FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1994
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 1-985
INGERSOLL-RAND COMPANY
Exact name of registrant as specified in its charter
New Jersey 13-5156640
State of incorporation I.R.S. Employer Identification No.
Woodcliff Lake, New Jersey 07675
Address of principal executive offices Zip Code
(201) 573-0123
Telephone number of principal executive offices
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes . X . No . . .
The number of shares of common stock outstanding as of April 29, 1994 was
105,463,740. <PAGE>
INGERSOLL-RAND COMPANY
FORM 10-Q
INDEX
PART I. FINANCIAL INFORMATION Page
Condensed Consolidated Balance Sheet at
March 31, 1994 and December 31, 1993 3
Condensed Consolidated Income Statement for
the three months ended March 31, 1994 and 1993 4
Condensed Consolidated Statement of Cash Flows
for the three months ended March 31, 1994 and 1993 5
Notes to Condensed Consolidated Financial Statements 6-7
Management's Discussion and Analysis of Financial
Condition and Results of Operations 8-12
Exhibit 11 - Computations of Primary and
Fully Diluted Earnings Per Share 13-14
PART II. OTHER INFORMATION 15
SIGNATURES 17
2 <PAGE>
PART I. FINANCIAL INFORMATION
INGERSOLL-RAND COMPANY
CONDENSED CONSOLIDATED BALANCE SHEET
(in thousands)
ASSETS
MARCH 31, DECEMBER 31,
1994 1993
Current assets:
Cash and cash equivalents $ 227,406 $ 227,993
Marketable securities 5,392 6,172
Accounts and notes receivable, net of
allowance for doubtful accounts 829,326 797,525
Inventories 735,065 713,690
Prepaid expenses and deferred taxes 170,839 156,780
Total current assets 1,968,028 1,902,160
Investments and advances:
Dresser-Rand Company 108,891 112,630
Partially-owned equity companies 160,376 158,645
269,267 271,275
Property, plant and equipment, at cost 1,696,003 1,665,428
Less - accumulated depreciation 816,854 790,284
Net property, plant and equipment 879,149 875,144
Intangible assets, net 104,252 105,855
Deferred income taxes 83,970 90,913
Other assets 130,588 129,985
Total assets $3,435,254 $3,375,332
LIABILITIES AND EQUITY
Current liabilities:
Loans payable $ 236,465 $ 206,939
Accounts payable and accruals 821,244 817,385
Total current liabilities 1,057,709 1,024,324
Long-term debt 313,219 314,136
Postemployment liabilities 516,258 515,787
Ingersoll-Dresser Pump Company minority interest 146,935 146,331
Other liabilities 25,285 24,929
Shareowners' equity:
Common stock 218,271 217,879
Other shareowners' equity 1,157,577 1,131,946
Total shareowners' equity 1,375,848 1,349,825
Total liabilities and equity $3,435,254 $3,375,332
See accompanying notes to condensed consolidated financial statements.
3 <PAGE>
INGERSOLL-RAND COMPANY
CONDENSED CONSOLIDATED INCOME STATEMENT
(in thousands except per share figures)
Three Months Ended
March 31,
1994 1993
NET SALES $1,010,308 $952,105
Cost of goods sold 775,924 728,042
Administrative, selling and service
engineering expenses 174,257 178,913
Operating income 60,127 45,150
Interest expense 11,871 13,878
Other income (expense), net (2,153) 1,424
Dresser-Rand income 5,700 6,100
Ingersoll-Dresser Pump Company
minority interest 184 (315)
Earnings before income taxes 51,987 38,481
Provision for income taxes 18,975 13,853
Earnings for the period before
the effect of accounting change 33,012 24,628
Effect of accounting change
(Net of income tax benefit):
- Postemployment benefits -- (21,000)
Net earnings $ 33,012 $ 3,628
Average number of common
shares outstanding 105,402 104,754
Net earnings per common share before
the effect of accounting change $ 0.31 $ 0.24
Effect of accounting change:
- Postemployment benefits -- (0.20)
Net earnings per common share $ 0.31 $ 0.04
Dividends per common share $0.175 $0.175
See accompanying notes to condensed consolidated financial
statements.
4 <PAGE>
INGERSOLL-RAND COMPANY
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands)
Three Months Ended
March 31,
1994 1993
Cash flows from operating activities:
Net earnings $ 33,012 $ 3,628
Adjustments to arrive at net cash
provided by operating activities:
Effect of accounting change -- 21,000
Depreciation and amortization 31,811 30,917
Equity earnings/loss, net of dividends (5,846) (9,165)
Minority interests in earnings 17 (3,322)
Deferred income taxes 6,943 1,402
Other noncash items 99 1,523
Changes in other assets and
liabilities, net (57,396) (58,455)
Net cash provided by (used in)
operating activities 8,640 (12,472)
Cash flows from investing activities:
Capital expenditures (36,204) (22,412)
Proceeds from sales of property, plant
and equipment 2,268 2,930
Decrease in marketable securities 796 7,108
Cash invested in or advances to
equity companies 9,717 32,139
Net cash (used in) provided by
investing activities (23,423) 19,765
Cash flows from financing activities:
Increase (decrease) in short-term
borrowings 27,990 (10,818)
Proceeds from long-term debt 1,769 100,506
Payments of long-term debt (1,035) (68,585)
Net change in debt 28,724 21,103
Dividends paid (18,453) (18,340)
Other 2,284 2,443
Net cash provided by financing
activities 12,555 5,206
Effect of exchange rate changes
on cash and cash equivalents 1,641 (1,394)
Net (decrease) increase in cash and
cash equivalents (587) 11,105
Cash and cash equivalents -
beginning of period 227,993 216,832
Cash and cash equivalents - end of period $227,406 $227,937
See accompanying notes to condensed consolidated financial
statements.
5 <PAGE>
INGERSOLL-RAND COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - In the opinion of management, the accompanying condensed
consolidated financial statements contain all adjustments
(consisting only of normal recurring accruals) necessary to
present fairly the consolidated unaudited financial position
and results of operations for the three months ended March
31, 1994 and 1993.
Note 2 - Inventories of appropriate domestic manufactured inventories
of standard products are valued on the last-in, first-out
(LIFO) method and all other inventories are valued using the
first-in, first-out (FIFO) method. The composition of
inventories for the balance sheets presented was as follows
(in thousands):
March 31, December 31,
1994 1993
Raw materials and supplies $ 125,037 $ 121,083
Work-in-process 303,580 295,829
Finished goods 474,053 462,677
902,670 879,589
Less - LIFO reserve 167,605 165,899
Total $ 735,065 $ 713,690
Work-in-process inventories are stated after deducting
customer progress payments of $17,391,000 at March 31, 1994
and $14,395,000 at December 31, 1993.
Note 3 - The company's investment in the Dresser-Rand partnership at
March 31, 1994 and December 31, 1993 was $138,989,000 and
$133,867,000, respectively. The company owed Dresser-Rand
$30,098,000 at March 31, 1994 and $21,237,000 at December
31, 1993.
Net sales of Dresser-Rand were $310.3 million for the three
months ended March 31, 1994 and $268.7 million for the three
months ended March 31, 1993; and gross profit was $49.1
million and $51.8 million, respectively. Dresser-Rand's net
income for the three months ended March 31, 1994 was $11.6
million and $13.8 million for the three months ended March
31, 1993.
6 <PAGE>
INGERSOLL-RAND COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(continued)
Note 3 - Continued:
The summarized financial position of Dresser-Rand was as
follows (in thousands):
March 31, December 31,
1994 1993
Current assets $ 454,962 $ 489,122
Property, plant and
equipment, net 211,751 220,604
Other assets and investments 20,647 18,531
687,360 728,257
Deduct:
Current liabilities 294,132 321,629
Noncurrent liabilities 190,006 188,211
484,138 509,840
Net partners' equity
and advances $ 203,222 $ 218,417
Note 4 - In February 1993, the company issued $100 million of notes
at 6 7/8% per annum, which are not redeemable prior to
maturity in 2003. The proceeds from these notes were used
to redeem $68 million of the company's outstanding
8.05% Debentures Due 2004 and for general corporate
purposes.
Note 5 - On July 20, 1993, the company sold substantially all of its
underground coal-mining machinery assets to Long-Airdox
Company. In connection with this sale, the company recorded
a $5 million restructure of operations charge, during the
1993 second quarter.
Note 6 - Effective August 1, 1993, the company acquired the
Kunsebeck, Germany, needle and cylindrical bearing business
of FAG Kugelfischer Georg Schafer AG of Schweinfurt,
Germany.
7 <PAGE>
INGERSOLL-RAND COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
First quarter 1994 net sales totalled $1.0 billion, 6.1 percent
higher than the amount reported for the first three months of 1993.
Operating income for the first quarter totalled $60.1 million, or
approximately one-third higher than the amount reported for the
comparable 1993 quarter.
The company reported net earnings of $33.0 million, or 31 cents
per common share, for the first quarter of 1994. Net earnings for
the first three months of 1993, before the effect of the retroactive
adoption of an accounting change, totalled $24.6 million, or 24 cents
per common share. The 1993 accounting change related to the
company's adoption, effective January 1, 1993, of Statement of
Financial Accounting Standards No. 112, "Employers' Accounting for
Postemployment Benefits". The 1993 adoption of this statement
resulted in a one-time after-tax charge of $21.0 million, or 20 cents
per share. After considering this charge, the company reported net
earnings of $3.6 million, or four cents per share for the three
months ended March 31, 1993.
The ratio of cost of goods sold to sales for the first quarter of
1994 reflects a slight deterioration from 1993's first quarter
primarily due to unabsorbed costs associated with the severe winter
weather experienced by a number of the company's plants located in
the Northeast, which were closed for periods up to one week during
the early part of the quarter. The ratio of administrative, selling
and service engineering expenses to sales during the first three
months of 1994 decreased significantly over 1993's first quarter due
to the combined effect of last year's restructuring activity at
Ingersoll-Dresser Pump Company and the continued effect of the
company's efforts from cost-containment programs.
There were no LIFO (last-in, first-out) inventory liquidations
during the first quarter of 1994 or 1993.
Other income (expense), net, aggregated $2.2 million of net
expense for the three months ended March 31, 1994. This represents a
$3.6 million unfavorable change from the $1.4 million of income
reported for the first quarter of 1993. The principal reasons for
this change are:
o losses from foreign exchange activity totalled $1.1 million in
the current quarter versus $391,000 in the comparable 1993
quarter; and,
o a reduction in equity earnings from partially-owned affiliated
companies of approximately $3 million.
8 <PAGE>
INGERSOLL-RAND COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(continued)
The company's pretax profits from its 49 percent interest in
Dresser-Rand Company (another partnership between Dresser and the
company) totalled $5.7 million for the first quarter of 1994,
compared to $6.1 million for the three months ended March 31, 1993.
The Ingersoll-Dresser Pump Company's minority interest represents
Dresser's interest in the operating results of IDP. The first
quarter of 1994 reflects a benefit to the company of $184,000, which
indicates that this joint venture produced a net loss at the
partnership level of approximately $375,000 during the first three
months of 1994. During the first quarter of 1993, the company
recorded a charge to pretax earnings of approximately $315,000, which
indicated that IDP generated net income at the partnership level of
approximately $640,000 in the comparable 1993 period. It should be
noted that despite a ten percent decrease in sales for the IDP
venture for the first quarter of 1994 versus last year, benefits
derived from cost-containment and restructuring programs helped to
generate operating income during the first quarter of 1994 which was
close to last year's level.
Interest expense for the first three months of the year decreased
by $2.0 million from the $13.9 million incurred during the first
quarter of 1993. This decrease is the composite result of lower
outstanding debt and an overall lower effective interest rate in the
first quarter of 1994 when compared to 1993.
The company's effective tax rates were 36.5 percent and 36.0
percent for the three months ended March 31, 1994 and 1993,
respectively. These rates represent the company's forecast of its
effective tax position for each year. The company's effective tax
rate differs from the statutory rate of 35 percent mainly due to
state income taxes and some foreign earnings being taxed at higher
rates. The effective tax rate for the full year 1993 was 35.5
percent.
The results for the first quarter of the year benefitted from the
combination of business improvements in most of the company's
domestic markets including auto, housing and construction and a
continued emphasis on cost-containment programs throughout the
company. International business has generally reflected a modest
increase during the first quarter of 1994 when compared to the first
three months of last year. Incoming orders totalled $1,137.4 million
and represents an increase of 5.7 percent over the 1993 first quarter
total of $1,075.8 million. The Production Equipment Group and IDP
were the only operations within the company which failed to report
meaningful increases in first quarter bookings levels when compared
to the first quarter of 1993. The company's backlog of orders at
9 <PAGE>
INGERSOLL-RAND COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(continued)
March 31, 1994, believed by it to be firm, was approximately
$1,032 million, which reflects an increase of $110 million over the
December 31, 1993 balance. The company estimates that approximately
90 percent of the backlog will be shipped during the next twelve
months.
Liquidity and Capital Resources
The company's financial position at March 31, 1994 did not change
materially from December 31, 1993. In the first three months of
1994, working capital increased by approximately $32.5 million to
$910.3 million at March 31, 1994 from December 31, 1993's balance of
$877.8 million. The current ratio at March 31, 1994 was 1.9 to 1,
which equalled the ratio at December 31, 1993.
The company's cash, cash equivalents and marketable securities
decreased by $1.4 million during the first three months of 1994 to
$232.8 million from $234.2 million at December 31, 1993. This
decrease is the net effect of a general decrease in cash and cash
equivalents of approximately $2.2 million, a $0.8 million decrease in
marketable securities and a $1.6 million increase attributed to the
effect of currency movements during the first quarter of the year.
Receivables totalled $829.3 million at March 31, 1994, which
represents a $31.8 million increase from the $797.5 million reported
at December 31, 1993. This increase is the net effect of a strong
selling period towards the end of the first quarter offset by
aggressive collection efforts and the effect of foreign currency
translation during the first three months of 1994.
Inventories totalled $735 million at March 31, 1994,
approximately $21 million higher than the December 31, 1993 level.
The activity during the first quarter of 1994 represents the net
effect of the normal first quarter build of domestic inventories
increased slightly by the change in exchange rates on the
international inventories.
Long-term debt, including current maturities, at the end of the
first quarter, totalled $397 million, which approximated the year-end
balance.
The company's March 31, 1994 debt-to-capital ratio was 29/71,
which reflects a slight increase from the 28/72 ratio at December 31,
1993.
10 <PAGE>
INGERSOLL-RAND COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(continued)
During the first three months of 1994, foreign currency
adjustment resulted in a net increase of approximately $5 million in
shareowners' equity, caused by the weakening of the U.S. dollar
against other currencies. Currency changes in Italy, Australia,
Singapore and Japan accounted for virtually all of this change. The
translation of accounts receivable and inventories were the principal
balance sheet items affected by the currency fluctuations since year-
end.
Environmental Matters
Environmental matters at March 31, 1994 remain substantially
unchanged from December 31, 1993. The company has been identified as
a potentially responsible party in environmental proceedings brought
under both the federal Superfund law and state remediation laws,
involving 29 sites within the United States. For all sites, there
are other potentially responsible parties and in most instances, the
company's involvement is minimal. Although there is a possibility
that a responsible party might have to bear more than its
proportional share of site clean-up costs if other responsible
parties fail to make contributions, the company has not yet had, and
to date there is no indication that it will have, to bear more than
its proportional share of clean-up costs at any site. The company
also is engaged in site investigations and remedial activities to
address environmental cleanup from past operations at current and
former manufacturing facilities. Although uncertainties regarding
environmental technology, state and federal regulations, insurance
coverage and individual site information make estimating the
liability difficult, management believes that the total liability for
the cost of environmental remediation will not have a material effect
on the financial condition or the results of operations of the
company.
Review of Business Segments
The Standard Machinery Segment reported sales of $319.2 million
for the first three months of 1994, an increase of 7.5 percent from
last year's first quarter. The segment's operating income for the
quarter totalled $22.9 million and represents a 67.2 percent increase
over the $13.7 million reported for 1993's first quarter. The
increase in sales is attributed to a double-digit improvement in
domestic markets combined with a slight improvement in international
business. The domestic increase in sales volume is more pronounced
when you adjust 1993's first quarter sales for underground coal
mining equipment, which was sold effective June 30, 1993. The Air
Compressor and Construction and Mining groups reported marked
improvements in their operating income margins, the result of
improved domestic operations and continued benefits from cost-
containment programs.
11 <PAGE>
INGERSOLL-RAND COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(continued)
Engineered Equipment Segment's sales for the first quarter of
1994 totalled $203.5 million, down 9.2 percent from the $224.0
million reported for the first three months of 1993. The segment
reported an operating loss of $1.8 million for the first quarter of
1994, as compared to $0.8 million of operating income in last year's
first quarter. Sales from Ingersoll-Dresser Pump Company declined by
approximately ten percent both domestically and internationally from
the amounts reported for the first three months of 1993. Benefits
derived from cost-containment and restructuring programs, however,
helped to generate operating income during the first quarter of the
year which was close to last year's level.
Process Systems Group's sales were also approximately ten percent
below 1993's first quarter due to the continued depressed conditions
in the pulp and paper industry. The reduced volume caused the group
to report an operating loss for the quarter.
The Bearings, Locks and Tools Segment reported sales of $487.6
million for the first quarter of 1994, which is 13.1 percent above
last year's first quarter total of $431.3 million. Operating income
totalled $47.4 million, which was significantly higher than the $38.2
million of operating income reported by the segment for the first
three months of 1993.
An increase in demand for automotive-related products and for
general industrial products caused higher sales and operating income
in the Bearings and Components Group when compared to last year's
first quarter. However, the group's operating results for the
quarter were adversely affected by the lack of profitability
generated from its plant in Kunsebeck, Germany, which was acquired in
the latter part of 1993 from FAG.
Increases in housing related markets coupled with market share
penetration produced higher sales and operating income from the Door
Hardware Group in the first quarter of 1994 when compared to last
year's performance.
The Production Equipment Group's sales increased slightly over
their prior year level. However, the group's first quarter operating
income and operating income margin improved notably over the levels
reported for the first three months of 1993 based on an improving
domestic market and cost-containment benefits.
12 <PAGE>
PART I - EXHIBIT 11
Page 1 of 2
INGERSOLL-RAND COMPANY
COMPUTATIONS OF PRIMARY AND FULLY DILUTED EARNINGS PER SHARE
(in thousands except per share figures)
Three Months Ended
March 31,
1994 1993
PRIMARY EARNINGS PER SHARE (NOTE 1):
Earnings before effect of accounting change $ 33,012 $ 24,628
Effect of accounting change:
- Postemployment benefits -- (21,000)
Net earnings applicable to common stock $ 33,012 $ 3,628
Average number of common shares outstanding 105,402 104,754
PRIMARY EARNINGS PER SHARE:
Earnings before effect of accounting change $0.31 $ 0.24
Effect of accounting change:
- Postemployment benefits -- (0.20)
Primary earnings per share $0.31 $ 0.04
FULLY DILUTED EARNINGS PER SHARE (NOTE 2):(*)
Earnings before effect of accounting change $ 33,012 $ 24,628
Effect of accounting change:
- Postemployment benefits -- (21,000)
Net earnings applicable to common stock $ 33,012 $ 3,628
Adjusted shares:
Average number of common shares outstanding 105,402 104,754
Number of common shares issuable
assuming exercise under incentive
stock plans 453 524
Average number of outstanding shares,
as adjusted for fully diluted earnings
per share calculations 105,855 105,278
FULLY DILUTED EARNINGS PER SHARE:
Earnings before effect of accounting change $0.31 $0.23
Effect of accounting change:
- Postemployment benefits -- (0.20)
Fully diluted earnings per share $0.31 $ 0.03
(*) This calculation is presented in accordance with the Securities
Exchange Act of 1934, although it is not required disclosure
under APB Opinion No. 15.
See accompanying notes to computations of primary and fully diluted
earnings per share.
13 <PAGE>
PART I - EXHIBIT 11
Page 2 of 2
INGERSOLL-RAND COMPANY
NOTES TO COMPUTATIONS OF PRIMARY AND FULLY DILUTED
EARNINGS PER SHARE
Note 1 - Shares issuable under outstanding stock plans, applying the
"Treasury Stock" method, have been excluded from the
computation of primary earnings per share since such shares
were less than 1% of common shares outstanding.
2 - Net earnings per share of common stock computed on a fully
diluted basis are based on the average number of common
shares outstanding during each year after adjustment for
individual securities which may be dilutive. Securities
entering into consideration in making this calculation are
common shares issuable under employee stock plans.
Employee stock options outstanding are included in the
calculation of fully diluted earnings per share by applying
the "Treasury Stock" method quarterly. Such calculations
are made using the higher of the average month-end market
prices or the market price at the end of the quarter, in
order to reflect the maximum potential dilution.
14 <PAGE>
INGERSOLL-RAND COMPANY
PART II - OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K
a.) Exhibits
The exhibits listed on the accompanying index to
exhibits on page 16 are filed as part of this Form 10-Q
Quarterly Report.
b.) Reports on Form 8-K
None.
15 <PAGE>
INGERSOLL-RAND COMPANY
INDEX TO EXHIBITS
(Item 6(a))
Description Page
12 Computations of Ratios of
Earnings to Fixed Charges 18-19
16 <PAGE>
INGERSOLL-RAND COMPANY
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
INGERSOLL-RAND COMPANY
(Registrant)
Date May 13, 1994 /S/ T.F. McBride
T.F. McBride, Senior Vice
President & Chief Financial Officer
Principal Financial Officer
Date May 13, 1994 /S/ R.A. Spohn
R.A. Spohn, Controller -
Accounting and Reporting
Principal Accounting Officer
17 <PAGE>
<TABLE>
INGERSOLL-RAND COMPANY EXHIBIT 12
COMPUTATIONS OF RATIOS OF EARNINGS TO FIXED CHARGES Page 1 of 2
(Dollar Amounts in Thousands)
(2) Years Ended December 31
Fixed charges: 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C>
Interest expense............................ $ 55,764 $ 64,698 $ 64,476 $ 71,663 $ 44,049
Amortization of debt discount and expense... 688 288 265 255 255
Rentals (one-third of rentals).............. 19,425 20,846 21,229 20,599 17,410
Capitalized interest........................ 3,103 3,460 4,640 4,197 4,336
Total fixed charges........................... $ 78,980 $ 89,292 $ 90,610 $ 96,714 $ 66,050
Net earnings (loss)........................... $142,524 $(234,406) $150,589 $185,343 $210,751
Add: Minority income (loss) of majority-
owned subsidiaries................... 13,571 (33,155) 1,938 2,232 1,304
Taxes on income........................ 90,000 67,400 84,600 99,800 100,374
Fixed charges.......................... 78,980 89,292 90,610 96,714 66,050
Effect of accounting changes........... 21,000 350,000 -- -- --
Less: Capitalized interest................... 3,103 3,460 4,640 4,197 4,336
Undistributed earnings (losses) from
less than 50% owned affiliates....... 39,933 16,603 13,523 3,327 6,036
Earnings available for fixed charges ......... $303,039 $ 219,068 $309,574 $376,565 $368,107
Ratio of earnings to fixed charges ........... 3.84(1) 2.45(3) 3.42(4) 3.89 5.57
Undistributed earnings (losses) from less
than 50% owned affiliates:
Equity in earnings (losses)................. $ 42,077 $ 17,865 $ 14,768 $ 4,187 $ 6,903
Less: Dividends paid .................... 2,144 1,262 1,245 860 867
Undistributed earnings (losses) from
less-than 50% owned affiliates............ $ 39,933 $ 16,603 $ 13,523 $ 3,327 $ 6,036
(1) The 1993 calculation includes the effect of the $5 million pretax charge relating to the
restructure of the company's underground mining machinery business. Excluding this amount, the
ratio would have been 3.90.
(2) The company's portion of the earnings and fixed charges of the Dresser-Rand Company (a joint
venture formed effective January 1, 1987 with Dresser Industries, Inc.) are included through
September 30, 1992. Effective October 1, 1992, the company's ownership interest in the
Dresser-Rand Company was reduced from 50% to 49%.
(3) The 1992 calculation includes (i) the effect of the $10 million pretax charge relating to the
restructure of the company's aerospace bearings business and (ii) the full effect of the $70
million pretax restructure of operations charge relating to the Ingersoll-Dresser Pump Company.
Excluding the 1992 restructure charges the ratio would have been 3.35.
(4) The 1991 ratio includes the $7.1 million net pretax benefit from a restructure of operations.
Excluding this amount the ratio would have been 3.34.
</TABLE>
18 <PAGE>
EXHIBIT 12
Page 2 of 2
INGERSOLL-RAND COMPANY
COMPUTATIONS OF RATIOS OF EARNINGS TO FIXED CHARGES
(Dollar Amounts in Thousands)
For the Three Months Ended March 31, 1994
Fixed charges:
Interest expense . . . . . . . . . . . . . . . $12,697
Amortization of debt discount and expense . . . 120
Rentals (one-third of rentals) . . . . . . . . 5,327
Capitalized interest . . . . . . . . . . . . . 600
Total fixed charges . . . . . . . . . . . . . . . $18,744
Net earnings . . . . . . . . . . . . . . . . . . $33,012
Add: Minority income (loss) of majority-
owned subsidiaries . . . . . . . . . . . 17
Taxes on income . . . . . . . . . . . . . . 18,975
Fixed charges . . . . . . . . . . . . . . . 18,744
Less: Capitalized interest . . . . . . . . . . . 600
Undistributed earnings (losses) from
less than 50% owned affiliates . . . . . 7,204
Earnings available for fixed charges . . . . . . $62,944
Ratio of earnings to fixed charges . . . . . . . 3.36
Undistributed earnings (losses) from less
than 50% owned affiliates:
Equity in earnings (losses) . . . . . . . . . . $ 7,486
Less: Dividends paid . . . . . . . . . . . . 282
Undistributed earnings (losses) from
less-than 50% owned affiliates . . . . . . . $ 7,204
19 <PAGE>
