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.
On December 31, 1986, the company and Dresser Industries, Inc. (Dresser) formed Dresser-Rand Company (Dresser-Rand), a partnership comprising the worldwide reciprocating compressor and turbomachinery businesses of the two companies. Dresser-Rand, originally a 50/50 partnership, commenced operations on January 1, 1987. Effective October 1, 1992, Dresser increased its ownership interest in the partnership to 51 percent from 50 percent. The company's ownership interest is now 49 percent. Dresser-Rand manufactures products such as gas turbines, gas compressors, power recovery systems, reciprocating gas engines and steam turbines, which were previously manufactured by the company.
Effective October 1, 1992, the company and Dresser formed Ingersoll-Dresser Pump Company (IDP), a partnership which is owned 51 percent by the company and 49 percent by Dresser. This joint venture includes the majority of the worldwide pump operations of the two companies, and its results have been included in the consolidated financial statements of the company since the formation date.
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 Effective February 1, 1990, the company completed the acquisition of The Aro Corporation (Aro) and its subsidiaries for $131.5 million in cash, from Todd Shipyards Corporation. Aro is a manufacturer of air-powered tools, valves, pumps and related equipment.
o On October 31, 1990, the company acquired ABG Verwaltungs GmbH and related entities (ABG) for $35.4 million in cash. ABG is a manufacturer of paving equipment and other road machinery. During 1990, the company also acquired several smaller operations for approximately $27.7 million in cash.
o In early 1992, the company acquired Industrias del Rodamiento, S.A. (IRSA) for $14.0 million in cash and $1.8 million in notes. IRSA manufactures and markets an extensive line of bearings, as well as wheel kits and automotive accessories.
o In August 1993, the company acquired the Kunsebeck, Germany, needle and cylindrical bearing business of FAG Kugelfischer Georg Schafer AG of Schweinfurt, Germany, for $42.5 million in cash, subject to final contract negotiations.
Dispositions that the company has made in recent years are as follows:
o The company sold on January 18, 1991, Schlage Electronics, a business unit of the company's Schlage Lock Company. The sales price was in excess of the carrying value of the investment in Schlage Electronics.
o The company sold the assets of several small business units in 1993, as well as substantially all of the assets of its coal- mining machinery and aerospace bearings businesses for $55.5 million in cash.
Products The company manufactures and sells primarily nonelectrical machinery and equipment. Principal products include the following:
Abrasive blasting and recovery Industrial pumps systems Lubrication equipment Air compressors Material handling equipment Air dryers Mining machinery Air logic controls Monitoring drills Air motors Needle roller bearings Air tools Pavement-milling machines Architectural hardware trim Paving equipment Asphalt compactors Pellet mills Automated-parts finishing Pneumatic cylinders systems Pneumatic valves Automated production systems Portable compressors Automotive components Portable generators Ball bearings Portable light towers Construction equipment Pulp-processing machinery Dewatering presses Road-building machinery Diaphragm pumps Rock drills Door closers Roller bearings Door hardware Roller mills Door locks Rotary drills Emergency exit devices Rough-terrain forklifts Engineered pumps Separation equipment Engine-starting systems Soil compactors Extrusion systems Spray-coating systems Fluid-handling equipment Waterjet-cutting systems Food-processing equipment Water well drills Foundation drills Winches Hoists
These products are sold primarily under the company's name and also under other names including Torrington, Fafnir, Klemm, Schlage, CPM, LCN Closers, Von Duprin, Aro, ABG, Ingersoll-Dresser Pumps, Pacific, Worthington, Jeumont-Schneider Pumps and Pleuger.
During the past three years, the division of the company's sales between capital goods and expendables has been in the approximate ratio of 56 percent and 44 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.
The seasonal business of the company is insignificant.
Additional information on the company's business and financial information about industry segments is presented in Footnote 16 of the Annual Report to Shareowners for 1993, 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 and pumps (through the IDP joint venture). In addition, it believes it is also an important factor in domestic markets for locks and other door hardware products.
International Operations Sales to customers outside the United States, including domestic sales for export, accounted for approximately 40 percent of the consolidated net sales in 1993. Information as to operating income by geographic area is set forth in Footnote 16 of the Annual Report to Shareowners for 1993, 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, 1993, believed by it to be firm, was $134 million for the Standard Machinery Segment, $393 million for the Engineered Equipment Segment and $395 million for the Bearings, Locks and Tools Segment as compared to $131 million, $428 million and $373 million, respectively, at December 31, 1992. 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 1,500 professional employees for its research, engineering and development activities. The company spent $150 million in 1993, $138 million in 1992 and $124 million in 1991 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's facilities are subject to environmental regulation by federal, state and local authorities. It is the company's policy to comply with all environmental regulatory requirements and the company is in substantial compliance with those laws and regulations. While there is some degree of uncertainty associated with the compliance costs resulting from new regulatory initiatives such as the 1990 Amendments to the Clean Air Act, which have not as yet been fully implemented, the ongoing cost of compliance has not had, nor is it expected to have, a material adverse effect upon the company's capital expenditures or financial position.
Federal Superfund and similar state laws impose joint and several responsibility for cleaning up designated hazardous sites not only on the owner and operator but also on any person who contributed hazardous waste to the site. As of December 31, 1993, the company has been identified as a potentially responsible party ("PRP") in connection with 29 federal and state superfund sites. At all these sites there are other PRPs and to date there is no indication the company will be liable for more than its pro rata share of remediation costs at any site. While some of these sites are still under investigation, in the aggregate, the company's anticipated pro rata share of responsibility at these sites is not deemed to be material. Additional lawsuits and claims involving environmental matters are likely to arise from time to time. In addition, the company continues to investigate and remediate environmental contamination from past operations at its facilities.
Based upon the company's experience to date with environmental claims and litigation and with site investigation and remediation, its expenditures for environmental purposes have not been and are not expected to be material or to have a material adverse effect on the company's capital expenditures, earnings or competitive position. (See also Financial Review and Management Analysis in the Annual Report to Shareowners for 1993 included as Exhibit 13 to this report.)
Employees There are approximately 35,100 employees of the company throughout the world, of whom approximately 22,800 work in the United States and 12,300 in foreign countries. Approximately 18 percent of the company's production and maintenance employees, who work in 9 plants in the United States, are represented by 7 unions. The company believes relations with its employees are satisfactory.
Item 2.
Item 2. PROPERTIES The company's executive offices are located at Woodcliff Lake, New Jersey. Manufacturing and assembly operations are conducted in 48 plants in the United States; 6 plants in Canada; 26 plants in Europe; 5 plants in the Far East; 5 plants in Latin America; 2 plants in Asia 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 plant 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 to small air compressors found worldwide in auto service stations. The segment is aligned into two operating groups: Air Compressor Group and Construction and Mining Group. The segment's manufacturing locations are as follows: Approximate Number of Plants Square Footage
Domestic 7 1,884,000 International 11 1,889,000
Total 18 3,773,000
Engineered Equipment The products manufactured by this segment are predominantly designed for specific customer applications. The segment's diverse product line includes pumps, liquid/solid separation and densification machinery. The segment is organized into two operating groups: Pump Group and Process Systems Group. The segment's manufacturing facilities are as follows: Approximate Number of Plants Square Footage
Domestic 12 2,473,000 International 19 2,457,000
Total 31 4,930,000
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 door 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 Door Hardware Group. The segment's manufacturing facilities are as follows: Approximate Number of Plants Square Footage
Domestic 29 6,358,000 International 15 1,607,000
Total 44 7,965,000
Item 3.
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 the cleanup of 29 waste sites under Superfund and similar state laws. In the opinion of the company pending legal matters, including those discussed below, are not expected to have a material adverse effect on its operations or financial condition.
By letter received on May 8, 1991, the Connecticut Department of Environmental Protection ("CTDEP") assessed a civil penalty in the amount of $207,500 on The Torrington Company, a wholly-owned subsidiary of the company ("Torrington"), for alleged effluent violations of a state wastewater discharge permit issued to Torrington's Newington facility. This penalty amount was calculated by CTDEP based on a stipulated judgment dated September 29, 1988, which provides for civil penalties to be assessed against Torrington for effluent violations of its discharge permit. This Stipulated Judgment was entered in an action entitled Stanley J. Pac, Commissioner of Environmental Protection v. Fafnir Bearing Division, The Torrington Company, in the Superior Court for the Judicial District of Hartford/New Britain at Hartford. Pursuant to a settlement agreement with CTDEP in February 1994, the penalty assessment was reduced to $130,475 and was paid by Torrington.
By letter dated June 18, 1992, Torrington was notified by the Office of the Attorney General of the state of Connecticut of a $675,000 penalty assessed against several of its plants located in Connecticut for alleged violations of state wastewater discharge regulations. On February 28, 1994, a Stipulated Judgment was entered in an action entitled Timothy R. E. Keeney, Commissioner of Environmental Protection v. The Torrington Company, in the Superior Court for the Judicial District of Hartford/New Britain at Hartford, pursuant to which the penalty assessment was reduced to $271,525 and paid by Torrington. Torrington is required under the Stipulated Judgment to perform certain investigative and testing activities to identify potential sources of contaminants at the involved plants. The Stipulated Judgment also includes stipulated penalties for any future violations of effluent limitations contained in discharge permits held by the involved plants.
Item 4.
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, 1993.
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(58) 5/4/77 Chairman of the Board, President and Chief Executive Officer, Director (President and Director, September 1992 - October 1993; Executive Vice President, 1982 - 1992) Thomas E. Bennett(64) 8/7/74 Executive Vice President (Executive Vice President and President of IDP, October 1992 - March 1994; Executive Vice President and President of the Bearings and Components Group, 1989 - October 1992; Vice President and President of the Bearings and Components Group, 1981 - 1989) William G. Mulligan(63) 5/2/73 Executive Vice President J. Frank Travis(58) 2/7/90 Executive Vice President (Vice President and President of the Bearings and Components Group, February 1992 - December 1993; President of the Air Compressor Group, 1989 - February 1992) Thomas F. McBride(58) 9/5/79 Senior Vice President and Chief Financial Officer (Senior Vice President and Comptroller, February 1992 - May 1993; Vice President and Comptroller, 1981 - 1992) William J. Armstrong(52) 8/3/83 Vice President and Treasurer Paul L. Bergren(44) 12/2/92 Vice President and President of the Air Compressor Group (Vice President and General Manager - Centrifugal Compressor Division, 1989 - 1992) Frederick W. Hadfield(57) 8/1/79 Vice President and President of IDP (Vice President, 1979 - March 1994)
Date of Service as Principal Occupation and an Executive Other Information Name and Age Officer for Past Five Years Daniel E. Kletter(55) 2/7/90 Vice President and President of the Construction and Mining Group (Vice President and General Manager - Portable Compressor Division, 1981 - 1989) David W. Lasier(61) 3/2/88 Vice President and President of Door Hardware Group Patricia Nachtigal(47) 11/2/88 Vice President and General Counsel (Secretary and Managing Attorney, 1988 - 1991) James R. O'Dell(55) 12/3/88 Vice President Larry H. Pitsch(53) 2/7/90 Vice President and President of the Process Systems Group (President of Industrial Process Machinery Group, 1985 - 1989) Gerald E. Swimmer(49) 5/1/82 Vice President R. Barry Uber(48) 2/7/90 Vice President and President of the Production Equipment Group (Vice President and General Manager - Power Tool Division, 1985 - 1989) Ronald G. Heller(47) 2/6/91 Secretary and Assistant General Counsel (Assistant General Counsel, 1988 - 1991)
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.
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 First quarter $36 1/4 $28 3/4 $.175 Second quarter 35 3/8 29 1/2 .175 Third quarter 39 3/4 31 .175 Fourth quarter 39 7/8 35 .175
High Low Dividend
First quarter $33 3/16 $26 1/4 $.165 Second quarter 32 1/4 25 3/8 .175 Third quarter 30 1/4 25 .175 Fourth quarter 34 1/4 26 3/8 .175
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, 1994 was 16,000.
Item 6.
Item 6. SELECTED FINANCIAL DATA Selected financial data for the five years ended December 31, 1993, is as follows (in thousands except per share amounts):
Item 7.
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 1993 and is incorporated by reference in this Form 10-K Annual Report.
Item 8.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The following financial statements and supplementary financial information included in the accompanying Annual Report to Shareowners for 1993 are incorporated by reference in this Form 10-K Annual Report:
(a) The consolidated financial statements and the report thereon of Price Waterhouse dated February 1, 1994, are included as Exhibit 13 - the Annual Report to Shareowners (excluding the Financial Review and Management Analysis) for 1993.
(b) The unaudited quarterly financial data for the two-year period ended December 31, 1993, is as follows (in thousands except per share amounts):
o During the fourth quarter of 1993, the company retroactively changed its method of accounting for postemployment benefits. The effect of this change on the company amounted to $21.0 million (net of tax) and resulted in the restatement of the company's net earnings for the first quarter from $24.6 million ($0.24 per share) to $3.6 million ($0.04 per share).
o During the second quarter of 1993, the company recorded a $5.0 million ($0.03 per share) restructure of operations charge, related to the sale of substantially all of the underground coal-mining machinery assets (see Note 4 to the Consolidated Financial Statements).
o The reductions in LIFO inventory quantities increased net earnings per share by $0.02, $0.05, $0.01 and $0.02 in the second and fourth quarters of 1993 and 1992, respectively.
o During the fourth quarter of 1992, the company retroactively changed its method of accounting for postretirement benefits other than pensions and deferred income taxes. The effect of these changes for the periods prior to January 1, 1992, amounted to $350.0 million (net of tax), and resulted in the restatement of the company's net earnings for the first quarter from $26.4 million ($0.25 per share) to a net loss of $329.4 million ($3.16 per share). These changes also resulted in the restatement of the company's net earnings for the second and third quarters of the year from $38.6 million ($0.37 per share) and $35.9 million ($0.35 per share) to $32.6 million ($0.31 per share) and $30.0 million ($0.29 per share), respectively.
o The fourth quarter of 1992 included the results of the Ingersoll-Dresser Pump Company formed on October 1, 1992 (see Note 2 to the Consolidated Financial Statements).
o In the third quarter of 1992, the company recorded a $10.0 million ($0.06 per share) restructure of operations charge relating to its aerospace bearings business (see Note 4 to the Consolidated Financial Statements).
o The fourth quarter of 1992 included a $70.0 million restructuring charge relating to the Ingersoll-Dresser Pump Company. The company's portion of the restructure of operations charge for IDP was $35.0 million pretax and $25.7 million ($0.25 per share) after-tax.
Item 9.
Item 9. CHANGES IN AND DISAGREEMENTS WITH INDEPENDENT ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.
PART III
Item 10.
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 3, 4, 6, and 7 of the company's definitive proxy statement for the Annual Meeting of Shareholders to be held on April 28, 1994, and (ii) included in Part I on pages 11 and 12 of this Form 10-K Annual Report.
Item 11.
Item 11. EXECUTIVE COMPENSATION Information on executive compensation is incorporated by reference in this Form 10-K Annual Report from pages 7 through 19 of the company's definitive proxy statement for the Annual Meeting of Shareholders to be held on April 28, 1994.
Item 12.
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 5 and 6 of the company's definitive proxy statement for the Annual Meeting of Shareholders to be held on April 28, 1994.
Item 13.
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 20 of the company's definitive proxy statement for the Annual Meeting of Shareholders to be held on April 28, 1994.
PART IV
Item 14.
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 dated February 1, 1994, 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 schedules listed in the accompanying index on page 19 should be read in conjunction with the financial statements in such Annual Report to Shareowners for 1993.
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 on pages 26 and 27 are filed as part of this Form 10-K Annual Report.
(b) Reports on Form 8-K None.
INGERSOLL-RAND COMPANY
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, 1993 and 1992 . . . . . . . . . . . . * For the years ended December 31, 1993, 1992 and 1991: Consolidated statement of income . . . . . . . . . * Consolidated statement of shareowners' equity . . . . . . . . . . . . . . . . . . . . . * Consolidated statement of cash flows . . . . . . . * Notes to consolidated financial statements . . . . . * Selected unaudited quarterly financial data . . . . . . 15
Financial Statement Schedules: Report of independent accountants on financial statement schedules . . . . . . . . . . . 20 Consolidated schedules for the years ended December 31, 1993, 1992 and 1991: Schedule V -- Property, Plant and Equipment . . . . 21 Schedule VI -- Accumulated Depreciation and Amortization of Property, Plant and Equipment . . . . . . . . . . . . . . . . . . . . 22 Schedule VIII -- Valuation and Qualifying Accounts . . . . . . . . . . . . . . . . . . . . 23 Schedule IX -- Short-Term Borrowings . . . . . . . 24 Schedule X -- Supplementary Income Statement Information . . . . . . . . . . . . . . . . . . . 25
* See Exhibit 13 - Ingersoll-Rand Company Annual Report to Shareowners for 1993.
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 SCHEDULES
To the Board of Directors of Ingersoll-Rand Company:
Our audits of the consolidated financial statements referred to in our report dated February 1, 1994 included as part of Exhibit 13 - the Annual Report to Shareowners for 1993 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 Schedules listed in Item 14(a) of this Form 10-K. In our opinion, these Financial Statement Schedules present fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements.
/S/ Price Waterhouse PRICE WATERHOUSE Hackensack, New Jersey February 1, 1994
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectuses constituting part of the Registration Statements on Form S-3 (No. 33-53696) and Form S-8 (Post-Effective Amendment No. 4 to No. 2-64708, No. 2-67834, No. 2-98258 and No. 33-35229) of Ingersoll-Rand Company of our report dated February 1, 1994 included as part of Exhibit 13 - the Annual Report to Shareowners for 1993, 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 Schedules, which appears on this page.
/S/ Price Waterhouse PRICE WATERHOUSE Hackensack, New Jersey March 30, 1994
SCHEDULE VIII
INGERSOLL-RAND COMPANY
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 and 1991 (Amounts in thousands)
Additions charged to Balance at costs and Balance beginning expenses Deductions at end Description of year (*) (**) of year
Doubtful accounts $23,057 $10,218 $11,186 $22,089
Doubtful accounts $18,772 $12,590 $ 8,305 $23,057
Doubtful accounts $17,045 $ 9,157 $ 7,430 $18,772
(*) "Additions" include foreign currency translation and in 1992 amounts contributed by Dresser Industries, Inc. to Ingersoll-Dresser Pump.
(**) "Deductions" include accounts and advances written off, less recoveries.
SCHEDULE X
INGERSOLL-RAND COMPANY
SUPPLEMENTARY INCOME STATEMENT INFORMATION
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 and 1991 (Amounts in thousands)
Item Charged to costs and expenses
1993 1992 1991
Maintenance and repairs . . . . $78,794 $73,216 $72,771
Amortization of intangible assets . . . . . . . . . . . $ 5,852 $ 5,597 $ 6,675
Taxes, other than payroll and income taxes . . . . . . . . $24,875 $28,545 $28,823
Royalties and advertising costs were less than one percent of sales.
INGERSOLL-RAND COMPANY INDEX TO EXHIBITS (Item 14(a)) Description Page 3 (i) Amendment to Restated Certificate of Incorporation of Ingersoll-Rand Company filed May 28, 1992. 30-32
3 (ii) Restated Certificate of Incorporation of Ingersoll-Rand Company as amended through May 28, 1992. 33-60
3 (iii) By-Laws of Ingersoll-Rand Company, as amended through October 1, 1993. 61-77
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. 78-92
10 (iii) (b) Description of Compensation Plan for Retired Directors of Ingersoll-Rand Company. 93
10 (iii) (c) Form of Contingent Compensation Agreements with Executive Vice Presidents and Group Presidents of Ingersoll-Rand Company. 94-99
10 (iii) (d) Description of Bonus Arrangements for Chairman, President and Staff Officers. 100
10 (iii) (e) Form of Change of Control Arrangements with Chairman and Chief Executive Officer. 101-113
10 (iii) (f) Form of Change of Control Arrangements with selected executive officers. 114-126
INGERSOLL-RAND COMPANY INDEX TO EXHIBITS (Item 14(a)) (Continued) Description Page
10 (iii) (g) Executive Supplementary Retirement Plan for selected senior executives. 127-132
10 (iii) (h) Incentive Stock Plan of 1985 of Ingersoll- Rand Company. 133-151
10 (iii) (i) Forms of insurance and related letter agreements with certain executive officers. 152-160
10 (iii) (j) Incentive Stock Plan of 1990 of Ingersoll- Rand Company. 161-182
10 (iii) (k) Restated Supplemental Pension Plan effective January 1, 1992. 183-188
10 (iii) (l) Supplemental Stock and Savings Investment Plan effective as of January 1, 1989. 189-198
10 (iii) (m) Supplemental Retirement Account Plan effective as of January 1, 1989. 199-206
11 (i) Computation of Primary Earnings Per Share. 207-208
11 (ii) Computation of Fully Diluted Earnings Per Share. 209-210
12 Computations of Ratios of Earnings to Fixed Charges. 211
13 Ingersoll-Rand Company Annual Report to Shareowners for 1993. (Not deemed to be filed as part of this report except to the extent incorporated by reference). 212-275
21 List of Subsidiaries of Ingersoll-Rand Company. 276-278
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/ Thomas F. McBride Thomas F. McBride Senior Vice President and Chief Financial Officer
Date March 30, 1994
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 30, 1994 (James E. Perrella)
Senior Vice President Chief Financial Officer (Principal Financial /S/ Thomas F. McBride Officer) March 30, 1994 (Thomas F. McBride)
Controller - Accounting and Reporting (Principal Accounting /S/ Richard A. Spohn Officer) March 30, 1994 (Richard A. Spohn)
/S/ Donald J. Bainton Director March 30, 1994 (Donald J. Bainton)
/S/ Theodore H. Black Director March 30, 1994 (Theodore H. Black)
Signature Title Date
/S/ Brendan T. Byrne Director March 30, 1994 (Brendan T. Byrne)
/S/ Joseph P. Flannery Director March 30, 1994 (Joseph P. Flannery)
/S/ William G. Kuhns Director March 30, 1994 (William G. Kuhns)
/S/ Alexander H. Massad Director March 30, 1994 (Alexander H. Massad)
/S/ John E. Phipps Director March 30, 1994 (John E. Phipps)
/S/ Donald E. Procknow Director March 30, 1994 (Donald E. Procknow)
/S/ Cedric E. Ritchie Director March 30, 1994 (Cedric E. Ritchie)
/S/ Willis A. Strauss Director March 30, 1994 (Willis A. Strauss)