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, 1999
or
_ TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____ to ____
Commission file number 1-985
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 the issuer of the securities held pursuant to the plan
and the address of its principal executive office:
INGERSOLL-RAND COMPANY
P.O. BOX 8738
200 Chestnut Ridge Road
Woodcliff Lake, New Jersey 07675
REQUIRED INFORMATION
A. Financial Statements and Schedules
Table of Contents
Independent Auditor's Report
Statements of Financial Condition for the Years ended
December 31, 1999 and 1998
Statements of Income and Changes in Plan Equity for the
Years ended December 31, 1999 and 1998
Notes to Financial Statements
Schedule I - Item 27a - Schedule of Assets Held for
Investment Purposes at December 31, 1999
Schedule V - Item 27d - Schedule of Reportable
Transactions for the Year Ended December 31, 1999
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 6/22/00 By: /S/ Donald H. Rice
Donald H. Rice
Benefits Committee Chairman
INGERSOLL-RAND COMPANY SAVINGS AND STOCK INVESTMENT PLAN
TABLE OF CONTENTS
INDEPENDENT AUDITORS' REPORT
FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED
DECEMBER 31, 1999 AND 1998:
Statements of Financial Condition
Statements of Income and Changes in Plan Equity
Notes to Financial Statements
SUPPLEMENTAL SCHEDULES (Combined Investment Trust):
Schedule I - Item 27a - Schedule of Assets Held for
Investment Purposes at December 31, 1999
Schedule V - Item 27d - Schedule of Reportable
Transactions for the year ended December 31, 1999
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 statements of financial condition
of the Ingersoll-Rand Company Savings and Stock Investment Plan
(the "Plan") as of December 31, 1999 and 1998, and the related
statements of income and changes in plan equity for the years 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 audits.
We conducted our audits in accordance with auditing standards
generally accepted in the United States of America. 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 audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all
material respects, the financial condition of the Plan as of
December 31, 1999 and 1998, and the income and changes in plan
equity for the years then ended in conformity with accounting
principles generally accepted in the United States of America.
Our audits were conducted for the purpose of forming an opinion on
the basic 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. These schedules are the responsibility of
the Benefits Committee. Such schedules have been subjected to the
auditing procedures applied in our audit of the basic 1999
financial statements and, in our opinion, are fairly stated in all
material respects when considered in relation to the basic 1999
financial statements taken as a whole.
/S/ Deloitte & Touche
DELOITTE & TOUCHE LLP
Parsippany, New Jersey
June 1, 2000
INGERSOLL-RAND COMPANY SAVINGS AND STOCK
INVESTMENT PLAN
STATEMENTS OF FINANCIAL CONDITION
AS OF DECEMBER 31, 1999 AND 1998
1999 1998
Assets:
Investments at current value -
Combined Trust Fixed Income Fund $ 234,765,497 $226,002,416
Combined Trust Mutual Fund 453,869,229 355,707,045
Combined Trust Ingersoll-Rand Company
Stock Fund 326,943,636 294,035,795
Total investments 1,015,578,362 875,745,256
Participant loans receivable 26,546,131 27,689,595
Contributions receivable 4,138,802 3,991,733
Due from merged plans 10,783,785 31,987,570
Total Assets and Plan equity $1,057,047,080 $939,414,154
See notes to the financial statements.
INGERSOLL-RAND COMPANY SAVINGS AND STOCK
INVESTMENT PLAN
STATEMENTS OF INCOME AND CHANGES IN PLAN
EQUITY
YEARS ENDED DECEMBER 31, 1999 AND 1998
1999 1998
Contributions:
Participants $ 53,075,655 $ 51,206,693
Investment income:
Dividends 32,466,088 18,022,005
Interest 16,601,081 15,578,911
Net appreciation of investments 120,300,479 103,899,604
Net investment income 169,367,648 137,500,520
Total additions 222,443,303 188,707,213
Participant withdrawals and distributions 115,463,976 97,928,329
Net increase prior to transfers 106,979,327 90,778,884
Transfers from other plans, net 10,653,599 31,381,688
Net increase in plan equity 117,632,926 122,160,572
Plan equity, beginning of year 939,414,154 817,253,582
Plan equity, end of year $1,057,047,080 $939,414,154
See notes to the financial statements.
INGERSOLL-RAND COMPANY SAVINGS AND STOCK INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999 AND 1998
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. Prior
to July 1, 1999, eligible participants could participate in the
Plan on the first day of the month following 30 calendar days of
employment. Effective July 1, 1999, automatic enrollment was
instituted for the Plan, whereby a new employee is automatically
enrolled in the Plan upon date of hire with a 2% pre-tax
contribution set-up. The employee then has a period of
approximately 30 days to elect to not contribute to the Plan.
Payroll deductions, consequently, do not begin until such period
has expired.
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. 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 automated 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%, but no more than 100% of
participants' basic contributions. For 1999 and 1998, the
Company matching contribution was set at 50% of basic
contributions. As a Company retirement contribution for certain
eligible employees, the Company also contributes to the Plan one
percent of the participant's monthly compensation. 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), 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% vested. Company
matching and retirement contributions, including those provided
to the LESOP, vest on a five-year, graded-vesting schedule.
Employees are immediately 20% vested. After completing two
years of service, the vested percentage increases in increments
of 20% per year until fully vested after five years of service.
All Company matching and retirement contributions become 100%
vested if a participant is disabled or his or her employment
terminates due to 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.
At December 31, 1999 and 1998, the number of participants with
balances in the Plan approximated 18,200 and 18,500,
respectively. The number of participants contributing to each
of the Plan's funds at December 31, 1999, were approximately:
Fixed Income Fund 8,400
Mutual Fund:
Templeton Foreign Fund 1,100
Fidelity Contra Fund 2,400
Putnam Vista Fund 2,200
Fidelity U.S. Equity Index Commingled Pool Fund 4,300
Fidelity Low-Priced Stock Fund 1,600
Fidelity Growth and Income Portfolio 5,300
Putnam New Opportunities Fund 3,400
Fidelity Magellan Fund 4,400
Ingersoll-Rand Company Stock Fund 5,100
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 Account 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 $244,158
in 1999 and $195,011 in 1998 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 the Plan's financial statements when paid. The
approved and unpaid amounts were $2,197,703 and $3,295,148 at
December 31, 1999 and 1998, respectively. These amounts will be
reflected as liabilities on the Plan's Form 5500 in accordance
with Department of Labor Regulations.
Reclassifications - Certain prior year amounts have been
reclassified to conform to the current year presentation. The
Plan has adopted Statement of Position 99-3, "Accounting for and
Reporting of Certain Defined Contribution Benefit Plan
Investments and Other Disclosure Matters", and, thus, previously
reported by-fund amounts have been eliminated.
3. FIXED INCOME FUND
Investments in the Fixed Income Fund at December 31 were as
follows:
1999 1998
Putnam Guaranteed Horizon Account $ - $ 33,833,943
Putnam Managed Accounts 146,624,228 140,431,941
Chase Domestic Liquidity Fund 40,092,278 29,793,375
MetLife Stable Income Fund 77,203,061 73,037,033
PIMCO Stable Value Fund 96,404,638 71,797,545
Total Combined Trust Fixed Income 360,324,205 348,893,837
Fund
Less other plans 125,558,708 122,891,421
Plan investment in Fixed Income $234,765,497 $226,002,416
Fund
At December 31, 1999 and 1998, certain assets of the Combined
Trust were invested in synthetic investment contracts. The
Putnam Guaranteed Horizon Account 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 Account matured on November 15,
1999. The Putnam Guaranteed Horizon Account under contract at
December 31, 1998 was:
Average Guaranteed Rate
Amount Yield of Return
$33,833,943 4.59% 6.224%
The Putnam Managed Accounts under contract at December 31, 1999
were:
Net
Crediting
Average Interest Maturity
Amount Yield Rate Date
$111,123,599 6.85% 6.264% None - end upon written notice
35,500,629 6.75 6.081 None - end upon written notice
$146,624,228
The Putnam Managed Accounts under contract at December 31, 1998
were:
Net
Crediting
Average Interest Maturity
Amount Yield Rate Rate
$105,713,723 5.54% 6.373% None - end upon written notice
34,718,218 5.36 6.090 None - end upon written notice
$140,431,941
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 5.297% in 1999 and 5.42% in 1998.
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;
6.06% from January 1, 1999 through May 31, 1999; and 6.16% from
June 1, 1999 through December 31, 1999. 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 20, 1998;
6.18% from October 1, 1998 through December 31, 1998; 6.22% from
January 1, 1999 through March 31, 1999; 6.14% from April 1, 1999
through May 20, 1999; 6.27% from May 21, 1999 through June 30,
1999; 6.21% from July 1, 1999 through September 30, 1999; and
6.18% from October 1, 1999 through December 31, 1999.
4. MUTUAL FUND
Investments in the Mutual Fund at December 31 were as follows:
1999 1998
Templeton Foreign Fund $ 11,586,291 $ 6,921,974
Fidelity Contra Fund 37,510,026 21,322,115
Putnam Vista Fund 48,320,134 32,992,446
Fidelity U.S. Equity Index Commingled
Pool Fund 135,905,290 117,107,351
Fidelity Low-Priced Stock Fund 14,615,615 17,601,769
Fidelity Growth and Income Portfolio 117,689,091 115,129,445
Putnam New Opportunities Fund 76,149,767 41,152,100
Fidelity Magellan Fund 95,900,248 69,122,106
Fidelity U.S. Equity Index Portfolio 1,475,468 1,078,526
Fidelity Fund 1,090,502 714,058
Total Combined Trust Mutual Fund 540,242,432 423,141,890
Less other plans 86,373,203 67,434,845
Plan investment in Mutual Fund $453,869,229 $355,707,045
Net realized and unrealized appreciation (depreciation) of
investments for the years ended December 31 were as follows:
1999 1998
Templeton Foreign Fund $ 2,564,435 $(1,211,980)
Fidelity Contra Fund 1,704,124 3,207,213
Putnam Vista Fund 11,179,611 3,168,970
Fidelity U.S. Equity Index Commingled 24,092,796 27,532,736
Pool Fund
Fidelity Low-Priced Stock Fund (215,761) (1,631,387)
Fidelity Growth and Income Portfolio 3,429,563 19,284,047
Putnam New Opportunities Fund 25,073,179 6,397,092
Fidelity Magellan Fund 10,097,567 14,089,078
Fidelity U.S. Equity Index Portfolio 221,356 212,894
Fidelity Fund 145,206 115,703
Total Combined Trust Mutual Fund 78,292,076 71,164,366
Less other plans 11,608,166 10,883,335
Net Plan appreciation $66,683,910 $60,281,031
5. INGERSOLL-RAND COMPANY STOCK FUND
Investments in the Ingersoll-Rand Company Stock Fund at December
31 were as follows:
1999 1998
Ingersoll-Rand Company Common Stock $357,300,067 $319,997,731
Chase Domestic Liquidity Fund 1,160,681 1,594,830
Total Combined Trust Ingersoll-Rand
Company Stock Fund 358,460,748 321,592,561
Less other plans 31,517,112 27,556,766
Plan investment in Ingersoll-Rand $326,943,636 $294,035,795
Company Stock Fund
Net realized and unrealized appreciation of investments for the
years ended December 31 were as follows:
1999 1998
Total Combined Trust Ingersoll-Rand $ 58,332,187 $ 47,184,264
Company Stock Fund
Less other plans 4,715,618 3,565,691
Net Plan appreciation $ 53,616,569 $ 43,618,573
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, 1999 and 1998
was 7,441 and 7,932, 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 1999 and 1998 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. DIVIDEND AND INTEREST INCOME
Dividend and interest income for all investments at December 31
were as follows:
1999 1998
Total Combined Trust $61,207,205 $42,039,999
Less other plans 12,140,036 8,439,083
Net Plan dividend and interest income
from investments $49,067,169 $33,600,916
8. 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 October 27, 1999. 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.
9. TRANSFERS TO/FROM OTHER PLANS
Effective December 31, 1999, the assets of the Johnstone Pump
Co. Savings Plan; Monarch Hardware, Inc. Profit Sharing Plan;
Zimmerman Handling Systems, Ingersoll-Rand's Employees 401(k)
Plan; and Torrington Rockford Salary Savings Plan (collectively,
the "Merged Plans") were merged into the Plan. During March
2000, the existing participant balances in the Merged Plans were
transferred to the investment options available in the Plan that
were elected by each participant.
Effective November 8, 1999, certain assets of the Harrow
Products, Inc. 401(k) Savings Plan & Trust (the "Harrow Plan")
were merged into the Plan. During March 2000, the existing
participant balances in the Harrow Plan were transferred to the
investment options available in the Plan that were elected by
each participant.
During July 1999, the assets of the Palm Sales/Towmaster 401(k)
Profit Sharing Plan And Trust (the "Palm Sales Plan") were
merged into the Plan. Existing participant balances in the Palm
Sales Plan were transferred to the investment options available
in the Plan that were elected by each participant.
During July 1999, certain assets of the CDS Midwest, Inc.
Bargaining Unit Employee Retirement And Savings Plan (the "CDS
Plan") were transferred into the Plan. Existing participant
balances in the CDS Plan were transferred to the investment
options available in the Plan that were elected by each
participant.
Effective December 31, 1998, the LCN Closers Employees' Profit
Sharing Plan (the "LCN Plan") 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 Plan
that were elected by each participant during December 1998.
10.COMBINED INVESTMENT TRUST FINANCIAL INFORMATION
At December 31, 1999 and 1998, the Plan had an 81% and 80%
participation, respectively, in the Combined Trust. The
financial statements for the Combined Trust are prepared on the
modified cash basis of accounting, which is substantially the
same as the accrual basis of accounting. The financial
statements of the Combined Trust with explanatory footnotes for
the years ended December 31, 1999 and 1998 follow.
INGERSOLL-RAND COMPANY COMBINED INVESTMENT TRUST
STATEMENTS OF NET ASSETS
AS OF DECEMBER 31, 1999 AND 1998
1999 1998
Investments:
Fixed Income Fund -
Putnam Guaranteed Horizon Account $ - $ 33,833,943
Chase Domestic Liquidity Fund 40,092,278 31,388,205
Putnam Managed Account 146,624,228 140,431,941
MetLife Stable Income Fund 77,203,061 73,037,033
PIMCO Stable Value Fund 96,404,638 71,797,545
Total Fixed Income Fund 360,324,205 350,488,667
Mutual Fund -
Templeton Foreign Fund 11,586,291 6,921,974
Fidelity Contra Fund 37,510,026 21,322,115
Putnam Vista Fund 48,320,134 32,992,446
Fidelity U.S. Equity Index Commingled Pool
Fund 135,905,290 117,107,351
Fidelity Low-Priced Stock Fund 14,615,615 17,601,769
Fidelity Growth and Income Portfolio 117,689,091 115,129,445
Putnam New Opportunities Fund 76,149,767 41,152,101
Fidelity Magellan Fund 95,900,248 69,122,106
Fidelity U.S. Equity Index Portfolio 1,475,468 1,078,526
Fidelity Fund 1,090,502 714,057
Total Mutual Fund 540,242,432 423,141,890
Ingersoll-Rand Company Common Stock Fund 358,460,748 319,997,731
Total investments at current value
(cost $898,976,910 in 1999 and
$791,758,503 in 1998) 1,259,027,385 1,093,628,288
Participant loans receivable 36,561,745 35,806,555
NET ASSETS $1,295,589,130 $1,129,434,843
INGERSOLL-RAND COMPANY COMBINED INVESTMENT TRUST
STATEMENTS OF CHANGES IN NET ASSETS
AS OF DECEMBER 31, 1999 AND 1998
1999 1998
Additions to net assets:
Contributions received $ 64,899,274 $ 62,650,395
Dividends and interest income from
investments 61,207,205 42,039,999
Net appreciation of investments 136,624,263 118,348,630
Total additions 262,730,742 223,039,024
Participant withdrawals and distributions 127,617,488 99,491,491
Net increase prior to transfers 135,113,254 123,547,533
Transfers from other plans, net 31,041,033 58,379,753
Increase in net assets for the year 166,154,287 181,927,286
Net assets, beginning of year 1,129,434,843 947,507,557
Net assets, end of year $1,295,589,130 $1,129,434,843
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 participating 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 (collectively, the "Plans"). The
participants of the 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.
These accounts record contributions, withdrawals and
transfers, and reflect investment earnings and changes in
market value.
Certain of the 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.
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
Account 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.
c. Investments
At December 31, 1999 and 1998, certain assets of the
Combined Trust were invested in synthetic investment
contracts. The Putnam Guaranteed Horizon Account 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 Account matures on November
15, 1999. The Putnam Guaranteed Horizon Account under
contract at December 31, 1998 was:
Average Guaranteed Rate
Amount Yield of Return
$ 33,833,943 4.59% 6.224%
The Putnam Managed Accounts under contract at December 31,
1999 were:
Net
Crediting
Average Interest Maturity
Amount Yield Rate Date
$ 111,123,599 6.85% 6.264% None - end upon written notice
35,500,629 6.75 6.081 None - end upon written notice
$ 146,624,228
The Putnam Managed Accounts under contract at December 31,
1998 were:
Net
Crediting
Average Interest Maturity
Amount Yield Rate Date
$ 105,713,723 5.54% 6.373% None - end upon written notice
34,718,218 5.36 6.090 None - end upon written notice
$ 140,431,941
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 5.297% in 1998 and 5.42%
in 1998.
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; 6.06% from January 1, 1999 through May
31, 1999; and 6.16% from June 1, 1999 through December 31,
1999. 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 Combined
Trust 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; 6.22%
from January 1, 1999 through March 31, 1999; 6.14% from
April 1, 1999 through May 20, 1999; 6.27% from May 21, 1999
through June 30, 1999; 6.21% from July 1, 1999 through
September 30, 1999; and 6.18% from October 1, 1999 through
December 31, 1999.
The total cost of the Combined Trust Mutual Fund was
$374,792,330 and $308,807,364 at December 31, 1999 and 1998,
respectively.
The Company Stock Fund investment in Ingersoll-Rand Company
common stock at December 31, 1999 and 1998, included
6,488,991 shares and 6,817,526 shares, respectively. At
December 31, 1999 and 1998, the average cost of these shares
was $162,888,525 and $132,462,472, respectively.
Net realized gain (loss) on securities sold of the Combined
Trust's investments for the years ended December 31 was as
follows:
1999 1998
Mutual Fund:
Templeton Foreign Fund $ (91,276) $ (365,827)
Fidelity Contra Fund 1,203,074 442,112
Putnam Vista Fund 1,820,135 1,070,041
Fidelity U.S. Equity Index
Commingled Pool Fund 8,701,850 6,369,851
Fidelity Low-Priced Stock Fund (284,031) 119,790
Fidelity Growth and Income
Portfolio 8,826,501 6,509,327
Putnam New Opportunities Fund 2,836,978 1,117,066
Fidelity Magellan Fund 4,081,607 3,114,960
Fidelity U.S. Equity Index
Portfolio 70,592 48,428
Fidelity Fund 11,070 6,051
Total Mutual Fund 27,176,500 18,431,799
Ingersoll-Rand Company Common Stock
Fund 51,455,799 31,279,147
Net realized gain $78,632,299 $49,710,946
Net unrealized gain (loss) of the Combined Trust's
investments for the years ended December 31 was as follows:
1999 1998
Mutual Fund:
Templeton Foreign Fund $ 2,655,711 $ (846,153)
Fidelity Contra Fund 501,050 2,765,101
Putnam Vista Fund 9,359,477 2,098,929
Fidelity U.S. Equity Index
Commingled Pool Fund 15,390,946 21,162,885
Fidelity Low-Priced Stock Fund 68,270 (1,751,178)
Fidelity Growth and Income
Portfolio (5,396,938) 12,774,721
Putnam New Opportunities Fund 22,236,201 5,280,025
Fidelity Magellan Fund 6,015,960 10,974,118
Fidelity U.S. Equity Index Portfolio
150,764 164,466
Fidelity Fund 134,136 109,653
Total Mutual Fund 51,115,577 52,732,567
Ingersoll-Rand Company Common Stock
Fund 6,876,387 15,905,117
Net unrealized gain $57,991,964 $68,637,684
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, the I-R/Clark Leveraged Employee
Stock Ownership Plan, and the Ingersoll-Rand/Thermo King
Savings and Stock Investment 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. A favorable determination letter for the
Ingersoll-Rand/Thermo King Retirement Savings Plan of Puerto
Rico was received from the tax authorities in Puerto Rico
that the plan is qualified under section 1165 of the Puerto
Rico Internal Revenue code of 1994. The Plan administrator
believes that the Plans are currently designed and being
operated in compliance with the applicable requirements of
the U.S. and Puerto Rico Internal Revenue Codes. Therefore,
no provision for income taxes has been included in the
Trust's financial statements.
e. Participant Loans Receivable
Participants in certain Plans may borrow from their vested
account balances subject to terms defined by the individual
Plans.
f. Transfers to/from Other Plans
Effective December 31, 1999, the assets of the Johnstone
Pump Co. Savings Plan; Monarch Hardware, Inc. Profit Sharing
Plan; Zimmerman Handling Systems, Ingersoll-Rand's Employees
401(k) Plan; and Torrington Rockford Salary Savings Plan
(collectively, the "Merged Plans") were merged into the
Combined Trust. During March 2000, the existing participant
balances in the Merged Plans were transferred to the
investment options available in the Ingersoll-Rand Company
Savings And Stock Investment Plan that were elected by each
participant.
Effective November 8, 1999, certain assets of the Harrow
Products, Inc. 401(k) Savings Plan & Trust (the "Harrow
Plan") were merged into the Combined Trust. During March
2000, the existing participant balances in the Harrow 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 July 1999, the assets of the Palm Sales/Towmaster
401(k) Profit Sharing Plan And Trust were merged into the
Combined Trust. Existing participant balances in this 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 July 1999, certain assets of the CDS Midwest, Inc.
Bargaining Unit Employee Retirement And Savings Plan were
transferred into the Combined Trust. Existing participant
balances in this plan were transferred to the investment
options available in the Ingersoll-Rand Company Savings And
Stock Investment Plan that were elected by each participant.
Effective December 31, 1999, the assets of the LCN Closers
Employees' Profit Sharing Plan (the "LCN Plan") 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.
g. Subsequent Events
Effective December 31, 1999, Ingersoll-Rand Company
completed the purchase of Ingersoll-Dresser Pump Company,
previously a joint venture with a third party, by acquiring
the joint venture partner's 49% share. On February 9, 2000,
Ingersoll-Rand Company entered into an agreement to sell the
Ingersoll-Dresser Pump Company unit. The transaction is
subject to regulatory approval and is expected to close
during the second quarter of 2000. Effective upon the
closing of the transaction, the Company will no longer
sponsor the Ingersoll-Dresser Pump Company Savings and
Investment Plan.
Putnam Investments ("Putnam") will become trustee and
recordkeeper of the Ingersoll-Rand Company Savings Plan for
Bargaining Unit Employees on July 1, 2000, at which time the
Plan's assets will be removed from the Combined Trust and
transferred to Putnam.
INGERSOLL-RAND COMPANY COMBINED INVESTMENT TRUST SCHEDULE I
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT
PURPOSES YEAR ENDED DECEMBER 31, 1999
Shares,
Description Units,
Identity of Issue of Principal Current
Investment Amount Value
Guaranteed Investment
Contracts:
Putnam Managed Account I 6.081%; no
maturity - $ 35,500,629
Putnam Managed Account II 6.264%; no
maturity - 111,123,599
Metropolitan Life Group Annuity
Insurance Company Contract - 77,203,061
PIMCO Stable Value Group Annuity
Contract Contract - 96,404,638
Templeton Foreign Fund Open-end Mutual
Fund 1,032,646 11,586,291
Fidelity Contra Fund Open-end Mutual
Fund 624,959 37,510,026
Putnam Vista Fund Open-end Mutual
Fund 2,767,476 48,320,134
Fidelity U.S. Equity Open-end Mutual
Index Commingled Fund
Pool Fund 3,231,224 135,905,290
Fidelity Low-Priced Stock Open-end Mutual
Fund Fund 645,566 14,615,615
Fidelity Growth & Income Open-end Mutual
Portfolio Fund 2,495,528 117,689,091
Putnam New Opportunities Open-end Mutual
Fund Fund 837,179 76,149,767
Fidelity Magellan Fund Open-end Mutual
Fund 701,897 95,900,248
Fidelity U.S. Equity Open-end Mutual
Index Portfolio Fund 28,325 1,475,468
Fidelity Fund Open-end Mutual
Fund 25,593 1,090,502
Ingersoll-Rand Company
Common Stock Class A 6,488,991 358,460,748
Chase Domestic Liquidity Money Market 41,064,128 40,092,278
Fund Fund
Participant Loans Due 1/1/98 -
Receivable 12/31/03; 6% -
9% 36,561,745
TOTAL INVESTMENTS $1,295,589,130
Note: The cost of the investment in the Ingersoll-Rand Company
Common Stock fund at December 31, 1999 was $162,888,525.
INGERSOLL-RAND COMPANY COMBINED INVESTMENT TRUST SCHEDULE V
ITEM 27d - SCHEDULE OF
REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1999
<TABLE>
<C>
<C> Current
<S> Expense <C> Value of
Identity of <C> <C> <C> Incurred Cost Asset On <C>
Party Description Purchase Selling With of Transaction Net Gain
Involved of Asset Price Price Transaction Asset Date (Loss)
Series of
Transactions:
Ingersoll-Rand
Company Common
Stock Class A $49,095,819 $ - $27,158 $ - $49,068,661 $ -
Ingersoll-Rand
Company Common
Stock Class A - 62,062,345 34,440 16,298,926 62,062,345 45,728,979
</TABLE>
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 1, 2000 which appears elsewhere in this Form
11-K.
/S/ Deloitte & Touche
DELOITTE & TOUCHE LLP
Parsippany, New Jersey
June 15, 2000
