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, 1998
or
__ TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____ to
Commission file number
A. Full title of the plan and address of the pan, if
Different from that of the issuer named below:
INGERSOLL-RAND COMPANY
SAVINGS AND STOCK INVESTMENT PLAN
B. Name of the issuer of the securities held pursuant to the
plan and the address of its prinicipal executive office:
Ingersoll-Rand Company
P.O. Box 8738
Woodcliff Lake, New Jersey 07675
REQURIED INFORMATION
A. Financial Statements and Schedules
Index to Financial Statements
Report of Independent Accountants
Statements of Finacial Condition at December 31, 1998 and
1997
Statements of Income and Changes in Plan/Fund Equty for the
Year Ended December 31, 1998 and 1997
Notes to Financial Statements
Schedule I - Item 27a - Schedule of Assets Held For
Investment Purposes at December 31, 1998
Schedule V - Item 27d - Schedule of Reportable Transactions
for the Year Ended December 31, 1998
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 _______________ By: ___________________________
Donald H. Rice
Benefits Committee Chairman
INGERSOLL-RAND COMPANY
SAVINGS AND STOCK INVESTMENT PLAN
INDEX TO FINANCIAL STATEMENTS
INDEPENDENT AUDITORS' REPORT 5-6
FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED
DECEMBER 31, 1998 AND 1997:
Statements of Financial Condition
Combined Plan Summary 8
Supplemental Information by Fund:
Fixed Income Fund 9
Mutual Fund 10
Ingersoll-Rand Company Stock Fund 11
Loan Fund 12
Statements of Income and Changes in Plan Equity
Combined Plan Summary 8
Supplemental Information by Fund:
Fixed Income Fund 9
Mutual Fund 10
Ingersoll-Rand Company Stock Fund 11
Loan Fund 12
Notes to Financial Statements 14-32
SUPPLEMENTAL SCHEDULES (Combined Investment Trust):
Schedule I - Item 27a - Schedule of Assets Held for
Investment Purposes at December 31, 1998 33-34
Schedule V - Item 27d - Schedule of Reportable Transactions
for the year ended December 31, 1998 35-36
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.
INDEPENDENT AUDITORS' REPORT
To the Ingersoll-Rand Company Benefits Committee and Participants
in the Ingersoll-Rand Company Savings and Stock Investment Plan
Woodcliff Lake, New Jersey
We have audited the accompanying statement of financial condition of the
Ingersoll-Rand Company Savings and Stock Investment Plan as of December 31,
1998 and the related statement of income and changes in plan equity for the
year then ended. These financial statements are the responsibility of the
Ingersoll-Rand Company Benefits Committee (the "Benefits Committee"). Our
responsibility is to express an opinion on these financial statements based on
our audit. The financial statements of the Ingersoll-Rand Company Savings and
Stock Investment Plan for the year ended December 31, 1997 were audited by
other auditors whose report, dated June 5, 1998, expressed an unqualified
opinion on those statements.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by the Benefits Committee, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, such 1998 financial statements present fairly, in all material
respects, the financial condition of the Plan as of December 31, 1998 and the
income and changes in plan equity for the year then ended in conformity with
generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic 1998
financial statements taken as a whole. The supplemental schedules listed in
the Table of Contents are presented for the purpose of additional analysis and
are not a required part of the basic financial statements, but are
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The supplemental information by fund in the statements
of financial condition and the statements of changes in fund equity is
presented for the purpose of additional analysis rather than to present the
financial condition and changes in fund equity of the individual funds. The
supplemental schedules and supplemental information by fund is the
responsibility of the Benefits Committee. Such supplemental schedules and
supplemental information by fund have been subjected to the auditing
procedures applied in our audit of the basic 1998 financial statements and, in
our opinion, are fairly stated in all material respects when considered in
relation to the basic 1998 financial statements taken as a whole.
/S/ Deloitte & Touche
DELOITTE & TOUCHE LLP
Florham Park, New Jersey
June 20, 1999
INGERSOLL-RAND COMPANY
SAVINGS AND STOCK INVESTMENT PLAN
FINANCIAL STATEMENTS
* * * * * *
DECEMBER 31, 1998 AND 1997
INGERSOLL-RAND COMPANY
SAVINGS AND STOCK INVESTMENT PLAN
COMBINED PLAN SUMMARY
STATEMENTS OF FINANCIAL CONDITION
At December 31, 1998 1997
Assets:
Investments at current value -
Combined Trust Fixed Income Fund $ 226,002,416 $207,301,167
Combined Trust Mutual Fund 355,707,045 297,485,385
Combined Trust Ingersoll-Rand
Company Stock Fund 294,035,795 279,232,315
875,745,256 784,018,867
Participant loans receivable 27,689,595 29,593,236
Contributions receivable 3,991,733 3,641,479
Due from merged Plan 31,987,570 -
Total assets 939,414,154 817,253,582
Plan equity $ 939,414,154 $817,253,582
STATEMENTS OF INCOME AND CHANGES IN PLAN EQUITY
For the years ended December 31, 1998 1997
Contributions:
Participants $ 51,206,693 $ 48,958,935
Investment income:
Dividends 18,022,005 15,748,925
Interest 15,578,911 13,935,929
Net appreciation of investments 103,899,604 127,336,002
Net investment income 137,500,520 157,020,856
Total additions 188,707,213 205,979,791
Participant withdrawals and
distributions 97,447,697 69,382,379
Net increase prior to transfers 91,259,516 136,597,412
Transfers (to) from other funds, net (480,632) 75,161
Transfers from other plans, net 31,381,688 147,429,670
Net increase in plan equity 122,160,572 284,102,243
Plan equity at beginning of year 817,253,582 533,151,339
Plan equity at end of year $ 939,414,154 $817,253,582
See notes to the financial statements.
INGERSOLL-RAND COMPANY
SAVINGS AND STOCK INVESTMENT PLAN
SUPPLEMENTAL INFORMATION BY FUND
FIXED INCOME FUND
STATEMENTS OF FINANCIAL CONDITION
For the years ended December 31, 1998 1997
Assets:
Investments at current value -
Combined Trust Fixed Income Fund $ 226,002,416 $207,301,167
Contribution receivable 1,257,209 1,203,008
Due from merged Plan 14,601,325 -
Total assets 241,860,950 208,504,175
Fund equity $ 241,860,950 $208,504,175
STATEMENTS OF INCOME AND CHANGES IN FUND EQUITY
For the years ended December 31, 1998 1997
Contributions:
Participants $ 15,503,969 $ 17,385,533
Investment income:
Interest 13,241,170 11,766,892
Net investment income 13,241,170 11,766,892
Total additions 28,745,139 29,152,425
Participant withdrawals and
distributions 36,034,892 28,652,944
Net (decrease) increase prior to
transfers (7,289,753) 499,481
Transfers from (to) other funds, net 26,054,326 (12,938,145)
Transfers from other plans, net 14,592,202 79,700,542
Net increase in fund equity 33,356,775 67,261,878
Fund equity at beginning of year 208,504,175 141,242,297
Fund equity at end of year $ 241,860,950 $208,504,175
See notes to the financial statements.
INGERSOLL-RAND COMPANY
SAVINGS AND STOCK INVESTMENT PLAN
SUPPLEMENTAL INFORMATION BY FUND
MUTUAL FUND
STATEMENTS OF FINANCIAL CONDITION
At December 31, 1998 1997
Assets:
Investments at current value -
Combined Trust Mutual Fund $ 355,707,045 $297,485,385
Contribution receivable 2,204,643 1,988,616
Due from merged Plan 17,109,390 -
Total assets 375,021,078 299,474,001
Fund equity $ 375,021,078 $299,474,001
STATEMENTS OF INCOME AND CHANGES IN FUND EQUITY
For the years ended December 31, 1998 1997
Contributions:
Participants $ 28,880,868 $ 25,998,175
Investment income:
Dividends 14,129,543 11,837,276
Net appreciation of investments 60,281,031 51,883,324
Net investment income 74,410,574 63,720,600
Total additions 103,291,442 89,718,775
Participant withdrawals and
distributions 31,456,280 20,427,493
Net increase prior to transfers 71,835,162 69,291,282
Transfers (to) from other funds, ne t (13,092,655) 8,695,034
Transfers from other plans, net 16,804,570 59,731,125
Net increase in fund equity 75,547,077 137,717,441
Fund equity at beginning of year 299,474,001 161,756,560
Fund equity at end of year $ 375,021,078 $299,474,001
See notes to the financial statements.
INGERSOLL-RAND COMPANY
SAVINGS AND STOCK INVESTMENT PLAN
SUPPLEMENTAL INFORMATION BY FUND
COMPANY STOCK FUND
STATEMENTS OF FINANCIAL CONDITION
At December 31, 1998 1997
Assets:
Investments at current value -
Combined Trust Ingersoll-Rand
Company Stock Fund $ 294,035,795 $279,232,315
Contribution receivable 529,881 449,855
Due from merged Plan 276,855 -
Total assets 294,842,531 279,682,170
Fund equity $ 294,842,531 $279,682,170
STATEMENTS OF INCOME AND CHANGES IN FUND EQUITY
For the years ended December 31, 1998 1997
Contributions:
Participants $ 6,821,856 $ 5,575,227
Investment income:
Dividends 3,892,462 3,911,649
Net appreciation of investments 43,618,573 75,452,678
Net investment income 47,511,035 79,364,327
Total additions 54,332,891 84,939,554
Participant withdrawals and
distributions 28,314,520 19,084,567
Net increase prior to transfers 26,018,371 65,854,987
Transfers (to) from other funds, net (10,964,486) 4,505,992
Transfers from other plans, net 106,476 4,181,923
Net increase in fund equity 15,160,361 74,542,902
Fund equity at beginning of year 279,682,170 205,139,268
Fund equity at end of year $ 294,842,531 $279,682,170
See notes to the financial statements.
INGERSOLL-RAND COMPANY
SAVINGS AND STOCK INVESTMENT PLAN
SUPPLEMENTAL INFORMATION BY FUND
LOAN FUND
STATEMENTS OF FINANCIAL CONDITION
At December 31, 1998 1997
Assets:
Participant loans receivable $ 27,689,595 $ 29,593,236
Plan equity $ 27,689,595 $ 29,593,236
STATEMENTS OF INCOME AND CHANGES IN FUND EQUITY
For the years ended December 31, 1998 1997
Transfers from other funds for loans $ 12,769,065 $ 14,223,700
Interest income from loans 2,337,741 2,169,037
Total additions 15,106,806 16,392,737
Participant distributions 1,642,005 1,217,375
Net increase prior to transfers 13,464,801 15,175,362
Transfers to other funds for
repayments (15,246,882) (14,411,420)
Transfers (to) from other plans, net (121,560) 3,816,080
Net (decrease) increase in fund
equity (1,903,641) 4,580,022
Fund equity at beginning of year 29,593,236 25,013,214
Fund equity at end of year $ 27,689,595 $ 29,593,236
See notes to the financial statements.
INGERSOLL-RAND COMPANY
SAVINGS AND STOCK INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
1. PLAN DESCRIPTION
The following brief description of the Ingersoll-Rand Company Savings
and Stock Investment Plan (the "Plan") provides only general
information. Participants should refer to the Plan Document for a
more complete description of the Plan's provisions.
General - Ingersoll-Rand Company (the "Company") adopted the Plan for
eligible employees at participating locations. Eligible employees may
participate in the Plan on the first day of the month following 30
calendar days of employment.
The Chase Manhattan Bank ("Chase") and PricewaterhouseCoopers are the
trustee and recordkeeper of the Plan, respectively.
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.
Contributions - 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 Company contributes to the Plan via a matching contribution and a
Company retirement contribution. The Company matches basic
contributions at a rate determined by the Company's Board of
Directors. The Plan requires that Company matching contributions be
at least 25 percent, but no more than 100 percent of participants'
basic contributions. For 1998 and 1997, the Company matching
contribution was set at 50 percent of 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 by 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), a participating plan in the Ingersoll-Rand Company Combined
Investment Trust (the "Combined Trust"). 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 a participant's employment terminates due to
disability, retirement or death.
Investment Options - The Plan assets are held in the 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:
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.
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 were able to select from the
following mutual funds: Fidelity Growth and Income Portfolio, Fidelity
Magellan Fund, Templeton Foreign Fund, 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 and Putnam New Opportunities 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 respective
fund's management company.
Ingersoll-Rand Company Stock Fund - A fund consisting primarily of the
Company's Common Stock. Prior to December 1, 1998, this fund limited
a participant's investment to 50% of current contributions or account
balance on transfers. Effective December 1, 1998, participants are
permitted to invest up to 100% of current contributions or account
balance on transfers into this fund.
Each fund reinvests its income in that fund.
On any business day, participants may change their allocation of
future contributions and transfer prior contributions between funds.
Transfers of prior contributions must be made 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.
Distributions and Withdrawals - Plan distributions may be in the form
of a lump sum or in such other manner that the Benefits Committee may
permit. In addition, effective December 1, 1998, Plan participants
who separate from service may elect distributions of at least $500 on
a daily basis.
Participants' accounts are kept in units and are valued on a daily
basis.
At December 31, 1998 and 1997, the number of participants with
balances in the Plan approximated 23,500 and 18,200, respectively.
The number of participants contributing to each of the Plan's funds at
December 31, 1998, were approximately:
Fixed Income Fund 8,700
Mutual Fund:
Fidelity Growth and Income Portfolio 5,400
Fidelity Magellan Fund 3,900
Templeton Foreign Fund 1,100
Fidelity Contra Fund 1,800
Fidelity Low Priced Stock Fund 1,800
Fidelity U.S. Equity Index Commingled Pool
Fund 4,300
Putnam Vista Fund 2,200
Putnam New Opportunities Fund 3,100
Ingersoll-Rand Company Stock Fund 5,200
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation - The Plan follows the accrual method of
accounting.
Use of Estimates - The preparation of financial statements in
conformity 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 - 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 values. 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 Funds and
the Ingersoll-Rand Company Common 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 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 LESOP in cash or Company stock.
Forfeitures - Forfeitures of nonvested Company contributions occur
when participants are terminated. Forfeitures of $195,011 in 1998 and
$587,084 in 1997 were or will be used to reduce future Company
contributions.
Expenses of the Plan - Most expenses associated with 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 $3,295,148 and $2,850,775 at December 31, 1998
and 1997, respectively. These amounts will be reflected as
liabilities on the Plan's Form 5500 in accordance with Department of
Labor Regulations.
3. FIXED INCOME FUND
Investments in the Fixed Income Fund at December 31 were as follows:
1998 1997
Putnam Guaranteed Horizon Accounts $ 33,833,943 $ 39,701,027
Putnam Managed Accounts 140,431,941 136,945,125
Chase Domestic Liquidity Fund 29,793,375 33,095,881
MetLife Stable Income Fund 73,037,033 59,125,348
PIMCO Stable Value Fund 71,797,545 -
Total Combined Trust Fixed Income
Fund 348,893,837 268,867,381
Less: Other plans 122,891,421 61,566,214
Plan investment in Fixed Income Fund $226,002,416 $207,301,167
4. MUTUAL FUND
Investments in the Mutual Fund at December 31 were as follows:
1998 1997
Fidelity Fund $ 714,058 $ 424,298
Fidelity Growth and Income
Portfolio 115,129,445 89,016,560
Fidelity U.S. Equity Index
Portfolio 1,078,526 705,452
Fidelity Magellan Fund 69,122,106 53,004,254
Templeton Foreign Fund 6,921,974 7,995,696
Fidelity Contra Fund 21,322,115 14,711,437
Fidelity Low Priced Stock Fund 17,601,769 18,848,539
Fidelity U.S. Equity Index
Commingled Pool Fund 117,107,351 100,620,520
Putnam Vista Fund 32,992,446 30,301,501
Putnam New Opportunities Fund 41,152,100 31,730,581
Total Combined Trust Mutual Fund 423,141,890 347,358,838
Less: Other plans 67,434,845 49,873,453
Plan investment in Mutual Fund $355,707,045 $297,485,385
Net realized and unrealized appreciation (depreciation) of investments
for the years ended December 31 were as follows:
1998 1997
Fidelity Fund $ 115,703 $ 986,287
Fidelity Growth and Income
Portfolio 19,284,047 16,431,077
Fidelity U.S. Equity Index
Portfolio 212,894 5,208,378
Fidelity Magellan Fund 14,089,078 8,513,494
Templeton Foreign Fund (1,211,980) (177,221)
Fidelity Contra Fund 3,207,213 904,623
Fidelity Low Priced Stock Fund (1,631,387) 1,646,255
Fidelity U.S. Equity Index
Commingled Pool Fund 27,532,736 20,368,899
Putnam Vista Fund 3,168,970 5,446,080
Putnam New Opportunities Fund 6,397,092 5,426,059
Total Combined Trust Mutual Fund 71,164,366 64,753,931
Less: Other plans 10,883,335 12,870,607
Net Plan appreciation $ 60,281,031 $ 51,883,324
5. INGERSOLL-RAND COMPANY STOCK FUND
Investments in the Ingersoll-Rand Company Stock Fund at December 31
were as follows:
1998 1997
Ingersoll-Rand Company Common
Stock $319,997,731 $295,081,502
Chase Domestic Liquidity Fund 1,594,830 3,564,578
Total Combined Trust Ingersoll-Rand
Company Stock Fund 321,592,561 298,646,080
Less: Other plans 27,556,766 19,413,765
Plan investment in Ingersoll-Rand
Company Stock Fund $294,035,795 $279,232,315
Net realized and unrealized appreciation of investments for the years
ended December 31 were as follows:
1998 1997
Total Combined Trust Ingersoll-Rand
Company Stock Fund $ 47,184,264 $80,697,853
Less: Other plans 3,565,691 5,245,175
Net Plan appreciation $ 43,618,573 $ 75,452,678
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, 1998 and 1997 was
7,932 and 8,363, respectively.
The Benefits Committee establishes the loan interest rate and reviews
the rate quarterly. The loan rate may be adjusted each quarter in
order to reflect the current prime rate. The interest rate on new
loans during 1998 and 1997 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.
7. TAX STATUS
The Plan is intended to be qualified under Code Section 401(a) of the
Internal Revenue Code of 1986 (the "Code") and is intended to be
exempt from taxation under Section 501(a) of the Code. The Plan
received a favorable IRS determination letter dated May 16, 1997. The
Plan has been amended since receiving the determination letter.
However, the Plan administrator believes that the Plan is currently
designed and being operated in compliance with the applicable
requirements of the Code. Therefore, no provision for income taxes
has been included in the Plan's financial statements.
8. TRANSFERS TO/FROM OTHER PLANS
Effective December 31, 1998, the LCN Closers Employees' Profit Sharing
Plan (LCN) was merged into the Plan. During January, 1999, the
existing participant balances in the LCN Plan were transferred to the
investment options available in the Ingersoll-Rand Company Savings and
Stock Investment Plan that were elected by each participant during
December, 1998.
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. Existing participant balances in these plans were transferred
to the investment options available in the Plan that were elected by
each participant.
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 additional asset transfers
from the Plan.
In 1997, there were also transfers to (from) the Plan resulting from
the transfer of Ingersoll-Dresser Pump Company and Dresser Industries
employees.
9. COMBINED INVESTMENT TRUST FINANCIAL INFORMATION
At December 31, 1998 and 1997, the Plan had an 80% and 85%
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 is substantially the same
as the accrual basis of accounting. The financial statements with
explanatory footnotes for the years ended December 31, 1998 and 1997
follow.
COMBINED INVESTMENT TRUST
STATEMENTS OF NET ASSETS
At December 31
1998 1997
Investments:
Fixed Income Fund -
Putnam Guaranteed Horizon Accounts$ 33,833,943 $ 39,701,027
Chase Domestic Liquidity Fund 29,793,375 33,095,881
Putnam Managed Accounts 140,431,941 136,945,125
Metlife Stable Income Fund 73,037,033 59,125,348
PIMCO Stable Value Fund 71,797,545 -
Total Fixed Income Fund 348,893,837 268,867,381
Mutual Fund -
Fidelity Fund 714,057 424,298
Fidelity Growth and Income
Portfolio 115,129,445 89,016,560
Fidelity U.S. Equity Index
Portfolio 1,078,526 705,452
Fidelity Magellan Fund 69,122,106 53,004,254
Templeton Foreign Fund 6,921,974 7,995,696
Fidelity Contra Fund 21,322,115 14,711,437
Fidelity Low Priced Stock Fund 17,601,769 18,848,539
Fidelity U.S. Equity Index
Commingled Pool Fund 117,107,351 100,620,520
Putnam Vista Fund 32,992,446 30,301,501
Putnam New Opportunities Fund 41,152,101 31,730,581
Total Mutual Fund 423,141,890 347,358,838
Ingersoll-Rand Company Common
Stock Fund 321,592,561 298,646,080
Total investments at current value
(cost $791,758,503 in 1998
and $681,640,301 in 1997) 1,093,628,288 914,872,299
Participant loans receivable 35,806,555 32,635,258
$ 1,129,434,843 $947,507,557
COMBINED INVESTMENT TRUST
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended December 31
1998 1997
Additions to net assets:
Contributions received $ 62,650,395 $ 61,301,154
Dividends and interest income
from investments 42,039,999 34,903,371
Net appreciation of investments 118,348,630 145,451,784
Total additions 223,039,024 241,656,309
Participant withdrawals and
distributions 99,491,491 87,845,689
Net increase prior to transfers 123,547,533 153,810,620
Transfers from other plans, net 58,379,753 137,542,781
Increase in net assets for the year 181,927,286 291,353,401
Net assets, beginning of year 947,507,557 656,154,156
Net assets, end of year $ 1,129,434,843 $947,507,557
NOTE A - TRUST DESCRIPTION
The Combined Investment Trust (the "Combined Trust") provides unified
investment management of the assets of several plans sponsored by
Ingersoll-Rand Company and certain of its subsidiaries (collectively
the "Companies"). The plans include the Ingersoll-Rand Company
Savings Plan for Bargaining Unit Employees, the Ingersoll-Dresser
Pump Company Savings and Investment Plan, the Ingersoll-Rand Company
Savings and Stock Investment Plan, 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. The participants of the individual
plans are eligible employees of the Companies. The Chase Manhattan
Bank ("Chase") and PricewaterhouseCoopers are the trustee and
recordkeeper of the Combined Trust, respectively. 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 in the Combined Trust only through
investment in the Fixed Income Fund and/or the Ingersoll-Rand Company
Stock Fund of the Combined Trust.
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation - The Combined Trust uses the modified cash
basis of accounting which is substantially the same as the accrual
basis of accounting.
Use of Estimates - The preparation of financial statements in
conformity 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 date 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
values. 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 Funds
(defined in Note C) and the Ingersoll-Rand Company Common 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 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.
NOTE C - INVESTMENTS
At December 31, 1998 and 1997, 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,
1998 were:
Average Guaranteed Rate Maturity
Amount Yield of Return Date
$33,833,943 4.59% 6.224% November 15, 1999
The Putnam Guaranteed Horizon Accounts under contract at December 31,
1997 were:
Average Guaranteed Rate Maturity
Amount Yield of Return 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 Managed Accounts under contract at December 31, 1998 were:
Average Guaranteed Rate Maturity
Amount Yield of Return Date
$ 105,713,723 5.54% 6.373% None - end upon
written notice
34,718,218 5.36 6.09 None - end upon
written notice
$ 140,431,941
The Putnam Managed Accounts under contract at December 31, 1997 were:
Average Guaranteed Rate Maturity
Amount Yield of Return 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 net crediting rate for all synthetic investment contracts is
reset twice a year, on January 1 and July 1. In no event is the net
crediting rate reset below 0%.
The Chase Domestic Liquidity Fund reported an annualized rate of
return as of December 31 of 5.42% in 1998 and 5.65% in 1997.
The Metropolitan Life Insurance (MetLife) Stable Income Fund invests
in a group annuity contract which is carried at contract value, an
approximation of current value. Interest rates credited to the fund
were 6.33% from January 1, 1998 through May 31, 1998; 6.14% from June
1, 1998 through December 31, 1998; and 6.27% in 1997. 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.
The PIMCO Stable Value Fund was purchased by the Plan on August 3,
1998. The fund is comprised of a separate account fixed income
portfolio actively managed by PIMCO and a book value wrap contract
issued by AIG Financial Products. The book value wrap contract
allows for the portfolio to be carried at contract value, which
equals net deposits plus credited interest. The contract has no
expiration date. Interest rates credited to the fund were 6.31% from
August 3, 1998 through September 30, 1998 and 6.18% from October 1,
1998 through December 31, 1998.
The total cost of the Combined Trust Mutual Fund was $308,807,364 and
$285,756,879 at December 31, 1998 and 1997, respectively.
The Company Stock Fund investment in Ingersoll-Rand Company common
stock at December 31, 1998 and 1997, included 6,817,526 shares and
7,285,963 shares, respectively. At December 31, 1998 and 1997, the
average cost of these shares was $132,462,472 and $123,451,463,
respectively.
Net realized gain (loss) on securities sold of the Combined Trust's
investments for the years ended December 31 was as follows:
1998 1997
Mutual Fund:
Fidelity Fund $ 6,051 $ 2,814,917
Fidelity Growth and Income
Portfolio 6,509,327 4,802,439
Fidelity U.S. Equity Index
Portfolio 48,428 29,744,529
Fidelity Magellan Fund 3,114,960 3,886,631
Templeton Foreign Fund (365,827) 562,003
Fidelity Contra Fund 442,112 212,092
Fidelity Low Priced Stock Fund 119,790 260,284
Fidelity U.S. Equity Index
Commingled Pool Fund 6,369,851 1,839,454
Putnam Vista Fund 1,070,041 2,947,297
Putnam New Opportunities Fund 1,117,066 1,158,185
Total Mutual Fund 18,431,799 48,227,831
Ingersoll-Rand Company Common Stock 31,279,147 19,210,842
Net realized gain $49,710,946 $67,438,673
Net unrealized gain (loss) of the Combined Trust's investments for the
years ended December 31 was as follows:
1998 1997
Mutual Fund:
Fidelity Fund $ 109,653 $(1,828,630)
Fidelity Growth and Income
Portfolio 12,774,721 11,628,638
Fidelity U.S. Equity Index
Portfolio 164,466 (24,536,151)
Fidelity Magellan Fund 10,974,118 4,626,863
Templeton Foreign Fund (846,153) (739,224)
Fidelity Contra Fund 2,765,101 692,531
Fidelity Low Priced Stock Fund (1,751,178) 1,385,971
Fidelity U.S. Equity Index
Commingled Pool Fund 21,162,885 18,529,445
Putnam Vista Fund 2,098,929 2,498,783
Putnam New Opportunities Fund 5,280,025 4,267,874
Total Mutual Fund 52,732,567 16,526,100
Ingersoll-Rand Company Common Stock 15,905,117 61,487,011
Net unrealized gain $68,637,684 $78,013,111
NOTE D - TAX STATUS
The Ingersoll-Rand Company Savings Plan for Bargaining Unit
Employees, the Ingersoll-Dresser Pump Company Savings and Investment
Plan, the Ingersoll-Rand Company Savings and Stock Investment Plan,
and the I-R/Clark Leveraged Employee Stock Ownership Plan are
intended to be qualified under Code Section 401(a) of the Internal
Revenue Code of 1986 (the "Code") and are intended to be exempt from
taxation under Section 501(a) of the Code. Each Plan has received a
favorable determination letter from the Internal Revenue Service.
Determination letters for the Ingersoll-Rand/Thermo King Savings and
Stock Investment Plan and the Ingersoll-Rand/Thermo King Retirement
Savings Plan of Puerto Rico were filed in December, 1998. A
favorable determination on these letters from the Internal Revenue
Service is pending. The Plan administrator believes that the Plans
are currently designed and being operated in compliance with the
applicable requirements of the Code. Therefore, no provision for
income taxes has been included in the Trust's financial statements.
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 December 31, 1998, the assets of the LCN Closers Employees'
Profit Sharing Plan (LCN) were merged into the Combined Trust.
During January, 1999, the existing participant balances in the LCN
Plan were transferred to the investment options available in the
Ingersoll-Rand Company Savings and Stock Investment Plan that were
elected by each participant during December, 1998.
Effective March 1, 1997, the assets of the Ingersoll-Rand Company
Hourly Pension Plan (Plan 45) and the Clark Savings and Investment
Plan were transferred into the Combined Trust. Additionally in 1997,
approximately $40 million, net, was transferred from the I-R/ Clark
Leveraged Employee Stock Ownership Plan. Additional investments
related to the former employees of the Process Systems Group, which
was sold in 1996, were transferred from the Combined Trust in 1997.
There were also transfers from the Combined Trust to Ingersoll-Rand
Company Pension Plan One and the Dresser Industries Savings Plan.
******
INGERSOLL-RAND COMPANY COMBINED INVESTMENT TRUST
SCHEDULE I
ITEM 27A- SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
YEAR ENDED DECEMBER 31, 1998
<TABLE>
<S> <C> <C> <C> <C>
Identity of Issue Description of Shares, Units Cost of Current
Investment Principal Amount Asset Value
Guaranteed Investment
Contracts:
Putnam Guaranteed Horizon
Accounts:
Contract VI 6.224%; 11/15/99 - 33,833,943 33,833,943
Putnam Managed Account I 6.090%; no maturity - 34,718,218 34,718,218
Putnam Managed Account II 6.373%; no maturity - 105,713,723 105,713,723
Metropolitan Life Group Annuity Contract - 73,037,033 73,037,033
Insurance Company
PIMCO Stable Value Group Annuity Contract - 71,797,545 71,797,545
Contract
Templeton Foreign Fund Open-end mutual fund 825,027 8,507,351 6,921,974
Fidelity Contrafund Open-end mutual fund 375,455 17,864,483 21,322,115
Putnam Vista Fund Open-end mutual fund 2,524,288 28,394,735 32,992,446
Fidelity U.S. Equity Open-end mutual fund 3,361,290 77,415,022 117,107,351
Index Commingled
Pool Fund
Fidelity Low Priced Stock Open-end mutual fund 770,318 17,966,975 17,601,769
Fund
Fidelity Growth and Open-end mutual fund 2,511,550 77,647,493 115,129,445
Income Portfolio
Putnam New Opportunities Open-end mutual fund 704,297 31,604,202 41,152,101
Fund
Fidelity Magellan Fund Open-end mutual fund 572,108 48,163,436 69,122,106
Fidelity U.S. Equity Open-end mutual fund 24,534 698,226 1,078,526
Index Portfolio
Fidelity Fund Open-end mutual fund 19,462 545,441 714,057
Ingersoll-Rand Company Class A 6,817,526 132,462,472 319,997,731
Common Stock
Chase Domestic Liquidity Money Market Fund 31,388,205 31,388,205 31,388,205
Fund
Participant Loans Due 1/1/98 - 12/31/03; - 35,806,555 35,806,555
Receivable 6%-9%
TOTAL INVESTMENTS 827,565,058 1,129,434,843
</TABLE>
INGERSOLL-RAND COMPANY COMBINED INVESTMENT TRUST
SCHEDULE V
ITEM 27D - SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1998
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
Identity of Description of Purchase Selling Expense Cost of Current Net Gain /
Party Involved Asset Price Price Incurred Asset Value Of (Loss)
With Asset on
Transaction Transaction
Date
Single Transactions:
Chase Domestic Money Market
Liquidity Fund Fund $49,163,946 $ - $ - $ - $ 49,163,946 $ -
Chase Domestic Money Market
Liquidity Fund Fund - 70,205,491 - 70,205,491 70,205,491 -
PIMCO Stable Group Annuity
Value Fund Contract 70,000 - - - 70,000 -
Series of Transactions:
Chase Domestic Money Market
Liquidity Fund Fund 197,521,827 - - - 197,521,827 -
Chase Domestic Money Market
Liquidity Fund Fund - 202,794,080 - 202,794,080 202,794,080 -
Fidelity Growth
and Income
Portfolio Open-end Mutual
Fund 28,827,316 - - - 202,827,316 -
Fidelity Growth
and Income
Portfolio Open-end Mutual
Fund - 15,489,149 - 21,998,477 15,489,149 6,509,328
Ingersoll-Rand
Company Common
Stock Class A 21,912,363 - 15,138 - 21,897,225 -
Ingersoll-Rand
Company Common
Stock Class A - 10,473,011 18,012 36,099,523 10,473,011 25,608,500
PIMCO Stable
Value
Contract Group Annuity
Contract 70,345,870 - - - 70,345,870 -
</TABLE>
EXHIBIT
INDEPENDENT AUDITORS' CONSENT
We 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 20, 1999 which appears elsewhere in this Form 11-K.
/S/ Deloitte & Touche
DELOITTE & TOUCHE LLP
Parsippany, New Jersey
June 24, 1999
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 relating to the financial statements, which
appears in this Form 11-K.
/s/PricewaterhouseCoopers LLP
PRICEWATERHOUSECOOPERS LLP
Florham Park, New Jersey
June 24, 1999
