<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, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
COMMISSION FILE NUMBER 1-4821
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)
<PAGE>
REQUIRED INFORMATION
Page
(a) Financial Statements - financial statements 3-16
required to be filed are listed in the
Index to Financial Statements attached hereto,
which is incorporated herein by reference.
(b) Exhibit:
Number Description
23 Consent of Independent Accountants 18
2
<PAGE>
PITTWAY CORPORATION
BLUE CHIP PROFIT SHARING
AND SAVINGS PLAN
FINANCIAL STATEMENTS
DECEMBER 31, 1994 and 1993
3
<PAGE>
PITTWAY CORPORATION
BLUE CHIP PROFIT SHARING AND SAVINGS PLAN
INDEX TO FINANCIAL STATEMENTS
Title Page
Report of independent accountants 5
Financial statements:
Statement of Net Assets Available for Benefits
(with Fund Information) at December 31, 1994 6
Statement of Net Assets Available for Benefits
(with Fund Information) at December 31, 1993 7
Statement of Changes in Net Assets Available
for Benefits (with Fund Information) for the year
ended December 31, 1994 8
Statements of Changes in Net Assets Available
for Benefits (with Fund Information) for the year
ended December 31, 1993 9
Notes to financial statements 10-14
Supplemental schedules:
Item 27a - Schedule of Assets held for Investment
Purposes at December 31, 1994 15
Item 27d - Schedule of Reportable Transactions
for the year ended December 31, 1994 16
Note: All other schedules of additional financial
information required by section 2520.103-10
of Department of Labor Rules and Regulations
for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974 (ERISA)
have been omitted because they are not applicable.
4
<PAGE>
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 net assets available for
benefits, and the related statements of changes in net assets available for
benefits present fairly, in all material respects, the net assets available
for benefits of the Pittway Corporation Blue Chip Profit Sharing and
Savings Plan at December 31, 1994 and 1993, and the changes in the net
assets available for benefits 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 additional information
included in the supplemental schedules is presented for purposes of
additional analysis and is not a required part of the basic financial
statements but is additional information required by ERISA. The Fund
Information in the statements of net assets available for benefits and the
statements of changes in net assets available for benefits is presented for
purposes of additional analysis rather than to present the net assets
available for benefits and the changes in net assets available for benefits
of each fund. The supplemental schedules and Fund Information have been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ Price Waterhouse LLP
Price Waterhouse LLP
Chicago, Illinois
June 9, 1995
5
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<TABLE>
PITTWAY CORPORATION
BLUE CHIP PROFIT SHARING AND SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS (WITH FUND INFORMATION)
AT DECEMBER 31, 1994
<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
ASSETS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investments $2,248,484 $9,665,865 $20,793,217 $5,922,393 $14,758,061 $2,474,352 - $55,862,372
Participant loans - - - - - - $1,228,651 1,228,651
Dividends and interest
receivable - 28,631 - - - - - 28,631
Contributions receivable:
From participating employees - 49,067 115,309 46,349 70,172 17,925 - 298,822
From employer - 19,499 45,887 18,490 27,896 7,215 - 118,987
Net assets available
for benefits $2,248,484 $9,763,062 $20,954,413 $5,987,232 $14,856,129 $2,499,492 $1,228,651 $57,537,463
<FN>
The accompanying notes are an integral part of this statement.
</FN>
6
</TABLE>
<PAGE>
<TABLE>
PITTWAY CORPORATION
BLUE CHIP PROFIT SHARING AND SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS (WITH FUND INFORMATION)
AT DECEMBER 31, 1993
<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
ASSETS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
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
Net assets available
for benefits $2,242,364 $4,996,110 $19,602,190 $4,724,496 $15,114,627 $1,210,824 $ 830,313 $48,720,924
<FN>
The accompanying notes are an integral part of this statement.
</FN>
7
</TABLE>
<PAGE>
<TABLE>
PITTWAY CORPORATION
BLUE CHIP PROFIT SHARING AND SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS (WITH FUND INFORMATION)
FOR THE YEAR ENDED DECEMBER 31, 1994
<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 - $ 774,437 $ 2,696,030 $1,028,923 $ 1,679,601 $ 326,680 - $ 6,505,671
From employer - 246,557 721,082 264,082 500,036 97,843 - 1,829,600
- 1,020,994 3,417,112 1,293,005 2,179,637 424,523 - 8,335,271
Income from investments:
Dividends and interest - 120,504 793,778 404,580 565,457 112,735 $ 51,575 2,048,629
Net appreciation/
(depreciation) in market
value of investments $ 704,232 1,567,953 (1,190,658) (289,702) - - - 791,825
Benefits paid to participants (55,344) (147,977) (766,649) (239,775) (1,073,722) (50,393) (25,326) (2,359,186)
Transfers between funds, net (642,768) 2,205,478 (901,360) 94,628 (1,929,870) 801,803 372,089 -
Net increase (decrease) in
net assets available for
benefits for the period 6,120 4,766,952 1,352,223 1,262,736 (258,498) 1,288,668 398,338 8,816,539
Net Assets available for
benefits, beginning 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
Net assets available for
benefits, end of the
period $2,248,484 $9,763,062 $20,954,413 $5,987,232 $14,856,129 $2,499,492 $1,228,651 $57,537,463
<FN>
The accompanying notes are an integral part of this statement.
</FN>
8
</TABLE>
<PAGE>
<TABLE>
PITTWAY CORPORATION
BLUE CHIP PROFIT SHARING AND SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS (WITH FUND INFORMATION)
FOR THE YEAR ENDED DECEMBER 31, 1993
<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 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
net assets available for
benefits for the period 2,242,364 3,312 963,620 2,712,393 (5,540,733) 674,066 (192,446) 862,576
Net assets available for
benefits, beginning of
the period - 4,992,798 18,638,570 2,012,103 20,655,360 536,758 1,022,759 47,858,348
Net assets available for
benefits, 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
<FN>
The accompanying notes are an integral part of this statement.
</FN>
9
</TABLE>
<PAGE>
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.
An employee becomes eligible to participate on the first day of each
calendar quarter after the completion of one year of service.
Participation is elected by authorizing employee earnings contributions to
the plan. Contributions could be of not less than 1 percent and not more
than 12 percent in 1993, and not more than 15 percent in 1994, of earnings
(subject to Internal Revenue Service limitations). 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.
The investment funds available that participants may select are the Pittway
Stock Fund, Fidelity Magellan Fund, Fidelity Money Market Fund, the
Fidelity Growth and Income Fund and the Fidelity Managed Income Fund. In
April 1993, the Aptar Stock Fund was established when the Company spun off
its Seaquist Group into a separate company called AptarGroup, Inc. and
distributed one share of AptarGroup, Inc. common stock for each share of
Pittway Class A Stock held. Any dividends paid on this fund are reinvested
in the Pittway Stock Fund.
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.
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,
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.
10
<PAGE>
Fidelity Management Trust Company is the trustee of the Fidelity Magellan
Fund, Fidelity Growth & Income Fund, Fidelity Money Market Fund and
Fidelity Managed Income Fund. Continental Trust Company, a subsidiary of
Bank of America Illinois, is the trustee of the Aptar Stock Fund and the
Pittway 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 Fidelity 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.
11
<PAGE>
Participant loans
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.
Loan proceeds are withdrawn from the participant's account on a defined
source and fund hierarchy. Loan repayments are applied to funds based on
the most recent fund election percentage designated by the participant.
This activity is reflected within net transfers between funds. All loan
fees are paid by participants and netted against loan interest income.
Contributions
Employer and employee contributions are invested monthly directly in
appropriate funds based on the most recent fund election percentage
designated by the participant.
Benefit payment obligations
Benefit payment obligations to terminated employees at year-end are not
presented as a liability in the Statements of Net Assets Available for
Benefits or as benefit payments in the Statements of Changes in Net Assets
Available for Benefits. This treatment results in a difference between the
Plan's Form 5500 and the financial statements. Benefit obligations
existing at December 31, 1994 and 1993 are as follows:
Fund 12/31/94 12/31/93
Aptar Stock Fund $ 5,455 $ 2,164
Pittway Stock Fund 14,784 8,399
Fidelity Magellan Fund 384,852 106,725
Fidelity Growth & Income Fund 96,467 16,639
Fidelity Money Market Fund 146,246 181,974
Fidelity Managed Income Fund 49,360 2,355
Participant Loans - 1,226
$697,164 $319,482
Trustee and administrative expenses
Expenses incurred in the administration of the Plan are paid by the
Company.
12
<PAGE>
NOTE 3 - PARTY-IN-INTEREST TRANSACTIONS:
Party-in-interest transactions consisted of loans made to participants and
investments in the Pittway Stock Fund and Aptar Stock Fund.
Stock in the Pittway Stock Fund is acquired 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 administrator believes that the
Plan 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
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.
NOTE 6 - INVESTMENTS:
The cost and market value of investments at December 31, 1994 and 1993 were
as follows:
Market Number
1994 Cost Value of Shares
AptarGroup, Inc. Common Stock $ 1,035,435 $ 2,248,484 78,208
Pittway Corp. Class A Stock 5,745,372 9,665,865 240,146
Fidelity Magellan Fund 21,270,462 20,793,217 311,276
Fidelity Growth & Income Fund 6,011,988 5,922,393 280,815
Fidelity Money Market Fund 14,758,061 14,758,061 14,758,061
Fidelity Managed Income Portfolio 2,474,352 2,474,352 2,474,352
$51,295,670 $55,862,372
13
<PAGE>
Market Number
1993 Cost Value of Shares
AptarGroup, Inc. Common Stock $ 1,499,318 $ 2,242,364 108,065
Pittway Corp. Class A Stock 2,498,179 4,976,020 154,295
Fidelity Magellan Fund 18,906,840 19,598,977 276,626
Fidelity Growth & Income Fund 4,483,066 4,723,941 212,598
Fidelity Money Market Fund 15,114,123 15,114,123 15,114,123
Fidelity Managed Income Portfolio 1,210,456 1,210,456 1,210,456
$43,711,982 $47,865,881
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 net assets for Seaquist
Group employees totaling $12,091,921 were 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.
14
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<TABLE>
PITTWAY CORPORATION
BLUE CHIP PROFIT SHARING AND SAVINGS PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AT DECEMBER 31, 1994
<CAPTION>
Par Value/ Interest
Security Description Share Cost Market Value Rate
<S> <C> <C> <C> <C>
AptarGroup, Inc. Common Stock 78,208 $ 1,035,435 $ 2,248,484
Pittway Corp. Class A Stock 240,146 5,745,372 9,665,865
Fidelity Magellan Fund 311,276 21,270,462 20,793,217
Fidelity Growth & Income Fund 280,815 6,011,988 5,922,393
Fidelity Money Market Fund 14,758,061 14,758,061 14,758,061
Fidelity Managed Income Portfolio 2,474,352 2,474,352 2,474,352
Participant Loans * - 1,228,651 1,228,651 7.0% - 9.5%
Total Assets Held for Investment $52,524,321 $57,091,023
<FN>
* Party-in-interest.
</FN>
15
</TABLE>
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<TABLE>
PITTWAY CORPORATION
BLUE CHIP PROFIT SHARING AND SAVINGS PLAN
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1994
AGGREGATED 5% SECURITY TRANSACTIONS BY ISSUE
<CAPTION>
Number of Purchase Selling Cost of Market Value Net Gain
Security Description Transactions Price Price Asset of Asset or (Loss)
<S> <C> <C> <C> <C> <C> <C>
Pittway Corp. Class A Stock:
Acquisitions 84 $3,557,711 $3,557,711 $3,557,711
Dispositions 28 $ 435,820 $ 310,519 $ 435,820 $125,301
Fidelity Magellan Fund:
Acquisitions 188 $5,871,941 $5,871,941 $5,871,941
Dispositions 99 $3,487,042 $3,508,318 $3,487,042 ($ 21,276)
Fidelity Growth & Income Fund:
Acquisitions 153 $2,696,380 $2,696,380 $2,696,380
Dispositions 73 $1,208,227 $1,167,458 $1,208,227 $ 40,769
Fidelity Money Market Fund:
Acquisitions 148 $4,062,503 $4,062,503 $4,062,503
Dispositions 133 $4,418,565 $4,418,565 $4,418,565 -
Fidelity Managed Income Portfolio:
Acquisitions 108 $1,984,902 $1,984,902 $1,984,902
Dispositions 60 $ 721,006 $ 721,006 $ 721,006 -
16
</TABLE>
<PAGE>
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 26, 1995
17
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<PAGE>
EXHIBIT 23
PITTWAY CORPORATION
DECEMBER 31, 1994
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 9, 1995 appearing on page 5 of this Form 11-K.
/s/ Price Waterhouse LLP
Price Waterhouse LLP
Chicago, Illinois
June 26, 1995
18
