SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
X ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996
or
TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number
A. Full title of the plan and address of the plan, if
different from that of the issuer named below:
INGERSOLL-RAND COMPANY
SAVINGS AND STOCK INVESTMENT PLAN
B. Name of issuer of the securities held pursuant to the plan
and the address of its principal executive office:
Ingersoll-Rand Company
P. O. Box 8738
Woodcliff Lake, New Jersey 07675
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Benefits Committee has duly caused this annual report
to be signed on its behalf by the undersigned hereunto duly
authorized.
Ingersoll-Rand Company Savings
and Stock Investment Plan
(Registrant)
Date June 30, 1997 By /S/Donald H. Rice
Donald H. Rice
Benefits Committee Chairman
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the
Registration Statement on Form S-8 (Post-Effective Amendment No.
4 to No. 2-64708) of Ingersoll-Rand Company of our report dated
June 21, 1997 appearing below in this Form 11-K.
/S/ Price Waterhouse LLP
PRICE WATERHOUSE LLP
Morristown, New Jersey
June 30, 1997
INGERSOLL-RAND COMPANY
SAVINGS AND STOCK INVESTMENT PLAN
INDEX TO FINANCIAL STATEMENTS
Report of independent accountants
Statement of financial condition at
December 31, 1996 and 1995
Combined Plan Summary
Fixed Income Fund
Mutual Fund
Company Stock Fund
Loan Fund
Statement of income and changes in
plan/fund equity for the years ended
December 31, 1996 and 1995
Combined Plan Summary
Fixed Income Fund
Mutual Fund
Company Stock Fund
Loan Fund
Notes to financial statements
Report of Independent Accountants
To the Benefits Committee and Participants
of the Ingersoll-Rand Company Savings and
Stock Investment Plan
In our opinion, the financial statements listed in the
accompanying index present fairly, in all material respects, the
net assets available for benefits of the Ingersoll-Rand Company
Savings and Stock Investment Plan at December 31, 1996 and 1995,
and the changes in its plan equity for the years then ended, in
conformity with generally accepted accounting principles. These
financial statements are the responsibility of the Benefits
Committee; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted
auditing standards which require that we plan and perform the
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, assessing the accounting
principles used and significant estimates made by the Benefits
Committee, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable
basis for the opinion expressed above.
/S/ Price Waterhouse LLP
PRICE WATERHOUSE LLP
Morristown, New Jersey
June 21, 1997
INGERSOLL-RAND COMPANY
SAVINGS AND STOCK INVESTMENT PLAN
COMBINED PLAN SUMMARY
STATEMENT OF FINANCIAL CONDITION
December 31 1996 1995
Assets:
Investments at current value:
Combined Trust Fixed Income Fund $140,109,747 $133,722,453
Combined Trust Mutual Fund 160,370,187 121,019,034
Combined Trust Ingersoll-Rand
Company Stock Fund 204,726,590 183,035,949
505,206,524 437,777,436
Participant loans receivable 25,013,214 24,120,786
Contributions receivable 2,931,601 2,820,869
Total assets 533,151,339 464,719,091
Plan equity $533,151,339 $464,719,091
STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY
For the years ended December 31 1996 1995
Contributions:
Participants $ 40,156,217 $ 36,428,015
Company -- 9,798,714
40,156,217 46,226,729
Investment income:
Dividends and interest 24,795,644 18,540,683
Net appreciation of investments 59,074,527 45,684,603
Net investment income 83,870,171 64,225,286
Total additions 124,026,388 110,452,015
Participant withdrawals and
distributions 48,384,259 40,215,502
Transfers (from) other funds, net (26) (86,819)
Transfers to (from) other
plans, net 7,209,907 (94,700)
Net increase in plan equity 68,432,248 70,418,032
Plan equity at beginning of year 464,719,091 394,301,059
Plan equity at end of year $533,151,339 $464,719,091
See accompanying notes to financial statements.
INGERSOLL-RAND COMPANY
SAVINGS AND STOCK INVESTMENT PLAN
FIXED INCOME FUND
STATEMENT OF FINANCIAL CONDITION
December 31 1996 1995
Assets:
Investments at current value:
Combined Trust Fixed Income Fund $140,109,747 $133,722,453
Contributions receivable 1,132,550 1,310,243
Total assets 141,242,297 135,032,696
Fund equity $141,242,297 $135,032,696
STATEMENT OF INCOME AND CHANGES IN FUND EQUITY
For the years ended December 31 1996 1995
Contributions:
Participants $ 16,129,982 $ 17,479,531
Investment income:
Interest 7,637,984 7,698,329
Net investment income 7,637,984 7,698,329
Total additions 23,767,966 25,177,860
Participant withdrawals and
distributions 18,802,248 16,096,516
Transfers (from) other funds, net (4,922,575) (2,356,769)
Transfers to (from) other
plans, net 3,678,692 (36,523)
Net increase in fund equity 6,209,601 11,474,636
Fund equity at beginning of year 135,032,696 123,558,060
Fund equity at end of year $141,242,297 $135,032,696
See accompanying notes to financial statements.
INGERSOLL-RAND COMPANY
SAVINGS AND STOCK INVESTMENT PLAN
MUTUAL FUND
STATEMENT OF FINANCIAL CONDITION
December 31 1996 1995
Assets:
Investments at current value:
Combined Trust Mutual Fund $160,370,187 $121,019,034
Contributions receivable 1,386,373 1,129,178
Total assets 161,756,560 122,148,212
Fund equity $161,756,560 $122,148,212
STATEMENT OF INCOME AND CHANGES IN FUND EQUITY
For the years ended December 31 1996 1995
Contributions:
Participants $ 19,025,763 $ 14,077,987
Investment income:
Dividends and interest 11,564,017 5,335,362
Net appreciation of investments 12,252,556 25,602,673
Net investment income 23,816,573 30,938,035
Total additions 42,842,336 45,016,022
Participant withdrawals and
distributions 10,423,098 7,770,548
Transfers (from) other funds, net (4,292,235) (1,127,498)
Transfers (from) other plans, net (2,896,875) (62,659)
Net increase in fund equity 39,608,348 38,435,631
Fund equity at beginning of year 122,148,212 83,712,581
Fund equity at end of year $161,756,560 $122,148,212
See accompanying notes to financial statements.
INGERSOLL-RAND COMPANY
SAVINGS AND STOCK INVESTMENT PLAN
COMPANY STOCK FUND
STATEMENT OF FINANCIAL CONDITION
December 31 1996 1995
Assets:
Investments at current value:
Combined Trust Ingersoll-Rand
Company Stock Fund $204,726,590 $183,035,949
Contributions receivable 412,678 381,448
Total assets 205,139,268 183,417,397
Fund equity $205,139,268 $183,417,397
STATEMENT OF INCOME AND CHANGES IN FUND EQUITY
For the years ended December 31 1996 1995
Contributions:
Participants $ 5,000,472 $ 4,870,497
Company -- 9,798,714
5,000,472 14,669,211
Investment income:
Dividends 3,725,891 3,844,442
Net appreciation of investments 46,821,971 20,081,930
Net investment income 50,547,862 23,926,372
Total additions 55,548,334 38,595,583
Participant withdrawals
and distributions 18,016,417 15,367,837
Transfers to other funds, net 9,572,174 6,681,904
Transfers to other plans, net 6,237,872 4,482
Net increase in fund equity 21,721,871 16,541,360
Fund equity at beginning of year 183,417,397 166,876,037
Fund equity at end of year $205,139,268 $183,417,397
See accompanying notes to financial statements.
INGERSOLL-RAND COMPANY
SAVINGS AND STOCK INVESTMENT PLAN
LOAN FUND
STATEMENT OF FINANCIAL CONDITION
December 31 1996 1995
Participant loans receivable $25,013,214 $24,120,786
Fund equity $25,013,214 $24,120,786
STATEMENT OF INCOME AND CHANGES IN FUND EQUITY
For the years ended December 31 1996 1995
Transfers from other funds
for loans $12,785,012 $14,526,476
Interest income from loans 1,867,752 1,662,550
14,652,764 16,189,026
Transfers to other funds
for repayments 12,427,622 11,242,020
Transfers to other plans, net 190,218 --
Participant distributions 1,142,496 980,601
Net increase in fund equity 892,428 3,966,405
Fund equity at beginning of year 24,120,786 20,154,381
Fund equity at end of year $25,013,214 $24,120,786
See accompanying notes to financial statements.
INGERSOLL-RAND COMPANY
SAVINGS AND STOCK INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - DESCRIPTION OF THE PLAN:
The following brief description of the Ingersoll-Rand Company Savings
and Stock Investment Plan (Plan) is for general information
purposes. Participants should refer to the Plan document for more
complete information.
The Ingersoll-Rand Company (Company) adopted the Plan, for eligible
employees at participating locations. Eligible employees may
participate the first day of the month following 30 calendar days of
employment.
Participants may contribute as basic contributions one to six percent
(in whole percentages) of their compensation through payroll
deductions. Participants contributing six percent of compensation may
contribute an additional one to eight percent of compensation as
supplemental contributions. Only basic contributions receive Company
matching contributions. Participants may use before or after-tax
dollars for part or all of their contributions. Contributions are
subject to varying limitations to ensure compliance with Internal
Revenue Code requirements. Participants may change their contribution
amounts at any time effective the first pay period of the following
month by contacting the recordkeeper through its Benefits Information
Line (BIL).
The Plan assets are held in the Combined Investment Trust (Combined
Trust), together with assets from other participating Plans.
Participants may invest their contributions, in multiples of one
percent, in one or more of the following funds:
o Fixed Income Fund - A fund that invests in securities
and debt that produce a fixed rate of return. Investments
may include United States government securities, corporate
bonds, notes, debentures, convertible securities, preferred
stocks, investment funds or investment contracts.
o Mutual Fund - Participants may select the
following Fidelity Mutual Funds: Fidelity Fund, Growth
and Income Portfolio, U.S. Equity Index Portfolio, and
Magellan Fund.
o Company Stock Fund - A mutual fund consisting
primarily of the Company's common stock. This fund
limits participant investment to 50% of current
contributions or account balance on transfers.
Each fund reinvests its income in that fund.
The Company matches basic contributions at a rate determined by
the Company's board of directors. For 1996 and 1995, the match
was set at 50 percent of basic contributions. The Plan requires
that Company contributions be at least 25 percent, but no more
than 100 percent of participants basic contributions.
Effective October 1, 1995, the Plan was amended to provide for an
offset in the part of Company match contributions under the Plan
with an equivalent benefit to the Plan participants under the
Ingersoll-Rand/Clark Leveraged Employee Stock Ownership Plan
(LESOP). Amounts accrued under the Plan prior to the effective
date of this amendment will remain in the Plan unaffected.
Participant contributions are always 100 percent vested. Company
contributions vest on a seven-year, graded-vesting schedule.
Employees are 20 percent vested after completing three years of
service. The vested percentage then increases in increments of
20 percent per year until fully vested after seven years of
service. All Company contributions become 100 percent vested if
the participant's employment terminates due to disability,
retirement or death.
On any business day, participants may change their allocation of
future contributions and transfer prior contributions between
funds. Transfers of prior contributions are in whole percentages
or dollars (with a $250 minimum).
Participants have several options that permit access to their
contributions, earnings, and certain vested Company
contributions. These options are subject to certain rules and
restrictions.
Plan distributions may be in the form of a lump sum, installments
over a maximum of five years or in such other manner that the
Benefits Committee may permit.
Participant accounts are kept in units and are valued on a daily
basis.
The Benefits Committee, appointed by the Company's board of
directors, administers the Plan. The Finance Committee of the
Company's board of directors establishes the Plan's investment
policies.
The Company intends to continue the Plan indefinitely. However,
the Company retains the right to discontinue the Plan. If the
Company discontinues the Plan, all participant account balances
become fully vested at the termination date.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
The Plan follows the accrual method of accounting. Chase Manhattan
Bank, NA (Chase) and Coopers & Lybrand LLP are the trustee and
record keeper of the Plan, respectively.
Use of Estimates:
The preparation of financial statements in accordance with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and
liabilities at the dates of the financial statements and the
reported amounts of revenues and expenses during the reporting
periods. Actual results could differ from these estimates.
Valuation of Investments:
Plan assets are part of the Combined Trust, which provides
unified investment management. Chase invests the Plan assets in
the various Combined Trust investment funds.
Separate participant accounts are maintained by investment fund.
These accounts record contributions, withdrawals, transfers,
earnings and changes in market value.
The insurance company guaranteed interest contracts, the Putnam
Guaranteed Horizon Accounts, and the Putnam Managed Account are
recorded at their respective contract value. Contract value
approximates current value assuming the trust holds the
investments until maturity. Contract value equals principal plus
cumulative interest earned, reduced by distributions.
The Chase Domestic Liquidity Fund contains short-term debt, bank
certificates of deposit and collateralized repurchase agreements.
The carrying value of these investments is a reasonable estimate
of their current value due to the short-term nature of the
instruments.
The financial statements report investments in the Mutual Fund
and the Company Stock Fund at current value based on published
market quotations.
Security Transactions and Investment Income:
Realized gains or losses on security transactions are recorded on
the trade date. Realized gains or losses are the difference
between the proceeds received and the participant's average unit
cost.
Dividend income is recorded on the ex-dividend date and interest
income is recorded when earned.
The statement of income and changes in Plan/fund equity includes
unrealized appreciation or depreciation in accordance with the
policy of stating investments at current value.
Contributions:
Participant and Company matching contributions are contributed to
the Combined Trust or LESOP as soon as practicable, after the end
of each month. Participant contributions for each fund are based
on the participants' investment decisions. The Company matching
contributions are made to the Company Stock Fund in cash or
common stock.
Forfeitures:
Forfeitures of nonvested Company contributions occur when
participants are terminated. Forfeitures of $569,345 in 1996 and
$737,713 in 1995 were used to reduce future Company
contributions.
Expenses of the Plan:
Most expenses for the administration of the Plan and the Combined
Trust are paid for by the Company. Expenses of the funds related
to the investment and reinvestment of assets are included in the
cost of the related investments.
Benefit Obligations:
Distributions to terminated employees are recorded in each fund's
financial statements, when paid. The approved and unpaid amounts
were $1,720,418 and $4,038,929 at December 31, 1996 and 1995
respectively. These amounts are reflected as liabilities on the
Plan's Form 5500.
NOTE 3 - FIXED INCOME FUND:
Investments in the Fixed Income Fund at December 31 were as
follows:
1996 1995
Group annuity contract with:
The Travelers Companies $ -- $ 4,428,355
Putnam Guaranteed Horizon
Accounts 78,726,520 77,702,758
Putnam Managed Account 93,410,720 89,191,183
Chase Domestic Liquidity Fund 20,346,853 13,483,488
Chase Cash Account 230 103
Total Combined Trust Fixed
Income Fund 192,484,323 184,805,887
Less: Other plans 52,374,576 51,083,434
Plan investment in Fixed
Income Fund $140,109,747 $133,722,453
The Travelers Companies' group annuity contract establishes a new
interest rate every December, when the contract renews. The new
rate applies to all funds held in the group annuity contract
during the next Plan year. The interest rate was 6.50% for 1996
and 5.95% in 1995. The contract was not renewed and therefore,
the balance as of December 31, 1996 was $0.
At December 31, 1996, certain assets of the Plan are invested in
synthetic investment contracts. The Putnam Guaranteed Horizon
Accounts and the Putnam Managed Account consist principally of an
investment agreement between the Company and Putnam and a wrapper
contract with a financially reliable third party which provides
liquidity, or benefit-responsiveness.
The Putnam Guaranteed Horizon Accounts under contract at December
31, 1996 were:
Net Crediting
Amount Average Yield Interest Rate Maturity Date
$ 6,742,584 5.78% 5.44% February 15, 1998
24,963,300 5.79% 7.44% December 22, 1997
15,214,111 5.33% 5.93% November 15, 1997
31,806,525 6.09% 6.22% November 15, 1999
$78,726,520
The Putnam Guaranteed Horizon Accounts under contract at December
31, 1995 were:
Net Crediting
Amount Average Yield Interest Rate Maturity Date
$ 6,959,870 5.24% 5.44% February 15, 1998
23,924,784 5.29% 7.44% December 22, 1997
15,324,134 5.19% 5.93% November 15, 1997
31,493,970 5.35% 6.22% November 15, 1999
$77,702,758
The contract value of the Putnam Managed Account at December 31
was $93,410,720 in 1996, and $89,191,183 in 1995. This contract
has no maturity date and ends upon written notice.
The average yield for the Putnam Managed Account was 6.68% in
1996 and 6.02% in 1995. The net crediting rate as of December 31
was 6.05% in 1996 and 6.21% in 1995.
The net crediting rate for all synthetic investment contracts is
reset twice a year, on January 1 and July 1. In no event shall
the net crediting rate be reset below 0%.
The Chase Domestic Liquidity Fund reported an annualized rate of
return as of December 31 of 5.30% in 1996 and 5.81% in 1995.
NOTE 4 - MUTUAL FUND:
Participants in the Mutual Fund may invest in the Fidelity Fund,
Growth and Income Portfolio, U.S. Equity Index Portfolio and
Magellan Fund. Each fund consists of a portfolio of common
stocks or other securities based on the fund's investment
objective. Prospectuses are available from the Fidelity
Management Trust Company.
Investments in the Mutual Fund at December 31 were as follows:
1996 1995
Fidelity Fund $ 17,710,287 $ 8,901,110
Growth and Income Portfolio 64,067,743 39,440,377
U.S. Equity Index Portfolio 71,666,187 58,776,728
Magellan Fund 57,388,300 53,489,060
Total Combined Trust Mutual Fund 210,832,517 160,607,275
Less: Other plans 50,462,330 39,588,241
Plan investment in Mutual Fund $160,370,187 $121,019,034
These funds cost $165,220,983 and $127,913,945 at December 31,
1996 and 1995, respectively.
Net realized and unrealized appreciation of investments for the
years ended December 31, 1996 and 1995 was as follows:
1996 1995
Fidelity Fund $ 1,033,725 $ 1,341,840
Growth and Income Portfolio 6,672,187 7,736,459
U.S. Equity Index Portfolio 11,398,945 14,353,970
Magellan Fund (2,848,573) 10,246,129
Total Combined Trust Mutual Fund 16,256,284 33,678,398
Less: Other plans 4,003,728 8,075,725
Net plan appreciation $ 12,252,556 $ 25,602,673
NOTE 5 - COMPANY STOCK FUND:
Investments in the Company Stock Fund at December 31 were as
follows:
1996 1995
Ingersoll-Rand Company common
stock $223,084,354 $198,743,432
Chase Domestic Liquidity Fund 1,763,702 2,002,775
Cash 7 9
Total Combined Trust Ingersoll-Rand
Company Stock Fund 224,848,063 200,746,216
Less: Other plans 20,121,473 17,710,267
Plan investment in Ingersoll-Rand
Company Stock Fund $204,726,590 $183,035,949
The Company Stock Fund investment in Company common stock at
December 31, 1996 and 1995, included 4,996,704 shares and
5,658,176 shares, respectively. At December 31, 1996 and 1995,
these shares cost $114,705,537 and $125,136,230, respectively.
Net realized and unrealized appreciation of investments for the
years ended December 31, 1996 and 1995 was as follows:
1996 1995
Combined Investment Trust $ 51,347,920 $ 22,059,385
Less: Other plans 4,525,949 1,977,455
Net plan appreciation $ 46,821,971 $ 20,081,930
NOTE 6 - LOAN FUND:
The Plan allows participants to borrow from their vested account
balance subject to certain limits. Loans are withdrawn from the
participants' accounts in a sequence outlined in the Plan.
The Benefits Committee establishes the loan interest rate and
reviews the rate quarterly. The loan rate may be adjusted each
quarter thereafter in order to reflect the current prime rate.
In 1995, the interest rate on new loans was 8% during the first
half of the year, and became 9% effective July 1, 1995. In 1996,
the interest rate on new loans was 9% during the entire year.
Interest charges begin 60 days after the initial loan date.
Loans are repaid in equal installments through payroll deductions
over a maximum of five years. Loan repayments consist of
interest and principal, and are reinvested according to the
participant's current investment elections. If a participant
terminates employment with the Company, any outstanding loan
balance is considered a distribution.
NOTE 7 - FEDERAL INCOME TAXES:
In May 1997, a favorable determination letter was received from
the Internal Revenue Service indicating that the Plan
documentation satisfied the requirements for tax qualification
under Section 401(a) of the Internal Revenue Code. The trust
established for the Plan is exempt from federal income tax under
Section 501(a) of the Internal Revenue Code. Filing for certain
amendments is pending. The Company believes the Plan complies
with Section 401(a); therefore, the financial statements do not
provide for income taxes. Employees defer taxes on income
earned, Company contributions, and contributions made under the
salary deferral feature. Taxes on employee distributions depend
on the form and amount of such payment.
NOTE 8 - TRANSFERS (FROM) TO OTHER PLANS:
In 1995 and 1996, there were transfers to (from) the Ingersoll-
Rand Company Savings and Stock Investment Plan resulting from the
transfer of Ingersoll-Dresser Pump Company and Dresser Industries
employees.
In 1996, there were transfers to (from) the Plan resulting from
the acquisition of the Steelcraft Division of MascoTech, Inc. ($8
million) and the sale of the Process Systems Group ($15 million).
NOTE 9 - SUBSEQUENT EVENTS:
Effective March 1, 1997, the Ingersoll-Rand Company Hourly
Pension Plan (Plan 45), the Clark Savings and Investment Plan and
the Ingersoll-Rand Company Retirement Account Plan were merged
into the Ingersoll-Rand Company Savings and Stock Investment
Plan. As applicable, existing participant balances were
transferred to the investment options available in the Ingersoll-
Rand Company Savings and Stock Investment Plan that were elected
by each participant.
Effective March 1, 1997, a change in investment options occurred.
The Fidelity Fund was eliminated as an election, and there are
five additional investment options available to participants:
Fidelity Low Priced Stock Fund, Fidelity Contrafund, Templeton
Foreign Fund, Putnam New Opportunities Fund and Putnam Vista
Fund.
