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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
For the fiscal year ended May 18, 1998
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
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DRESSER INDUSTRIES, INC.
STOCK PURCHASE PLAN
FINANCIAL STATEMENTS
MAY 18, 1998 AND DECEMBER 31, 1997
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DRESSER INDUSTRIES, INC.
STOCK PURCHASE PLAN
INDEX TO PLAN FINANCIAL STATEMENTS
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<TABLE>
<CAPTION>
Page
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<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 4-5
</TABLE>
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[PricewaterhouseCoopers 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 May 18, 1998 and
December 31, 1997, and the changes in its net assets available for benefits for
the period from January 1, 1998 through May 18, 1998 and for the year ended
December 31, 1997, 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 audits 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.
As more fully described in Note 1 to the financial statements, on September 18,
1997, the Employee Benefit Committee of Dresser Industries, Inc. (Dresser)
voted to freeze the plan. As of May 18, 1998, all assets of the plan were
merged into other defined contribution plans administered by Dresser.
/s/ PricewaterhouseCoopers LLP
PRICEWATERHOUSECOOPERS LLP
Dallas, Texas
September 11, 1998
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DRESSER INDUSTRIES, INC.
STOCK PURCHASE PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
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<TABLE>
<CAPTION>
MAY 18, DECEMBER 31,
1998 1997
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<S> <C> <C>
ASSETS
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Due from Dresser Industries $ - $ 3,125
Dresser Industries, Inc. common stock at market
(1998 - 0 shares; cost $0;
1997 - 780,679 shares; cost $13,471,846) - 32,642,141
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Total assets - 32,645,266
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LIABILITIES
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Book overdraft - 2,749
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Net assets available for benefits $ - $ 32,642,517
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</TABLE>
See accompanying notes to financial statements.
2
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DRESSER INDUSTRIES, INC.
STOCK PURCHASE PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
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<TABLE>
<CAPTION>
PERIOD ENDED YEAR ENDED
MAY 18, DECEMBER 31,
1998 1997
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<S> <C> <C>
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Contributions:
Employees $ - $ 1,090,023
Employer - 218,563
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Total contributions - 1,308,586
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Investment income:
Cash dividends on Dresser Industries, Inc.
common stock 125,425 574,228
Interest - 12,708
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Total investment income 125,425 586,936
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Other increases:
Net appreciation in fair value of investments 4,927,128 8,798,927
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Total additions 5,052,553 10,694,449
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DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits paid to participants:
Cash 4,388 3,023
Stock, at market 5,675,574 4,448,913
Transfers to other benefit plans 32,015,108 -
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Total deductions 37,695,070 4,451,936
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Net (decrease) increase (32,642,517) 6,242,513
Net assets available for benefits:
Beginning of period/year 32,642,517 26,400,004
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End of period/year - $ 32,642,517
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</TABLE>
See accompanying notes to financial statements.
3
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DRESSER INDUSTRIES, INC.
STOCK PURCHASE PLAN
NOTES TO FINANCIAL STATEMENTS
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1. STATUS OF THE PLAN
On September 18, 1997, the Employee Benefit Committee (the Committee) of
Dresser Industries, Inc. (Dresser) voted to freeze the Dresser
Industries, Inc. Stock Purchase Plan (the Plan). Participant
contributions ceased immediately following the last payroll period in
1997 and company contributions (including stock purchase discounts)
ceased coincident with the cessation of participant contributions. All
participation in the Plan froze such that no further employees became
eligible to participate in the Plan from and after December 31, 1997.
Subsequent to freezing the Plan, the Plan was merged into the Company's
various 401(k) plans based upon participation eligibility in those plans
and subject to specific provisions that may be required under applicable
law and as determined to be appropriate by the Committee. Such mergers
were effected April 1, 1998 and completed as of May 18, 1998.
2. DESCRIPTION OF THE PLAN
The Plan was established to assist eligible employees of Dresser to
acquire and accumulate shares of common stock of Dresser through payroll
deductions. Dresser supplemented the contributions of employees who had
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, were eligible to participate in the Plan.
Employees represented by a union could participate only if eligibility
is afforded to them as a result of collective bargaining. No employee
could contribute to the Plan during the same calendar year quarter in
which contributions were 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, were transferred to a trust fund that
purchased shares of common stock for the accounts of participants.
Common stock of Dresser was purchased on a quarterly basis. At December
31, 1997, Dresser common stock, shown on the accompanying statement of
net assets, included 10,981 shares issuable by Dresser based on
contributions and investment earnings for the quarter then ended. These
shares were issued on January 28, 1998.
Common stock, plus cash for any partial share credited to a
participant's account, were distributed to the participant (or the
participant's designated beneficiary or estate) in full after the end of
a quarter in which a participant became eligible for a distribution due
to permanent disability, death, retirement, or termination of
employment. Prior to termination of employment, shares could be
distributed to a participant upon voluntary withdrawal from the Plan or
for emergencies at the discretion of the Committee, as provided in the
Plan document.
The Plan's assets, which consisted principally of Dresser common stock,
were held in safekeeping for custodial purposes by an independent bank.
Contributions were managed by the trustee, which invested cash received,
interest and dividend income, and made distributions to participants.
Certain administrative functions were performed by officers or employees
of Dresser. No such officer or employee received compensation from the
Plan.
4
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DRESSER INDUSTRIES, INC.
STOCK PURCHASE PLAN
NOTES TO FINANCIAL STATEMENTS
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3. 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 were 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 was applied to the purchase of stock in the quarter in
which the dividend was declared for participants who had balances as of the
date of record.
EXPENSES
Dresser paid all of the Plan's administrative expenses.
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). Subsequent to the decision to freeze the assets
of the Plan, the Internal Revenue Service granted a favorable letter of
determination to the Plan on July 17, 1998. 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
At December 31, 1997, Plan assets totaling $6,605 relate to participants
who had withdrawn from the Plan but had not yet been paid.
5
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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 Bryant
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Paul Bryant, Chairman
Stock Purchase Plan Committee
September 22, 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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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 September 11, 1998 appearing on page 1 of this Form 11-K.
/s/ PricewaterhouseCoopers LLP
PRICEWATERHOUSECOOPERS LLP
Dallas, Texas
September 22, 1998