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, 1997
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
REQUIRED INFORMATION
A. Financial Statements and Schedules
Index to Financial Statements
Report of Independent Accountants
Statements of Financial Condition at December 31, 1997 and 1996
Statements of Income and Changes in Plan/Fund Equity for the
Year Ended December 31, 1997 and 1996
Notes to Financial Statements
Schedule I - Item 27a - Schedule of Assets Held For
Investment Purposes at December 31, 1997
Schedule V - Item 27d - Schedule of Reportable Transactions
for the Year Ended December 31, 1997
B. Exhibit
Consent of Independent Accountants
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 23, 1998 By: /S/ Donald H. Rice
Donald H. Rice
Benefits Committee Chairman
INGERSOLL-RAND COMPANY
SAVINGS AND STOCK INVESTMENT PLAN
INDEX TO FINANCIAL STATEMENTS
Report of Independent Accountants
Statements of Financial Condition at
December 31, 1997 and 1996
Combined Plan Summary
Fixed Income Fund
Mutual Fund
Company Stock Fund
Loan Fund
Statements of Income and Changes in
Plan/Fund Equity for the years ended
December 31, 1997 and 1996
Combined Plan Summary
Fixed Income Fund
Mutual Fund
Company Stock Fund
Loan Fund
Notes to Financial Statements
Additional Information* (Combined Investment Trust):
Schedule I - Item 27a - Schedule of Assets Held for
Investment Purposes at December 31, 1997
Schedule V - Item 27d - Schedule of Reportable
Transactions for the year ended December 31, 1997
*Other schedules required by Section 2520.103-10
of the DOL Rules and Regulations for Reporting and
Disclosure under ERISA have been omitted because
they are not applicable.
Report of Independent Accountants
June 5, 1998
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 financial
condition of the Ingersoll-Rand Company Savings and Stock Investment
Plan at December 31, 1997 and 1996, 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.
Our audits were performed for the purpose of forming an opinion on
the basic financial statements taken as a whole. The additional
information included in Schedule I and Schedule V of the Combined
Investment Trust is presented for purposes of additional analysis and
is not a required part of the basic financial statements but is
additional information required by ERISA. Such information has been
subjected to the auditing procedures applied in the audit of the
basic financial statements, and in our opinion, is fairly stated in
all material respects in relation to the basic financial statements
taken as a whole.
/S/ Price Waterhouse
Price Waterhouse LLP
Florham Park, New Jersey
INGERSOLL-RAND COMPANY
SAVINGS AND STOCK INVESTMENT PLAN
COMBINED PLAN SUMMARY
STATEMENTS OF FINANCIAL CONDITION
At December 31 1997 1996
Assets:
Investments at current value:
Combined Trust Fixed Income Fund $ 207,301,167 $140,109,747
Combined Trust Mutual Fund 297,485,385 160,370,187
Combined Trust Ingersoll-Rand
Company Stock Fund 279,232,315 204,726,590
784,018,867 505,206,524
Participant loans receivable 29,593,236 25,013,214
Contributions receivable 3,641,479 2,931,601
Total assets 817,253,582 533,151,339
Plan equity $ 817,253,582 $533,151,339
STATEMENTS OF INCOME AND CHANGES IN PLAN EQUITY
For the years ended December 31 1997 1996
Contributions:
Participants $ 48,958,935 $ 40,156,217
Investment income:
Dividends 15,748,925 15,289,908
Interest 13,935,929 9,505,736
Net appreciation of investments 127,336,002 59,074,527
Net investment income 157,020,856 83,870,171
Total additions 205,979,791 124,026,388
Participant withdrawals and
distributions 69,382,379 48,384,259
Total deductions 69,382,379 48,384,259
Net increase prior to transfers 136,597,412 75,642,129
Transfers from other funds, net 75,161 26
Transfers from (to) other plans,
net 147,429,670 (7,209,907)
Increase in plan equity 284,102,243 68,432,248
Plan equity at beginning of year 533,151,339 464,719,091
Plan equity at end of year $817,253,582 $533,151,339
The accompanying notes are an integral part of these financial
statements.
INGERSOLL-RAND COMPANY
SAVINGS AND STOCK INVESTMENT PLAN
FIXED INCOME FUND
STATEMENTS OF FINANCIAL CONDITION
At December 31 1997 1996
Assets:
Investments at current value:
Combined Trust Fixed Income Fund $207,301,167 $140,109,747
Contributions receivable 1,203,008 1,132,550
Total assets 208,504,175 141,242,297
Fund equity $208,504,175 $141,242,297
STATEMENTS OF INCOME AND CHANGES IN FUND EQUITY
For the years ended December 31 1997 1996
Contributions:
Participants $ 17,385,533 $ 16,129,982
Investment income:
Interest 11,766,892 7,637,984
Total additions 29,152,425 23,767,966
Participant withdrawals and
distributions 28,652,944 18,802,248
Total deductions 28,652,944 18,802,248
Net increase prior to transfers 499,481 4,965,718
Transfers (to) from other funds, net (12,938,145) 4,922,575
Transfers from (to) other plans, net 79,700,542 (3,678,692)
Increase in fund equity 67,261,878 6,209,601
Fund equity at beginning of year 141,242,297 135,032,696
Fund equity at end of year $208,504,175 $141,242,297
The accompanying notes are an integral part of these financial
statements.
INGERSOLL-RAND COMPANY
SAVINGS AND STOCK INVESTMENT PLAN
MUTUAL FUND
STATEMENTS OF FINANCIAL CONDITION
At December 31 1997 1996
Assets:
Investments at current value:
Combined Trust Mutual Fund $297,485,385 $160,370,187
Contributions receivable 1,988,616 1,386,373
Total assets 299,474,001 161,756,560
Fund equity $299,474,001 $161,756,560
STATEMENTS OF INCOME AND CHANGES IN FUND EQUITY
For the years ended December 31 1997 1996
Contributions:
Participants $ 25,998,175 $ 19,025,763
Investment income:
Dividends 11,837,276 11,564,017
Net appreciation of investments 51,883,324 12,252,556
Net investment income 63,720,600 23,816,573
Total additions 89,718,775 42,842,336
Participant withdrawals and
distributions 20,427,493 10,423,098
Total deductions 20,427,493 10,423,098
Net increase prior to transfers 69,291,282 32,419,238
Transfers from other funds, net 8,695,034 4,292,235
Transfers from other plans, net 59,731,125 2,896,875
Increase in fund equity 137,717,441 39,608,348
Fund equity at beginning of year 161,756,560 122,148,212
Fund equity at end of year $299,474,001 $161,756,560
The accompanying notes are an integral part of these financial
statements.
INGERSOLL-RAND COMPANY
SAVINGS AND STOCK INVESTMENT PLAN
COMPANY STOCK FUND
STATEMENTS OF FINANCIAL CONDITION
At December 31 1997 1996
Assets:
Investments at current value:
Combined Trust Ingersoll-Rand
Company Stock Fund $279,232,315 $204,726,590
Contributions receivable 449,855 412,678
Total assets 279,682,170 205,139,268
Fund equity $279,682,170 $205,139,268
STATEMENTS OF INCOME AND CHANGES IN FUND EQUITY
For the years ended December 31 1997 1996
Contributions:
Participants $ 5,575,227 $ 5,000,472
Investment Income:
Dividends 3,911,649 3,725,891
Net appreciation of investments 75,452,678 46,821,971
Net investment income 79,364,327 50,547,862
Total additions 84,939,554 55,548,334
Participant withdrawals and
distributions 19,084,567 18,016,417
Total deductions 19,084,567 18,016,417
Net increase prior to transfers 65,854,987 37,531,917
Transfers from (to) other funds, net 4,505,992 (9,572,174)
Transfers from (to) other plans, net 4,181,923 (6,237,872)
Increase in fund equity 74,542,902 21,721,871
Fund equity at beginning of year 205,139,268 183,417,397
Fund equity at end of year $279,682,170 $205,139,268
The accompanying notes are an integral part of these financial
statements.
INGERSOLL-RAND COMPANY
SAVINGS AND STOCK INVESTMENT PLAN
LOAN FUND
STATEMENTS OF FINANCIAL CONDITION
At December 31 1997 1996
Participant loans receivable $ 29,593,236 $ 25,013,214
Fund equity $ 29,593,236 $ 25,013,214
STATEMENTS OF INCOME AND CHANGES IN
FUND EQUITY
For the years ended December 31 1997 1996
Transfers from other funds for loans $ 14,223,700 $ 12,785,012
Interest income from loans 2,169,037 1,867,752
Transfers from other plans 3,816,080 -
Total additions 20,208,817 14,652,764
Transfers to other funds for
repayments 14,411,420 12,427,622
Transfers to other plans - 190,218
Participant distributions 1,217,375 1,142,496
Total deductions 15,628,795 13,760,336
Increase in fund equity 4,580,022 892,428
Fund equity at beginning of year 25,013,214 24,120,786
Fund equity at end of year $ 29,593,236 $ 25,013,214
The accompanying notes are an integral part of these 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.
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. Existing
participant balances in these plans were transferred to the
investment options available in the Ingersoll-Rand Company Savings
and Stock Investment Plan that were elected by each participant.
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 ten 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
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 - Prior to March 1, 1997, participants
could select from the following mutual funds: Fidelity Fund,
Fidelity Growth and Income Portfolio, Fidelity U.S. Equity
Index Portfolio, and Fidelity Magellan Fund. After March 1,
1997, participants can select from the following mutual
funds: Templeton Foreign Fund, Fidelity Growth and Income
Portfolio, Fidelity Contra Fund, Fidelity Low-Priced Stock
Fund, Fidelity U.S. Equity Index Commingled Pool Fund
(formerly known as the Fidelity Institutional S&P 500
Index), Putnam Vista Fund, Putnam New Opportunities Fund and
Fidelity Magellan Fund.
o Company Stock Fund - A 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 contributes to the Plan via a Company matching
contribution and a Company retirement contribution. The Company
matches basic contributions at a rate determined by the Company's
board of directors. For 1997 and 1996, the match was set at 50
percent of basic contributions. The Plan requires that Company
matching contributions be at least 25 percent, but no more than 100
percent of participants' basic contributions.
As a Company retirement contribution, the Company contributes one
percent of each eligible participant's monthly compensation to the
Plan. An additional one percent is contributed to the Plan for
employees who meet certain criteria, as outlined in the Plan.
Effective October 1, 1995 for Company matching contributions, and
effective March 1, 1996 for Company retirement contributions, the
Plan was amended to provide for an offset to the Company
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 dates of these amendments remain in the Plan unaffected.
Participant contributions are always 100 percent vested. Effective
March 1, 1997, Company matching and retirement contributions,
including those provided to the LESOP, vest on a five-year, graded-
vesting schedule. Employees are immediately 20 percent vested. After
completing two years of service, the vested percentage increases in
increments of 20 percent per year until fully vested after five years
of service. All Company matching and retirement contributions become
100 percent vested if the participant's employment terminates under
the terms of the plan 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.
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 or shares and are valued on a
daily basis.
At December 31, 1997 and 1996, the number of participants with
balances in the Plan approximated 18,200 and 15,100, respectively.
The number of participants contributing to each of the Plan's funds
at December 31, 1997, were approximately:
Fixed Income Fund 15,300
Mutual Fund:
Fidelity Fund -
Fidelity Growth and Income Portfolio 5,900
Fidelity U.S. Equity Index Portfolio -
Fidelity Magellan Fund 4,400
Templeton Foreign Fund 1,400
Fidelity Contra Fund 1,600
Fidelity Low Priced Stock Fund 1,900
Fidelity U.S. Equity Index Commingled Pool Fund 4,900
Putnam Vista Fund 2,500
Putnam New Opportunities Fund 3,100
Ingersoll-Rand Company Stock Fund 5,600
The Benefits Committee, which is appointed by the Company's board of
directors (or its delegate), 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.
In August 1997, the Company's board of directors declared a three-for-
two stock split of the Company's common stock. The stock split was
made in the form of a stock dividend and was paid on September 2,
1997. All prior year share amounts have been restated to reflect the
stock split.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
The Plan follows the accrual method of accounting. The Chase
Manhattan Bank (Chase) and Coopers & Lybrand LLP are trustee and
recordkeeper 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 Putnam Guaranteed Horizon Accounts and the Putnam Managed
Accounts are recorded at their respective contract value. 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. Rates
of return on the money-market funds vary with the instruments
purchased and changes in short-term interest rates.
The financial statements report investments in the Mutual Fund and
the Ingersoll-Rand Company Common Stock 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. Appreciation or
depreciation of investments reflects both realized gains and losses
and the change in unrealized appreciation and depreciation of investments.
Contributions:
Participant and Company matching contributions are contributed to the
Combined Trust or the LESOP trust, as applicable, on a monthly basis.
Participant contributions for each fund are based on the
participants' investment decisions. Company retirement contributions
are contributed to the Combined Trust or the LESOP after the end of
each month or annually, as outlined in the Plan. The Company
matching and retirement contributions may be made to the Combined
Trust or the LESOP in cash or Company stock.
Forfeitures:
Forfeitures of nonvested Company contributions occur when
participants are terminated. Forfeitures of $587,084 in 1997 and
$569,345 in 1996 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 $2,850,775 and $1,720,418 at December 31, 1997 and 1996
respectively. These amounts will be reflected as liabilities on the
Plan's Form 5500 in accordance with Department of Labor Regulations.
NOTE 3 - FIXED INCOME FUND:
Investments in the Fixed Income Fund at December 31 were as follows:
1997 1996
Putnam Guaranteed Horizon Accounts $ 39,701,027 $ 78,726,520
Putnam Managed Accounts 136,945,125 93,410,720
Chase Domestic Liquidity Fund 33,095,881 20,347,083
MetLife Stable Income Funds 59,125,348 -
Total Combined Trust Fixed
Income Fund 268,867,381 192,484,323
Less: Other plans 61,566,214 52,374,576
Plan investment in Fixed Income
Fund $207,301,167 $140,109,747
NOTE 4 - MUTUAL FUND:
Investments in the Mutual Fund at December 31 were as follows:
1997 1996
Fidelity Fund $ 424,298 $ 17,710,287
Fidelity Growth and Income Portfolio 89,016,560 64,067,743
Fidelity U.S. Equity Index Portfolio 705,452 71,666,187
Fidelity Magellan Fund 53,004,254 57,388,300
Templeton Foreign Fund 7,995,696 -
Fidelity Contra Fund 14,711,437 -
Fidelity Low Priced Stock Fund 18,848,539 -
Fidelity U.S. Equity Index
Commingled Pool Fund 100,620,520 -
Putnam Vista Fund 30,301,501 -
Putnam New Opportunities Fund 31,730,581 -
Total Combined Trust Mutual Fund 347,358,838 210,832,517
Less: Other plans 49,873,453 50,462,330
Plan investment in Mutual Fund $297,485,385 $160,370,187
The total cost of the Combined Trust Mutual Funds was $285,756,879
and $165,220,983 at December 31, 1997 and 1996, respectively.
Net realized and unrealized appreciation (depreciation) of
investments for the years ended December 31, 1997 and 1996 was as
follows:
1997 1996
Fidelity Fund $ 986,287 $ 1,033,725
Fidelity Growth and Income Portfolio 16,431,077 6,672,187
Fidelity U.S. Equity Index Portfolio 5,208,378 11,398,945
Fidelity Magellan Fund 8,513,494 (2,848,573)
Templeton Foreign Fund (177,221) -
Fidelity Contra Fund 904,623 -
Fidelity Low Priced Stock Fund 1,646,255 -
Fidelity U.S. Equity Index
Commingled Pool Fund 20,368,899 -
Putnam Vista Fund 5,446,080 -
Putnam New Opportunities Fund 5,426,059 -
Total Combined Trust Mutual Fund 64,753,931 16,256,284
Less: Other plans 12,870,607 4,003,728
Net plan appreciation $51,883,324 $ 12,252,556
NOTE 5 - COMPANY STOCK FUND:
Investments in the Company Stock Fund at December 31 were as
follows:
1997 1996
Ingersoll-Rand Company common stock $295,081,502 $223,084,354
Chase Domestic Liquidity Fund 3,564,578 1,763,709
Total Combined Trust Ingersoll-Rand
Company Stock Fund 298,646,080 224,848,063
Less: Other plans 19,413,765 20,121,473
Plan investment in Ingersoll-Rand
Company Stock Fund $279,232,315 $204,726,590
The Company Stock Fund investment in Company common stock at December
31, 1997 and 1996, included 7,285,963 shares and 7,495,056 shares,
respectively. At December 31, 1997 and 1996, the average cost of
these shares was $123,451,463 and $114,705,537, respectively.
Net realized and unrealized appreciation of investments for the years
ended December 31, 1997 and 1996 was as follows:
1997 1996
Combined Investment Trust $80,697,853 $51,347,920
Less: Other plans 5,245,175 4,525,949
Net Plan appreciation $75,452,678 $46,821,971
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 number of loans outstanding at December 31, 1997 and 1996 was
8,363 and 8,122, respectively.
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 1997 and
1996, the interest rate on new loans was 9%. 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 satisfied the
requirements for 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.
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:
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
Plan, transferring approximately $158 million of assets.
Approximately $9 million of investments related to the former
employees of the Process Systems Group, which was sold in 1996, were
transferred from the Plan in 1997. Other dispositions during 1997
resulted in approximately $1.2 million of investment assets
transferred from the Plan.
In 1997 and 1996, there were also transfers to (from) the Plan
resulting from the transfer of Ingersoll-Dresser Pump Company and
Dresser Industries employees.
In 1996, there were transfers to the Plan resulting from the
acquisition of the Steelcraft Division of MascoTech, Inc. of $8
million and transfers from the Plan of $15 million due to the sale of
the Process Systems Group.
NOTE 9 - COMBINED INVESTMENT TRUST FINANCIAL INFORMATION:
At December 31, 1997 and 1996, the Plan had an 85% and 80%
participation, respectively, in the Combined Investment Trust. The
financial statements for the Combined Investment Trust are prepared
on the modified cash basis of accounting, which in the case of the
Combined Investment Trust is substantially the same as the accrual
basis of accounting. The financial statements for the years ended
December 31, 1997 and 1996 follow.
COMBINED INVESTMENT TRUST
STATEMENTS OF NET ASSETS AVAILABLE
FOR BENEFITS
At December 31 1997 1996
Investments:
Fixed Income Fund:
Putnam Guaranteed Horizon Accounts $ 39,701,027 $ 78,726,520
Chase Domestic Liquidity Fund 33,095,881 20,347,083
Putnam Managed Accounts 136,945,125 93,410,720
MetLife Stable Income Fund 59,125,348 -
Total Fixed Income Fund 268,867,381 192,484,323
Mutual Fund:
Templeton Foreign Fund 7,995,696 -
Fidelity Contra Fund 14,711,437 -
Putnam Vista Fund 30,301,501 -
Fidelity U.S. Equity Index
Commingled Pool Fund 100,620,520 -
Fidelity Low Priced Stock Fund 18,848,539 -
Fidelity Growth and Income Portfolio 89,016,560 64,067,743
Putnam New Opportunities Fund 31,730,581 -
Fidelity Magellan Fund 53,004,254 57,388,300
Fidelity U.S. Equity Index Portfolio 705,452 71,666,187
Fidelity Fund 424,298 17,710,287
Total Mutual Fund 347,358,838 210,832,517
Ingersoll-Rand Company
Common Stock Fund 298,646,080 224,848,063
Total investments at current value
(cost - $681,640,301 in 1997 and
$471,872,442 in 1996) 914,872,299 628,164,903
Participant loans receivable 32,635,258 27,989,253
Net assets available for benefits $947,507,557 $656,154,156
The accompanying notes are an integral part of these financial
statements.
COMBINED INVESTMENT TRUST
STATEMENTS OF CHANGES IN NET ASSETS
AVAILABLE FOR BENEFITS
At December 31 1997 1996
Additions to net assets:
Contributions received $ 61,301,154 $ 51,149,315
Dividends and interest income
from investments 34,903,371 31,806,347
Net appreciation of investments 145,451,784 67,604,204
Transfers from other plans 151,939,773 12,582,414
Total additions 393,596,082 163,142,280
Deductions from net assets:
Participant withdrawals and
distributions 87,845,689 61,649,249
Transfers to other plans 14,396,992 18,605,989
Transfers to other funds, net - -
Total deductions 102,242,681 80,255,238
Increase in net assets for the year 291,353,401 82,887,042
Net assets, beginning of year 656,154,156 573,267,114
Net assets, end of year $947,507,557 $656,154,156
The accompanying notes are an integral part of these financial
statements.
NOTE A - GENERAL DESCRIPTION OF THE COMBINED INVESTMENT TRUST:
The Combined Investment Trust (Combined Trust) provides unified
investment management of the assets of several plans sponsored by
Ingersoll-Rand Company or its subsidiaries. The participants of the
individual plans are eligible employees of Ingersoll-Rand Company or
its subsidiaries. The Chase Manhattan Bank (Chase) and Coopers &
Lybrand LLP are the trustee and recordkeeper, respectively of the
Combined Trust. The Combined Trust maintains separate participant
accounts by investment fund in units. These accounts record
contributions, withdrawals and transfers, and reflect investment
earnings and changes in market value.
Certain of these plans, namely the I-R/Clark Leveraged Employee Stock
Ownership Plan, the Ingersoll-Rand/Thermo King Savings and Stock
Investment Plan and the Ingersoll-Rand/Thermo King Retirement Savings
Plan of Puerto Rico participate only through investment in the Fixed
Income Fund and/or the Ingersoll-Rand Stock Fund of the Combined
Trust.
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
The Combined Trust uses the modified cash basis of accounting which
in the case of the Combined Trust is substantially the same as
accrual basis accounting.
Use of Estimates:
The preparation of financial statements in accordance with generally
accepted accounting principles requires the Benefits Committee 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 those estimates.
Valuation of Investments:
The Putnam Guaranteed Horizon Accounts and the Putnam Managed
Accounts are recorded at their respective contract value. 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. Rates
of return on the money-market funds vary with the instruments
purchased and changes in the short-term interest rates.
The financial statements report investments in the Mutual Fund and
the Ingersoll-Rand Company common stock 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 changes in net assets includes unrealized
appreciation or depreciation in accordance with the policy of stating
investments at current value. Appreciation or depreciation of
investments reflects both realized gains and losses and the change
in unrealized appreciation and depreciation of investments.
Contributions and Expenses:
The Combined Trust records contributions when received from the
participating Plans. It reports disbursements from the participating
Plans for participant withdrawals, loans and Plan to Plan transfers
when paid.
Most expenses for the administration of the participating Plans and
the Combined Trust are paid for by the companies. Expenses of the
funds related to the investment and reinvestment of assets are
included in the cost of the related investments.
Reclassifications:
Certain prior year amounts have been reclassified to conform to the
current year presentation.
NOTE C - INVESTMENTS:
At December 31, 1997 and 1996, certain assets of the Combined Trust
were invested in synthetic investment contracts. The Putnam
Guaranteed Horizon Accounts and the Putnam Managed Accounts consist
principally of an investment agreement between the Company and Putnam
and a wrapper contract with a financially responsible third party
which provides liquidity or benefit-responsiveness.
The Putnam Guaranteed Horizon Accounts under contract at December 31,
1997 were:
Guaranteed
Amount Average Yield Rate of Return Maturity Date
$33,004,081 5.65% 6.224% November 15, 1999
6,696,946 5.12% 5.440% February 28, 1998
$39,701,027
The Putnam Guaranteed Horizon Accounts under contract at December 31,
1996 were:
Guaranteed
Amount Average Yield Rate of Return Maturity Date
$ 6,742,584 5.78% 5.440% February 15, 1998
24,963,300 5.79% 7.438% December 22, 1997
15,214,111 5.33% 5.930% May 15, 1997
31,806,525 6.09% 6.224% November 15, 1999
$78,726,520
The Putnam Managed Accounts under contract at December 31, 1997 were:
Net Crediting
Average Interest
Amount Yield Rate Maturity Date
$100,561,308 6.16% 6.268% None-end upon written notice
36,383,817 6.03% 6.120% None-end upon written notice
$136,945,125
The Putnam Managed Account under contract at December 31, 1996 was:
Net Crediting
Average Interest
Amount Yield Rate Maturity Date
$93,410,720 6.68% 6.05% None-end upon written notice
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 5.65% in 1997 and 5.30% in 1996.
The Metropolitan Life Insurance (MetLife) Stable Income Fund invests
in a group annuity contract which is carried at contract value which
approximates current value. Interest rates credited to the fund were
6.27% in 1997 and 6.40% in 1996. This contract has no expiration
date. The MetLife group annuity contract consists principally of an
investment agreement between the Company and MetLife in which MetLife
maintains a separate account for the investment of participants'
assets in an actively managed institutional bond fund.
Net realized gain (loss) on securities sold of the Combined Trust's
investments for the years ended December 31, 1997 and 1996 was as
follows:
1997 1996
Mutual Fund:
Fidelity Fund $ 2,814,917 $ 153,780
Fidelity Growth and Income
Portfolio 4,802,439 1,043,544
Fidelity U.S. Equity Index
Portfolio 29,744,529 3,323,568
Fidelity Magellan Fund 3,886,631 (686,940)
Templeton Foreign Fund 562,003 -
Fidelity Contra Fund 212,092 -
Fidelity Low Priced Stock Fund 260,284 -
Fidelity U.S. Equity Index
Commingled Pool Fund 1,839,454 -
Putnam Vista Fund 2,947,297 -
Putnam New Opportunities Fund 1,158,185 -
Total Mutual Fund 48,227,831 3,833,952
Ingersoll-Rand Company Common Stock 19,210,842 19,337,501
Net realized gain $67,438,673 $23,171,453
Net unrealized gain (loss) of the Combined Trust's investments for
the years ended December 31, 1997 and 1996 was as follows:
1997 1996
Mutual Fund:
Fidelity Fund $(1,828,630) $ 879,945
Fidelity Growth and Income
Portfolio 11,628,638 5,628,643
Fidelity U.S. Equity Index
Portfolio (24,536,151) 8,075,377
Fidelity Magellan Fund 4,626,863 (2,161,633)
Templeton Foreign Fund (739,224) -
Fidelity Contra Fund 692,531 -
Fidelity Low Priced Stock Fund 1,385,971 -
Fidelity U.S. Equity Index
Commingled Pool Fund 18,529,445 -
Putnam Vista Fund 2,498,783 -
Putnam New Opportunities Fund 4,267,874 -
Total Mutual Fund 16,526,100 12,422,332
Ingersoll-Rand Company Common Stock 61,487,011 32,010,419
Net unrealized gain $78,013,111 $44,432,751
NOTE D - FEDERAL INCOME TAXES:
The Ingersoll-Rand Company Savings and Stock Investment Plan, the
Ingersoll-Dresser Pump Company Savings and Investment Plan, the
Ingersoll-Rand Company Savings Plan for Bargaining Unit Employees and
the I-R/Clark Leveraged Employee Stock Ownership Plan have received
favorable determination letters from the Internal Revenue Service,
indicating that the plans satisfy the requirements for qualification
under Section 401(a) of the Internal Revenue Code. Determination
letters are pending for the new I-R/Thermo King Savings Plans. The
Combined Trust is exempt from income tax under Section 501(a) of the
Internal Revenue Code. Therefore, these financial statements do not
provide for income taxes.
NOTE E - PARTICIPANT LOANS RECEIVABLE:
Participants in certain Plans may borrow from their vested account
balances subject to terms defined by the individual Plans.
NOTE F - TRANSFERS TO/FROM OTHER PLANS:
Effective March 1, 1997, the Ingersoll-Rand Company Hourly Pension
Plan (Plan 45) and the Clark Savings and Investment Plan were merged
into the Combined Trust, transferring approximately $108 million of
assets. Additionally in 1997, approximately $40 million, net, was
transferred from the I-R/Clark Leveraged Employee Stock Ownership
Plan. Approximately $9 million of investments remaining in 1997
related to the former employees of the Process Systems Group which
was sold in 1996, were transferred out of the Combined Trust.
In 1996, assets were transferred to the Combined Trust due to the
establishment of the Savings Plan for Bargaining Unit Employees on
January 1, 1996 and also due to the acquisition of the Steelcraft
Division of MascoTech, Inc. In 1996, there were transfers from the
Combined Trust to Ingersoll-Rand Company Pension Plan One and the
Dresser Industries Savings Plan. Additionally, the assets related to
the employees of the Pulp Machinery Division of the Process Systems
Group which was sold in 1996, were transferred from the Combined
Trust.
<TABLE>
SCHEDULE I
INGERSOLL-RAND COMPANY
COMBINED INVESTMENT TRUST
ITEM 27A - SCHEDULE OF
ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1997
Shares, Units
Description Principal Cost of Current
Identity of Issue of Investment Amount Asset Value
Guaranteed Investment Contracts:
Putnam Guaranteed Horizon Accounts:
<S> <C> <C> <S> <C> <C>
Contract VI 6.224%; 11/15/99 - $ 33,004,081 $ 33,004,081
Contract IX 5.440%; 2/28/98 - 6,696,946 6,696,946
Putnam Managed Account I 6.268%; no maturity - 100,561,308 100,561,308
Putnam Managed Account II 6.120%; no maturity - 36,383,817 36,383,817
MetLife Insurance Company Group Annuity Contract - 59,125,348 59,125,348
<S> <S> <C> <C> <C>
Templeton Foreign Fund Open-end mutual fund 803,588 8,734,920 7,995,696
Fidelity ContraFund Open-end mutual fund 315,493 14,018,906 14,711,437
Putnam Vista Fund Open-end mutual fund 2,552,780 27,802,718 30,301,501
Fidelity U.S. Equity Index
Commingled Pool Fund Open-end mutual fund 3,718,423 82,091,076 100,620,520
Fidelity Low Priced Stock Fund Open-end mutual fund 750,041 17,462,568 18,848,539
Fidelity Growth & Income Portfolio Open-end mutual fund 2,336,393 64,309,328 89,016,560
Putnam New Opportunities Fund Open-end mutual fund 652,222 27,462,707 31,730,581
Fidelity Magellan Fund Open-end mutual fund 556,358 43,019,703 53,004,254
Fidelity U.S. Equity Index
Portfolio Open-end mutual fund 20,167 489,619 705,452
Fidelity Fund Open-end mutual fund 14,233 365,334 424,298
Ingersoll-Rand Company Common
Stock Class A 7,285,963 123,451,463 295,081,502
Chase Domestic Liquidity Fund Money Market Fund 36,660,459 36,660,459 36,660,459
Participant Loans Receivable Due 1/1/97-12/31/02;9% - - 32,635,258
<C> <C>
$681,640,301 $947,507,557
</TABLE>
<TABLE>
SCHEDULE V
INGERSOLL-RAND COMPANY
COMBINED INVESTMENT TRUST
ITEM 27D - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
(in 000's)
Current
Expense Value
Incurred of Asset on Net
Identity of Description Purchase Selling With Cost of Transaction Gain/
Party Involved of Asset Price Price Transaction Asset Date (Loss)
Chase Domestic Money Market
<S> <S> <C> <C> <C> <C> <C> <C>
Liquidity Fund Fund 153,906 - - - 153,906 -
Chase Domestic Money Market
Liquidity Fund Fund - 139,628 - 139,628 139,628 -
Fidelity Growth & Open-end
Income Portfolio Mutual Fund 27,490 - - - 27,490 -
Fidelity Growth & Open-end
Income Portfolio Mutual Fund - 18,436 - 13,634 18,436 4,802
Fidelity
Institutional
Trust U.S. Equity Open-end
Index Mutual Fund 84,694 - - - 84,694 -
Fidelity
Institutional
Trust U.S. Equity Open-end
Index Mutual Fund - 1,921 - 1,903 1,921 18
Fidelity Magellan Open-end
Fund Mutual Fund 13,540 - - - 13,540 -
Fidelity Magellan Open-end
Fund Mutual Fund - 26,627 - 22,701 26,627 3,926
Fidelity U.S. Open-end
Equity Index Fund Mutual Fund 3,408 - - - 3,408 -
Fidelity U.S. Open-end
Equity Index Fund Mutual Fund - 79,577 - 49,833 79,577 29,744
I-R Company Common
Stock Class A 22,349 - 9 - 22,340 -
I-R Company Common
Stock Class A - 27,940 13 10,310 27,940 -
Putnam Investments
GIC Horizon V 7,44%;12/22/97 6,546 - - - 6,546 -
Putnam Investments
GIC Horizon V 7,44%;12/22/97 - 26,546 - 26,546 26,546 -
Putnam New
Opportunities Open-end
Fund Mutual Fund 31,880 - - - 31,880 -
Putnam New
Opportunities Open-end
Fund Mutual Fund - 5,575 - 4,417 5,575 1,158
Putnam Vista Open-end
Fund Mutual Fund 33,546 - - - 33,546 -
Putnam Vista Open-end
Fund Mutual Fund - 8,691 - 5,744 8,691 2,947
</TABLE>
EXHIBIT
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the
Registration Statement on Form S-8 No. 333-42133 of Ingersoll-Rand
Company of our report dated June 5, 1998 which appears elsewhere in
this Form 11-K.
/S/ Price Waterhouse
PRICE WATERHOUSE LLP
Florham Park, New Jersey
June 24, 1998
