<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, 1998
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,
1998 and 1997 and Supplemental Schedules for the Year Ended December 31, 1998
prepared by the firm of Deloitte & Touche LLP, Independent Auditors.
<PAGE>
HONEYWELL SAVINGS AND STOCK
OWNERSHIP PLAN
FINANCIAL STATEMENTS AS OF AND FOR THE
YEARS ENDED DECEMBER 31, 1998 AND 1997
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, 1998 and 1997 2,3
Statements of Changes in Net Assets Available for Benefits,
Years Ended December 31, 1998 and 1997 4,5
Notes to Financial Statements 6
EXHIBIT 23.1
Independent Auditors' Consent i
<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 (the Plan) as of December 31, 1998
and 1997 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, 1998
and 1997 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, and 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.
Minneapolis, Minnesota
June 18, 1999
<PAGE>
HONEYWELL SAVINGS AND STOCK OWNERSHIP PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1998 (IN THOUSANDS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SUPPLEMENTAL INFORMATION BY FUND
--------------------------------------------------
GOVERNMENT SHORT-TERM DIVERSIFIED DIVERSIFIED
COMBINED INCOME BOND INCOME BALANCED
TOTAL FUND FUND FUND FUND
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments in Master Trusts $2,788,565 $ 404,947 $ 35,670 $ 76,692 $ 375,590
Investments at U.S. Bank 6,536
Contributions receivable 12,346 91 13 26 42
Other receivables 7,674 1,620 142 944 4,415
---------- ---------- ---------- ---------- ----------
Total assets 2,815,121 406,658 35,825 77,662 380,047
LIABILITIES:
Administration fees payable 312 63 14 22 73
Other payables 7,749 1,609 130 946 4,343
---------- ---------- ---------- ---------- ----------
Total liabilities 8,061 1,672 144 968 4,416
---------- ---------- ---------- ---------- ----------
NET ASSETS AVAILABLE FOR
BENEFITS AT END OF YEAR $2,807,060 $ 404,986 $ 35,681 $ 76,694 $ 375,631
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
</TABLE>
<TABLE>
<CAPTION>
SUPPLEMENTAL INFORMATION BY FUND
------------------------------------------------------------------------------------------
VANGUARD
HONEYWELL UNITED COLUMBIA WORLD
S&P STOCK INCOME JANUS TEMPLETON SPECIAL GROWTH
500 FUND FUND FUND FUND FUND FUND FUND
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments in Master Trusts $714,251 $551,855 $73,520 $129,015 $16,851 $38,315 $130,821
Investments at U.S. Bank
Contributions receivable 148 11,544 17 154 13 24 125
Other receivables 487 1 (4) 2
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total assets 714,886 563,400 73,537 129,165 16,864 38,341 130,946
LIABILITIES:
Administration fees payable 136
Other payables 536 92 10 1
---------- ---------- ---------- ----------
Total liabilities 672 92 10 1
---------- ---------- ---------- ---------- ---------- ---------- ----------
NET ASSETS AVAILABLE FOR
BENEFITS AT END OF YEAR $714,214 $563,308 $73,537 $129,155 $16,864 $38,340 $130,946
---------- ---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ---------- ----------
</TABLE>
<TABLE>
<CAPTION>
SUPPLEMENTAL INFORMATION BY FUND
-----------------------------------------------------------------------------------
T. ROWE T. ROWE T. ROWE
PRICE PRICE PRICE
DIVERSIFIED INTERNATIONAL SMALL EQUITY
GROWTH STOCK CAP VALUE INCOME ISOLATED PARTICIPANT
FUND FUND FUND FUND FUNDS LOANS
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments in Master Trusts $5,271 $54,268 $51,706 $87,169 $42,624
Investments at U.S. Bank $ 6,536
Contributions receivable 2 29 48 70
Other receivables 69 1 (2) (1)
---------- ---------- ---------- ---------- ---------- ----------
Total assets 5,342 54,298 51,752 87,238 6,536 42,624
LIABILITIES:
Administration fees payable 4
Other payables 67 7 8
---------- ---------- ----------
Total liabilities 71 7 8
---------- ---------- ---------- ---------- ---------- ----------
NET ASSETS AVAILABLE FOR
BENEFITS AT END OF YEAR $5,271 $54,291 $51,744 $87,238 $6,536 $42,624
---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ----------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
HONEYWELL SAVINGS AND STOCK OWNERSHIP PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1997 (IN THOUSANDS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SUPPLEMENTAL INFORMATION BY FUND
-------------------------------------------------------------------------
GOVERNMENT SHORT-TERM DIVERSIFIED DIVERSIFIED
COMBINED INCOME BOND INCOME BALANCED
TOTAL FUND FUND FUND FUND
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments in Master Trusts $2,278,085 $350,818 $17,049 $53,566 $334,967
Investments at U.S. Bank 6,536
Contributions receivable 12,348 175 14 33 174
Other receivables 5,153 3,182 134 1,073
----------- ---------- ---------- ---------- ----------
Total assets 2,302,122 354,175 17,063 53,733 336,214
LIABILITIES:
Administration fees payable 227 32 6 13 64
Other payables 5,281 3,174 3 142 1,072
----------- ---------- ---------- ---------- ----------
Total liabilities 5,508 3,206 9 155 1,136
----------- ---------- ---------- ---------- ----------
NET ASSETS AVAILABLE FOR
BENEFITS AT END OF YEAR $2,296,614 $350,969 $17,054 $53,578 $335,078
----------- ---------- ---------- ---------- ----------
----------- ---------- ---------- ---------- ----------
</TABLE>
<TABLE>
<CAPTION>
SUPPLEMENTAL INFORMATION BY FUND
------------------------------------------------------------------
HONEYWELL UNITED
S&P STOCK INCOME JANUS TEMPLETON
500 FUND FUND FUND FUND FUND
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments in Master Trusts $549,751 $485,669 $34,497 $66,336 $21,565
Investments at U.S. Bank
Contributions receivable 293 11,236 35 68 22
Other receivables 5 10 495 4
-------- -------- -------- -------- --------
Total assets 550,049 496,915 34,532 66,899 21,591
LIABILITIES:
Administration fees payable 112
Other payables 78 145 500 7
-------- -------- -------- --------
Total liabilities 190 145 500 7
-------- -------- -------- -------- --------
NET ASSETS AVAILABLE FOR
BENEFITS AT END OF YEAR $549,859 $496,770 $ 34,532 $ 66,399 $ 21,584
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
</TABLE>
<TABLE>
<CAPTION>
SUPPLEMENTAL INFORMATION BY FUND
---------------------------------------------------------
T. ROWE
VANGUARD PRICE
COLUMBIA WORLD DIVERSIFIED INTERNATIONAL
SPECIAL GROWTH GROWTH STOCK
FUND FUND FUND FUND
<S> <C> <C> <C> <C>
ASSETS:
Investments in Master Trusts $41,505 $65,751 $56,444
Investments at U.S. Bank
Contributions receivable 40 70 $ 1 41
Other receivables 151 99
------- ------- ------- -------
Total assets 41,696 65,920 1 56,485
LIABILITIES:
Administration fees payable
Other payables 160
-------
Total liabilities 160
------- ------- ------- -------
NET ASSETS AVAILABLE FOR
BENEFITS AT END OF YEAR $41,536 $65,920 $ 1 $56,485
------- ------- ------- -------
------- ------- ------- -------
</TABLE>
<TABLE>
<CAPTION>
SUPPLEMENTAL INFORMATION BY FUND
------------------------------------------------------
T. ROWE T. ROWE
PRICE PRICE
SMALL EQUITY
CAP VALUE INCOME ISOLATED PARTICIPANT
FUND FUND FUNDS LOANS
<S> <C> <C> <C> <C>
ASSETS:
Investments in Master Trusts $70,323 $93,698 $36,146
Investments at U.S. Bank $ 6,536
Contributions receivable 66 80
Other receivables
------- ------- ------- -------
Total assets 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 $70,389 $93,778 $ 6,536 $36,146
------- ------- ------- -------
------- ------- ------- -------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
HONEYWELL SAVINGS AND STOCK OWNERSHIP PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 1998 (IN THOUSANDS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SUPPLEMENTAL INFORMATION BY FUND
------------------------------------------------------------------------------
GOVERNMENT SHORT-TERM DIVERSIFIED DIVERSIFIED
COMBINED INCOME BOND INCOME BALANCED
TOTAL FUND FUND FUND FUND
<S> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME
IN MASTER TRUSTS $405,920 $19,969 $1,887 $9,062 $64,261
CONTRIBUTIONS:
Employer contributions 43,398 30 11 20 21
Conversion-in 105,395 19,689 4,633 1,039 2,855
Employee pretax contributions 117,765 11,744 1,483 3,526 13,497
----------- ----------- ----------- ----------- -----------
Total contributions 266,558 31,463 6,127 4,585 16,373
TRANSFERS FROM (TO)
OTHER FUNDS 39,463 13,414 14,850 (20,130)
----------- ----------- ----------- ----------- -----------
TOTAL INVESTMENT INCOME,
CONTRIBUTIONS, AND
TRANSFERS 672,478 90,895 21,428 28,497 60,504
LOANS:
Repayments 3,444 325 501 2,899
Distributions (3,432) (230) (515) (3,005)
DISTRIBUTIONS TO PARTICIPANTS (159,090) (36,420) (2,824) (5,236) (19,310)
TRUSTEES' AND ADMINI-
STRATIVE FEES (2,942) (470) (72) (131) (535)
----------- ----------- ----------- ----------- -----------
INCREASE (DECREASE) IN
NET ASSETS 510,446 54,017 18,627 23,116 40,553
NET ASSETS AVAILABLE FOR
BENEFITS AT BEGINNING
OF YEAR 2,296,614 350,969 17,054 53,578 335,078
----------- ----------- ----------- ----------- -----------
NET ASSETS AVAILABLE FOR
BENEFITS AT END OF YEAR $ 2,807,060 $ 404,986 $ 35,681 $ 76,694 $ 375,631
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
</TABLE>
<TABLE>
<CAPTION>
SUPPLEMENTAL INFORMATION BY FUND
-----------------------------------------------------------------------------------------------
HONEYWELL UNITED COLUMBIA
S&P 500 STOCK INCOME JANUS TEMPLETON SPECIAL
FUND FUND FUND FUND FUND FUND
<S> <C> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME
IN MASTER TRUSTS $161,167 $50,903 $14,277 $34,365 $ 383 $5,598
CONTRIBUTIONS:
Employer contributions 250 42,596 12 96 18 29
Conversion-in 19,743 27,348 20,273
Employee pretax contributions 27,719 17,793 3,848 7,298 1,714 3,070
----------- ----------- ----------- ----------- ----------- -----------
Total contributions 47,712 60,389 31,208 27,667 1,732 3,099
TRANSFERS FROM (TO)
OTHER FUNDS (8,961) (18,324) (2,319) 7,081 (5,713) (9,776)
----------- ----------- ----------- ----------- ----------- -----------
TOTAL INVESTMENT INCOME,
CONTRIBUTIONS, AND
TRANSFERS 199,918 92,968 43,166 69,113 (3,598) (1,079)
LOANS:
Repayments 5,382 2,868 918 1,312 224 481
Distributions (5,612) (3,192) (598) (1,064) (210) (425)
DISTRIBUTIONS TO PARTICIPANTS (34,358) (25,734) (4,439) (6,535) (1,123) (2,147)
TRUSTEES' AND ADMINI-
STRATIVE FEES (975) (372) (42) (70) (13) (26)
----------- ----------- ----------- ----------- ----------- -----------
INCREASE (DECREASE) IN
NET ASSETS 164,355 66,538 39,005 62,756 (4,720) (3,196)
NET ASSETS AVAILABLE FOR
BENEFITS AT BEGINNING
OF YEAR 549,859 496,770 34,532 66,399 21,584 41,536
----------- ----------- ----------- ----------- ----------- -----------
NET ASSETS AVAILABLE FOR
BENEFITS AT END OF YEAR $714,214 $563,308 $73,537 $129,155 $16,864 $38,340
----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- -----------
</TABLE>
<TABLE>
<CAPTION>
SUPPLEMENTAL INFORMATION BY FUND
------------------------------------------------------------------------------------------------
T. ROWE T. ROWE T. ROWE
VANGUARD PRICE PRICE PRICE
WORLD DIVERSIFIED INTERNATIONAL SMALL CAP EQUITY
GROWTH GROWTH STOCK VALUE INCOME ISOLATED PARTICIPANT
FUND FUND FUND FUND FUND FUNDS LOANS
<S> <C> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME
IN MASTER TRUSTS $ 31,981 $ 530 $ 8,058 $ (7,914) $ 7,947 $3,446
CONTRIBUTIONS:
Employer contributions 97 2 35 82 99
Conversion-in 3,125 1,492 5,198
Employee pretax contributions 8,231 595 3,713 6,209 7,325
----------- ---------- ---------- --------- --------- -------
Total contributions 11,453 2,089 3,748 6,291 7,424 5,198
TRANSFERS FROM (TO)
OTHER FUNDS 26,164 2,828 (10,210) (13,588) (14,875) 96
----------- ---------- ---------- --------- --------- -------
TOTAL INVESTMENT INCOME,
CONTRIBUTIONS, AND
TRANSFERS 69,598 5,447 1,596 (15,211) 496 8,740
LOANS:
Repayments 1,231 92 621 724 856 (21,878)
Distributions (1,164) (55) (600) (616) (755) 21,473
DISTRIBUTIONS TO PARTICIPANTS (4,572) (190) (3,773) (3,499) (7,073) (1,857)
TRUSTEES' AND ADMINI-
STRATIVE FEES (67) (24) (38) (43) (64)
----------- ---------- ---------- --------- --------- -------
INCREASE (DECREASE) IN
NET ASSETS 65,026 5,270 (2,194) (18,645) (6,540) 6,478
NET ASSETS AVAILABLE FOR
BENEFITS AT BEGINNING
OF YEAR 65,920 1 56,485 70,389 93,778 $6,536 36,146
----------- ---------- ---------- --------- --------- ------- -------
NET ASSETS AVAILABLE FOR
BENEFITS AT END OF YEAR $130,946 $5,271 $54,291 $51,744 $87,238 $6,536 $42,624
----------- ---------- ---------- --------- --------- ------- -------
----------- ---------- ---------- --------- --------- ------- -------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
HONEYWELL SAVINGS AND STOCK OWNERSHIP PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 1997 (IN THOUSANDS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SUPPLEMENTAL INFORMATION BY FUND
----------------------------------------------------------------
GOVERNMENT SHORT-TERM DIVERSIFIED DIVERSIFIED
COMBINED INCOME BOND INCOME BALANCED
TOTAL FUND FUND FUND FUND
<S> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME
IN MASTER TRUSTS $315,024 $19,343 $1,068 $6,684 $58,072
CONTRIBUTIONS:
Employer contributions 37,837 10 6 4 3
Other (1,047) (46) 40 (57) (662)
Employee pretax contributions 108,438 11,945 1,096 3,135 14,067
---------- -------- ------- ------- --------
Total contributions 145,228 11,909 1,142 3,082 13,408
TRANSFERS (TO) FROM
OTHER FUNDS (4,581) 2,253 8,765 (19,987)
---------- -------- ------- ------- --------
TOTAL INVESTMENT INCOME
CONTRIBUTIONS, AND
TRANSFERS 460,252 26,671 4,463 18,531 51,493
LOANS:
Repayments 3,335 183 441 3,088
Distributions (3,487) (171) (389) (3,002)
DISTRIBUTIONS TO PARTICIPANTS (96,941) (26,731) (1,467) (2,040) (12,515)
TRUSTEES' AND ADMINI-
STRATIVE FEES (3,040) (569) (49) (103) (572)
---------- -------- ------- ------- --------
INCREASE (DECREASE) IN
NET ASSETS 360,271 (781) 2,959 16,440 38,492
NET ASSETS AVAILABLE FOR
BENEFITS AT BEGINNING
OF YEAR 1,936,343 351,750 14,095 37,138 296,586
---------- -------- ------- ------- --------
NET ASSETS AVAILABLE FOR
BENEFITS AT END OF YEAR $2,296,614 $350,969 $17,054 $53,578 $335,078
---------- -------- ------- ------- --------
---------- -------- ------- ------- --------
</TABLE>
<TABLE>
<CAPTION>
SUPPLEMENTAL INFORMATION BY FUND
------------------------------------------------------------------------------------------------
VANGUARD
HONEYWELL UNITED COLUMBIA WORLD
S&P 500 STOCK INCOME JANUS TEMPLETON SPECIAL GROWTH
FUND FUND FUND FUND FUND FUND FUND
<S> <C> <C> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME
IN MASTER TRUSTS $ 136,558 $19,111 $6,196 $12,237 $ 1,716 $ 4,813 $12,169
CONTRIBUTIONS:
Employer contributions 24 37,695 1 13 10 15
Other (446) (676) (1) 41 (5) 18 49
Employee pretax contributions 23,415 17,853 2,285 5,949 1,791 4,076 6,387
-------- -------- ------- ------- ------- ------- ------
Total contributions 22,993 54,872 2,285 6,003 1,786 4,104 6,451
TRANSFERS (TO) FROM
OTHER FUNDS 6,416 (5,339) 3,830 (5,696) 10,709 (14,757) 8,485
-------- -------- ------- ------- ------- ------- ------
TOTAL INVESTMENT INCOME
CONTRIBUTIONS, AND
TRANSFERS 165,967 68,644 12,311 12,544 14,211 (5,840) 27,105
LOANS:
Repayments 4,610 2,854 389 805 261 563 879
Distributions (4,544) (2,567) (300) (694) (194) (578) (753)
DISTRIBUTIONS TO PARTICIPANTS (18,797) (18,898) (994) (2,257) (530) (1,477) (2,145)
TRUSTEES' AND ADMINI-
STRATIVE FEES (901) (452) (29) (59) (19) (39) (58)
-------- -------- ------- ------- ------- ------- ------
INCREASE (DECREASE) IN
NET ASSETS 146,335 49,581 11,377 10,339 13,729 (7,371) 25,028
NET ASSETS AVAILABLE FOR
BENEFITS AT BEGINNING
OF YEAR 403,524 447,189 23,155 56,060 7,855 48,907 40,892
-------- -------- ------- ------- ------- ------- ------
NET ASSETS AVAILABLE FOR
BENEFITS AT END OF YEAR $549,859 $496,770 $34,532 $66,399 $21,584 $41,536 65,920
-------- -------- ------- ------- ------- ------- ------
-------- -------- ------- ------- ------- ------- ------
</TABLE>
<TABLE>
<CAPTION>
SUPPLEMENTAL INFORMATION BY FUND
------------------------------------------------------------------------------------------------
T. ROWE T. ROWE T. ROWE
PRICE PRICE PRICE
DIVERSIFIED INTERNATIONAL SMALL CAP EQUITY
GROWTH STOCK 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.
<PAGE>
HONEYWELL SAVINGS AND STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998 AND 1997
- -------------------------------------------------------------------------------
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
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.
Effective January 2, 1998, the Measurex Retirement Results Plan was
merged into the Plan due to the acquisition of Measurex by Honeywell
on March 10, 1997. Plan assets of approximately $105,400,000 were
transferred into the Plan as a result of this merger.
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 standing member positions 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 Administrative 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.
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. 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 employee or a supplemental employee during the plan year
becomes a participant on the date of hire by the Sponsor or transfer
into the Plan. Limited service employees scheduled to perform less
than 1,000 hours of service during the plan year become participants
on the following July 1 or January 1, 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 after three years of service, change of
control, 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:
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 to five years) maturities.
DIVERSIFIED INCOME FUND - Diversified among U.S. Treasury
bills, high-quality intermediate- and long-term bonds, and
domestic stocks.
DIVERSIFIED BALANCED 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 capitalizations that are less than the average for the
companies included in the Standard & Poor's 500 Stock Index.
VANGUARD WORLD GROWTH 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.
T. ROWE PRICE INTERNATIONAL STOCK FUND - Invests primarily in
stocks of established companies outside the United States with
proven performance records.
T. ROWE PRICE SMALL CAP VALUE FUND - Invests primarily in
common stocks of small, rapidly growing companies.
8
<PAGE>
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 obtained its latest determination letter in
February 1999 from the Internal Revenue Service. 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.
In the event of plan termination, participants shall be 100% vested
in their accounts.
3. INVESTMENT IN EXECUTIVE LIFE INSURANCE COMPANY
At December 31, 1998 and 1997, the Plan's Isolated Funds consisted
primarily 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. As of the report date, June 11,
1999, 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.
After the conservatorship was established, the 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 U.S. Bank 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, 1998 and 1997, the Plan's interest in
the net assets of the Master Trusts was approximately 99.9%, 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>
1998 1997
---- ----
<S> <C> <C>
Investments at fair value:
Custom funds:
Government Income Fund $ 405,703 $ 351,626
Short-Term Bonds Fund 35,670 17,050
Diversified Income Fund 76,692 53,566
Diversified Balanced Fund 376,469 335,838
S&P 500 Fund 714,874 550,320
Honeywell Stock Fund 552,364 486,146
Mutual funds, primarily equity securities 587,066 450,322
Participants' loans 42,645 36,203
---------- ----------
$2,791,483 $2,281,071
---------- ----------
---------- ----------
Investment income for the Master Trust is as follows (in thousands):
Net appreciation in fair value of investments:
Custom funds:
Short-Term Bond Fund $ 1,887 $ 1,063
Diversified Income Fund 8,708 6,437
Diversified Balanced Fund 62,215 55,009
S&P 500 Fund 161,309 136,367
Honeywell Stock Fund 50,802 18,488
Mutual funds, primarily equity securities 44,825 31,918
---------- ----------
329,746 249,282
Interest and dividends 76,602 64,274
---------- ----------
$ 406,348 $ 313,556
---------- ----------
---------- ----------
</TABLE>
In 1993, the Sponsor transferred the GICs issued by Executive Life
and Mutual Benefit Life Insurance Company to U.S. Bank 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, 1998 and
1997, the Plan's interest in the net assets of the Master Trust was
approximately 99%. The contract value of the GICs for the Master
Trust was approximately $6.6 million at December 1, 1998 and 1997.
5. PARTY-IN-INTEREST TRANSACTIONS
There were no prohibited party-in-interest transactions during the
years ended December 31, 1998 and 1997.
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 Retirement
Committee as of December 31, 1998 were T. Rowe Price Trust Company
and U.S. Bank National Association.
10
<PAGE>
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 $1,391,286 and $2,134,612 as of
December 31, 1998 and 1997, 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, 1998 and 1997, respectively.
7. SUBSEQUENT EVENT
Effective June 7, 1999, Honeywell Inc., the Sponsor, and
AlliedSignal Inc. signed a definitive merger agreement. The Sponsor
has not yet determined the impact this event will have upon the
Plan.
11
<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 29, 1999 By: /s/ Jim Porter
-----------------------------------
<PAGE>
Exhibit Index Page
Exhibit 23.1 -- Independent Auditors' Consent i
<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
on Form S-8 of our report dated June 18, 1999, appearing in this Annual
Report on Form 11-K of the Honeywell Savings and Stock Ownership Plan for the
year ended December 31, 1998.
Minneapolis, Minnesota
June 25, 1999
i
