<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 Number 33-44282
A. Full title of the plan and address of the plan, if different from that
of the issuer named below:
HONEYWELL RETIREMENT INVESTMENT 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 10 hereof are the Honeywell
Retirement Investment 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 RETIREMENT
INVESTMENT PLAN
FINANCIAL STATEMENTS AS OF AND FOR THE
YEARS ENDED DECEMBER 31, 1998 AND 1997
AND INDEPENDENT AUDITORS' REPORT
<PAGE>
HONEYWELL RETIREMENT INVESTMENT PLAN
TABLE OF CONTENTS
- -------------------------------------------------------------------------------
PAGE
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits, December 31, 2, 3
1998 and 1997
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 Retirement Investment Plan
We have audited the statement of net assets available for benefits of Honeywell
Retirement Investment Plan (the Plan) as of December 31, 1998 and 1997 and the
statement 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
1
<PAGE>
HONEYWELL RETIREMENT INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1998 (IN THOUSANDS)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL INFORMATION BY FUND
- --------------------------------------------------------------------------------------------------------------------------------
GOVERNMENT SHORT-TERM DIVERSIFIED HONEYWELL UNITED COLUMBIA
COMBINED INCOME BOND BALANCED S&P 500 STOCK INCOME SPECIAL
TOTAL FUND FUND FUND FUND FUND FUND FUND
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments in Master Trusts $2,917,806 $755,801 $879,242 $622,829 $508,952 $15,369 $ 1,498
Investments at U.S. Bank 41,541
Other receivables 13,745 3,001 10,326 418
---------- -------- -------- -------- -------- ------- -------
Total assets 2,973,092 758,802 889,568 623,247 508,952 15,369 1,498
LIABILITIES:
Administration fees payable 407 117 171 119
Other payables 13,598 3,001 10,146 451
Total liabilities 14,005 3,118 10,317 570
---------- -------- -- -------- -------- -------- ------- -------
NET ASSETS AVAILABLE FOR
BENEFITS AT END OF YEAR $2,959,087 $755,684 $- $879,251 $622,677 $508,952 $15,369 $ 1,498
---------- -------- -- -------- -------- -------- ------- -------
---------- -------- -- -------- -------- -------- ------- -------
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL INFORMATION BY FUND
- --------------------------------------------------------------------------------------------------------------------
T. ROWE T. ROWE T. ROWE
VANGUARD PRICE PRICE PRICE
WORLD INTERNATIONAL SMALL CAP EQUITY
JANUS GROWTH STOCK VALUE INCOME ISOLATED PARTICIPANT
FUND FUND FUND FUND FUND FUNDS LOANS
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments in Master Trusts $63,976 $36,240 $4,927 $7,870 $ 9 $21,093
Investments at U.S. Bank $ 41,541
Other receivables
------- ------- ------ ------ ---- -------- -------
Total assets 63,976 36,240 4,927 7,870 9 41,541 21,093
LIABILITIES:
Administration fees payable
Other payables
Total liabilities
------- ------- ------ ------ ---- -------- -------
NET ASSETS AVAILABLE FOR
BENEFITS AT END OF YEAR $63,976 $36,240 $4,927 $7,870 $ 9 $ 41,541 $21,093
------- ------- ------ ------ ---- -------- -------
------- ------- ------ ------ ---- -------- -------
</TABLE>
See accompanying notes to financial statements.
2
<PAGE>
HONEYWELL RETIREMENT INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1997 (IN THOUSANDS)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL INFORMATION BY FUND
- --------------------------------------------------------------------------------------------------------------------------------
GOVERNMENT SHORT-TERM DIVERSIFIED HONEYWELL UNITED COLUMBIA
COMBINED INCOME BOND BALANCED S&P 500 STOCK INCOME SPECIAL
TOTAL FUND FUND FUND FUND FUND FUND FUND
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments in Master Trusts $2,985,981 $807,708 $1,021 $870,563 $569,385 $476,681 $12,375 $59,753
Investments at U.S. Bank 41,541
Other receivables 19,915 7,308 2,787
---------- -------- ------ -------- -------- -------- ------- -------
Total assets 3,047,437 815,016 1,021 873,350 569,385 476,681 12,375 59,753
LIABILITIES:
Administration fees payable 357 74 167 116
Other payables 10,175 7,308 2,786 81
Total liabilities 10,532 7,382 2,953 197
---------- -------- ------ -------- -------- -------- ------- -------
NET ASSETS AVAILABLE FOR
BENEFITS AT END OF YEAR $3,036,905 $807,634 $1,021 $870,397 $569,188 $476,681 $12,375 $59,753
---------- -------- ------ -------- -------- -------- ------- -------
---------- -------- ------ -------- -------- -------- ------- -------
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL INFORMATION BY FUND
- ------------------------------------------------------------------------------------------------------------------------------
T. ROWE T. ROWE T. ROWE
VANGUARD PRICE PRICE PRICE
WORLD INTERNATIONAL SMALL CAP EQUITY
JANUS GROWTH STOCK VALUE INCOME ISOLATED PARTICIPANT
FUND FUND FUND FUND FUND FUNDS LOANS
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments in Master Trusts $47,908 $32,886 $20,709 $25,661 $ 3,963 $57,368
Investments at U.S. Bank $ 41,541
Other receivables 9,820
------- ------- ------- ------- ------- -------- -------
Total assets 57,728 32,886 20,709 25,661 3,963 41,541 57,368
LIABILITIES:
Administration fees payable
Other payables
Total liabilities
------- ------- ------- ------- ------- -------- -------
NET ASSETS AVAILABLE FOR
BENEFITS AT END OF YEAR $57,728 $32,886 $20,709 $25,661 $ 3,963 $ 41,541 $57,368
------- ------- ------- ------- ------- -------- -------
------- ------- ------- ------- ------- -------- -------
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
HONEYWELL RETIREMENT INVESTMENT 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 HONEYWELL UNITED
COMBINED INCOME BOND INCOME BALANCED S&P 500 STOCK INCOME
TOTAL FUND FUND FUND FUND FUND FUND FUND
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME
IN MASTER TRUSTS $ 444,848 $ 38,903 $ 36 $ $ 170,142 $ 148,150 $ 54,076 $ 3,002
CONTRIBUTIONS:
Employer contributions
Rollover contributions
Employee pretax contributions
----------- --------- ------- ---- -------- -------- --------- -------
Total contributions
TRANSFERS FROM (TO) OTHER
FUNDS 721 1,540 (28,295) 29,803
----------- --------- ------- ---- -------- -------- --------- -------
TOTAL INVESTMENT INCOME,
CONTRIBUTIONS, AND
TRANSFERS 444,848 39,624 36 171,682 119,855 83,879 3,002
LOANS:
Repayments 5,853 1,395 1,525
Distributions
DISTRIBUTIONS TO PARTICIPANTS (519,312) (96,566) (1,056) (162,882) (67,098) (51,329)
TRUSTEES' AND ADMINISTRATIVE
FEES (3,354) (861) (1) (1,339) (793) (279) (8)
----------- --------- ------- ---- -------- -------- --------- -------
(DECREASE) INCREASE IN NET
ASSETS (77,818) (51,950) (1,021) 8,856 53,489 32,271 2,994
NET ASSETS AVAILABLE FOR
BENEFITS AT BEGINNING
OF YEAR 3,036,905 807,634 1,021 870,397 569,188 476,681 12,375
----------- --------- ------- ---- -------- -------- --------- -------
NET ASSETS AVAILABLE FOR
BENEFITS AT END OF YEAR $ 2,959,087 $ 755,684 $ - $ $879,253 $622,677 $ 508,952 $15,369
----------- --------- ------- ---- -------- -------- --------- -------
----------- --------- ------- ---- -------- -------- --------- -------
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL INFORMATION BY FUND
- -----------------------------------------------------------------------------------------------------------------------------------
T. ROWE T. ROWE T. ROWE
VANGUARD PRICE PRICE PRICE
COLUMBIA WORLD INTERNATIONAL SMALL CAP EQUITY
SPECIAL JANUS GROWTH STOCK VALUE INCOME ISOLATED PARTICIPANT
FUND FUND FUND FUND FUND FUND FUNDS LOANS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME
IN MASTER TRUSTS $ 1,177 $ 18,031 $ 11,871 $ 1,228 $ (3,561) $ 227 $ 1,566
CONTRIBUTIONS:
Employer contributions
Rollover contributions
Employee pretax contributions
-------- -------- -------- -------- -------- ------- --------
Total contributions
TRANSFERS FROM (TO) OTHER
FUNDS 9,016 (4,301) (8,484)
-------- -------- -------- -------- -------- ------- --------
TOTAL INVESTMENT INCOME,
CONTRIBUTIONS, AND
TRANSFERS 1,177 27,047 11,871 (3,073) (12,045) 227 1,566
LOANS:
Repayments 130 130 130 (9,163)
Distributions
DISTRIBUTIONS TO PARTICIPANTS (59,427) (20,898) (8,626) (12,703) (5,866) (4,181) (28,680)
TRUSTEES' AND ADMINISTRATIVE
FEES (5) (31) (21) (6) (10)
-------- -------- -------- -------- -------- ------- --------
(DECREASE) INCREASE IN NET
ASSETS (58,255) 6,248 3,354 (15,782) (17,791) (3,954) (36,277)
NET ASSETS AVAILABLE FOR
BENEFITS AT BEGINNING
OF YEAR 59,753 57,728 32,886 20,709 25,661 3,963 $ 41,541 57,368
-------- -------- -------- -------- -------- ------- -------- --------
NET ASSETS AVAILABLE FOR
BENEFITS AT END OF YEAR $ 1,498 $ 63,976 $ 36,240 $ 4,927 $ 7,870 $ 9 $ 41,541 $ 21,091
-------- -------- -------- -------- -------- ------- -------- --------
-------- -------- -------- -------- -------- ------- -------- --------
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
HONEYWELL RETIREMENT INVESTMENT 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 HONEYWELL
COMBINED INCOME BOND INCOME BALANCED S&P 500 STOCK
TOTAL FUND FUND FUND FUND FUND FUND
<S> <C> <C> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME
IN MASTER TRUSTS $ (697,549) $ 112,792 $ (6,331) $ (13,320) $(162,615) $(195,183) $(458,114)
OTHER 1,215,079 (320,543) 7,161 64,951 526,068 531,689 430,617
----------- --------- -------- --------- --------- --------- ---------
517,530 (207,751) 830 51,631 363,453 336,506 (27,497)
CONTRIBUTIONS:
Employer contributions
Rollover contributions
Employee pretax contributions
----------- --------- -------- --------- --------- --------- ---------
Total contributions
TRANSFERS FROM (TO) OTHER
FUNDS 359,133 (2,005) (53,465) (204,680) (191,284) 145,095
----------- --------- -------- --------- --------- --------- ---------
TOTAL INVESTMENT INCOME,
CONTRIBUTIONS, AND
TRANSFERS 517,530 151,382 (1,175) (1,834) 158,773 145,222 117,598
LOANS:
Repayments 14,803 3,683 12,031 4,681)
Distributions
DISTRIBUTIONS TO PARTICIPANTS (976,584) (200,029) (1,654) (5,594) (268,070) (174,926) (215,609)
TRUSTEES' AND ADMINISTRATIVE
FEES (6,346) (3,100) 159 67 (790) (960) (1,392)
----------- --------- -------- --------- --------- --------- ---------
(DECREASE) INCREASE IN NET
ASSETS (465,400) (36,944) (2,670) (7,361) (106,404) (18,633) (94,722)
NET ASSETS AVAILABLE FOR
BENEFITS AT BEGINNING
OF YEAR 3,502,305 844,578 3,691 7,361 976,801 587,821 571,403
----------- --------- -------- --------- --------- --------- ---------
NET ASSETS AVAILABLE FOR
BENEFITS AT END OF YEAR $ 3,036,905 $ 807,634 $ 1,021 $ - $ 870,397 $ 569,188 $ 476,681
----------- --------- -------- --------- --------- --------- ---------
----------- --------- -------- --------- --------- --------- ---------
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL INFORMATION BY FUND
- ----------------------------------------------------------------------------------------------------------------------------------
T. ROWE T. ROWE T. ROWE
VANGUARD PRICE PRICE PRICE
UNITED COLUMBIA WORLD INTERNATIONAL SMALL CAP EQUITY
INCOME SPECIAL JANUS GROWTH STOCK VALUE INCOME ISOLATED PARTICIPANT
FUND FUND FUND FUND FUND FUND FUND FUNDS LOANS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME
IN MASTER TRUSTS $ (1,569) $ 11,405 $ 6,934 $ 4,120 $ (2,327) $ (1,281) $ 1,480 $ 6,460
OTHER 1,580 8,364 14,175 3,500 8,755 7,160 5,026 $ (19,882) (53,542)
-------- -------- -------- -------- -------- -------- -------- --------- ---------
11 19,769 21,109 7,620 6,428 5,879 6,506 (19,882) (47,082)
CONTRIBUTIONS:
Employer contributions
Rollover contributions
Employee pretax contributions
-------- -------- -------- -------- -------- -------- -------- --------- ---------
Total contributions
TRANSFERS FROM (TO) OTHER
FUNDS 12,283 (21,308) 20,008 (12,283) 811 13,518 (65,823)
-------- -------- -------- -------- -------- -------- -------- --------- ---------
TOTAL INVESTMENT INCOME,
CONTRIBUTIONS, AND
TRANSFERS 12,294 (1,539) 21,109 27,628 (5,855) 6,690 20,024 (85,705) (47,082)
LOANS:
Repayments 97 97 1,009 1,485 327 1,255 (39,468)
Distributions
DISTRIBUTIONS TO PARTICIPANTS (11,112) (10,556) (37,233) (6,795) (731) (23,296) (20,979)
TRUSTEES' AND ADMINISTRATIVE
FEES (18) (87) (82) (33) (51) (48) (11)
-------- -------- -------- -------- -------- -------- -------- --------- ---------
(DECREASE) INCREASE IN NET
ASSETS 12,373 (12,641) 11,480 (8,153) (12,374) 7,166 (3,283) (85,705) (107,529)
NET ASSETS AVAILABLE FOR
BENEFITS AT BEGINNING
OF YEAR 2 72,394 46,248 41,039 33,083 18,495 7,246 127,246 164,897
-------- -------- -------- -------- -------- -------- -------- --------- ---------
NET ASSETS AVAILABLE FOR
BENEFITS AT END OF YEAR $ 12,375 $ 59,753 $ 57,728 $ 32,886 $ 20,709 $ 25,661 $ 3,963 $ 41,541 $ 57,368
-------- -------- -------- -------- -------- -------- -------- --------- ---------
-------- -------- -------- -------- -------- -------- -------- --------- ---------
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
HONEYWELL RETIREMENT INVESTMENT 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
Retirement Investment Plan (the Plan) are prepared under the accrual
method of accounting. Contributions to the Plan were included in income
in the year the contributions payable were 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
GENERAL INFORMATION - The Plan is a voluntary, tax-deferred savings
program designed to provide supplemental retirement benefits to certain
employees. It succeeded Part B of the Sperry Retirement Program. Most
legal provisions of the Sperry Plan remained unchanged, and the Plan
continues to serve employees covered by a collective bargaining
agreement which provided for coverage under the Plan.
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.
In May 1996, the Sponsor sold the division to which the participants
were employed. In accordance with the sale, participants can no longer
contribute to the Plan and no longer receive contributions from the
Sponsor. All participants became fully vested upon sale of the division.
It is Honeywell's intent to hold these assets until the participants are
eligible to access them under plan provisions. There were no other
significant changes to the provisions of the Plan.
LOANS TO PARTICIPANTS - The Plan allows participants to apply for and
obtain loans in an amount as defined in the Plan (not less than $1,000
and not greater than $50,000 or 50% of their pretax and pretax 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 6 months after 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. Also, participants may have only one outstanding loan at a
time. No loans were made to participants subsequent to May 1996.
6
<PAGE>
PARTICIPATION - Employees are eligible to participate in the Plan only
if they are classified regular full-time or regular part-time employees,
are not covered by any other savings plan maintained by Honeywell Inc.,
and are covered under a collective bargaining agreement which provides
for participation in the Plan.
VESTING - Participants are 100% vested in the portion of their
individual accounts attributable to their 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. In
the event of plan termination, the individual participants' vested
accounts become distributable to the participants or their beneficiaries
in accordance with the provisions of the Plan.
FORFEITURES - All nonvested sponsor contributions are forfeited by
participants when they terminate employment. Prior to May 1996, such
forfeitures are used to reduce the Sponsor's subsequent contributions.
INVESTMENT OPTIONS - For contributions, the Plan provides for several
investment options. 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-term 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.
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.
JANUS FUND - Invests primarily in a combination of large,
established corporations and small, rapidly emerging companies.
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.
7
<PAGE>
T. ROWE PRICE INTERNATIONAL STOCK FUND - Invests primarily in
stock 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.
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 has received a favorable determination letter
from the Internal Revenue Service stating that the Plan was qualified
under the applicable sections of the Internal Revenue Code.
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.
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
approximately 1% of total net assets available for benefits in 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, 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.
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. INTERESTS 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. Each participating retirement 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 .1%, in each year. 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.
8
<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 Bond 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
------------ ------------
------------ ------------
</TABLE>
Investment income for the Master Trust is as follows (in thousands):
<TABLE>
<S> <C> <C>
Net appreciation of 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 1%. The contract value of
the GICs for the Master Trust was approximately $6.6 million at December
31, 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.
9
<PAGE>
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.
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.
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 as of December 31, 1998 and 1997.
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.
10
<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 RETIREMENT INVESTMENT 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.
33-44282 of the Honeywell Retirement Investment Plan on Form S-8 of our
report dated June 18, 1999, appearing in this Annual Report on Form 11-K of
the Honeywell Retirement Investment Plan for the year ended December 31, 1998.
Minneapolis, Minnesota
June 25, 1999
i
