<PAGE>
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, 1993
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
COMMISSION FILE NUMBER 2-95366
PITTWAY CORPORATION
BLUE CHIP PROFIT SHARING AND SAVINGS PLAN
(Full title of the Plan)
PITTWAY CORPORATION
(Name of Issuer of the Securities Held Pursuant to the Plan)
200 S. Wacker Drive, Suite 700
Chicago, Illinois 60606-5802
(Address of Issuer's Principal Executive Office)
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REQUIRED INFORMATION
Page
(a) Financial Statements - financial statements 3-14
required to be filed are listed in the
Index to Financial Statements attached hereto,
which is incorporated herein by reference.
(b) Exhibit:
Consent of Independent Accountants 16
2
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PITTWAY CORPORATION
BLUE CHIP PROFIT SHARING
AND SAVINGS PLAN
FINANCIAL STATEMENTS
DECEMBER 31, 1993 and 1992
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PITTWAY CORPORATION
BLUE CHIP PROFIT SHARING AND SAVINGS PLAN
INDEX TO FINANCIAL STATEMENTS
Title Page
Report of independent accountants 5
Financial statements:
Statement of Financial Position (with Fund Information)
at December 31, 1993 6
Statement of Financial Position (with Fund Information)
at December 31, 1992 7
Statements of Income and Changes in Plan Equity (with
Fund Information) for the year ended December 31, 1993 8
Statements of Income and Changes in Plan Equity (with
Fund Information) for the year ended December 31, 1992 9
Notes to financial statements 10-14
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REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and the
Administrative Committee of the
Pittway Corporation Blue Chip
Profit Sharing and Savings Plan
In our opinion, the accompanying statements of financial position, and the
related statements of income and changes in plan equity present fairly, in
all material respects, the financial position of the Pittway Corporation
Blue Chip Profit Sharing and Savings Plan at December 31, 1993 and 1992,
and the results of its operations and 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
Plan's Administrative 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 Plan's Administrative 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 Fund Information in the
statements of financial position and the statements of income and changes
in plan equity is presented for purposes of additional analysis rather than
to present the financial position and income and changes in plan equity of
each fund. The Fund Information has been subjected to the auditing
procedures applied in the audits 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.
Price Waterhouse
Chicago, Illinois
June 17, 1994
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PITTWAY CORPORATION
BLUE CHIP PROFIT SHARING AND SAVINGS PLAN
STATEMENT OF FINANCIAL POSITION (WITH FUND INFORMATION)
AT DECEMBER 31, 1993
<TABLE>
<CAPTION>
Fidelity Fidelity Fidelity
Aptar Pittway Fidelity Growth & Money Managed
Stock Stock Magellan Income Market Income Participant
Fund Fund Fund Fund Fund Fund Loans Total
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments $2,242,364 $4,976,020 $19,598,977 $4,723,941 $15,114,123 $1,210,456 - $47,865,881
Participant loans - - - - - - $ 830,313 830,313
Dividends and interest
receivable - 19,601 - - - - - 19,601
Contributions receivable:
From participating employees - 384 2,374 444 365 294 - 3,861
From employer - 105 839 111 139 74 - 1,268
$2,242,364 $4,996,110 $19,602,190 $4,724,496 $15,114,627 $1,210,824 $ 830,313 $48,720,924
LIABILITIES AND PLAN EQUITY
Participants' equity $2,242,364 $4,996,110 $19,602,190 $4,724,496 $15,114,627 $1,210,824 $ 830,313 $48,720,924
$2,242,364 $4,996,110 $19,602,190 $4,724,496 $15,114,627 $1,210,824 $ 830,313 $48,720,924
</TABLE>
The accompanying notes are an integral part of this statement.
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PITTWAY CORPORATION
BLUE CHIP PROFIT SHARING AND SAVINGS PLAN
STATEMENT OF FINANCIAL POSITION (WITH FUND INFORMATION)
AT DECEMBER 31, 1992
<TABLE>
<CAPTION>
Fidelity Fidelity Fidelity
Life Pittway Fidelity Growth & Money Managed
Insurance Stock Magellan Income Market Income Participant
Fund Fund Fund Fund Fund Fund Loans Total
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments - $4,964,108 $18,535,297 $1,990,832 $20,547,009 $ 525,690 - $46,562,936
Participant loans - - - - - - $1,022,759 1,022,759
Contributions receivable:
From participating employees - 22,446 80,117 16,976 84,558 8,536 - 212,633
From employer - 6,244 23,156 4,295 23,793 2,532 - 60,020
- $4,992,798 $18,638,570 $2,012,103 $20,655,360 $ 536,758 $1,022,759 $47,858,348
LIABILITIES AND PLAN EQUITY
Participants' equity - $4,992,798 $18,638,570 $2,012,103 $20,655,360 $ 536,758 $1,022,759 $47,858,348
- $4,992,798 $18,638,570 $2,012,103 $20,655,360 $ 536,758 $1,022,759 $47,858,348
</TABLE>
The accompanying notes are an integral part of this statement.
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PITTWAY CORPORATION
BLUE CHIP PROFIT SHARING AND SAVINGS PLAN
STATEMENTS OF INCOME AND CHANGES IN PLAN EQUITY (WITH FUND INFORMATION)
FOR THE YEAR ENDED DECEMBER 31, 1993
<TABLE>
<CAPTION>
Fidelity Fidelity Fidelity
Aptar Pittway Fidelity Growth & Money Managed
Stock Stock Magellan Income Market Income Participant
Fund Fund Fund Fund Fund Fund Loans Total
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Contributions:
From participating employees - $ 544,358 $ 2,348,516 $ 778,519 $ 2,040,902 $ 248,949 - $ 5,961,244
From employer - 157,606 598,191 176,374 525,882 61,176 - 1,519,229
- 701,964 2,946,707 954,893 2,566,784 310,125 - 7,480,473
Income from investments:
Dividends and interest - 93,545 1,784,766 230,226 473,545 53,103 $ 46,112 2,681,297
Net appreciation in market
value of investments $ 808,965 1,542,531 2,136,123 321,443 - - - 4,809,062
Benefits paid to participants (28,122) (53,229) (1,041,992) (31,338) (1,177,252) (25,771) (8,244) (2,365,948)
Transfers between funds, net 1,461,695 (1,177,452) 383,244 1,798,072 (2,930,933) 370,503 94,871 -
Transfers to/from other
plans, net (174) (1,104,047) (5,245,228) (560,903) (4,472,877) (33,894) (325,185) (11,742,308)
Net increase (decrease) in
participants' equity
for the period 2,242,364 3,312 963,620 2,712,393 (5,540,733) 674,066 (192,446) 862,576
Participants' equity,
beginning of the period - 4,992,798 18,638,570 2,012,103 20,655,360 536,758 1,022,759 47,858,348
Participants' equity,
end of the period $2,242,364 $4,996,110 $19,602,190 $4,724,496 $15,114,627 $1,210,824 $ 830,313 $48,720,924
</TABLE>
The accompanying notes are an integral part of this statement.
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PITTWAY CORPORATION
BLUE CHIP PROFIT SHARING AND SAVINGS PLAN
STATEMENTS OF INCOME AND CHANGES IN PLAN EQUITY (WITH FUND INFORMATION)
FOR THE YEAR ENDED DECEMBER 31, 1992
<TABLE>
<CAPTION>
Fidelity Fidelity Fidelity
Life Pittway Fidelity Growth & Money Managed
Insurance Stock Magellan Income Market Income Participant
Fund Fund Fund Fund Fund Fund Loans Total
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Contributions:
From participating employees $ 12,698 $ 402,852 $ 2,747,325 $ 220,878 $ 3,309,309 $ 83,553 - $ 6,776,615
From employer - 92,001 569,264 31,668 731,176 16,612 - 1,440,721
12,698 494,853 3,316,589 252,546 4,040,485 100,165 - 8,217,336
Income from investments:
Dividends and interest - 127,784 2,603,748 156,960 831,009 13,431 $ 77,898 3,810,830
Increase in cash surrender
value of life insurance 29,111 - - - - - - 29,111
Net appreciation/
(depreciation) in market
value of investments - 631,981 (1,412,624) (48,293) - - - (828,936)
Life insurance premiums (12,698) - - - - - - (12,698)
Benefits paid to participants (4,174) (147,981) (2,266,780) (73,616) (3,804,621) (2,499) (62,260) (6,361,931)
Transfers between funds, net (221,805) 1,052,801 33,925 1,724,506 (3,201,575) 425,661 186,487 -
Net increase (decrease) in
participants' equity
for the period (196,868) 2,159,438 2,274,858 2,012,103 (2,134,702) 536,758 202,125 4,853,712
Participants' equity,
beginning of the period 196,868 2,833,360 16,363,712 - 22,790,062 - 820,634 43,004,636
Participants' equity,
end of the period - $4,992,798 $18,638,570 $2,012,103 $20,655,360 $ 536,758 $1,022,759 $47,858,348
</TABLE>
The accompanying notes are an integral part of this statement.
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PITTWAY CORPORATION
BLUE CHIP PROFIT SHARING AND SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - DESCRIPTION OF THE PLAN:
The Pittway Corporation Blue Chip Profit Sharing and Savings Plan (the
"Plan") covers eligible full-time employees of Pittway Corporation and
certain of its subsidiaries (the "Company" or the "Employer"). The Plan is
administered by a committee appointed by the Company.
Through June 1992 an employee became eligible to participate on January 1
or July 1 after the completion of one year of service. Beginning July
1992, an employee also becomes eligible to participate on April 1 or
October 1 after the completion of one year of service. Participation is
elective and is exercised by means of authorizing contributions of salary
to the Plan of not less than 1 percent and not more than 12 percent
(subject to Internal Revenue Service limitation) of earnings.
Participants' earnings are generally defined as total compensation for
services rendered to a participating Employer. Participants may elect to
suspend their contributions at any time. Eligible employees will not share
in any Employer contributions for any period in which they voluntarily
suspend their contributions or do not participate in the Plan. Active
participation can be elected again on the next regular enrollment date.
The amount of Employer contributions is determined annually for each
separate participating Employer. Such contributions are computed as a
matching percentage of each participant's contribution within specified
limits.
Through June 1992, the investment funds available that participants could
select were the Pittway Class A Stock Fund, Fidelity Magellan Fund and
Fidelity Money Market Fund. Beginning July 1992, two additional investment
funds, the Fidelity Growth and Income Fund and the Fidelity Managed Income
Fund, were made available for selection. In April 1992, the Life Insurance
Fund was eliminated as an investment option; all cash values earned under
this option were transferred to the Fidelity Money Market Fund and the
policies (without cash value) were distributed to the respective
participants. In April 1993, the AptarGroup, Inc. Common Stock Fund was
established when the Company spun off its Seaquist Group into a separate
company called AptarGroup, Inc. and distributed an amount of AptarGroup,
Inc. common stock equal to each share of Pittway Class A Stock held.
Through June 1992, a participant could elect to transfer certain portions
of his or her account in the Plan from one fund to another each January 1
or July 1 enrollment date. Beginning July 1992, a participant may elect to
transfer certain portions of his or her account in the Plan from one fund
to another up to twelve times per year subject to certain restrictions
between the Fidelity Money Market Fund, Fidelity Managed Income Fund,
Pittway Class A Stock Fund and AptarGroup, Inc. Common Stock Fund.
Each participant is fully vested in his or her contributions at all times.
Vesting of the Employer contribution occurs at the rate of 20 percent per
year on a cumulative basis for each year of service with a participating
Employer. Forfeitures of nonvested amounts occur when a participant
terminates employment for any reason other than retirement after age 65,
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death, or disability. Upon withdrawal from the Plan, the participant will
receive the amount of his or her contributions plus the vested portion of
his or her Employer contributions. Forfeited amounts are used to reduce
future contributions of the Employer.
Effective January 1, 1993, Fidelity Management Trust Company replaced
Continental Trust Company as the trustee of the Fidelity Magellan Fund,
Fidelity Growth & Income Fund, Fidelity Money Market Fund and Fidelity
Managed Income Fund. Continental Trust Company remains the trustee of the
AptarGroup, Inc. Common Stock Fund and the Pittway Class A Stock Fund.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Basis of accounting
The financial statements of the Plan have been prepared on the accrual
basis of accounting.
Investments
The Aptar Stock Fund and Pittway Stock Fund invest in shares of AptarGroup,
Inc. common stock and Pittway Corporation Class A stock, respectively. The
Fidelity Magellan Fund is an open end mutual fund that invests in the
stocks of both well-known and lesser-known foreign and domestic companies.
The Fidelity Growth and Income Fund is an open end mutual fund that invests
in common stocks, securities convertible into common stocks, preferred
stocks and fixed-income securities. The Fidelity Money Market Fund is an
open end mutual fund that invests in obligations issued or guaranteed as to
principal and interest by the U.S. Government. The Managed Income Fund is
a pooled investment fund that invests in high-quality, short and long term
investment contracts, bank investment contracts, short-term money market
instruments and debt obligations issued by one institution and insured by
another as to the payment of principal at maturity.
Investments in the Aptar Stock Fund and Pittway Stock Fund are valued at
quoted market prices. Investments in the Fidelity Magellan Fund and
Fidelity Growth and Income Fund are valued at quoted market prices which
represent the net asset value of shares held by the Plan at year-end.
Investments in the Fidelity Money Market Fund and Fidelity Managed Income
Fund are stated at fair value as determined by the trustee. Participant
loans are valued at cost which approximates market value.
Purchases and sales of securities, including related gains and losses, are
recorded as of the trade date.
Interest income is recorded when earned. Dividend income is recorded on
the ex-dividend date.
The cost of securities sold is determined on an average cost basis. In
accordance with regulatory requirements for the Plan's Form 5500, the cost
of securities sold is determined based on the fund price at the beginning
of the plan year. This treatment results in a difference in realized and
unrealized appreciation or depreciation between the Plan's Form 5500 and
the financial statements.
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Participant loans
Certain prior year amounts relating to participant loan activity have been
reclassified to conform to the current year classification of reporting
loan disbursements based on a source and fund hierarchy and loan repayments
based on the most recent fund election percentage designated by the
participant. Accordingly, participants' equity in the Fidelity Money
Market Fund decreased and participants' equity in Participant Loans
increased by $1,022,759 as a result of reclassifying the participant loan
activity. Activity initially recorded against participant fund balances is
reflected within net transfers between funds.
Contributions
Through June 1992, Employer and employee contributions were invested by
Continental Trust Company (the trustee) in a short-term investment fund in
the month after the payroll deductions were withheld from the Plan
participants. Allocation of these contributions to the appropriate funds
was made in the following month based upon information provided by the Plan
recordkeeper. Beginning July 1992, Employer and employee contributions are
invested directly in appropriate funds.
Benefit payment obligations
Benefit payment obligations to terminated employees at year-end are not
presented as a liability in the Statements of Financial Position or as
benefit payments in the Statements of Income and Changes in Plan Equity.
This treatment results in a difference between the Plan's Form 5500 and the
financial statements. Benefit obligations existing at December 31, 1993
and 1992 are as follows:
<TABLE>
<CAPTION>
Fund 12/31/93 12/31/92
<S> <C> <C>
Aptar Stock Fund $ 2,164 -
Pittway Stock Fund 8,399 $ 22,503
Fidelity Magellan Fund 106,725 145,958
Fidelity Growth & Income Fund 16,639 4,923
Fidelity Money Market Fund 181,974 149,010
Fidelity Managed Income Fund 2,355 73
Participant Loans 1,226 3,385
$319,482 $325,852
</TABLE>
Life Insurance Fund
Proceeds from Life Insurance Fund benefits, cancellations and withdrawals
may have been temporarily deposited into the Fidelity Money Market Fund
until disbursement to the plan participant was made. This disbursement
activity was reflected within the Life Insurance Fund for financial
statement purposes.
Trustee and administrative expenses
Expenses incurred in the administration of the Plan are paid by the
Company.
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NOTE 3 - PARTY-IN-INTEREST TRANSACTIONS:
Party-in-interest transactions consisted of loans made to participants and
investments in the Pittway Class A Stock Fund.
The Plan provides that a participant may, for reasons of hardship, borrow
from the Plan an amount not to exceed 50 percent of the participant's
vested account balance. Each participant loan is evidenced by a note and
is considered an investment of that participant's account. Accordingly,
principal and interest payments are credited to the respective
participant's account. Each participant note carries an interest rate
equal to the prime rate plus one percent on the date of the loan, and
repayment occurs through payroll withholding over a period not to exceed 54
months.
Stock in the Pittway Class A Stock Fund is acquired by Fidelity Management
Trust Company on the open market at fair market value on the date
purchased.
NOTE 4 - FEDERAL INCOME TAX STATUS:
The Internal Revenue Service has made a favorable determination as to the
qualification of the Plan pursuant to Section 401(a) of the Internal
Revenue Code (IRC). The Trust has been determined to be exempt from
taxation under Section 501(a). The Plan has been amended since receiving
the determination letter. However, the Plan administrator and the Plan's
tax counsel believe that the Plan is designed and is currently being
operated in compliance with the applicable requirements of the IRC.
NOTE 5 - AMENDMENT AND TERMINATION OF PLAN:
The Plan may be amended at any time by the Company. However, no amendment
may adversely affect the current rights of the participants in the Plan
with respect to contributions made prior to the date of the amendment.
Employer contributions may be discontinued and the Company may terminate
its participation in the Plan at any time.
The Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974 (ERISA) applicable to defined contribution plans.
Since the Plan provides for an individual account for each participant and
for benefits based solely on the amount contributed to the participant's
account and any income, expenses, gains and losses attributed thereto, its
benefits are not insured by the Pension Benefit Guaranty Corporation
pursuant to Title IV of ERISA.
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NOTE 6 - INVESTMENTS:
The cost and market value of investments at December 31, 1993 and 1992 were
as follows:
<TABLE>
<CAPTION>
Market Number
1993 Investments Cost Value of Shares
<S> <C> <C> <C>
Aptar Common Stock $ 1,499,318 $ 2,242,364 108,065.752
Pittway Class A Stock 2,498,179 4,976,020 154,295.207
Fidelity Magellan Fund 18,906,840 19,598,977 276,626.352
Fidelity Growth & Income Fund 4,483,066 4,723,941 212,598.604
Fidelity Money Market Fund 15,114,123 15,114,123 15,114,122.590
Fidelity Managed Income Portfolio 1,210,456 1,210,456 1,210,456.290
$43,711,982 $47,865,881
Market Number
1992 Investments Cost Value of Shares
Pittway Class A Stock $ 3,946,247 $ 4,964,108 143,887.184
Fidelity Magellan Fund 16,373,081 18,535,297 294,164.371
Fidelity Growth and Income Fund 2,028,002 1,990,832 101,006.177
Fidelity Money Market Fund 20,547,009 20,547,009 20,547,009.170
Fidelity Managed Income Portfolio 525,690 525,690 525,690.460
$43,420,029 $46,562,936
</TABLE>
NOTE 7 - TRANSFER TO/FROM OTHER PLANS:
On April 22, 1993, the Company spun off its Seaquist Group into a separate
company called AptarGroup, Inc. On this date, Plan equity for Seaquist
Group employees totaling $12,091,921 was transferred to AptarGroup, Inc.
Additionally, $349,613 of assets from a predecessor plan of a subsidiary of
the Company were merged and transferred into the Plan.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the Plan) have duly caused this
annual report to be signed on its behalf by the undersigned hereunto duly
authorized.
PITTWAY CORPORATION BLUE CHIP
PROFIT SHARING AND SAVINGS PLAN
BY: /s/ Nicholas J. Caccamo
Nicholas J. Caccamo
Member of Plan Administrative Committee
Date: June 27, 1994
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EXHIBIT
PITTWAY CORPORATION
DECEMBER 31, 1993
FORM 11-K
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 33-35168) of Pittway Corporation of our report
dated June 17, 1994 appearing on page 5 of this Form 11-K.
Price Waterhouse
Chicago, Illinois
June 27, 1994
16
