UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File No. 1-985
INGERSOLL-RAND COMPANY
(Exact name of registrant as specified in its charter)
New Jersey 13-5156640
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Woodcliff Lake, New Jersey 07675
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(201)573-0123
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
Series A Preference New York, London and
Stock Purchase Rights Amsterdam Stock Exchanges
Common Stock, $2 par value New York, London and
Amsterdam Stock Exchanges
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K [ ]
The aggregate market value of common stock held by nonaffiliates
on March 10, 1997 was $5,220,602,952 based on the closing price
of such stock on the New York Stock Exchange. This includes the
shares owned by the Registrant's Leveraged Employee Stock
Ownership Plan.
The number of shares of common stock outstanding as of March 10,
1997 was 109,786,546.
DOCUMENTS INCORPORATED BY REFERENCE
Annual Report to Shareowners for fiscal year ended December 31,
1996. With the exception of those portions which are
incorporated by reference into Parts I, II and IV of this Form
10-K Annual Report, the 1996 Annual Report to Shareowners is not
to be deemed filed as part of this report.
Proxy Statement for Annual Meeting of Shareholders to be held
on April 25, 1997. See Part III of this Form 10-K Annual Report
for portions incorporated by reference. (A definitive proxy
statement has been filed with the Commission since the close of
the fiscal year).
PART I
Item 1. BUSINESS
Ingersoll-Rand Company (the company) was organized in
1905 under the laws of the State of New Jersey as a consolidation
of Ingersoll-Sergeant Drill Company and the Rand Drill Company,
whose businesses were established in the early 1870's. Over the
years, the company has supplemented its original business, which
consisted primarily of the manufacture and sale of rock drilling
equipment, with additional products which have been developed
internally or obtained through acquisition.
The following acquisitions have been accounted for as
purchases and, accordingly, each purchase price was allocated to
the acquired assets and assumed liabilities based on their
estimated fair values. The results of operations since the dates
of acquisition are included in the consolidated financial
statements.
o On August 27, 1996, the company acquired for $34.3 million in
cash and the assumption of certain liabilities, substantially
all of the assets of Zimmerman International Corp.
(Zimmerman). Zimmerman manufactures equipment and systems
that assist in handling or lifting tools, components and
materials for a variety of industrial operations.
o On January 31, 1996, the company acquired for $95.4 million in
cash and the assumption of certain liabilities, the Steelcraft
Division of MascoTech, Inc. Steelcraft manufactures a wide
range of cold-rolled and galvanized steel doors for use
primarily in nonresidential construction.
o In May 1995, the company acquired Clark Equipment Company
(Clark) for approximately $1.5 billion in cash. Clark's
business is the design, manufacture and sale of skid-steer
loaders, compact excavators, agricultural equipment, asphalt
paving equipment, transmissions for off-highway equipment
(subsequently sold), golf cars and light utility vehicles.
Dispositions that the company has made in recent years
are as follows:
o On February 14, 1997, the company sold Clark-Hurth Components
Group to Dana Corporation. At December 31, 1996, the net
assets subject to sale totalled $265.7 million and have been
classified as current assets on the Consolidated Balance
Sheet. Clark-Hurth Components had been reported as part of
the Engineered Equipment Segment.
o In August 1996, the company agreed to sell the remaining
assets of the Process Systems Group to Gencor Industries,Inc.
The sale was completed during the fourth quarter of 1996 at a
price of approximately $58 million in cash for a pretax gain of
approximately $10 million. The Process Systems Group had been
reported as part of the Engineered Equipment Segment.
o On March 26, 1996, the company sold the assets of the Pulp
Machinery Division (the largest unit in the Process Systems
Group) for approximately $122.3 million to Beloit Corporation,
a subsidiary of Harnischfeger Industries, Inc., for a pretax
gain of $45 million. In addition, in March 1996, the company
sold an investment for a gain of $4.8 million.
o In May 1995, the company sold the domestic paving equipment
business to Champion Road Machinery Limited of Canada. The
sale was a preacquisition requirement, in order to satisfy
concerns of the United States Justice Department, prior to the
Clark acquisition. The company incurred a $7.1 million pretax
loss associated with this sale.
During March 1997, the company was notified by regulatory
authorities involved with the company's January 27, 1997,
offer to acquire Newman Tonks Group PLC (Newman Tonks), that
they would not challenge the proposed acquisition, valued at
approximately $376 million (230 million pounds sterling). The
company expects to complete its acquisition of Newman Tonks in
April 1997.
Products
The company manufactures and sells primarily
nonelectrical machinery and equipment. Principal products
include the following:
Agricultural sprayers Foundation drills
Air balancers Golf cars
Air compressors & accessories Hoists
Air dryers Industrial pumps
Air logic controls Lubrication equipment
Air motors Material handling equipment
Air tools Monitoring drills
Architectural hardware trim Needle roller bearings
Asphalt compactors Paving equipment
Automated-parts washing Pneumatic cylinders
systems Pneumatic valves
Automated production systems Portable compressors
Automotive components Portable generators
Ball bearings Portable light towers
Blasthole drills Road-building machinery
Compact hydraulic excavators Rock drills
Construction equipment Rock stabilizers
Diaphragm pumps Roller bearings
Door closers Rotary drills
Door hardware Rough-terrain forklifts
Door locks Skid-steer loaders
Engineered pumps Soil compactors
Engine-starting systems Spray-coating systems
Exit devices Utility vehicles
Extrusion pump systems Waterjet-cutting systems
Fastener-tightening systems Water well drills
Fluid-handling equipment Winches
These products are sold primarily under the company's
name and also under other names including ABG, Aro, Blaw-Knox,
Bobcat, Centac, Charles Maire, Club Car, Ecoair, Fafnir,
Ingersoll-Dresser Pumps, Jeumont-Schneider Pumps, Klemm, LCN,
McCartney, Melroe, Montabert, NREC, Pacific, Pleuger, Schlage,
Spra-Coupe, Steelcraft, Torrington, Von Duprin, Worthington and
Zimmerman.
During the past three years, the division of the
company's sales between capital goods and expendables has been in
the approximate ratio of 58 percent and 42 percent, respectively.
The company generally defines as expendables those products which
are not capitalized by the ultimate user. Examples of such
products are parts sold for replacement purposes, power tools and
needle bearings.
Additional information on the company's business and
financial information about industry segments is presented in
Note 15 to the Consolidated Financial Statements included in the
company's Annual Report to Shareowners for 1996, incorporated by
reference in this Form 10-K Annual Report.
Distribution
The company's products are distributed by a number of
methods which the company believes are appropriate to the type of
product. Sales are made domestically through branch sales
offices and through distributorships and dealers across the
United States. International sales are made through
approximately 60 subsidiary sales and service companies with a
supporting chain of distributors in over 100 countries.
Working Capital
The working capital requirements of the company vary with
respect to the many products and industries in which it is
involved. In general, the requirements of its Engineered
Equipment Segment, which manufactures machinery for specialized
customer needs, involve a relatively long lead time and, at
times, more significant company investment with respect to the
particular product or order. Historically, these orders are
generally covered by progress payments, which reduce the
company's investment in the amount of inventory maintained by
this segment. The products manufactured by the company's
Standard Machinery and Bearings, Locks and Tools segments are
more in the nature of standard equipment. Consequently, a wider
variety must usually be more readily available to meet rapid
delivery requirements. Such working capital requirements are
not, however, in the opinion of management, materially different
from those experienced by the company's major competitors.
Customers
No material part of the company's business is dependent
upon a single customer or very few customers, the loss of any one
of which would have a material adverse effect on the company's
operations.
Competitive Conditions
The company's products are sold in highly competitive
markets throughout the world against products produced by both
foreign and domestic corporations. The principal methods of
competition in these markets relate to price, quality and
service. The company believes that it is one of the leading
manufacturers in the world of a broad line of air compression
systems, anti-friction bearings, construction equipment, air
tools, pumps (through the IDP joint venture), golf cars and
utility vehicles. In addition, the company believes it is a
leading supplier in domestic markets for locks, other door
hardware products, skid-steer loaders and asphalt paving
equipment.
International Operations
Sales to customers outside the United States, including
domestic sales for export, accounted for approximately 41 percent
of the consolidated net sales in 1996. Information as to
operating income by geographic area is set forth in Note 15 to
the Consolidated Financial Statements included in the company's
Annual Report to Shareowners for 1996, incorporated by reference
in this Form 10-K Annual Report. Sales outside of the United
States are made in more than 100 countries; therefore, the
attendant risks of manufacturing or selling in a particular
country, such as nationalization and establishment of common
markets, would not have a significant effect on the company's
international operations.
Raw Materials
The company manufactures many of the components included
in its products. The principal raw materials required for the
manufacture of the company's products are purchased from numerous
suppliers, and the company believes that available sources of
supply will generally be sufficient for its needs for the
foreseeable future.
Backlog
The company's approximate backlog of orders at December
31, 1996, believed by it to be firm, was $335 million for the
Standard Machinery Segment, $369 million for the Engineered
Equipment Segment and $638 million for the Bearings, Locks and
Tools Segment as compared to $389 million, $636 million and $564
million, respectively, at December 31, 1995. These backlog
figures are based on orders received. While the major portion of
the company's products are built in advance of order and either
shipped or assembled from stock, orders for specialized machinery
or specific customer application are submitted with extensive
lead time and are often subject to revision, deferral,
cancellation or termination. The company estimates that
approximately 90 percent of the backlog will be shipped during
the next twelve months.
Research, Engineering and Development
The company maintains extensive research, engineering and
development facilities for experimenting, testing and developing
high quality products. The company employs approximately 2,000
professional employees for its research, engineering and
development activities. The company spent $209 million in 1996,
$190 million in 1995 and $155 million in 1994 on research,
engineering and development.
Patents and Licenses
The company owns numerous patents and patent applications
and is licensed under others. While it considers that in the
aggregate its patents and licenses are valuable, it does not
believe that its business is materially dependent on its patents
or licenses or any group of them. In the company's opinion,
engineering and production skills, and experience are more
responsible for its market position than patents or licenses.
Environmental Matters
The company has been and continues to be dedicated to an
environmental program to reduce the utilization and generation of
hazardous materials during the manufacturing process and to
remediate identified environmental concerns. As to the latter,
the company currently is engaged in site investigations and
remedial activities to address environmental cleanup from past
operations at current and former manufacturing facilities,
including the facilities added through the Clark acquisition.
During 1996, the company spent approximately $8 million
on capital projects for pollution abatement and control and an
additional $6 million for environmental remediation expenditures
at sites presently or formerly owned or leased by the company.
It should be noted that these amounts are difficult to estimate
because environmental improvement costs are generally a part of
the overall improvement costs at a particular plant, and the
accurate estimate of which portion of an improvement or a capital
expenditure relates to an environmental improvement is difficult
to ascertain. The company believes that these expenditure levels
will continue and may increase over time. Given the evolving
nature of environmental laws, regulations and technology, the
ultimate cost of future compliance is uncertain.
The company is a party to environmental lawsuits and
claims, and has received notices of potential violations of
environmental laws and regulations from the Environmental
Protection Agency and similar state authorities. It is
identified as a potentially responsible party (PRP) for cleanup
costs associated with off-site waste disposal at approximately 39
federal Superfund and state remediations sites (including Clark-
acquired PRP locations), excluding sites as to which the
company's records disclose no involvement or as to which the
company's liability has been fully determined. For all sites
there are other PRPs and in most instances, the company's site
involvement is minimal. In estimating its liability, the
company has not assumed it will bear the entire cost of
remediation of any site to the exclusion of other PRPs who may be
jointly and severally liable. The ability of other PRPs to
participate has been taken into account, based generally on the
parties' financial condition and probable contribution on a per
site basis. Additional lawsuits and claims involving
environmental matters are likely to arise from time to time in
the future.
Although uncertainties regarding environmental
technology, state and federal laws and regulations and individual
site information make estimating the liability difficult,
management believes that the total liability for the cost of
remediation and environmental lawsuits and claims will not have a
material effect on the financial condition, results of operations
liquidity or cash flows of the company for any year. It should
be noted that when the company estimates its liability for
environmental matters, such estimates are based on current
technologies and the company does not discount its liability or
assume any insurance recoveries.
Employees
There are approximately 40,100 employees of the company
throughout the world, of whom approximately 26,300 work in the
United States and 13,800 in foreign countries. Approximately 29
percent of the company's United States production and maintenance
employees, who work in 12 plants, are represented by 7 unions.
The company believes relations with its employees are good.
Item 2. PROPERTIES
The company's executive offices are located at Woodcliff
Lake, New Jersey. Manufacturing and assembly operations are
conducted in 49 plants in the United States; 5 plants in Canada;
25 plants in Europe; 7 plants in Asia; 6 plants in Latin America
and 1 plant in Africa. The company also maintains various
warehouses, offices and repair centers in the United States,
Canada and abroad.
Substantially all plant facilities are owned by the
company and the remainder are under long-term lease. The company
believes that its plants and equipment have been well-maintained
and are generally in good condition. The company has several
closed facilities that it is actively marketing with the intent
of selling them at their net realizable value.
The operating segments for which the facilities are
primarily used are as described below. Facilities that produce
products in several operating segments are classified by the
products which they primarily manufacture. Facilities under
long-term lease are included below and are not significant to
each operating segment's total number of plants or square
footage.
Standard Machinery
This segment's products include machinery regularly used
in general manufacturing and in industries such as mining and
construction. Products range from blasthole drills used in
mining and construction, small air compressors found worldwide in
auto service stations, skid-steer loaders and golf cars. The
segment is aligned into five operating groups: Air Compressor,
Construction and Mining, Melroe, Club Car and Mining Machinery
(which was sold in 1993). The segment's remaining manufacturing
locations are as follows:
Approximate
Number of Plants Square Footage
Domestic 11 3,321,000
International 11 2,003,000
Total 22 5,324,000
Engineered Equipment
This segment is organized into three operating groups: Pump,
Process Systems (which was sold in 1996) and Clark-Hurth (sold
February 1997). The remaining products manufactured by this
segment are predominantly pumps for diversified industrial use
and specialty pumps for process, power generation and marine
applications. The segment's remaining manufacturing facilities
are as follows:
Approximate
Number of Plants Square Footage
Domestic 7 1,682,000
International 15 1,883,000
Total 22 3,565,000
Bearings, Locks and Tools
This segment primarily serves the automotive, capital
goods, energy and construction industries. Products in this
segment include bearings for specialized and industrial
application, locks and architectural hardware for residential and
commercial buildings, air tools for industrial use, air winches,
hoists and engine starting systems, and automated production
systems for transportation equipment manufacturers. There are
three operating groups in this segment: Bearings and Components
Group, Production Equipment Group and Architectural Hardware
Group (formerly known as Door Hardware Group). The segment's
manufacturing facilities are as follows:
Approximate
Number of Plants Square Footage
Domestic 31 6,743,000
International 18 2,437,000
Total 49 9,180,000
Item 3. LEGAL PROCEEDINGS
In the normal course of business, the company is involved
in a variety of lawsuits, claims and legal proceedings, including
proceedings for off-site waste disposal cleanup of approximately
39 sites under federal Superfund and similar state laws. In the
opinion of the company, pending legal matters are not expected to
have a material adverse affect on the results of operations,
financial condition, liquidity or cash flows.
See also the discussion under Item 1 - Environmental
Matters.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of the company's
security holders during the last quarter of its fiscal year ended
December 31, 1996.
The following information is included in accordance with the
provision of Part III, Item 10.
Date of
Service as Principal Occupation and
an Executive Other Information
Name and Age Officer for Past Five Years
James E. Perrella(61) 5/4/77 Chairman of the Board,
President and Chief
Executive Officer,
Director (President and
Director, 1992 - 1993)
J. Frank Travis(61) 2/7/90 Vice Chairman of the Board,
(Executive Vice President
1993-1996; Executive
Vice President and
President of the
Production Equipment
Group, 1994 - 1995; Vice
President and President
of the Bearings and
Components Group, 1992 -
1993)
Frank B. O'Brien (50) 3/10/97 Senior Vice President and
Chief Financial Officer,
(Nacco Industries, Inc.;
Senior Vice President -
Corporate Development and
Chief Financial Officer,
1994 - 1997; Senior Vice
President - Corporate
Development, 1993 - 1994;
Vice President - Corporate
Development 1987 - 1993)
William J. Armstrong(55) 8/3/83 Vice President and Treasurer
Paul L. Bergren(47) 12/2/92 Vice President, President
of the Air Compressor
Group, (President of
Ingersoll-Rand Europe,
1994 - 1997; Vice
President and General
Manager - Centrifugal Compressor
Division, 1989 - 1992)
Gerard V. Geraghty (46) 5/2/96 Vice President and
Comptroller (Controller -
Operations, 1993 - 1996;
Assistant Controller
1988 - 1993)
Frederick W. Hadfield(60) 8/1/79 Vice President and President
of Ingersoll Dresser Pump
Company (Vice President,
1979 - 1994)
Brian D. Jellison(51) 2/7/96 Vice President and President
of the Architectural
Hardware Group (President
of the Door Hardware
Group, 1994 - 1995;
President, Von Duprin,
1988 - 1994)
Daniel E. Kletter(58) 2/7/90 Vice President (Vice
President and President of
the Construction and
Mining Group, 1989 - 1994)
Steven T. Martin (55) 5/2/96 Vice President and President
of Production Equipment
Group (President of
Production Equipment Group
1995 - 1996; Vice
President and General
Manager Fafnir Bearings
Division of Torrington,
1986 - 1995)
Patricia Nachtigal(50) 11/2/88 Vice President and General
Counsel
Allen M. Nixon(56) 2/1/95 Vice President and President
of Bearing and Components
Group (Vice President and
General Manager Torrington
Needle Bearings Division,
1983 - 1994)
James R. O'Dell(58) 12/3/88 Vice President
Nicholas J. Pishotti(56) 4/10/95 Vice President - Strategic
Sourcing (General Manager,
Aircraft Engine Sourcing
Department, General
Electric Company, 1988 -
1995)
Donald H. Rice(52) 2/1/95 Vice President (Executive
Director - Human Resources
1994; Vice President,
Human Resources - Bearings
and Components Group, 1988
- 1993)
Gerald E. Swimmer(52) 5/1/82 Vice President
R. Barry Uber(51) 2/7/90 Vice President and President
of the Construction and
Mining Group (Vice
President and President of
the Production Equipment
Group, 1990 - 1994)
Ronald G. Heller(50) 2/6/91 Secretary and Assistant
General Counsel
No family relationship exists between any of the above-listed
executive officers of the company. All officers are elected to
hold office for one year or until their successors are elected
and qualify.
PART II
Item 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
Information regarding the principal market for the
company's common stock and related stockholder matters are as
follows:
Quarterly share prices and dividends for the common stock are
shown in the following tabulation. The common shares are listed
on the New York Stock Exchange and also on the London and
Amsterdam exchanges.
Common Stock
High Low Dividend
1996
First quarter $42 7/8 $35 1/8 $.185
Second quarter 44 3/8 37 1/4 .185
Third quarter 47 1/2 37 7/8 .205
Fourth quarter 47 5/8 40 5/8 .205
1995
First quarter $34 $28 3/8 $.185
Second quarter 39 3/8 32 5/8 .185
Third quarter 42 3/8 35 5/8 .185
Fourth quarter 38 5/8 33 5/8 .185
The Bank of New York (Church Street Station, P.O. Box
11258, New York, NY 10286-1258, (800)524-4458) is the transfer
agent, registrar and dividend reinvestment agent.
There are no significant restrictions on the payment of
dividends. The approximate number of record holders of common
stock as of March 10, 1997 was 13,000.
Item 6. SELECTED FINANCIAL DATA
Selected financial data for the five years ended December 31,
1996, is as follows (in millions except per share amounts):
December 31 1996 1995 1994 1993 1992
Net sales $6,702.9 $5,729.0 $4,507.5 $4,021.1 $3,783.8
Net earnings (loss) 358.0 270.3 211.1 142.5 (234.4)
Total assets 5,621.6 5,563.3 3,596.9 3,375.3 3,387.6
Long-term debt 1,163.8 1,304.4 315.9 314.1 355.6
Shareowners' equity 2,090.8 1,795.5 1,531.3 1,349.8 1,293.4
Earnings (loss) per
common share $3.33 $2.55 $2.00 $1.36 $(2.25)
Dividends per
common share 0.78 0.74 0.72 0.70 0.69
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Management's discussion and analysis of financial
condition and results of operations is included as Financial
Review and Management Analysis in Exhibit 13 - the Annual Report
to Shareowners for 1996 and is incorporated by reference in this
Form 10-K Annual Report.
Safe Harbor Statement
Information provided by the company in this 1996 Annual
Report on Form 10-K, in other such reports, in press releases and
in statements made by employees in oral discussions may
constitute or contain "forward-looking statements" as that term
is defined in the Private Securities Litigation Reform Act of
1995 or by the Securities and Exchange Commission in its rules,
regulations and releases. Forward-looking statements by their
nature involve risk and uncertainty.
The company cautions investors that forward-looking
statements are not guarantees of future performance. A variety
of factors could cause business conditions and actual results to
differ materially from expected results contained in forward-
looking statements. The company includes among those factors the
following: changes in the rate of economic growth in the United
States and in other major international economies, such as
Germany; impacts of unusual items resulting from ongoing
evaluations of organizational structures, business strategies and
acquisitions and dispositions; significant changes in trade,
monetary and fiscal policies worldwide; currency fluctuations
among the U.S. dollar and other currencies; demand for company
products; distributor inventory levels; performance issues with
key suppliers and subcontractors; failure to achieve the
company's productivity targets; costs and effects of
unanticipated legal and administrative proceedings; and,
competitor actions, such as unanticipated pricing actions or
product and cost reduction strategies.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following financial statements and supplementary
financial information included in the accompanying Annual Report
to Shareowners for 1996 are incorporated by reference in this
Form 10-K Annual Report:
(a) The consolidated financial statements and the report
thereon of Price Waterhouse LLP dated February 4, 1997, are
included as Exhibit 13 - the Annual Report to Shareowners
(excluding the Financial Review and Management Analysis) for
1996.
(b) The unaudited quarterly financial data for the
two-year period ended December 31, 1996, is as follows (in
millions except per share amounts):
Earnings
per
Net Cost of Operating Net common
1996 sales goods sold income earnings share
First quarter $1,604.9 $1,208.8 $150.6 $ 74.5 $0.70
Second quarter 1,761.9 1,338.0 176.3 92.3 0.86
Third quarter 1,595.8 1,206.7 148.7 81.9 0.76
Fourth quarter 1,740.3 1,276.4 207.9 109.3 1.01
Year 1996 $6,702.9 $5,029.9 $683.5 $358.0 $3.33
1995
First quarter $1,185.6 $ 893.1 $ 89.2 $ 46.3 $0.44
Second quarter 1,392.1 1,051.0 118.7 66.6 0.63
Third quarter 1,521.3 1,163.2 119.1 61.8 0.58
Fourth quarter 1,630.0 1,202.9 170.0 95.6 0.90
Year 1995 $5,729.0 $4,310.2 $497.0 $270.3 $2.55
o The reductions in LIFO inventory quantities increased net
earnings per share by $0.01 and $0.02 in the second and
fourth quarters of 1996, respectively, and $0.02 in the
fourth quarter of 1995.
o The first quarter of 1995 does not include the results of
Clark Equipment Company (see Note 2 to the Consolidated
Financial Statements included in the company's Annual Report
to Shareowners for 1996, incorporated by reference in this
Form 10-K Annual Report).
Item 9. CHANGES IN AND DISAGREEMENTS WITH INDEPENDENT
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by Item 10 is (i) incorporated
by reference in this Form 10-K Annual Report from pages 1 through
5, 17 and 18 of the company's definitive proxy statement for the Annual
Meeting of Shareholders to be held on April 25, 1997, and (ii)
included after Item 4 in Part I of this Form 10-K Annual Report.
Item 11. EXECUTIVE COMPENSATION
Information on executive compensation is incorporated by
reference in this Form 10-K Annual Report from pages 7 through 17
of the company's definitive proxy statement for the Annual
Meeting of Shareholders to be held on April 25, 1997.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
Information on security ownership of directors and
nominees, directors and officers as a group and certain
beneficial owners is incorporated by reference in this Form 10-K
Annual Report on pages 4 and 5 of the company's definitive proxy
statement for the Annual Meeting of Shareholders to be held on
April 25, 1997.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information required by Item 13 is incorporated by
reference in this Form 10-K Annual Report from page 17 of the
company's definitive proxy statement for the Annual Meeting of
Shareholders to be held on April 25, 1997.
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K
(a) 1. and 2. Financial statements and financial statement
schedules
The financial statements, together with the
report thereon of Price Waterhouse LLP dated
February 4, 1997, included as Exhibit 13
(excluding Financial Review and Management
Analysis) and the unaudited quarterly financial
data included in Part II Item 8(b) are
incorporated by reference in this Form 10-K
Annual Report. The financial statement schedule
listed in the accompanying index should be read
in conjunction with the financial statements in
such Annual Report to Shareowners for 1996.
Separate financial statements for all 50
percent or less owned companies, accounted for
by the equity method have been omitted because
no individual entity constitutes a significant
subsidiary.
3. Exhibits
The exhibits listed on the accompanying
index to exhibits are filed as part of this Form
10-K Annual Report.
(b) Reports on Form 8-K
None.
INGERSOLL-RAND COMPANY
INDEX TO FINANCIAL STATEMENTS
AND FINANCIAL STATEMENT SCHEDULES
(Item 14 (a) 1 and 2)
Form
10-K
Consolidated Financial Statements:
Report of independent accountants *
Consolidated balance sheet at
December 31, 1996 and 1995 *
For the years ended December 31, 1996, 1995
and 1994:
Consolidated statement of income *
Consolidated statement of shareowners'
equity *
Consolidated statement of cash flows *
Notes to consolidated financial statements *
Selected unaudited quarterly financial data **
Financial Statement Schedule:
Report of independent accountants on
financial statement schedule See below
Consolidated schedule for the years ended
December 31, 1996, 1995 and 1994:
Schedule II -- Valuation and Qualifying
Accounts See below
* See Exhibit 13 - Ingersoll-Rand Company Annual Report to
Shareowners for 1996.
** See Item 8 - Financial Statements and Supplementary Data.
Financial statement schedules not included in this Form 10-K
Annual Report have been omitted because they are not applicable
or the required information is shown in the financial statements
or notes thereto.
Financial statements of the company's 50 percent or less owned
companies, are omitted because individually they do not meet the
significant subsidiary test of Rule 3-09 of Regulation S-X.
REPORT OF INDEPENDENT ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULE
To the Board of Directors of Ingersoll-Rand Company:
Our audits of the consolidated financial statements referred to
in our report dated February 4, 1997, which is included as part
of Exhibit 13 - the Annual Report to Shareowners for 1996 of
Ingersoll-Rand Company, (which report and consolidated financial
statements are incorporated by reference in this Annual Report on
Form 10-K), also included an audit of the Financial Statement
Schedule listed in Item 14(a) of this Form 10-K. In our opinion,
this Financial Statement Schedule presents fairly, in all
material respects, the information set forth therein when read in
conjunction with the related consolidated financial statements.
/S/ Price Waterhouse LLP
PRICE WATERHOUSE LLP
Morristown, New Jersey
February 4, 1997
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the
Prospectus constituting part of the Registration Statement on
Form S-3 (No. 33-60249) and to the incorporation by reference in
the Registration Statements on Form S-8 (No. 333-19445, No. 333-
00829, No. 33-35229, No. 2-98258 and Post-Effective Amendment No.
4 to No. 2-64708) of Ingersoll-Rand Company of our report dated
February 4, 1997, which is included as part of Exhibit 13 - the
Annual Report to Shareowners for 1996, which is incorporated in
this Annual Report on Form 10-K. We also consent to the
incorporation by reference of our report on the Financial
Statement Schedule, which appears on this page.
/S/ Price Waterhouse LLP
PRICE WATERHOUSE LLP
Morristown, New Jersey
March 26, 1997
SCHEDULE II
INGERSOLL-RAND COMPANY
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 and 1994
(Amounts in millions)
Additions
charged to
Balance at costs and Balance
beginning expenses Deductions at end
Description of year (*) (**) of year
1996
Doubtful accounts $38.3 $ 8.6 $12.6 $34.3
1995
Doubtful accounts $25.9 $17.8 $ 5.4 $38.3
1994
Doubtful accounts $22.1 $12.6 $ 8.8 $25.9
(*) "Additions" include foreign currency translation.
(**) "Deductions" include accounts and advances written off,
less recoveries.
INGERSOLL-RAND COMPANY
INDEX TO EXHIBITS
(Item 14(a))
Description
2 Agreement and Plan of Merger, dated as of April 9,
1995 by and among Ingersoll-Rand Company, CEC
Acquisition Corp. and Clark Equipment Company
(Incorporated by reference from Amendment No. 2 to
Schedule 14D-1 with respect to the tender offer by
CEC Acquisition Corp., a wholly-owned subsidiary
of Ingersoll-Rand Company, for shares of Clark
Equipment Company.)
3 (i) Amendment to Restated Certificate of Incorporation
of Ingersoll-Rand Company filed May 28, 1992.
Incorporated by reference to Form 10-K of Ingersoll-Rand
Company for Fiscal Year Ended December 31, 1993. (See
pages 30-32 of the 1993 Form 10-K).
3 (ii) Restated Certificate of Incorporation of
Ingersoll-Rand Company as amended through May 28, 1992.
Incorporated by reference to Form 10-K of Ingersoll-Rand
Company for Fiscal Year Ended December 31, 1993. (See
pages 33-60 of the 1993 Form 10-K).
3 (iii) By-Laws of Ingersoll-Rand Company, as amended
through September 4, 1996. (Filed herewith).
4 (i) Rights Agreement, dated as of December 7, 1988, as
amended by Amendment No. 1 thereto dated as of December 7,
1994. Incorporated by reference from Form 8-A of Ingersoll-
Rand Company filed on December 12, 1988, and Form 8-A/A
of Ingersoll-Rand Company filed December 15, 1994.
4 (ii) Indenture, dated as of August 1, 1996 between
Ingersoll-Rand Company and the Bank of New York, as
Trustee, as supplemented. (Incorporated by reference to
Exhibits 4.1, 4.2 and 4.3 of the company's Form S-3
Registration Statement No. 33-39474).
4 (iii) Ingersoll-Rand Company is a party to several
long-term debt instruments under which in each case the
total amount of securities authorized does not exceed
10% of the total assets of Ingersoll-Rand Company and
its subsidiaries on a consolidated basis. Pursuant to
paragraph 4(iii)(A) of Item 601(b) of Regulation S-K,
Ingersoll-Rand Company agrees to furnish a copy of such
instruments to the Securities and Exchange Commission
upon request.
10 (iii) The following exhibits constitute management
contracts or compensatory plans or arrangements required
by Item 601 of Regulation S-K.
10 (iii) (a) Management Incentive Unit Plan of Ingersoll-
Rand Company. Amendment to the Management Incentive Unit
Plan, effective January 1, 1982. Amendment to the
Management Incentive Unit Plan, effective January 1, 1987.
Amendment to the Management Incentive Unit Plan, effective
June 3, 1987. Incorporated by reference to Form 10-K of
Ingersoll-Rand Company for Fiscal Year Ended December 31,
1993. (See pages 78-92 of the 1993 Form 10-K).
10 (iii) (b) Ingersoll-Rand Company Directors Deferred
Compensation and Stock Award Plan. (Filed herewith).
10 (iii) (c) Forms of Contingent Compensation Agreements
with Vice Presidents and/or Group Presidents of
Ingersoll-Rand Company. (Filed herewith).
10 (iii) (d) Description of Bonus Arrangements for
Chairman, President and Staff Officers. Incorporated by
reference to Form 10-K of Ingersoll-Rand Company for
Fiscal Year Ended December 31, 1993. (See page 100
of the 1993 Form 10-K).
10 (iii) (e) Form of Change of Control Agreement with
Chairman and Chief Executive Officer of Ingersoll-Rand
Company. Incorporated by reference to Form 10-K of
Ingersoll-Rand Company for Fiscal Year Ended
December 31, 1995. (See pages 48-64 of the 1995
Form 10-K).
10 (iii) (f) Form of Change of Control Agreement
with selected executive officers other than
Chairman of Ingersoll-Rand Company. Incorporated by
reference to Form 10-K of Ingersoll-Rand Company for
Fiscal Year Ended December 31, 1995. (See pages
65-84 of the 1995 Form 10-K).
10 (iii) (g) (1) Executive Supplementary Retirement
Agreement for selected executive officers.
Incorporated by reference to Form 10-K of
Ingersoll-Rand Company for Fiscal Year Ended
December 31, 1993. (See pages 127-132 of the
1993 Form 10-K).
10 (iii) (g) (2) Executive Supplementary Retirement
Agreement for selected executive officers. (Filed
herewith).
10 (iii) (h) Incentive Stock Plan of 1985 of Ingersoll-
Rand Company. Incorporated by reference to Form 10-K of
Ingersoll-Rand Company for Fiscal Year Ended December
31, 1993. (See pages 133-151 of the 1993 Form 10-K).
10 (iii) (i) Forms of insurance and related letter
agreements with certain executive officers.
Incorporated by reference to Form 10-K of Ingersoll-Rand
Company for Fiscal Year Ended December 31, 1993. (See
pages 152-160 of the 1993 Form 10-K).
10 (iii) (j) Incentive Stock Plan of 1990 of Ingersoll-
Rand Company. Incorporated by reference to Form 10-K of
Ingersoll-Rand Company for Fiscal Year Ended December
31, 1993. (See pages 161-182 of the 1993 Form 10-K).
10 (iii) (k) Restated Supplemental Pension Plan.
Incorporated by reference to Form 10-K of Ingersoll-Rand
Company for Fiscal Year Ended December 31, 1995.
(See pages 85-91 of the 1995 Form 10-K).
10 (iii) (l) Supplemental Stock and Savings Investment
Plan effective as of January 1, 1989. Incorporated by
reference to Form 10-K of Ingersoll-Rand Company for
Fiscal Year Ended December 31, 1993. (See pages 189-198
of the 1993 Form 10-K).
10 (iii) (m) Supplemental Retirement Account Plan
effective as of January 1, 1989. Incorporated by
reference to Form 10-K of Ingersoll-Rand Company for
Fiscal Year Ended December 31, 1993. (See pages
199-206 of the 1993 Form 10-K).
10 (iii) (n) Incentive Stock Plan of 1995 of Ingersoll-
Rand Company. Incorporated by reference to the Notice
of 1995 Annual Meeting of Shareholders and Proxy
Statement dated March 15, 1995. (See Appendix A of the
Proxy Statement dated March 15, 1995).
10 (iii) (o) Senior Executive Performance Plan.
Incorporated by reference to the Notice of 1995
Annual Meeting of Shareholders and Proxy Statement
dated March 15, 1995. (See Appendix B of the Proxy
Statement dated March 15, 1995).
10 (iii) (p) Elected Officers Supplemental Plan.
Incorporated by reference to Form 10-K of
Ingersoll-Rand Company for Fiscal Year Ended
December 31, 1995. (See pages 92-108 of the 1995
Form 10-K).
10 (iii) (q) Selected Executive Officer Employment
Agreement. Incorporated by reference to Form 10-K of
Ingersoll-Rand Company for Fiscal Year Ended
December 31, 1995. (See pages 109-111 of the 1995
Form 10-K).
10 (iii) (r) Executive Deferred Compensation and Stock
Award Plan. (Filed herewith).
10 (iii) (s) Senior Vice President and Chief Financial
Officer Employment Agreement. (Filed herewith).
11 (i) Computation of Primary Earnings Per Share.
(Filed herewith).
11 (ii) Computation of Fully Diluted Earnings Per Share.
(Filed herewith).
12 Computations of Ratios of Earnings to Fixed Charges.
(Filed herewith).
13 Ingersoll-Rand Company Annual Report to
Shareowners for 1996. (Not deemed to be filed as
part of this report except to the extent incorporated
by reference).(Filed herewith).
18 Letter dated August 11, 1995 from Price Waterhouse
LLP regarding change in accounting method. Incorporated
by reference to Form 10-Q of Ingersoll-Rand Company for
the quarterly period ended June 30, 1995 reported under
Item 6, Exhibits.
21 List of Subsidiaries of Ingersoll-Rand Company.
(Filed herewith).
27 Financial Data Schedule.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly
authorized.
INGERSOLL-RAND COMPANY
(Registrant)
By /S/ Frank B. O'Brien
Date March 26, 1997
Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on
the dates indicated.
Signature Title Date
Chairman, President,
Chief Executive Officer
and Director (Principal
/S/ James E. Perrella Executive Officer) March 26, 1997
(James E. Perrella)
Senior Vice President
Chief Financial Officer
(Principal Financial
/S/ Frank B. O'Brien Officer) March 26, 1997
(Frank B. O'Brien)
Vice President and
Comptroller
(Principal Accounting
/S/ Gerard V. Geraghty Officer) March 26, 1997
(Gerard V. Geraghty)
/S/ Theodore H. Black Director March 26, 1997
(Theodore H. Black)
/S/ Joseph P. Flannery Director March 26, 1997
(Joseph P. Flannery)
/S/ Constance J. Horner Director March 26, 1997
(Constance J. Horner)
/S/ H. William Lichtenberger Director March 26, 1997
(H. William Lichtenberger)
/S/ Theodore E. Martin Director March 26, 1997
(Theodore E. Martin)
/S/ Cedric E. Ritchie Director March 26, 1997
(Cedric E. Ritchie)
/S/ Orin R. Smith Director March 26, 1997
(Orin R. Smith)
/S/ Richard J. Swift Director March 26, 1997
(Richard J. Swift)
/S/ Frank Travis Director March 26, 1997
(J. Frank Travis)
/S/ Tony L. White Director March 26, 1997
(Tony L. White)