<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(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 Numbers: 33-44284 and 33-59359
A. Full title of the plan and address of the plan, if different from that
of the issuer named below:
HONEYWELL SAVINGS AND STOCK OWNERSHIP PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
HONEYWELL INC.
Honeywell Plaza
Minneapolis, Minnesota 55408
Included herewith and set forth on pages 2 to 11 hereof are the Honeywell
Investment Plus Plan Financial Statements for the Years Ended December 31,
1997 and 1996 and Supplemental Schedules for the Year Ended December 31, 1997
prepared by the firm of Deloitte & Touche LLP, Independent Auditors.
<PAGE>
SAVINGS AND STOCK OWNERSHIP PLAN OF
HONEYWELL INC.
FINANCIAL STATEMENTS AS OF AND FOR THE
YEARS ENDED DECEMBER 31, 1997 AND 1996
AND INDEPENDENT AUDITORS' REPORT
<PAGE>
SAVINGS AND STOCK OWNERSHIP PLAN OF
HONEYWELL INC.
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
PAGE
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits,
December 31, 1997 and 1996 2,3
Statements of Changes in Net Assets Available for Benefits,
Years Ended December 31, 1997 and 1996 4,5
Notes to Financial Statements 6
<PAGE>
INDEPENDENT AUDITORS' REPORT
Honeywell Savings and Stock Ownership Plan
We have audited the statements of net assets available for benefits of the
Honeywell Savings and Stock Ownership Plan, formerly known as the Investment
Plus Plan of Honeywell Inc. (the Plan) as of December 31, 1997 and 1996 and the
statements of changes in net assets available for benefits for the years then
ended. 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 accompanying financial statements present fairly, in all
material respects, the net assets available for benefits as of 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.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information by fund is
presented for the purpose of additional analysis of the basic financial
statements, rather than to present information regarding the net assets
available for benefits and changes in net assets available for benefits of the
individual funds. It is not a required part of the basic financial statements.
This supplemental information by fund is the responsibility of the Plan's
management. Such supplemental information by fund has been subjected to the
auditing procedures applied in our audits of the basic financial statements and,
in our opinion, is fairly stated in all material respects when considered in
relation to the basic financial statements taken as a whole.
June 8, 1998
Minneapolis, Minnesota
1
<PAGE>
HONEYWELL SAVINGS AND STOCK OWNERSHIP PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1997 (AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
SUPPLEMENTAL INFORMATION BY FUND
---------------------------------------------------------
GOVERNMENT SHORT-TERM
COMBINED INCOME BOND BONDS STOCKS S&P
TOTAL FUND FUND PLUS FUND PLUS FUND 500 FUND
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investment in Master Trusts $2,278,085 $ 350,818 $ 17,049 $ 53,566 $ 334,967 $ 549,751
Investment at First Trust 6,536
Contributions receivable 12,348 175 14 33 174 293
Other receivables 5,153 3,182 134 1,073 5
---------- ---------- --------- -------- ---------- ---------
Total assets 2,302,122 354,175 17,063 53,733 336,214 550,049
LIABILITIES:
Administration fees
payable 227 32 6 13 64 112
Other payables 5,281 3,174 3 142 1,072 78
---------- ---------- --------- -------- ---------- ---------
Total liabilities 5,508 3,206 9 155 1,136 190
---------- ---------- --------- -------- ---------- ---------
NET ASSETS AVAILABLE
FOR BENEFITS AT END
OF YEAR $2,296,614 $ 350,969 $ 17,054 $ 53,578 $ 335,078 $ 549,859
---------- ---------- --------- -------- ---------- ---------
---------- ---------- --------- -------- ---------- ---------
<CAPTION>
- --------------------------------------------------------------------------------------------------------
SUPPLEMENTAL INFORMATION BY FUND
------------------------------------------------------------
HONEYWELL UNITED COLUMBIA VANGUARD
STOCK INCOME JANUS TEMPLETON SPECIAL WORLD
FUND FUND FUND FUND FUND FUND
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investment in Master Trusts $ 485,669 $ 34,497 $ 66,336 $21,565 $41,505 $65,751
Investment at First Trust
Contributions receivable 11,236 35 68 22 40 70
Other receivables 10 495 4 151 99
--------- ---------- -------- ------- ------- -------
Total assets 496,915 34,532 66,899 21,591 41,696 65,920
LIABILITIES:
Administration fees
payable
Other payables 145 500 7 160
--------- -------- ------- -------
Total liabilities 145 500 7 160
--------- ---------- -------- ------- ------- -------
NET ASSETS AVAILABLE
FOR BENEFITS AT END
OF YEAR $ 496,770 $ 34,532 $ 66,399 $21,584 $41,536 $65,920
--------- ---------- -------- ------- ------- -------
--------- ---------- -------- ------- ------- -------
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
SUPPLEMENTAL INFORMATION BY FUND
-------------------------------------------------------------------------
T. ROWE T. ROWE T. ROWE
PRICE PRICE PRICE
DIVERSIFIED INTER- SMALL EQUITY
GROWTH NATIONAL CAP VALUE INCOME ISOLATED PARTICIPANT
FUND FUND FUND FUND FUNDS LOANS
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investment in Master Trusts $ 56,444 $ 70,323 $ 93,698 $ 36,146
Investment at First Trust $ 6,536
Contributions receivable $ 1 41 66 80
Other receivables
-------- -------- -------- -------- ------- ---------
Total assets 1 56,485 70,389 93,778 6,536 36,146
LIABILITIES:
Administration fees
payable
Other payables
Total liabilities
-------- -------- -------- -------- ------- ---------
NET ASSETS AVAILABLE
FOR BENEFITS AT END
OF YEAR $ 1 $ 56,485 $ 70,389 $ 93,778 $ 6,536 $ 36,146
-------- -------- -------- -------- ------- ---------
-------- -------- -------- -------- ------- ---------
</TABLE>
See accompanying notes to financial statements.
2
<PAGE>
HONEYWELL SAVINGS AND STOCK OWNERSHIP PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1996 (AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
SUPPLEMENTAL INFORMATION BY FUND
----------------------------------------------------------
GOVERNMENT SHORT-TERM
COMBINED INCOME BOND BONDS STOCKS S&P
TOTAL FUND FUND PLUS FUND PLUS FUND 500 FUND
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investment in Master Trusts $1,912,127 $ 351,210 $ 14,091 $ 37,137 $ 296,511 $ 403,315
Investment at First Trust 15,508
Contributions receivable 8,533 132 10 22 151 202
Other receivables 3,411 3,211 17 76 98
--------- ---------- --------- -------- ---------- ---------
Total assets 1,939,579 354,553 14,101 37,176 296,738 403,615
LIABILITIES:
Administration fees
payable 232 65 6 12 63 86
Other payables 3,004 2,738 26 89 5
--------- ---------- --------- -------- ---------- ---------
Total liabilities 3,236 2,803 6 38 152 91
--------- ---------- --------- -------- ---------- ---------
NET ASSETS AVAILABLE
FOR BENEFITS AT END
OF YEAR $1,936,343 $ 351,750 $ 14,095 $ 37,138 $ 296,586 $ 403,524
--------- ---------- --------- -------- ---------- ---------
--------- ---------- --------- -------- ---------- ---------
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
SUPPLEMENTAL INFORMATION BY FUND
-------------------------------------------------------------
HONEYWELL UNITED COLUMBIA VANGUARD
STOCK INCOME JANUS TEMPLETON SPECIAL WORLD
FUND FUND FUND FUND FUND FUND
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investment in Master Trusts $ 439,471 $ 23,146 $ 56,012 $ 7,865 $48,885 $40,842
Investment at First Trust
Contributions receivable 7,717 21 55 8 50 45
Other receivables 3 6
--------- ---------- -------- ------- ------- -------
Total assets 447,191 23,167 56,067 7,873 48,935 40,893
LIABILITIES:
Administration fees
payable
Other payables 2 12 7 18 28 1
--------- ---------- -------- ------- ------- -------
Total liabilities 2 12 7 18 28 1
--------- ---------- -------- ------- ------- -------
NET ASSETS AVAILABLE
FOR BENEFITS AT END
OF YEAR $ 447,189 $ 23,155 $ 56,060 $ 7,855 $48,907 $40,892
--------- ---------- -------- ------- ------- -------
--------- ---------- -------- ------- ------- -------
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
SUPPLEMENTAL INFORMATION BY FUND
--------------------------------------------------------------
T. ROWE T. ROWE T. ROWE
PRICE PRICE PRICE
INTER- SMALL EQUITY
NATIONAL CAP VALUE INCOME ISOLATED PARTICIPANT
FUND FUND FUND FUNDS LOANS
<S> <C> <C> <C> <C> <C>
ASSETS:
Investment in Master Trusts $61,503 $ 38,140 $ 58,530 $35,469
Investment at First Trust $ 15,508
Contributions receivable 40 34 46
Other receivables
------- -------- -------- -------- -------
Total assets 61,543 38,174 58,576 15,508 35,469
LIABILITIES:
Administration fees
payable
Other payables 52 12 14
------- -------- --------
Total liabilities 52 12 14
------- -------- -------- -------- ------
NET ASSETS AVAILABLE
FOR BENEFITS AT END
OF YEAR $61,491 $ 38,162 $ 58,562 $ 15,508 $35,469
------- -------- -------- -------- ------
------- -------- -------- -------- ------
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
HONEYWELL SAVINGS AND STOCK OWNERSHIP PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 1997 (AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
SUPPLEMENTAL INFORMATION BY FUND
----------------------------------------------------------
GOVERNMENT SHORT-TERM BONDS STOCKS
COMBINED INCOME BOND PLUS PLUS S&P 500
TOTAL FUND FUND FUND FUND FUND
<S> <C> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME
IN MASTER TRUSTS $ 315,024 $ 19,343 $ 1,068 $ 6,684 $ 58,072 $ 136,558
CONTRIBUTIONS:
Employer contributions 37,837 10 6 4 3 24
Other (1,047) (46) 40 (57) (662) (446)
Employee pretax
contributions 108,438 11,945 1,096 3,135 14,067 23,415
--------- ---------- ------- -------- ---------- ---------
Total contributions 145,228 11,909 1,142 3,082 13,408 22,993
TRANSFERS (TO) FROM
OTHER FUNDS (4,581) 2,253 8,765 (19,987) 6,416
--------- ---------- ------- -------- ---------- ---------
TOTAL INVESTMENT
INCOME, CONTRIBUTIONS,
AND TRANSFERS 460,252 26,671 4,463 18,531 51,493 165,967
LOANS:
Repayments 3,335 183 441 3,088 4,610
Distributions (3,487) (171) (389) (3,002) (4,544)
DISTRIBUTIONS TO
PARTICIPANTS (96,941) (26,731) (1,467) (2,040) (12,515) (18,797)
TRUSTEES' AND ADMINI-
STRATIVE FEES (3,040) (569) (49) (103) (572) (901)
--------- ---------- ------- -------- ---------- ---------
INCREASE (DECREASE) IN
NET ASSETS 360,271 (781) 2,959 16,440 38,492 146,335
NET ASSETS AVAILABLE
FOR BENEFITS AT
BEGINNING OF YEAR 1,936,343 351,750 14,095 37,138 296,586 403,524
--------- ---------- ------- -------- ---------- ---------
NET ASSETS AVAILABLE
FOR BENEFITS AT
END OF YEAR $2,296,614 $ 350,969 $17,054 $ 53,578 $ 335,078 $ 549,859
--------- ---------- ------- -------- ---------- ---------
--------- ---------- ------- -------- ---------- ---------
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
SUPPLEMENTAL INFORMATION BY FUND
--------------------------------------------------------------
HONEYWELL UNITED COLUMBIA VANGUARD
STOCK INCOME JANUS TEMPLETON SPECIAL WORLD
FUND FUND FUND FUND FUND FUND
<S> <C> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME
IN MASTER TRUSTS $ 19,111 $ 6,196 $12,237 $ 1,716 $ 4,813 $ 12,169
CONTRIBUTIONS:
Employer contributions 37,695 1 13 10 15
Other (676) (1) 41 (5) 18 49
Employee pretax
contributions 17,853 2,285 5,949 1,791 4,076 6,387
-------- --------- ------ ------- -------- ---------
Total contributions 54,872 2,285 6,003 1,786 4,104 6,451
TRANSFERS (TO) FROM
OTHER FUNDS (5,339) 3,830 (5,696) 10,709 (14,757) 8,485
-------- --------- ------ ------- -------- ---------
TOTAL INVESTMENT
INCOME, CONTRIBUTIONS,
AND TRANSFERS 68,644 12,311 12,544 14,211 (5,840) 27,105
LOANS:
Repayments 2,854 389 805 261 563 879
Distributions (2,567) (300) (694) (194) (578) (753)
DISTRIBUTIONS TO
PARTICIPANTS (18,898) (994) (2,257) (530) (1,477) (2,145)
TRUSTEES' AND ADMINI-
STRATIVE FEES (452) (29) (59) (19) (39) (58)
-------- --------- ------ ------- -------- ---------
INCREASE (DECREASE) IN
NET ASSETS 49,581 11,377 10,339 13,729 (7,371) 25,028
NET ASSETS AVAILABLE
FOR BENEFITS AT
BEGINNING OF YEAR 447,189 23,155 56,060 7,855 48,907 40,892
-------- --------- ------ ------- -------- ---------
NET ASSETS AVAILABLE
FOR BENEFITS AT
END OF YEAR $496,770 $ 34,532 $66,399 $21,584 $ 41,536 $ 65,920
-------- --------- ------ ------- -------- ---------
-------- --------- ------ ------- -------- ---------
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL INFORMATION BY FUND
------------------------------------------------------------------------
T. ROWE T. ROWE
T. ROWE PRICE PRICE
DIVERSIFIED PRICE SMALL CAP EQUITY
GROWTH INTERNATIONAL VALUE INCOME ISOLATED PARTICIPANT
FUND FUND FUND FUND FUNDS LOANS
<S> <C> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME
IN MASTER TRUSTS $ 1,637 $ 12,846 $ 19,541 $ 3,033
CONTRIBUTIONS:
Employer contributions 4 12 40
Other 5 4 288 401
Employee pretax
contributions $ 1 4,604 5,136 6,617 81
------- -------- -------- --------- ---------
Total contributions 1 4,613 5,152 6,945 482
TRANSFERS (TO) FROM
OTHER FUNDS (9,130) 16,151 12,146 $(8,972) (293)
------- -------- -------- --------- ------- ---------
TOTAL INVESTMENT
INCOME, CONTRIBUTIONS,
AND TRANSFERS 1 (2,880) 34,149 38,632 (8,972) 3,222
LOANS:
Repayments 747 605 799 (19,559)
Distributions (696) (534) (654) 18,563
DISTRIBUTIONS TO
PARTICIPANTS (2,119) (1,939) (3,483) (1,549)
TRUSTEES' AND ADMINI-
STRATIVE FEES (58) (54) (78)
------- -------- -------- --------- ------- ---------
INCREASE (DECREASE) IN
NET ASSETS 1 (5,006) 32,227 35,216 (8,972) 677
NET ASSETS AVAILABLE
FOR BENEFITS AT
BEGINNING OF YEAR 61,491 38,162 58,562 15,508 35,469
------- -------- -------- --------- ------- ---------
NET ASSETS AVAILABLE
FOR BENEFITS AT
END OF YEAR $ 1 $ 56,485 $ 70,389 $ 93,778 $ 6,536 $ 36,146
------- -------- -------- --------- ------- ---------
------- -------- -------- --------- ------- ---------
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
HONEYWELL SAVINGS AND STOCK OWNERSHIP PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 1996 (AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
SUPPLEMENTAL INFORMATION BY FUND
----------------------------------------------------------
GOVERNMENT SHORT-TERM BONDS STOCKS
COMBINED INCOME BOND PLUS PLUS S&P 500
TOTAL FUND FUND FUND FUND FUND
<S> <C> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME
IN MASTER TRUSTS $ 296,701 $ 16,828 $ 605 $ 2,899 $ 38,705 $ 71,854
CONTRIBUTIONS:
Employer contributions 27,018
Rollover contributions 8,627 571 184 391 664 1,121
Employee pretax
contributions 81,100 9,240 1,138 2,691 14,546 18,680
--------- ---------- ------- -------- ---------- ---------
Total contributions 116,745 9,811 1,322 3,082 15,210 19,801
TRANSFERS (TO) FROM
OTHER FUNDS (13,511) (1,484) 4,362 (19,717) (1,510)
--------- ---------- ------- -------- ---------- ---------
TOTAL INVESTMENT
INCOME, CONTRIBUTIONS,
AND TRANSFERS 413,446 13,128 443 10,343 34,198 90,145
LOANS:
Repayments 2,927 185 376 2,813 3,766
Distributions (4,314) (192) (365) (3,504) (4,233)
DISTRIBUTIONS TO
PARTICIPANTS (77,249) (23,021) (889) (1,420) (13,193) (13,644)
TRUSTEES' AND ADMINI-
STRATIVE FEES (2,003) (478) (41) (70) (433) (545)
MERGER FROM RSP 85,291 26,211 532 1,765 13,883 21,838
--------- ---------- ------- -------- ---------- ---------
INCREASE (DECREASE) IN
NET ASSETS 419,485 14,453 38 10,629 33,764 97,327
NET ASSETS AVAILABLE
FOR BENEFITS AT
BEGINNING OF YEAR 1,516,858 337,297 14,057 26,509 262,822 306,197
--------- ---------- ------- -------- ---------- ---------
NET ASSETS AVAILABLE
FOR BENEFITS AT
END OF YEAR $1,936,343 $ 351,750 $14,095 $ 37,138 $ 296,586 $ 403,524
--------- ---------- ------- -------- ---------- ---------
--------- ---------- ------- -------- ---------- ---------
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
SUPPLEMENTAL INFORMATION BY FUND
--------------------------------------------------------------
HONEYWELL UNITED COLUMBIA VANGUARD
STOCK INCOME JANUS TEMPLETON SPECIAL WORLD
FUND FUND FUND FUND FUND FUND
<S> <C> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME
IN MASTER TRUSTS $116,575 $ 3,719 $8,043 $ 725 $ 4,930 $ 6,524
CONTRIBUTIONS:
Employer contributions 27,018
Rollover contributions 960 247 933 50 589 662
Employee pretax
contributions 9,372 1,691 4,573 286 4,288 3,235
-------- --------- ------ ------- -------- ---------
Total contributions 37,350 1,938 5,506 336 4,877 3,897
TRANSFERS (TO) FROM
OTHER FUNDS (1,037) (837) 5,536 6,719 1,875 10,613
-------- --------- ------ ------- -------- ---------
TOTAL INVESTMENT
INCOME, CONTRIBUTIONS,
AND TRANSFERS 152,888 4,820 19,085 7,780 11,682 21,034
LOANS:
Repayments 1,963 320 631 46 714 558
Distributions (2,535) (218) (578) (44) (664) (432)
DISTRIBUTIONS TO
PARTICIPANTS (14,333) (615) (1,881) (109) (1,497) (760)
TRUSTEES' AND ADMINI-
STRATIVE FEES (246) (14) (32) (33) (19)
MERGER FROM RSP 7,171 755 1,738 182 1,486 1,204
-------- --------- ------ ------- -------- ---------
INCREASE (DECREASE) IN
NET ASSETS 144,908 5,048 18,963 7,855 11,688 21,585
NET ASSETS AVAILABLE
FOR BENEFITS AT
BEGINNING OF YEAR 302,281 18,107 37,097 37,219 19,307
-------- --------- ------ ------- -------- ---------
NET ASSETS AVAILABLE
FOR BENEFITS AT
END OF YEAR $447,189 $ 23,155 $56,060 $ 7,855 $ 48,907 $ 40,892
-------- --------- ------ ------- -------- ---------
-------- --------- ------ ------- -------- ---------
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
SUPPLEMENTAL INFORMATION BY FUND
------------------------------------------------------------------------
T. ROWE T. ROWE
T. ROWE PRICE PRICE
SCUDDER PRICE SMALL CAP EQUITY
ITERNATIONAL INTERNATIONAL VALUE INCOME ISOLATED PARTICIPANT
FUND FUND FUND FUND FUNDS LOANS
<S> <C> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME
IN MASTER TRUSTS $ 1,136 $ 7,208 $ 6,414 $ 8,534 $ 2,002
CONTRIBUTIONS:
Employer contributions
Rollover contributions 2 362 405 1,486
Employee pretax
contributions 559 4,128 2,871 3,800 2
------- -------- -------- --------- ---------
Total contributions 561 4,490 3,276 5,286 2
TRANSFERS (TO) FROM
OTHER FUNDS (16,411) 11,863 7,070 9,472 $(3,003)
------- -------- -------- --------- ------- ---------
TOTAL INVESTMENT
INCOME, CONTRIBUTIONS,
AND TRANSFERS (14,714) 23,561 16,760 23,292 (3,003) 2,004
LOANS:
Repayments 90 707 398 606 (16,100)
Distributions (98) (695) (359) (538) 18,769
DISTRIBUTIONS TO
PARTICIPANTS (315) (2,583) (1,244) (1,695) (50)
TRUSTEES' AND ADMINI-
STRATIVE FEES (5) (36) (20) (31)
MERGER FROM RSP 2,224 947 2,435 1,003 1,917
------- -------- -------- --------- ------- ---------
INCREASE (DECREASE) IN
NET ASSETS (15,042) 23,178 16,482 24,069 (2,050) 6,590
NET ASSETS AVAILABLE
FOR BENEFITS AT
BEGINNING OF YEAR 15,042 38,313 21,680 34,493 17,558 28,879
------- -------- -------- --------- ------- ---------
NET ASSETS AVAILABLE
FOR BENEFITS AT
END OF YEAR $ - $ 61,491 $ 38,162 $ 58,562 $15,508 $ 35,469
------- -------- -------- --------- ------- ---------
------- -------- -------- --------- ------- ---------
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
HONEYWELL SAVINGS AND STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997 AND 1996
- -------------------------------------------------------------------------------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING - The financial statements of the Honeywell Savings and
Stock Ownership Plan (the Plan) are prepared under the accrual method of
accounting. Contributions to the Plan are included in income in the year
the contributions payable are accrued by Honeywell Inc. (the Sponsor) or
paid in by plan participants.
INVESTMENT VALUATION - All determinations of fair values of investments are
made by the trustees and are based upon quoted prices in an active market,
except unallocated insurance contracts, which are valued at their contract
values, as determined by the issuing insurance companies.
PAYMENT OF BENEFITS - Benefits are recorded when paid.
2. PLAN DESCRIPTION
AMENDMENTS - Prior to January 1, 1997, the Plan was known as the Investment
Plus Plan of Honeywell Inc.
Effective December 31, 1996, the Retirement Savings Plan, sponsored by
Honeywell Inc., was merged into the Investment Plus Plan of Honeywell Inc.
Effective January 1, 1997, the Investment Plus Plan of Honeywell Inc. was
renamed as the Honeywell Savings and Stock Ownership Plan. Effective
January 1, 1997, the DMC 401(k) Plan, which was also sponsored by Honeywell
Inc., was merged into the Plan.
GENERAL INFORMATION - The plan is a qualified, tax-deferred savings plan
designed to provide qualified retirement benefits to Honeywell Inc.
employees.
The Board of Directors selects the members of the Savings Plan Committee,
which is a named fiduciary in the document. The Savings Plan Committee has
the authority to take such actions as may be necessary for the
administration of the Plan. The Savings Plan Committee appoints the members
to the Honeywell Pension and Retirement Administrative Committee and may
delegate certain responsibilities to this Committee.
CONTRIBUTIONS - The following contributions are made to the Plan:
(a) The Sponsor contributes to the Plan, on behalf of the participants,
various percentages of the participants' pay as elected by the
participants. The maximum pretax and after-tax contribution
percentages are determined by the Honeywell Pension and Retirement
Committee. Participants elect their own salary reduction contribution
levels, subject to these limits.
6
<PAGE>
(b) Participants who have received distributions from other qualified
plans under Section 401(a) of the Internal Revenue Code or from
individual retirement plans under Sections 402 and 408 of the code may
transfer (rollover) all or a part of such distribution to their
accounts.
(c) All nonunion employees are eligible to receive stock match
contributions. The Sponsor contributes between $.50 and $1.00 in
Honeywell stock to the participants' Performance stock match fund
account for each $1.00 the participants contribute to their pretax
account. Such sponsor contribution is limited to a maximum of 5% of
the participants' pay. Additional contributions may be made based on
the return on investment (as defined) attained by the Plan Sponsor for
the respective year. In addition, the Plan Sponsor reserves the right
to make additional discretionary contributions.
(d) As a plan enhancement, participants are given the option, following
the payment of dividends on employer stock allocated to their
individual accounts, to elect to contribute as an additional salary
reduction contribution an amount equal to dividends paid. The Plan
Sponsor has made application for a Private Letter Ruling on this
enhancement.
LOANS TO PARTICIPANTS - The Plan allows participants to apply for and
obtain a loan in an amount as defined in the Plan (in increments of $100,
an amount that is not less than $1,000 and not more than the lesser of
$50,000 and 50% of their pretax and rollover account balances) from the
balance of their accounts. The loans can be repaid through payroll
deductions over the period of 12 to 48 months or up to 180 months for the
purchase of a primary residence, or they can be repaid in full at any time
that is at least 3 months following the date of the loan. Interest is
charged at a rate equal to prime rate plus 1%. Payments of principal and
interest are credited to the participants' accounts and invested pursuant
to their current investment election for contributions. Also, participants
may have only one outstanding loan at a time.
PARTICIPATION - Each nonunion employee of the Sponsor classified as a
regular full-time employee or a regular part-time employee scheduled to
perform at least 1,000 hours of service during the plan year becomes a
participant on the date of hire by the Sponsor or transfer into the Plan.
Regular part-time employees scheduled to perform less than 1,000 hours of
service during the plan year become participants on the first day of the
first enrollment period after performing 1,000 hours of service. In
addition, union employees may participate in the plan subject to relevant
collective bargaining agreements.
VESTING - Participants are 100% vested in their individual accounts
attributable to their salary-deferral and rollover contributions and become
100% vested in the portion of their accounts attributable to sponsor
contributions to the stock match fund after three years of service,
attainment of age 65, or upon death or disability. In the event of plan
termination, the individual participants' accounts become distributable to
the participants or their beneficiaries in accordance with the provisions
of the Plan.
FORFEITURES - All nonvested Plan Sponsor contributions are forfeited by
participants when they terminate employment. Such forfeitures are used to
restore account balances to certain former employees who return to service
within five years of separation. Any remaining forfeitures reduce the
Sponsor's matching and profit sharing contributions.
7
<PAGE>
INVESTMENT OPTIONS - For contributions, the Plan provides for several
investment options. All funds are held by Master Trusts. Individual
participants choose the fund or funds in which to invest from the following
funds:
GOVERNMENT INCOME FUND - Invests primarily in short-term U.S.
Government securities.
SHORT-TERM BOND FUND - Invests in U.S. Government, mortgage, and
high-quality corporate bonds with short- and intermediate-term (one -
five years) maturities.
BONDS PLUS FUND - Diversified among U.S. Treasury bills, high-quality
intermediate- and long-term (one - ten years) bonds, and domestic
stocks.
STOCKS PLUS FUND - Invests in domestic stocks that make up the
Standard & Poor's 500 Composite Stock Index, high-quality bonds, T.
Rowe Price Foreign Equity Fund, and U.S. Treasury bills.
S&P 500 FUND - Invests in stocks that make up the Standard & Poor's
500 Composite Stock Index.
HONEYWELL STOCK FUND - Invests entirely in shares of Honeywell Inc.
common stock.
UNITED INCOME FUND - Invests primarily in common stocks of large,
well-established companies that pay above-average dividends. The Fund
also invests, to a lesser extent, in fixed income securities - both
high-quality corporate bonds and U.S. Treasury obligations.
JANUS FUND - Invests primarily in a combination of large, established
corporations and small, rapidly emerging companies.
TEMPLETON FUND - A global stock fund that invests primarily in common
stock of companies of any nation and not concentrated in any
particular industry.
COLUMBIA SPECIAL FUND - Invests primarily in smaller companies with
capitalization that is less than the average for the companies
included in the Standard & Poor's 500 Stock Index.
VANGUARD WORLD FUND - Invests primarily in high-quality, established
growth stocks of companies with exceptional earnings records, strong
market positions, good financial strength, and low sensitivity to
changing economic conditions.
DIVERSIFIED GROWTH FUND - Invests primarily in U.S. stocks, and some
bonds that are primarily growth oriented but with a small income
component and sensitivity to interest rates.
SCUDDER INTERNATIONAL FUND - Intends to diversify through foreign
investments among several countries and not concentrated in any
particular industry. This fund option was replaced in 1996 by the
Templeton Fund.
T. ROWE PRICE INTERNATIONAL STOCK FUND - Invests primarily in stocks
of established companies outside the United States with proven
performance records.
8
<PAGE>
T. ROWE PRICE SMALL CAP VALUE FUND - Invests primarily in common
stocks of small, rapidly growing companies.
T. ROWE PRICE EQUITY INCOME FUND - Invests primarily in common stocks
of large, well-established companies that pay above-average dividends.
PLAN STATUS - The Plan formerly known as the Investment Plus Plan of
Honeywell Inc. obtained its latest determination letter in February 1993,
in which the Internal Revenue Service stated that the Plan, as then
designed, was in compliance with the applicable requirements of the
Internal Revenue Code. The Plan has been amended since receiving the above
mentioned determination letter. However, the plan administrator believes
that the Plan is currently designed and being operated in compliance with
the applicable requirements of the Internal Revenue Code. Therefore, no
provision for income taxes has been included in the Plan's financial
statements.
PLAN TERMINATION - Although it has not expressed any intent to do so, the
Sponsor has the right under the Plan to discontinue its contributions at
any time and to terminate the Plan subject to the provisions of the
Employee Retirement Income Security Act of 1974 (ERISA). In the event of
plan termination, participants shall be 100% vested in their accounts.
3. INVESTMENT IN EXECUTIVE LIFE INSURANCE COMPANY
At December 31, 1997 and 1996, the Plan's Isolated Funds primarily
consisted of investments in Executive Life Insurance Company (Executive
Life) guaranteed investment contracts (GICs), which represented less than
1% of total net assets available for benefits for both years. In 1991, the
State of California insurance commissioner seized Executive Life and placed
it in a court-supervised conservatorship. Distributions had been received
from the conservator totaling approximately 80% of the contract balance
immediately prior to the conservatorship. As of the report date, June 8,
1998, the Plan has received 91% of the contract balance. Further, the
Plan's management currently estimates that the sum of additional
distributions from the conservator and recoveries from various state
guarantee funds will not differ significantly from the remaining recorded
contract values. Although the Plan is currently involved in litigation with
various state guaranty funds regarding the amount and nature of coverage,
plan management does not believe that the ultimate shortfall will be
material to the Plan's financial statements.
After the conservatorship was established, the Plan's Sponsor isolated the
Executive Life GICs into the Isolated Fund pursuant to a plan amendment
requiring such action. Currently, there are certain restrictions on the
ability to withdraw, transfer, or conduct settlement activity with respect
to the remaining balances.
4. INTEREST IN MASTER TRUSTS
The Plan's investments are included in Master Trusts with T. Rowe Price
Trust Company and First Trust National Association, which were established
in 1993 for the investment of assets of the Plan and several other
Honeywell-sponsored retirement plans. Previously, the Plan's investments
were held in Master Trusts with various trust companies. Each participating
plan has an undivided interest in the Master Trusts. At December 31, 1997
and 1996, the Plan's interest in the net assets of the Master Trusts was
approximately 99%, in both years. Investment income and administrative
expenses related to the Master Trust are allocated to the individual plans
based upon average monthly balances invested by each plan.
9
<PAGE>
The following table presents the fair value of investments held in Master
Trusts (in thousands):
<TABLE>
<CAPTION>
1997 1996
<S> <C> <C>
Investments at fair value:
Custom funds:
Government Income Fund $ 351,626 $ 351,723
Short-Term Bonds Fund 17,050 14,095
Bonds Plus Fund 53,566 37,144
Stocks Plus Fund 335,838 297,488
S&P 500 Fund 550,320 403,903
Honeywell Stock Fund 486,146 440,043
Mutual funds, primarily equity securities 450,322 335,143
Participants' loans 36,203 35,634
-------------- -------------
$ 2,281,071 $ 1,915,173
-------------- -------------
-------------- -------------
Investment income for the Master Trust is as follows (in thousands):
Net appreciation in fair value of investments:
Custom funds:
Short-Term Bond Fund $ 1,063 $ 604
Bonds Plus Fund 6,437 2,874
Stocks Plus Fund 55,009 38,909
S&P 500 Fund 136,367 76,126
Honeywell Stock Fund 18,488 111,749
Mutual funds, primarily equity securities 31,918 21,906
-------------- -------------
249,282 252,168
Interest and dividends 64,274 57,377
-------------- -------------
$ 313,556 $ 309,545
-------------- -------------
-------------- -------------
</TABLE>
In 1993, the Sponsor transferred the GICs issued by Executive Life and
Mutual Benefit Life Insurance Company to First Trust National Association.
A Master Trust was established for the investment of these assets of the
Plan and several other Honeywell-sponsored retirement plans. Each
participating retirement plan has an undivided interest in the Master
Trust. At December 31, 1997 and 1996, the Plan's interest in the net assets
of the Master Trust was approximately 99% and 90%, respectively. The
contract value of the GICs for the Master Trust was approximately $6.6
million and $17.6 million at December 31, 1997 and 1996, respectively.
5. PARTIES-IN-INTEREST TRANSACTIONS
There were no prohibited party-in-interest transactions during the periods
ended December 31, 1997 and 1996.
6. INFORMATION PROVIDED BY TRUSTEES
Plan funds are held in trust by trustees for the sole purpose of making
investments and plan payments and paying trust operating expenses. Trustees
appointed by the Honeywell Pension and
10
<PAGE>
Retirement Committee as of December 31, 1997 were T. Rowe Price Trust
Company and First Trust National Association.
The trustees provide the Plan with monthly statements which report all
transactions. The plan administrator has obtained certifications from the
trustees that the information in such statements is complete and accurate.
The amounts in the accompanying statements of net assets available for
benefits and of changes in net assets available for benefits have been
derived from the information submitted by the trustees, except for certain
adjustments which resulted in increases in the amount of net assets
reported of $2,134,612 and $8,621,802 as of December 31, 1997 and 1996,
respectively. Such adjustments are primarily recorded for the purpose of
converting the trustees' statements from the cash basis to the accrual
basis of accounting and to reflect the impact of participant loan activity.
The Government Income Fund, Stocks Plus Fund, S&P 500 Fund, and Honeywell
Stock Fund individually represent 5% or more of net assets available for
benefits at December 31, 1997 and 1996, respectively.
11
<PAGE>
Exhibit Index Page
Exhibit 23.1 -- Independent Auditors' Consent I
<PAGE>
SIGNATURE
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 hereunto
duly authorized.
HONEYWELL SAVINGS AND STOCK OWNERSHIP PLAN
Dated: June 25, 1998 By: /s/ Jim Porter
-----------------------------------
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement No.
33-44284 and No. 33-59359 of the Honeywell Savings and Stock Ownership Plan
(formerly Investment Plus Plan of Honeywell Inc.) on Form S-8 of our report
dated June 8, 1998, appearing in this Annual Report on Form 11-K of the
Honeywell Savings and Stock Ownership Plan for the year ended December 31,
1997.
Minneapolis, Minnesota
June 23, 1998
