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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 [FEE REQUIRED]
For the fiscal year ended March 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ____________ to ____________
COMMISSION FILE NUMBER: 1-4003
A. Full title of the Plan and the address of the Plan, if different from that
of the issuer named below:
THE M. W. KELLOGG COMPANY EMPLOYEE STOCK PURCHASE PLAN
P.O. Box 4557
Houston, Texas 77210
B. Name of issuer of the securities held pursuant to the Plan and the address
of its principal executive office:
DRESSER INDUSTRIES, INC.
2001 Ross Avenue
Dallas, Texas 75201
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THE M. W. KELLOGG COMPANY EMPLOYEE STOCK PURCHASE PLAN
INDEX TO FINANCIAL STATEMENTS
March 31, 1998 and 1997
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PAGE
Report of Independent Accountants 1
Financial Statements:
Statement of Financial Condition 2
Statement of Income and Changes in Plan Equity 3
Notes to Financial Statements 4 - 5
Schedules I, II and III are not applicable due to sole investment of the Plan
being Dresser Industries, Inc. common stock.
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[Letterhead]
REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants of
The M. W. Kellogg Company Employee Stock Purchase Plan
In our opinion, the financial statements listed in the accompanying index
present fairly, in all material respects, the financial condition of The M. W.
Kellogg Company Employee Stock Purchase Plan (the Plan) at March 31, 1998 and
1997, and its income and changes in plan equity for the three years ended March
31, 1998, in conformity with generally accepted accounting principles. These
financial statements are the responsibility of the Plan's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that ouraudits provide a reasonable basis for the opinion expressed
above.
/s/ PRICE WATERHOUSE LLP
PRICE WATERHOUSE LLP
Houston, Texas
May 29, 1998
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THE M. W. KELLOGG COMPANY EMPLOYEE STOCK PURCHASE PLAN
STATEMENT OF FINANCIAL CONDITION
March 31, 1998 and 1997
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<TABLE>
1998 1997
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<S> <C> <C>
ASSETS
Dresser Industries, Inc. common stock, $0.25 par value
at market value of $48.06 per share (32,952 shares;
cost $993,000) and $30.25 per share (25,983 shares;
cost $709,000) $1,584,000 $786,000
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Total assets $1,584,000 $786,000
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PLAN EQUITY
Plan equity, at cost $ 993,000 $709,000
Unrealized appreciation of investments 591,000 77,000
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Plan equity, at market 1,584,000 786,000
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Total plan equity $1,584,000 $786,000
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</TABLE>
The accompanying notes are an integral part of these financial statements.
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THE M. W. KELLOGG COMPANY EMPLOYEE STOCK PURCHASE PLAN
STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY
Years Ended March 31, 1998, 1997 and 1996
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<TABLE>
1998 1997 1996
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<S> <C> <C> <C>
Contributions:
Employee contributions $ 549,000 $ 429,000 $367,000
Investment income:
Cash dividends on Dresser Industries, Inc.
common stock 26,000 15,000 6,000
Other increases:
Realized appreciation of investments 5,000
Unrealized appreciation of investments 514,000 96,000
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Total increase 1,089,000 444,000 474,000
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Distributions to participants:
Cash (291,000) (90,000) (22,000)
Other decreases:
Realized depreciation of investments (1,000)
Unrealized depreciation of investments (19,000)
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Total decrease (291,000) (110,000) (22,000)
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Net increase in plan equity 798,000 334,000 452,000
Plan equity, beginning of year 786,000 452,000 -0-
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Plan equity, end of year $1,584,000 $ 786,000 $452,000
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</TABLE>
The accompanying notes are an integral part of these financial statements.
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THE M. W. KELLOGG COMPANY EMPLOYEE STOCK PURCHASE PLAN
NOTES TO FINANCIAL STATEMENTS
March 31, 1998, 1997 and 1996
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1. DESCRIPTION OF THE PLAN AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The M. W. Kellogg Company Employee Stock Purchase Plan (the Plan) was
established in April 1994 to assist eligible employees of The M. W. Kellogg
Company (the Company) acquire and accumulate shares of Dresser Industries,
Inc.'s (Dresser's) common stock through regular and systematic payroll
deductions. The Company supplements the purchase by paying for the
transaction cost of the purchase and other incidental costs of the service.
Reference should be made to the Plan brochure for complete information.
The Plan began operating in May 1995.
Substantially all regular, full-time employees of the Company are eligible
to participate in the Plan.
The aggregate amount of each payroll deduction is used to purchase shares
of Dresser's common stock off the open market. The shares purchased are
credited to individual securities accounts established for each
participant. The amount credited is determined by the average share price
of the purchase and the participant's contribution.
A participant can sell all or part of his investment at any time. All
distributions are made in cash and the participant is responsible for all
transaction and service fees associated with the sale of stock held in his
individual securities account. The cost of shares is determined using the
first-in, first-out principle.
The Company may terminate the Plan at any time. Upon termination of the
Plan, a participant's individual securities account can remain open at the
discretion of the employee and the employee can continue to buy, sell and
hold securities; however, different transaction fees and account fees may
apply.
The accounting records of the Plan are maintained on an accrual basis.
Investments are recorded at market value as determined by the average of
the high and low sales prices of the Dresser common stock on the last
business day of each plan quarter. The Company pays all of the Plan's
administrative expenses.
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.
2. TAX STATUS OF THE PLAN
Management does not intend for the Plan to be qualified under
Section 401(a) of the Internal Revenue Code or subject to regulation under
the Employee Retirement Income Security Act of 1974 (ERISA).
Contributions to the Plan reflect after-tax dollars and participants are
liable for income taxes on distributions received on plan investments in
accordance with the Internal Revenue Code.
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THE M. W. KELLOGG COMPANY EMPLOYEE STOCK PURCHASE PLAN
NOTES TO FINANCIAL STATEMENTS
March 31, 1998 and 1997
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3. SIGNIFICANT EVENT
On February 26, 1998, the Boards of Directors of Dresser and Halliburton
Company announced their intention to merge the companies. Management
intends to complete the merger during the second half of 1998 conditioned
upon approval by shareholders of both companies as well as various foreign,
federal and state regulatory agencies. Management currently has no
intentions to change or terminate the Plan as the result of this merger.
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SIGNATURE
The Plan. 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 thereunto duly authorized.
The M. W. Kellogg Company
Employee Stock Purchase Plan
/s/ Thomas E. Giles
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Thomas E. Giles
The M.W. Kellogg Company Plan Administration Committee
Date: June 24, 1998
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION OF EXHIBIT
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23 Consent of Independent Accountants
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Exhibit 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 of Dresser Industries, Inc. (33-52989) of our report dated
May 29, 1998 appearing on page 1 of this Form 11-K.
/s/ PRICE WATERHOUSE LLP
PRICE WATERHOUSE LLP
Houston, Texas
June 24, 1998
