost of revenues (1,364.6) (1,279.8) (2,707.3) (2,422.3)
--------- --------- --------- ---------
Gross earnings 406.7 349.8 768.5 670.2
Selling, engineering, admini-
strative and general
expenses (267.1) (242.9) (525.1) (480.1)
Other income (deductions)
Interest expense, net (15.2) (10.9) (30.0) (20.9)
Other, net (.5) (4.1) (2.7) (4.4)
--------- --------- --------- ---------
Earnings before items below 123.9 91.9 210.7 164.8
Income taxes (43.4) (31.2) (73.8) (56.0)
Minority interest (5.7) (3.5) (10.0) (5.0)
--------- --------- --------- ---------
Net Earnings 74.8 57.2 126.9 103.8
--------- --------- --------- ---------
--------- --------- --------- ---------
Earnings per common share $ .42 $ .31 $ .72 $ .57
Cash dividends per common
share $ .17 $ .17 $ .34 $ .34
Average common shares
outstanding 176.2 181.2 176.0 181.5
See accompanying Notes to Condensed Consolidated Financial
Statements.
4
<PAGE>
DRESSER INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Millions)
April 30, October 31,
ASSETS 1997 1996
--------- ---------
(Unaudited)
Current Assets
Cash and cash equivalents $ 144.0 $ 232.4
Notes and accounts receivable, net 1,146.5 1,152.1
Inventories, net 942.0 913.6
Deferred income taxes 83.8 83.8
Other current assets 81.1 87.6
--------- ---------
Total Current Assets 2,397.4 2,469.5
Investments in and receivables from
unconsolidated affiliates 178.5 182.5
Goodwill, net 857.9 870.6
Deferred income taxes 185.2 184.0
Other assets 200.7 181.2
Property, plant and equipment - at cost 2,878.3 2,836.7
Accumulated depreciation and amortization 1,643.4 1,574.3
--------- ---------
Total properties, net 1,234.9 1,262.4
--------- ---------
Total Assets $5,054.6 $5,150.2
--------- ---------
--------- ---------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Short-term debt $ 112.6 $ 86.0
Accounts payable 490.8 570.6
Contract advances 456.8 459.8
Accrued compensation and benefits 253.8 250.4
Income taxes 112.8 111.3
Other current liabilities 321.0 383.7
-------- --------
Total Current Liabilities 1,747.8 1,861.8
Employee retirement and postemployment
benefit obligations 656.8 676.3
Long-term debt 754.8 756.3
Deferred compensation, insurance
reserves and other liabilities 120.1 118.0
Minority interest 161.6 155.6
Shareholders' Equity
Common shares 46.2 46.2
Capital in excess of par value 451.8 454.8
Retained earnings 1,487.9 1,420.8
Cumulative translation adjustments (109.6) (81.5)
Pension liability adjustment (6.9) (6.9)
-------- --------
1,869.4 1,833.4
Less treasury shares, at cost 255.9 251.2
-------- --------
Total Shareholders' Equity 1,613.5 1,582.2
-------- --------
Total Liabilities and
Shareholders' Equity $5,054.6 $5,150.2
-------- --------
-------- --------
Actual common shares outstanding 175.6 175.6
See accompanying Notes to Condensed Consolidated Financial
Statements.
5
<PAGE>
DRESSER INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Millions)
Six Months Ended
April 30,
------------------------
1997 1996
---- ----
(Unaudited)
Cash flows from operating activities:
Net earnings $ 126.9 $ 103.8
Adjustments to reconcile net earnings
to cash flow:
Depreciation and amortization 126.1 108.2
Equity earnings from
unconsolidated affiliates (19.1) (13.8)
Minority interest 10.0 5.0
Changes in working capital (190.9) (151.5)
Other - net (4.6) (2.6)
------- -------
Net cash provided by operating
activities 48.4 49.1
------- -------
Cash flows from investing activities:
Capital expenditures (114.6) (153.2)
Business acquisitions (3.6) (18.0)
Proceeds from sales of assets 24.1 11.7
------- -------
Net cash used by investing
activities (94.1) (159.5)
------- -------
Cash flows from financing activities:
Dividends paid (59.8) (61.8)
Purchases of common shares for
Treasury (19.0) (74.4)
Issuance of common shares 9.2 17.3
Increase in short-term debt 26.5 176.9
(Decrease) Increase in long-term
debt (1.5) 2.6
------- -------
Net cash (used) provided by
financing activities (44.6) 60.6
------- -------
Effect of translation adjustments on
cash 1.9 (.9)
------- -------
Net decrease in cash and cash
equivalents (88.4) (50.7)
Cash and cash equivalents,
beginning of period 232.4 248.7
------- -------
Cash and cash equivalents,
end of period $ 144.0 $ 198.0
------- -------
------- -------
See accompanying Notes to Condensed Consolidated Financial Statements.
Certain reclassifications of prior years' data have been made to conform to
1997 presentation.
6
<PAGE>
DRESSER INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
April 30, 1997
(Unaudited)
NOTE A - INFORMATION BY INDUSTRY SEGMENT (IN MILLIONS)
<TABLE>
Three Months Ended Six Months Ended
April 30, April 30,
----------------------- ----------------------
1997 1996 1997 1996
-------- -------- -------- --------
<S> <C> <C> <C> <C>
REVENUES
Petroleum Products and Services $ 644.6 $ 521.9 $1,247.3 $ 988.1
-------- -------- -------- --------
Engineering Services
M. W. Kellogg Operations 444.5 466.4 901.7 858.4
-------- -------- -------- --------
Energy Equipment
Compression and Pumping 296.4 264.9 587.8 540.4
Measurement 164.2 154.1 315.2 301.8
Flow Control 143.0 150.1 288.3 295.9
Power Systems 84.5 79.0 145.2 143.5
-------- -------- -------- --------
688.1 648.1 1,336.5 1,281.6
Eliminations (5.9) (6.8) (9.7) (35.6)
-------- -------- -------- --------
Total revenues $1,771.3 $1,629.6 $3,475.8 $3,092.5
-------- -------- -------- --------
-------- -------- -------- --------
OPERATING PROFIT
Petroleum Products and Services $ 75.4 $ 57.1 $ 147.4 $ 110.0
-------- -------- -------- --------
Engineering Services 24.4 21.8 50.8 40.9
-------- -------- -------- --------
Energy Equipment
Compression and Pumping 22.0 15.2 31.6 29.3
Measurement 15.7 11.8 26.9 21.2
Flow Control 15.7 16.4 26.0 28.8
Power Systems 12.9 9.2 13.5 12.4
-------- -------- -------- --------
66.3 52.6 98.0 91.7
-------- -------- -------- --------
Total segment
operating profit 166.1 131.5 296.2 242.6
Amortization of acquisition
intangibles (7.8) (7.8) (15.4) (16.2)
General corporate expenses (19.2) (20.9) (40.1) (40.7)
Interest expense, net (15.2) (10.9) (30.0) (20.9)
-------- -------- -------- --------
Earnings before taxes and
minority interest $ 123.9 $ 91.9 $ 210.7 $ 164.8
-------- -------- -------- --------
-------- -------- -------- --------
</TABLE>
7
<PAGE>
DRESSER INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 1997
(UNAUDITED)
NOTE B - UNCONSOLIDATED AFFILIATED COMPANIES
The Company has several investments in less than majority owned affiliates.
A summary of the impact of these investments on the condensed consolidated
financial statements follows (in millions):
Three Months Ended Six Months Ended
April 30, April 30,
------------------ ----------------
1997 1996 1997 1996
---- ---- ---- ----
Share of earnings of unconsoli-
dated affiliates
Ingersoll-Dresser Pump (49%
owned) $5.9 $2.5 $15.1 $11.7
Other affiliates 2.2 .9 4.0 2.1
---- ---- ----- -----
$8.1 $3.4 $19.1 $13.8
---- ---- ----- -----
---- ---- ----- -----
April 30, October 31,
1997 1996
---- ----
Investments in and receivables
from unconsolidated affiliates
Ingersoll-Dresser Pump (49%
owned) $119.4 $132.5
Other affiliates 59.1 50.0
------ ------
$178.5 $182.5
------ ------
------ ------
NOTE C - INVENTORIES
The determination of inventory values and cost of sales under the LIFO method
for interim financial results is based on management's estimates of expected
year-end inventories.
Inventories include the following (in millions):
April 30, October 31,
1997 1996
---- ----
Finished products and work in
process $720.1 $699.4
Raw materials and supplies 221.9 214.2
------ ------
$942.0 $913.6
------ ------
------ ------
8
<PAGE>
DRESSER INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 1997
(UNAUDITED)
NOTE D - DIVIDENDS
On May 15, 1997 the Company declared a quarterly dividend of $.17 per share
of common stock payable on June 20, 1997 to shareholders of record on June 2,
1997.
NOTE E - LITIGATION AND CONTINGENCIES
The Company is involved in certain legal actions and claims arising in the
ordinary course of business. See Note J -Commitments and Contingencies - in
the Company's 1996 Annual Report on Form 10-K for a complete discussion of
these matters. A discussion of significant changes subsequent to October 31,
1996 follows.
ASBESTOSIS LITIGATION
The Company has approximately 75,100 pending claims at April 30, 1997, with
approximately 4,700 new claims filed and approximately 2,700 claims resolved
during the second quarter of the fiscal year. Approximately 32,100 claims are
currently being carried as pending until the settlements or dismissals are
final. Resolution of these claims will reduce the number of pending claims
at April 30, 1997, by approximately 45% for refractory product claims and 42%
for non-refractory product claims.
Management recognizes the uncertainties of litigation and the possibility
that one or more adverse rulings could materially impact operating results.
However, based upon the nature of and management's understanding of the facts
and circumstances which gave rise to such actions and claims, management
believes that such litigation and claims will be resolved without material
effect on the Company's financial position or results of operations.
9
<PAGE>
DRESSER INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 1997
(UNAUDITED)
NOTE F - BAROID FINANCIAL INFORMATION
Dresser Industries, Inc. (Dresser) merged with Baroid Corporation (Baroid) on
January 21, 1994. Baroid has ceased filing periodic reports with the
Securities and Exchange Commission. Baroid's 8% Senior Notes (the
Notes)remain outstanding and are fully guaranteed by the Company. As long as
the Notes remain outstanding, summarized financial information of Baroid is
required to be presented as follows (in millions):
April 30, October 31,
1997 1996
---- ----
BAROID CORPORATION
Current assets $ 891.9 $ 796.2
Noncurrent assets 581.1 578.9
-------- --------
Total $1,473.0 $1,375.1
-------- --------
-------- --------
Current liabilities $ 396.2 $ 377.7
Noncurrent liabilities 464.0 429.2
Shareholders' equity 612.8 568.2
-------- --------
Total $1,473.0 $1,375.1
-------- --------
-------- --------
Three Months Ended Six Months Ended
April 30, April 30,
------------------ ----------------
1997 1996 1997 1996
---- ---- ---- ----
Revenues $474.4 $374.9 $904.3 $732.8
------ ------ ------ ------
------ ------ ------ ------
Gross earnings $131.5 $105.0 $254.3 $210.0
------ ------ ------ ------
------ ------ ------ ------
Earnings from operations $ 59.9 $ 44.4 $112.6 $ 91.2
Other income (deductions) (2.7) (4.5) (7.7) (11.6)
------ ------ ------ ------
Earnings before taxes
and minority interests 57.2 39.9 104.9 79.6
Income taxes (20.0) (13.6) (36.7) (27.1)
Minority interest (.4) - (.3) (.2)
------ ------ ------ ------
Net earnings $ 36.8 $ 26.3 $ 67.9 $ 52.3
------ ------ ------ ------
------ ------ ------ ------
10
<PAGE>
DRESSER INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 1997
(UNAUDITED)
NOTE G - OTHER DEVELOPMENTS
On March 5, 1997, the Company signed a letter of intent to sell certain
assets of its Sub Sea International Division to Global Industries, Ltd. The
Company is currently responding to a second information request from the
Department of Justice related to its Hart-Scott-Rodino filing.
11
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS - THREE MONTHS AND SIX MONTHS ENDED APRIL 30, 1997
COMPARED TO 1996
CONSOLIDATED OPERATIONS
Earnings per share for the second quarter increased 35% to $.42 versus $.31
in the 1996 second quarter. Revenues of $1.8 billion were 9% higher, and
segment operating profit of $166.1 million was 26% higher than in the 1996
second quarter.
The results for the second quarter were primarily driven by high activity
levels across the oil and gas industry. April 30, 1997 consolidated backlog
was $5.3 billion, 18% higher than a year ago.
For the six months ended April 30, 1997, net earnings and earnings per share
increased 26% to $126.9 million and $.72 versus $103.7 million and $.57 in
1996. Six month revenues of $3.48 billion were 12% higher than a year ago,
and operating profit of $296.2 million was 22% higher than a year ago.
Selling, engineering, administrative and general expenses of $267.1 million
for the quarter and $525.1 million for the six months were about 10% higher
than the prior year. The increase was primarily due to higher levels of
business activity.
Net interest expense of $15.2 million in the quarter and $30.0 million for
the six months was up 39% and 44%, respectively, from the 1996 periods due
primarily to an increase in total borrowings and a higher interest rate on
new long-term debt versus the previously issued commercial paper.
The estimated income tax rate for the six months ended April 30, 1997 is
currently 35% compared to 34% for last year.
INDUSTRY SEGMENT ANALYSIS
See Note A to Condensed Consolidated Financial Statements for details of
financial information by Industry Segment.
PETROLEUM PRODUCTS AND SERVICES SEGMENT
Revenues rose 24% to $644.6 million for the quarter and 26% to $1,247.3
million for the six months. Operating profit increased 32% to $75.4 million
for the quarter and 34% to $147.4 million for the six months.
12
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
INDUSTRY SEGMENT ANALYSIS (CONTINUED)
PETROLEUM PRODUCTS AND SERVICES SEGMENT (CONTINUED)
Drilling and production activity continued to be strong in the quarter, as
indicated by a 14% increase in worldwide rig count. North American rig
activity was 24% higher, and offshore activity was 10% higher. Baroid
Drilling Fluids, Sperry-Sun and Security DBS saw substantial volume increases
in both the quarter and the six month periods. Improved product mix and
market share gains also contributed to higher earnings.
Bredero-Shaw, Sub Sea and Wellstream had significantly higher revenues in
both the quarter and the six months. Bredero-Shaw and Wellstream had
improved profits in both periods. Pipeline activity in the North Sea, Mid
East, Far East and the U.S. spurred the improved performance of the
Bredero-Shaw pipecoating business. Wellstream benefitted from subsea
completion activity in the North Sea and offshore Brazil. Sub Sea began work
on the Schiehallion field in the West of Shetlands offshore region, but
continued to be negatively impacted by market conditions in the Gulf of
Mexico.
At the end of the quarter, segment backlog was $547.3 million, up from $526.5
million a year ago.
ENGINEERING SERVICES SEGMENT
M. W. KELLOGG OPERATIONS
For the quarter, operating profit increased 12% to $24.4 million despite
revenues of $444.5 million being down 5%. For the six months, operating
profit was up 24% to $50.8 million, and revenues were up 5% to $901.7. The
profit improvement for the quarter and the six months reflected higher
activity on LNG and ammonia projects in Africa, the Mid East and Latin
America, with earnings also benefitting from successful milestones being
reached on several projects nearing completion in Europe, the Far East and
South America. Year-to-date bookings were $1.1 billion, and backlog at April
30, 1997 was a record $3.1 billion. The backlog was 35% higher than a year
ago. Bid and proposal costs in the six months of $20.9 million were 17%
higher than last year.
ENERGY EQUIPMENT SEGMENT
Segment operating profit for the quarter of $66.3 million was up 26% and
revenues of $688.1 million were up 6%. For the six months, segment operating
profit of $98.0 million and revenues of $1,336.5 million were up 7% and 4%,
respectively. Of the four business lines, only Flow Control had lower
revenues and earnings. Segment backlog was $1.7 billion, up from $1.5 billion
at October 31, 1996 and the same as a year ago.
13
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
INDUSTRY SEGMENT ANALYSIS (CONTINUED)
ENERGY EQUIPMENT SEGMENT (CONTINUED)
COMPRESSION AND PUMPING
Revenues and operating profits were up for both the quarter and the six
months. Compared to 1996, Dresser-Rand's operating profit rose 36% for the
quarter but was off 8% year-to-date. The gain in the quarter reflected
increased contract compression activity in South America. Year-to-date
profit continued to be negatively impacted by sales of low margin complete
machines earlier this year. Earnings from Ingersoll-Dresser Pump were up in
the quarter and the six months reflecting improvements in the Engineered
Products Group along with lower headquarters expenses.
MEASUREMENT
Revenues rose 7% while operating profits were up 33% in the quarter. In the
six months, revenues rose 4% and operating profits were up 27%. Successful
product introductions and lower U.S. cost structure in the Wayne fuel
dispenser business accounted for the majority of the earnings improvement.
FLOW CONTROL
Revenues and operating profits were down slightly in both the quarter and the
six months reflecting lower margin shipments in the Control Valve business
earlier this year. Energy Valve results are ahead of last year, and bidding
activity continues at high levels.
POWER SYSTEMS
In the quarter, operating profit was up 40% on a revenue gain of 7%. For the
six months, operating profit was up 9% while revenues were essentially level.
The gains in the quarter reflected improvements by Waukesha as it recovered
from a work slowdown earlier in the year and benefitted from growth in the
gas compression market and high aftermarket activity.
14
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL CONDITION
The Company's overall financial condition remained strong at April 30, 1997.
Since the beginning of the year, the Company used approximately $113.4
million more cash than the operations generated resulting in an increase in
short-term borrowings of $26.5 million. Major expenditures included $114.6
million for capital expenditures and $59.8 million for dividends. In
addition, $190.9 million of cash was used to finance working capital,
primarily for increases in inventories and decreases in payables and accrued
expenses.
Total debt was $867.4 million as of April 30, 1997, compared to $842.3
million at October 31, 1996. Total debt was 35% of total book capitalization
as of April 30, 1997 and October 31, 1996. Net debt was 12% of market
capitalization at April 30, 1997, versus 9% at October 31, 1996.
LEGAL AND ENVIRONMENTAL MATTERS
The Company is currently involved in a number of lawsuits and has also been
identified as a potentially responsible party in a number of Superfund sites.
Note E to Condensed Consolidated Financial Statements includes significant
changes subsequent to October 31, 1996.
In accordance with the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995, the Company notes that the statements in this
Form 10-Q and elsewhere, which are forward-looking and which provide other
than historical information, involve risks and uncertainties that may impact
the Company's results of operations. These forward-looking statements
include, among others, statements concerning the Company's general business
strategies, financing decisions, corporate structure, backlog, operating
trends, industry trends, cost reduction strategies and their results,
expectations for funding capital expenditures and operations in future
periods. The Company also continues to face many risks and uncertainties
including: litigation, environmental laws, operations in high risk countries,
technological and structural changes in the industries served by the Company,
changes in the price of oil and natural gas, changes in capital spending by
customers in the hydrocarbon industry for exploration, development,
production, processing and refining and pipeline delivery networks. The
risks and uncertainties inherent in these forward-looking statements could
cause actual results to differ materially from those expressed in or implied
by these statements.
15
<PAGE>
PART II. OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES
(c) In March 1997, the Company issued 23 shares of
Common Stock ($.25 par value) to one executive
officer of the Company in connection with the
exercise of stock options. Under the terms of the
Company's 1989 Restricted Incentive Stock Plan
(Plan), one restricted share will be issued for
every five shares of the related stock option
exercised. Stock issued pursuant to the Plan are
not registered. No consideration for the
unregistered shares was exchanged.
In issuing the above securities, the Company
relied on the exemption from the registration and
prospectus delivery requirements of the Securities
Act of 1933 (the Securities Act) provided by
Section 4(2) of the Securities Act.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The Annual Meeting of Shareholders of Registrant
was held on March 20, 1997
(c) At the Annual meeting, the shareholders:
(i) voted to elect, in an uncontested election,
twelve directors of the Company. Each
nominee for Director was elected by a vote of
the shareholders as follows:
Votes
Votes For Withheld
William E. Bradford 146,966,808 329,259
Samuel B. Casey, Jr. 146,906,330 389,737
Lawrence S. Eagleburger 146,901,426 394,641
Sylvia A. Earle 146,923,326 372,741
Rawles Fulgham 146,950,182 345,885
John Gavin 146,950,001 346,066
Ray L. Hunt 146,969,659 326,408
J. Landis Martin 146,963,286 332,781
Lionel H. Olmer 146,935,699 360,368
Jay A. Precourt 136,640,364 10,655,703
Donald C. Vaughn 146,955,052 341,015
Richard W. Vieser 146,916,777 379,290
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
Exhibit 27 Financial Data Schedule
16
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
DRESSER INDUSTRIES, INC.
By: /s/ Kenneth J. Kotara
Kenneth J. Kotara
Controller
Dated: June 16, 1997
17
<PAGE>
EXHIBIT INDEX
Exhibit Description
- ------- -----------
27 Financial Data Schedule. (Pursuant to Item 601(c)(iv)
of Regulation S-K, the Financial Data Schedule is not
deemed to be "filed" for purposes of Section 11 of the
Securities Act of 1933, as amended, or Section 18 of the
Securities Exchange Act of 1934, as amended.)
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-END> APR-30-1997
<CASH> 144,000
<SECURITIES> 0
<RECEIVABLES> 1,146,500
<ALLOWANCES> 0
<INVENTORY> 942,000
<CURRENT-ASSETS> 2,397,400
<PP&E> 2,878,300
<DEPRECIATION> 1,643,400
<TOTAL-ASSETS> 5,054,600
<CURRENT-LIABILITIES> 1,747,800
<BONDS> 754,800
0
0
<COMMON> 46,200
<OTHER-SE> 1,567,300
<TOTAL-LIABILITY-AND-EQUITY> 5,054,600
<SALES> 3,456,700
<TOTAL-REVENUES> 3,475,800
<CGS> 2,707,300
<TOTAL-COSTS> 3,232,400
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 34,300
<INCOME-PRETAX> 210,700
<INCOME-TAX> 73,800
<INCOME-CONTINUING> 126,900
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 126,900
<EPS-PRIMARY> .72
<EPS-DILUTED> .72
</TABLE>
