Ingersoll-Rand Company Savings and Stock
Investment Plan
Independent Auditors' Report
Financial Statements
Years Ended December 31, 2000 and 1999
Supplemental Schedules
Year Ended December 31, 2000
INGERSOLL-RAND COMPANY SAVINGS AND STOCK INVESTMENT PLAN
TABLE OF CONTENTS
Page
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED
DECEMBER 31, 2000 AND 1999:
Statements of Financial Condition 2
Statements of Income and Changes in Plan Equity 3
Notes to Financial Statements 4-21
SUPPLEMENTAL SCHEDULES (Combined Investment Trust):
Schedule I - Schedule of Assets Held for Investment Purposes at
December 31, 2000 22
Schedule II - Schedule of Reportable Transactions for the Year
Ended December 31, 2000 23
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, 2000 and 1999,
and the related statements of income and changes in plan equity
for the years then ended. These financial statements are the
responsibility of the Plan's management. 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 management, 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, 2000 and 1999, 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 Plan's management.
Such schedules have been subjected to the auditing procedures
applied in our audit of the basic 2000 financial statements
and, in our opinion, are fairly stated in all material respects
when considered in relation to the basic 2000 financial
statements taken as a whole.
/s/ Deloitte & Touche
DELOITTE & TOUCHE LLP
Parsippany, New Jersey
June 26, 2001
INGERSOLL-RAND COMPANY SAVINGS AND STOCK INVESTMENT PLAN
STATEMENTS OF FINANCIAL CONDITION
DECEMBER 31, 2000 AND 1999
2000 1999
Assets:
Investments at current value -
Combined Trust Fixed Income Fund $ 220,866,728 $ 234,765,497
Combined Trust Mutual Fund 406,090,952 453,869,229
Combined Trust Ingersoll-Rand Company Common
Stock Fund 278,863,776 326,943,636
Total investments 905,821,456 1,015,578,362
Participant loans receivable 24,408,547 26,546,131
Contributions receivable 1,088,804 4,138,802
Due from merged plans - 10,783,785
Total assets and Plan equity $ 931,318,807 $1,057,047,080
See notes to financial statements.
INGERSOLL-RAND COMPANY SAVINGS AND STOCK INVESTMENT PLAN
STATEMENTS OF INCOME AND CHANGES IN PLAN EQUITY
YEARS ENDED DECEMBER 31, 2000 AND 1999
2000 1999
Contributions:
Participants $ 51,229,104 $ 53,075,655
Investment (loss) income:
Dividends 39,634,921 32,466,088
Interest 16,349,429 16,601,081
Net (depreciation) appreciation of investments (149,571,712) 120,300,479
Net investment (loss) income (93,587,362) 169,367,648
Total (deductions) additions (42,358,258) 222,443,303
Participant withdrawals and distributions 93,457,321 115,463,976
Net (decrease) increase prior to transfers (135,815,579) 106,979,327
Transfers from other plans, net 10,087,306 10,653,599
Net (decrease) increase in plan equity (125,728,273) 117,632,926
Plan equity, beginning of year 1,057,047,080 939,414,154
Plan equity, end of year $ 931,318,807 $1,057,047,080
See notes to financial statements.
INGERSOLL-RAND COMPANY SAVINGS AND STOCK INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2000 AND 1999
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 setup. 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 6% of compensation may contribute an additional one
to 10% 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 2000 and 1999, 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 I-R/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 1%,
in one or more of the following funds:
O Fixed Income Fund - A fund that invests in securities that
produce a fixed rate of return. Investments may include United
States government securities, corporate bonds, notes, debentures,
convertible securities, preferred stocks, investment funds or
investment contracts.
O Mutual Fund - Prior to March 1, 1997, participants could select
from the following mutual funds: Fidelity Fund, Fidelity Growth and
Income Portfolio, Fidelity U.S. Equity Index Portfolio, and
Fidelity Magellan Fund. After March 1, 1997, participants 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.
O Ingersoll-Rand Company Common 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, 2000 and 1999, the number of participants with
balances in the Plan approximated 19,400 and 18,200,
respectively. The number of participants contributing to each
of the Plan's funds at December 31, 2000, were approximately:
Fixed Income Fund 11,100
Mutual Fund:
Templeton Foreign Fund 1,500
Fidelity Contra Fund 3,200
Putnam Vista Fund 3,500
Fidelity U.S. Equity Index Commingled Pool Fund 5,000
Fidelity Low-Priced Stock Fund 1,900
Fidelity Growth and Income Portfolio 5,800
Putnam New Opportunities Fund 5,100
Fidelity Magellan Fund 5,600
Ingersoll-Rand Company Common Stock Fund 7,600
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 Managed Accounts are recorded at their respective
contract values. Contract value equals principal plus
cumulative interest earned, reduced by distributions.
The Metropolitan Life Insurance ("MetLife") Stable Income Fund
invests in a group annutiy contract which is carried at contract
value, an approximation of current value.
The PIMCO Stable Value Contract is carried at contract value,
which equals net deposits plus credited interest.
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 $127,733
in 2000 and $244,158 in 1999 were or will be used to reduce
future Company contributions. Effective April 8, 2000,
forfeitures may also be used to make Company contributions other
than Company Matching Contributions and Company Retirement
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 $1,934,376 and $2,197,703 at
December 31, 2000 and 1999, 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:
2000 1999
Putnam Managed Accounts $ 125,128,764 $ 146,624,228
Chase Domestic Liquidity Fund 19,236,393 40,092,278
MetLife Stable Income Fund 73,988,601 77,203,061
PIMCO Stable Value Contract 91,844,955 96,404,638
Total Combined Trust Fixed Income
Fund 310,198,713 360,324,205
Less other plans 89,331,985 125,558,708
Plan investment in Fixed Income
Fund $ 220,866,728 $ 234,765,497
At December 31, 2000 and 1999, certain assets of the Combined
Trust were invested in synthetic investment contracts. 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 Managed Account under contract at December 31, 2000
was:
Guaranteed
Average Rate Maturity
Amount Yield of Return Date
$125,128,764 5.96% 6.630% None - end upon written notice
The Putnam Managed Account II terminated on November 8, 2000.
The Putnam Managed Accounts under contract at December 31, 1999
were:
Average Net Crediting Maturity
Amount Yield Interest 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 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 6.428% in 2000 and 5.297% in 1999.
The 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 6.06%
from January 1, 1999 through May 31, 1999; 6.16% from June 1,
1999 through December 31, 1999; 6.06% from January 1, 2000
through June 30, 2000; 6.23% from July 1, 2000 through December
31, 2000. 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 Contract 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 6.22% 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; 6.08% from January 1, 2000
through January 30, 2000; 6.00% from January 31, 2000 through
March 31, 2000; 6.07% from April 1, 2000 through June 30, 2000;
5.90% from July 1, 2000 through September 30, 2000; and 6.21%
from October 1, 2000 through December 31, 2000.
4. MUTUAL FUND
Investments in the Mutual Fund at December 31 were as follows:
2000 1999
Templeton Foreign Fund $ 8,427,712 $ 11,586,291
Fidelity Contra Fund 30,178,848 37,510,026
Putnam Vista Fund 47,764,103 48,320,134
Fidelity U.S. Equity Index Commingled
Pool Fund 97,089,713 135,905,290
Fidelity Low-Priced Stock Fund 14,679,402 14,615,615
Fidelity Growth and Income Portfolio 83,029,238 117,689,091
Putnam New Opportunities Fund 57,971,107 76,149,767
Fidelity Magellan Fund 67,891,609 95,900,248
Fidelity U.S. Equity Index Portfolio - 1,475,468
Fidelity Fund - 1,090,502
Total Combined Trust Mutual Fund 407,031,732 540,242,432
Less other plans 940,780 86,373,203
Plan investment in Mutual Fund $406,090,952 $453,869,229
The total cost of the Combined Trust Mutual Fund was $369,720,898
and $374,792,330 at December 31, 2000 and 1999, respectively.
Net realized and unrealized (depreciation) appreciation of
investments for the years ended December 31 were as follows:
2000 1999
Templeton Foreign Fund $ (973,936) $ 2,564,435
Fidelity Contra Fund (6,301,456) 1,704,124
Putnam Vista Fund (12,491,479) 11,179,611
Fidelity U.S. Equity Index Commingled
Pool Fund (10,090,468) 24,092,796
Fidelity Low-Priced Stock Fund 333,950 (215,761)
Fidelity Growth and Income Portfolio (10,808,648) 3,429,563
Putnam New Opportunities Fund (29,326,885) 25,073,179
Fidelity Magellan Fund (10,481,802) 10,097,567
Fidelity U.S. Equity Index Portfolio (16,473) 221,356
Fidelity Fund (15,224) 145,206
Total Combined Trust Mutual Fund (80,172,421) 78,292,076
Putnam Managed Accounts (339,541) -
Less other plans (247,192) 11,608,166
Net Plan (depreciation)
appreciation $(80,264,770) $66,683,910
5. INGERSOLL-RAND COMPANY COMMON STOCK FUND
Investments in the Ingersoll-Rand Company Stock Fund at December
31 were as follows:
2000 1999
Ingersoll-Rand Company Common Stock $288,178,558 $357,300,067
Chase Domestic Liquidity Fund 2,534,105 1,160,681
Total Combined Trust Ingersoll-Rand
Company Common Stock Fund 290,712,663 358,460,748
Less other plans 11,848,887 31,517,112
Plan investment in Ingersoll-Rand
Company Common Stock Fund $278,863,776 $326,943,636
The Company Common Stock Fund investment in Ingersoll-Rand
Company common stock at December 31, 2000 and 1999 included
6,881,876 shares and 6,488,991 shares, respectively. At
December 31, 2000 and 1999, the average cost of these shares was
$205,653,151 and $162,888,525, respectively.
Net realized and unrealized (depreciation) appreciation of
investments for the years ended December 31 were as follows:
2000 1999
Total Combined Trust Ingersoll-Rand
Company Common Stock Fund $(79,738,091) $58,332,187
Less other plans (10,431,149) 4,715,618
Net Plan (depreciation)
appreciation $(69,306,942) $53,616,569
6. INVESTMENTS
The following investments represent 5 percent or more of the
Plan's net assets at December 31.
2000 1999
Fixed Income Fund $ 220,866,728 $ 234,765,497
Putnam Vista Fund 47,629,280 42,090,492
Fidelity U.S. Equity Index Commingled
Pool Fund 96,703,304 119,660,007
Fidelity Growth and Income Portfolio 82,831,596 96,206,624
Putnam New Opportunities Fund 57,863,772 64,458,725
Fidelity Magellan Fund 67,807,485 77,240,800
Ingersoll-Rand Company Common
Stock Fund * 278,863,776 326,943,636
* Nonparticipant-directed
7. 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, 2000 and 1999
was 6,923 and 7,441, 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 was 9% and 10% in 2000 and 9% in
1999. 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.
8. DIVIDEND AND INTEREST INCOME
Dividend and interest income for all investments at December 31
were as follows:
2000 1999
Total Combined Trust $64,916,178 $61,207,205
Less other plans 8,931,828 12,140,036
Net Plan dividend and interest income
from investments $55,984,350 $49,067,169
9. TAX STATUS
The Internal Revenue Service has determined and informed the
Company by letter dated October 27, 1999 that the Plan and
related trust are designed in accordance with applicable
sections of the Internal Revenue Code (the Code). 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 Internal Revenue Code. Therefore, no
provision for income taxes has been included in the Plan's
financial statements.
10.TRANSFERS TO/FROM OTHER PLANS
The Ingersoll-Dresser Pump Company ("IDP") was sold in the
current year to Flowserve Corporation ("Flowserve"). Effective
October 31, 2000, the total account balances of participants who
were employed by IDP and became an employee of Flowserve were
transferred to the qualified defined contribution 401(k) plan
maintained by Flowserve at which time the Plan's assets were
removed from the Combined Trust. Effective December 31, 2000,
the total accounts of participants which were not transferred to
the qualified 401(k) defined contribution plan maintained by
Flowserve were merged into the Ingersoll-Rand Company Savings
and Stock Investment Plan.
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.
11.SUBSEQUENT EVENTS
Effective December 31, 2000, Ingersoll-Rand Company completed
the sale of the assets of the ALCO Building Products ("ALCO")
business unit of Steelcraft to LaForce, Inc. As a result of the
sale, effective December 29, 2000, a trust to trust transfer of
the assets held in the Ingersoll-Rand Company Savings and Stock
Investment Plan was approved for the benefit of participants who
were former employees of ALCO and who, on December 29, 2000
became employees of LaForce, Inc. The value of such assets is
to be determined and transferred to LaForce, Inc. as soon as
administratively practicable.
12.COMBINED INVESTMENT TRUST FINANCIAL INFORMATION
At December 31, 2000 and 1999, the Plan had an 89% and 81%
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, 2000 and 1999 follow.
INGERSOLL-RAND COMPANY COMBINED INVESTMENT TRUST
STATEMENTS OF NET ASSETS
DECEMBER 31, 2000 AND 1999
2000 1999
ASSETS:
Investments:
Fixed Income Fund -
Chase Domestic Liquidity Fund $ 19,236,393 $ 40,092,278
Putnam Managed Accounts 125,128,764 146,624,228
MetLife Stable Income Fund 73,988,601 77,203,061
PIMCO Stable Value Contract 91,844,955 96,404,638
Total Fixed Income Fund 310,198,713 360,324,205
Mutual Fund -
Templeton Foreign Fund 8,427,712 11,586,291
Fidelity Contra Fund 30,178,848 37,510,026
Putnam Vista Fund 47,764,103 48,320,134
Fidelity U.S. Equity Index
Commingled Pool Fund 97,089,713 135,905,290
Fidelity Low-Priced Stock Fund 14,679,402 14,615,615
Fidelity Growth and Income
Portfolio 83,029,238 117,689,091
Putnam New Opportunities Fund 57,971,107 76,149,767
Fidelity Magellan Fund 67,891,609 95,900,248
Fidelity U.S. Equity Index
Portfolio - 1,475,468
Fidelity Fund - 1,090,502
Total Mutual Fund 407,031,732 540,242,432
Ingersoll-Rand Company Common Stock
Fund 290,712,663 358,460,748
Total investments at current value
(cost - $888,149,351 in 2000;
$898,976,910 in 1999) 1,007,943,108 1,259,027,385
Participant loans receivable 24,408,547 36,561,745
TOTAL ASSETS 1,032,351,655 1,295,589,130
LIABILITIES:
Loan payable 6,216,851 -
TOTAL LIABILITIES 6,216,851 -
NET ASSETS $1,026,134,804 $1,295,589,130
See notes to financial statements.
INGERSOLL-RAND COMPANY COMBINED INVESTMENT TRUST
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED DECEMBER 31, 2000 AND 1999
2000 1999
Changes in net assets:
Contributions received $ 65,356,470 $ 64,899,274
Dividends and interest income from
investments 64,916,178 61,207,205
Net (depreciation) appreciation of
investments (160,250,053) 136,624,263
Total (deductions) additions (29,977,405) 262,730,742
Participant withdrawals and distributions 132,583,862 127,617,488
Net (decrease) increase prior to transfers (162,561,267) 135,113,254
Transfers (to) from other plans, net (106,893,059) 31,041,033
(Decrease) increase in net assets for the
year (269,454,326) 166,154,287
Net assets, beginning of year 1,295,589,130 1,129,434,843
Net assets, end of year $1,026,134,804 $1,295,589,130
See notes to financial statements.
INGERSOLL-RAND COMPANY COMBINED INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2000 AND 1999
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") is the
trustee and recordkeeper of the Combined Trust. 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 only through
investment in the Fixed Income Fund and/or the Ingersoll-Rand
Company Common 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 Managed Accounts are
recorded at their respective contract values. Contract value
equals principal plus cumulative interest earned, reduced by
distributions.
The Metropolitan Life Insurance ("MetLife") Stable Income Fund
invests in a group annutiy contract which is carried at contract
value, an approximation of current value.
The PIMCO Stable Value Contract is carried at contract value,
which equals net deposits plus credited interest.
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 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 associated with 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, 2000 and 1999, certain assets of the Combined
Trust were invested in synthetic investment contracts. 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 Managed Account under contract at December 31, 2000
was:
Guaranteed
Average Rate Maturity
Amount Yield of Return Date
$125,128,764 5.96% 6.630% None - end upon written notice
The Putnam Managed Account II terminated on November 8, 2000.
The Putnam Managed Accounts under contract at December 31, 1999
were:
Guaranteed
Average Rate Maturity
Amount Yield of Return 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 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 6.428% in 2000 and 5.297% in 1999.
The 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 6.06%
from January 1, 1999 through May 31, 1999; 6.16% from June 1,
1999 through December 31, 1999; 6.06% from January 1, 2000
through June 30, 2000; and 6.23% from July 1, 2000 through
December 31, 2000. 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 Contract 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 6.22% 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; 6.18% from October 1, 1999
through December 31, 1999; 6.08 % from January 1, 2000 through
January 30, 2000; 6.00% from January 31, 2000 through March 31,
2000; 6.07% from April 1, 2000 through June 30, 2000; 5.90% from
July 1, 2000 through September 30, 2000; and 6.21% from October
1, 2000 through December 31, 2000.
The total cost of the Combined Trust Mutual Fund was
$369,720,898 and $374,792,330 at December 31, 2000 and 1999,
respectively.
The Company Common Stock Fund investment in Ingersoll-Rand
Company common stock at December 31, 2000 and 1999 included
6,881,876 shares and 6,488,991 shares, respectively. At
December 31, 2000 and 1999, the average cost of these shares was
$205,653,151 and $162,888,525, respectively.
Net realized gain (loss) on securities sold of the Combined
Trust's investments for the years ended December 31 were as
follows:
2000 1999
Mutual Fund:
Templeton Foreign Fund $ (4,852) $ (91,276)
Fidelity Contra Fund 682,634 1,203,074
Putnam Vista Fund 5,872,371 1,820,135
Fidelity U.S. Equity Index Commingled
Pool Fund 14,531,169 8,701,850
Fidelity Low-Priced Stock Fund (36,658) (284,031)
Fidelity Growth and Income Portfolio 9,833,713 8,826,501
Putnam New Opportunities Fund 8,418,590 2,836,978
Fidelity Magellan Fund 7,867,764 4,081,607
Fidelity U.S. Equity Index Portfolio 514,590 70,592
Fidelity Fund 287,529 11,070
Total Mutual Fund 47,966,850 27,176,500
Ingersoll-Rand Company Common Stock
Fund 32,148,044 51,455,799
Putnam Managed Accounts (339,541) -
Net realized gain $79,775,353 $78,632,299
Net unrealized (loss) gain of the Combined Trust's investments
for the years ended December 31 were as follows:
2000 1999
Mutual Fund:
Templeton Foreign Fund $ (969,084) $ 2,655,711
Fidelity Contra Fund (6,984,090) 501,050
Putnam Vista Fund (18,363,850) 9,359,477
Fidelity U.S. Equity Index Commingled
Pool Fund (24,621,637) 15,390,946
Fidelity Low-Priced Stock Fund 370,608 68,270
Fidelity Growth and Income Portfolio (20,642,361) (5,396,938)
Putnam New Opportunities Fund (37,745,475) 22,236,201
Fidelity Magellan Fund (18,349,566) 6,015,960
Fidelity U.S. Equity Index Portfolio (531,063) 150,764
Fidelity Fund (302,753) 134,136
Total Mutual Fund (128,139,271) 51,115,577
Ingersoll-Rand Company Common Stock
Fund (111,886,135) 6,876,387
Net unrealized (loss) gain $(240,025,406) $57,991,964
The following investments represent 5 percent or more of the
Combined Trust's net assets at December 31.
2000 1999
Putnam Managed Accounts $125,128,764 $146,624,228
MetLife Stable Income Fund 73,988,601 77,203,061
PIMCO Stable Value Contract 91,844,955 96,404,638
Fidelity U.S. Equity Index
Commingled Pool Fund 97,089,713 135,905,290
Fidelity Growth and Income
Portfolio 83,029,238 117,689,091
Putnam New Opportunities Fund 57,971,107 76,149,767
Fidelity Magellan Fund 67,891,609 95,900,248
Ingersoll-Rand Company Common
Stock Fund * 290,712,663 358,460,748
* Nonparticipant-directed
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
revenue 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 Combined 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
The Ingersoll-Dresser Pump Company ("IDP") was sold in the
current year to Flowserve Corporation ("Flowserve"). Effective
October 31, 2000, the total account balances of participants who
were employed by IDP and became an employee of Flowserve were
transferred to the qualified defined contribution 401(k) plan
maintained by Flowserve at which time the Plan's assets were
removed form the Combined Trust. Effective December 31, 2000,
the total accounts of participants who were not transferred to
the qualified 401(k) defined contribution plan maintained by
Flowserve were merged into the Ingersoll-Rand Company Savings
and Stock Investment Plan.
Effective July 1, 2000, Putnam Investments ("Putnam") became
trustee and recordkeeper of the Ingersoll-Rand Company Savings
Plan for Bargaining Unit Employees at which time the Plan's
assets were removed from the Combined Trust and transferred to
Putnam.
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, 1998, 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, 2000, Ingersoll-Rand Company completed
the sale of the assets of the ALCO Building Products ("ALCO")
business unit of Steelcraft to LaForce, Inc. As a result of the
sale, effective December 29, 2000, a trust to trust transfer of
the assets held in the Ingersoll-Rand Company Savings and Stock
Investment Plan was approved for the benefit of participants who
were former employees of ALCO and who, on December 29, 2000
became employees of LaForce, Inc. The value of such assets is
to be determined and transferred to LaForce, Inc. as soon as
administratively practicable.
* * * *
SCHEDULE I
INGERSOLL-RAND COMPANY COMBINED INVESTMENT TRUST
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
YEAR ENDED DECEMBER 31, 2000
Identity of Issue Description of Investment Shares, Units, Current Value
Principal Amount
Guaranteed Investment Contracts:
Putnam Managed Account I 6.630%; no maturity - $ 125,128,764
MetLife Stable Income Fund Group Annuity Contract - 73,988,601
PIMCO Stable Value Contract Group Annuity Contract - 91,844,955
Mutual Funds:
Templeton Foreign Fund Open-end Mutual Fund 815,059 8,427,712
Fidelity Contra Fund Open-end Mutual Fund 613,765 30,178,848
Putnam Vista Fund Open-end Mutual Fund 3,668,518 47,764,103
Fidelity U.S. Equity Index
Commingled Pool Fund Open-end Mutual Fund 2,534,318 97,089,713
Fidelity Low-Priced Stock Fund Open-end Mutual Fund 634,922 14,679,402
Fidelity Growth and Income
Portfolio Open-end Mutual Fund 1,972,191 83,029,238
Putnam New Opportunities Fund Open-end Mutual Fund 988,931 57,971,107
Fidelity Magellan Fund Open-end Mutual Fund 569,083 67,891,609
Ingersoll-Rand Company Common
Stock Fund Class A 6,881,876 290,712,663
Chase Domestic Liquidity Fund Money Market Fund 19,236,393
Participant Loans Receivable Due 1/1/99 - 12/31/05; 6% - 10% 24,408,547
TOTAL INVESTMENTS $1,032,351,655
Note: The cost of the investment in the Ingersoll-Rand Company Common Stock fund at December
31, 2000 was $205,653,151.
INGERSOLL-RAND COMPANY COMBINED INVESTMENT TRUST SCHEDULE II
SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 2000
Current Value
Expense of Asset on
Identity of Description Purchase Selling Incurred with Cost of Transaction Net Gain
Party Involved of Asset Price Price Tramsaction Asset Date (Loss)
Series of Transactins:
Ingersoll-Rand Company Common Stock Class A $81,174,777 $ - $ 61,461 - $ 81,113,316 $ -
Ingersoll-Rand Company Common Stock Class A - 45,116,671 32,525 24,079,799 45,116,671 21,004,347
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration
Statement No. 333-42133 of Ingersoll-Rand Company on Form S-8 of
our report dated June 26, 2001, appearing in this Annual Report on
Form 11-K of Ingersoll-Rand Company Savings and Stock Investment
Plan for the year ended December 31, 2000.
/S/ Deloitte & Touche
DELOITTE & TOUCHE LLP
Parsippany, New Jersey
June 26, 2001