<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
For the fiscal year ended December 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES
EXCHANGE ACT OF 1934
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:
DRESSER INDUSTRIES, INC. STOCK PURCHASE PLAN
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
<PAGE>
DRESSER INDUSTRIES, INC.
STOCK PURCHASE PLAN
FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
<PAGE>
INDEX TO PLAN FINANCIAL STATEMENTS
<TABLE>
Page
----
<S> <C>
Report of Independent Accountants 1
Plan Financial Statements:
Statement of Net Assets Available for Benefits 2
Statement of Changes in Net Assets Available for Benefits 3
Notes to Financial Statements 4-6
Supplemental Schedules:
Schedule of Assets Held for Investment Purposes Schedule 1
Schedule of Reportable Transactions Schedule 2
</TABLE>
<PAGE>
[Letterhead]
REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and Employee Benefits
Committee of the Dresser Industries, Inc.
Stock Purchase Plan
In our opinion, the financial statements listed in the accompanying index
present fairly, in all material respects, the net assets available for benefits
of the Dresser Industries, Inc. Stock Purchase Plan at December 31, 1997 and
1996, and the changes in net assets available for benefits for the years then
ended, 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 our audits provide a reasonable basis for the opinion expressed
above.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information included in
Schedules 1 and 2 is presented for purposes of additional analysis and is not a
required part of the basic financial statements but is additional information
required by the Employee Retirement Income Security Act of 1974. Such
information has been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
As more fully described in Note 3 to the financial statements, on September 18,
1997, the Employee Benefit Committee of Dresser Industries, Inc. (Dresser) voted
to freeze the plan and subsequently merge the assets of the plan into other
defined contribution plans administered by Dresser.
/s/ Price Waterhouse LLP
Dallas, Texas
May 19, 1998
1
<PAGE>
DRESSER INDUSTRIES, INC.
STOCK PURCHASE PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
DECEMBER 31,
------------------------------
1997 1996
------------- -------------
<S> <C> <C>
ASSETS
Due from Dresser Industries, Inc. $ 3,125 $ 2,927
Dresser Industries, Inc. common stock at market
(1997 - 780,679 shares: cost $13,471,846
1996 - 844,792 shares: cost $13,411,557) 32,642,141 26,399,750
------------- -------------
Total assets 32,645,266 26,402,677
LIABILITIES
Book overdraft 2,749 2,673
------------- -------------
Net assets available for benefits $ 32,642,517 $ 26,400,004
------------- -------------
------------- -------------
</TABLE>
See accompanying notes to financial statements.
2
<PAGE>
DRESSER INDUSTRIES, INC.
STOCK PURCHASE PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
YEAR ENDED DECEMBER 31,
-------------------------
1997 1996
----------- -----------
<S> <C> <C>
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Contributions:
Employees $ 1,090,023 $ 1,078,861
Employer 218,563 208,714
----------- -----------
Total contributions 1,308,586 1,287,575
----------- -----------
Investment income:
Cash dividends on Dresser Industries, Inc.
common stock 574,228 571,019
Interest 12,708 10,257
----------- -----------
Total investment income 586,936 581,276
----------- -----------
Other increases:
Net appreciation in fair value of investments 8,798,927 6,203,161
----------- -----------
Total additions 10,694,449 8,072,012
----------- -----------
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits paid to participants:
Cash 3,023 2,052
Stock, at market 4,448,913 3,751,065
----------- -----------
Total deductions 4,451,936 3,753,117
----------- -----------
Net increase 6,242,513 4,318,895
Net assets available for benefits:
Beginning of year 26,400,004 22,081,109
----------- -----------
End of year $32,642,517 $26,400,004
----------- -----------
----------- -----------
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
DRESSER INDUSTRIES, INC.
STOCK PURCHASE PLAN
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF THE PLAN
The Dresser Industries, Inc. Stock Purchase Plan (the "Plan") was
established to assist eligible employees of Dresser Industries, Inc.
(Dresser) to acquire and accumulate shares of common stock of Dresser
through payroll deductions. Dresser supplements the contributions of
employees who have four or more years of service. Reference should be made
to the Plan document for more complete information.
Substantially all employees of Dresser having at least one year of
employment with Dresser (as defined in the Plan document), except its
officers and directors, are eligible to participate in the Plan. Employees
represented by a union can participate only if eligibility is afforded to
them as a result of collective bargaining. No employee may contribute to
the Plan during the same calendar year quarter in which contributions are
made to any other qualified defined contribution plan sponsored by Dresser,
other than a 401(k) plan.
Amounts contributed by the participants and Dresser and cash dividends
received from Dresser, if any, are transferred to a trust fund which
purchases shares of common stock for the accounts of participants. Common
stock of Dresser is purchased on a quarterly basis. At December 31, 1997
and 1996, Dresser common stock shown on the accompanying statement of net
assets includes 10,981 and 14,797 shares, respectively, issuable by
Dresser, based on contributions and investment earnings for the quarters
then ended. These shares were issued on January 28, 1998 and January 30,
1997, respectively.
Common stock, plus cash for any partial share credited to a participant's
account, will be distributed to the participant (or the participant's
designated beneficiary or estate) in full after the end of a quarter in
which a participant becomes eligible for a distribution due to permanent
disability, death, retirement, or termination of employment. Prior to
termination of employment, shares can be distributed to a participant upon
voluntary withdrawal from the Plan or for emergencies at the discretion of
the Stock Purchase Plan Committee, as provided in the Plan document.
The Plan's assets, which consist principally of Dresser common stock, are
held in safekeeping for custodial purposes by an independent bank.
Contributions are managed by the trustee, which invests cash received,
interest and dividend income, and makes distributions to participants.
Certain administrative functions are performed by officers or employees of
Dresser. No such officer or employee receives compensation from the Plan.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The financial statements of the Plan are presented on the accrual basis of
accounting.
INVESTMENT VALUATION AND INCOME RECOGNITION
Investments are recorded at market value, as determined by the average of
the high and low sales prices of Dresser common stock on the last business
day of the Plan quarter.
Dividend income is applied to the purchase of stock in the quarter in
which the dividend is declared for participants who have balances as of
the date of record.
4
<PAGE>
EXPENSES
Dresser pays all of the Plan's administrative expenses.
3. STATUS OF THE PLAN
On September 18, 1997, the Employee Benefit Committee of Dresser (the
"Committee") voted to freeze the Plan. Participant contributions ceased
immediately following the last payroll period in 1997 and company
contributions (including stock purchase discounts) to the Plan ceased
coincident with the cessation of participant contributions. Participation
in the Plan froze such that no further employees shall become eligible to
participate in the Plan from and after December 31, 1997. Effective April
1, 1998, assets of the Plan in the amount of $32,015,108 were merged into
other defined contribution plans administered by Dresser based upon
participation eligibility in those plans and subject to specific provisions
that may be required under applicable law or determined to be appropriate
by the Committee. Participants currently receiving benefits will not be
affected.
4. TAX STATUS OF THE PLAN
Management believes the Plan is qualified under section 401(a) of the
Internal Revenue Code and, therefore, the trust is exempt from taxation
under section 501(a). The Internal Revenue Service (IRS) granted a
favorable letter of determination to the Plan on November 1, 1995.
Generally, employer contributions to a qualified plan are deductible by
Dresser when made. Earnings of the trust are tax exempt and participants
are not taxed on their benefits until withdrawn from the Plan.
Management believes the Plan is qualified under the applicable sections of
the Internal Revenue Code and ERISA. The Plan has complied with the
fidelity bonding requirements of ERISA.
5. PARTICIPANTS WITHDRAWN AT YEAR-END
Plan assets totaling $6,605 and $85,985 relate to participants who have
withdrawn from the Plan but have not yet been paid at December 31, 1997 and
1996, respectively.
5
<PAGE>
6. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for Plan benefits
per the financial statements to the Form 5500:
<TABLE>
December 31,
1997
-----------
<S> <C>
Net assets available for Plan benefits
per the financial statements $32,642,517
Less: benefit obligations currently payable (Note 5) 6,605
-----------
Net assets available for Plan benefits
per the Form 5500 $32,635,912
-----------
-----------
</TABLE>
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500:
<TABLE>
<S> <C>
Benefits paid to participants per the
financial statements $ 4,451,936
Add: benefit obligations currently payable (Note 5) 6,605
-----------
Benefits paid to participants per the Form 5500 $ 4,458,541
-----------
-----------
</TABLE>
Amounts currently payable to or for participants, dependents and
beneficiaries are recorded on the Form 5500 for benefit claims that have
been processed and approved for payment prior to December 31, but not yet
paid as of that date.
6
<PAGE>
DRESSER INDUSTRIES, INC.
STOCK PURCHASE PLAN
ITEM 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1997
SCHEDULE 1
<TABLE>
Identity of Issuer, Borrower, Description of Investment
Lessor or Similar Party Including Par Value Cost Current Value
- ----------------------------- ------------------------- ----------- -------------
<S> <C> <C> <C>
Dresser Industries, Inc. * 780,679 shares of common $13,471,846 $32,642,141
stock, $.25 par value
</TABLE>
* Party-In-Interest
<PAGE>
DRESSER INDUSTRIES, INC.
STOCK PURCHASE PLAN
ITEM 27D - SCHEDULE OF REPORTABLE TRANSACTIONS (A)
YEAR ENDED DECEMBER 31, 1997
SCHEDULE 2
<TABLE>
Current
Expenses Value
Incurred of Asset on Net
Identity of Description Purchase Selling Lease with Cost of Transaction Gain
Party Involved of Assets Price Price Rental Transaction Asset Date (Loss)
- ------------------------- ------------------- ---------- ------- ------ ----------- ---------- ----------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
TOTAL OF QUARTERLY
TRANSACTIONS
Dresser Industries, Inc.* 50,703 shares of $1,892,388 $ - $ - $ - $1,892,388 $1,892,388 $ -
Dresser Industries,
Inc. common stock
</TABLE>
(A) Transactions in excess of five percent of the current value of the Plan's
assets as of January 1, 1997, as defined in Section 2520.103-6 of the
Department of Labor's Rules and Regulations for Reporting and Disclosure
under ERISA.
* Party-In-Interest
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Stock Purchase Plan Committee has duly caused this Annual Report to be signed
on its behalf by the undersigned thereunto duly authorized.
DRESSER INDUSTRIES, INC.
STOCK PURCHASE PLAN
/s/ Paul M. Bryant
---------------------------
Paul M. Bryant, Chairman
Stock Purchase Plan Committee
June 19, 1998
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION OF EXHIBIT
- ----------- ----------------------
23 Consent of Independent Accountants
<PAGE>
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 2-81536) of Dresser Industries, Inc. of our report
dated May 19, 1998 appearing on page 1 of this Form 11-K.
/s/ Price Waterhouse LLP
- ----------------------------
PRICE WATERHOUSE LLP
Dallas, Texas
June 19, 1998
