HomeMy WebLinkAboutResolution - 899 - Memo Of Agreement - LIDC - Ingersoll-Rand Company Project - 09/10/1981t
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RESOLUTION 899 - 9/10/81
CITY SECRETARY -TREASURER
j
A RESOLUTION by the City Council of the City of
Lubbock, Texas, ratifying, confirming and approving
a "Memorandum of Agreement" pertaining to the
financing of an industrial development project
between the Lubbock Industrial Development Corporation
and Ingersoll-Rand Company.
WHEREAS, the Lubbbck Industrial Development Corporation
(the "Issuer") has submitted to this City Council for approval
a "Memorandum of Agreement" between the Issuer and Ingersoll-Rand
Company (the "Company") pertaining to the financing of an
industrial development project for the Company and/or its sub-
sidiary Ingersoll-Rand Oilfield Products, Inc., , such
agreement being attached hereto as Exhibit A and.made a part
of this resolution for all purposes; and
WHEREAS, this City Council has reviewed the foregoing
agreement and determined that such project will promote and
encourage employment within the City of Lubbock, Texas, and
benefit the public welfare and the same should be approved;
now, therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
LUBBOCK, TEXAS:
SECTION 1: That the "Memorandum of Agreement" attached
hereto as Exhibit A, by and between the Issuer and the
Company is hereby in all respects ratified, confirmed and
approved and the parties thereto may proceed with the project
described therein and the making of arrangements for the
financing thereof.
SECTION 2: That any bonds, or other obligations,
issued as a result of the Memorandum-of,Agreement herein
approved shall not constitute a debt of the State of Texas,
the City of Lubbock, Texas or any other political corporation,
subdivision or agency of the State of Texas or a pledge of
the faith and credit of any of them, but any.such bonds or
obligations shall be payable solely from those funds derived
.and resulting from, any and all agreements by and between
the Issuer and the Company, and all such bonds or obligations
issued shall contain.on their face a statement to the effect
that neither the State, the City nor any political corporation,
subdivision or agency of the State shall be obligated to pay
the same or the interest thereon and that neither the faith
and credit nor the taxing power of the State, the City, or
any political corporation, subdivision or agency thereof is
pledged t0_ --the payment of the principal of or interest on
such bonds.
PASSEI[� AND APPROVED-, this the ay of e e er 1981.
ATTEST: -
City Secret ry i y of
Lubbock, Texas
(City Seal)
'! � �_) ;24�/ J 4 d", A -
Mayor, City of Lubbock, Texas
Approved as to form:
John C. Ross, Jr., city Attorney
' . EXHIBIT A
MEMORANDUM OF AGREEMENT
THIS AGREEMENT is entered into by and between Lubbock
Industrial Development Corporation (the "Issuer") and Ingersoll-
Rand Company together with its subsidiary, Ingersoll-Rand Oilfield
Products, Inc. (hereinafter collectively referred to as the
"Company"), for the purpose of securing the agreement of
the Corporation to issue its revenue bonds (the "Bonds") for
the purpose of financing certain industrial, manufacturing
or commercial facilities (the "Facilities") for the use of
the Company, such Facilities to be located wholly or partly
within the boundaries of the City of Lubbock, Texas (the
"Unit").
(a) The obligations of the parties hereunder are
contingent upon obtaining prior to the issuance of the
Bonds, a ruling from the. Internal Revenue Service to the
effect that interest on the Bonds will be exempt from federal
income tax under Section 103(b) (6) of the Internal Revenue
Code of 1954, as amended, if in the opinion of Bond Counsel
such a ruling is required, and upon obtaining such other
rulings, approvals, consents, certificates, opinions of
counsel and other instruments and proceedings as may be
deemed necessary by the Company or Bond Counsel with respect
to the Facilities, the Bonds or any instrument relating .
thereto, from such governmental agencies and entities as may
possess, or may have asserted authority or jurisdiction over
or interest in matters pertaining to the Facilities, all of
which shall be in full force and effect at the time of the
issuance of the Bonds.
(b) Substantially all of the proceeds of the Bonds
shall be used solely to finance the acquisition, construction .
and improvement of the Facilities or a portion thereof, as
generally described in. Schedule A attached hereto and hereby
made a part hereof.
(c) The -Bonds shall be in an aggregate principal
amount of not to exceed Ten Million Dollars ($10,000,000),
and shall be issued in one or more series, but only pursuant
to a resolution or resolutions of the Issuer's Board of
Directors which will be approved as to form by Bond Counsel.
Subject to the terms hereof, the Issuer agrees as follows:
(1) To issue the Bonds and, if the Company and
the Issuer agree, other evidences of indebtedness
providing temporary financing of the Facilities which
will be issued after the date hereof and be refunded by
the Bonds pursuant to legislation heretofore or hereafter
enacted which may provide a suitable method of tax
exempt bond financing. The Bonds shall be issued in an
aggregate principal amount not to exceed the then
estimated cost of the Facilities, including the costs
of issuance.
(2) To cooperate with the Company with respect to
the issuance and sale of the Bonds, and, if arrangements
therefor satisfactory to the Company and the Issuer can
be made, the Issuer will authorize the execution of
such documents and will take such further action as may
be necessary or advisable for the authorization, issuance
and sale of the Bonds and the completion of the Facilities.
(3)' To take such actions and execute such documents
as may be necessary and as may be agreed upon between
the Company and the Issuer to permit the issuance from
time to time in the future of additional Bonds on terms
which shall be set forth therein, whether pari passu
with other series of Bonds or otherwise, for the purpose
of defraying the costs of completions, enlargements,
improvements and expansions of the Facilities, or any
segment thereof, as requested by the Company, and
within the limitations of Section 103(b)(6) of the
Internal Revenue Code of 1954, as amended.
(d) The Company and the Issuer will enter into a
contract under the terms of which the Company will unconditionally
obligate itself to pay to the Issuer (or a trustee, as the
case may be) sums sufficient in the aggregate to pay the
principal of, interest on and redemption premiums, if any,
together with trustee --'s fees and fees of paying agents, with
respect to the Bonds, as and when the same become due and
payable.
(e) Provisions shall be made in each resolution of the
Issuer's Board of Directors providing for issuance of the
Bonds for payment to the Issuer from proceeds of the Bonds
of an amount equal to all costs incurred by it (including
legal fees) in connection with the issuance and sale of the
Bonds.
(f) Should no Bonds have been issued pursuant hereto
on or before five years from the date hereof, the Issuer's
obligation to issue Bonds shall cease, and the Company shall
pay to the Issuer an amount equal to all costs, direct and
indirect, incurred by the Issuer in negotiating contracts
hereunder, in acquiring and constructing facilities and in
preparing for issuance of Bonds which are not actually
issued; and the Issuer shall transfer to the Company good
title to all real or personal property theretofore transferred
by the Company to the Issuer and all other real or personal
property acquired by the Issuer with any funds advanced to
the Issuer by the Company hereunder.
(g) Upon completion of the acquisition, construction
and improvement of the Facilities, they shall be operated
and maintained by the Company without cost or expense to the
Issuer.
(h) The Company hereby irrevocably agrees that it will
(1) pay all project costs which are not or cannot be paid or
reimbursed from the proceeds of the Bonds issued by you, and
(2) at all times indemnify and hold harmless the Issuer and
the members and officers of its Board of Directors and the
Unit and the members and officers of its governing body
against all losses, costs, damages, expenses and liabilities
of whatsoever nature or kind (including but not limited to
attorneys' fees, litigation and court costs, amounts paid in
.settlement, and amounts paid to discharge judgments) directly
or indirectly resulting from, arising out of or relating to
this Agreement or the issuance, offering, sale or delivery
of any Bonds, or the design, construction, installation,
operation, use, occupancy, maintenance or ownership of the
Facilities. It is further understood and agreed that the
indemnity provisions hereof shall be continuing and shall
survive and continue to be effective after any approval or
.disapproval of this Agreement and the issuance or failure to
issue any such Bonds and the construction and operation of
the Facilities
(i) In addition to the payments provided for above,
the Company shall pay to the Issuer, from the proceeds of.
the Bonds or otherwise as agreed upon, all costs and expenses
incurred by the Issuer in issuing the Bonds, and all costs
and expenses incurred by the Issuer in administering the
Bonds subsequent to issuance through final maturity and
payment and such other payments as shall be agreed upon in
writing between the parties.
(j) The terms of the Bonds (maturity schedules, interest
rates, denominations, redemption provisions, etc.) shall be
as authorized by the Development Corporation Act of 1979,
and as may be mutually satisfactory to the Company and the
Issuer.
(k) If the Bonds shall not be issued for any reason,
the Company shall have no obligation under this Agreement,
except with respect to paragraphs (f) and (h) hereof.
(1) It is contemplated that the form and contents of
all resolutions, contracts, trust indentures and other
documents contemplated hereunder will be mutually acceptable
to the Company and the Issuer.
(m) The Company agrees that any official statement,
prospectus or other offering memoranda, through the use of
which the proposed obligations are to be offered, sold or
placed with any lender, purchaser or investor, shall contain
the disclosures required by the Regulations adopted by the
Issuer.
(n) The Company agrees to pay the fees and expenses of
the Financial Advisor, Bond Counsel and General Counsel of.
the Issuer incurred on this Project after the execution of
this Agreement and its approval by the Unit, it being understood
that a part of such fees and expenses may required to be
paid as their work progresses.
IN WITNESS WHEREOF, the parties hereto have entered
into this Agreement by their respective officers, thereunto
duly authorized as of the day of 31
1981.
LUBBOCK INDUSTRIAL DEVELOPMENT
CORPORATION
By:
President, Board of Directors
(Corporate Seal)
ATTEST:
Secretary, Board of Directors
INGERSOLL-RAND COMPANY
By
Its
(Corporate Seal)
ATTEST:
INDUSTRIAL DEVELOPMENT FINANCING
PROJECT ELIGIBILITY QUESTIONNAIRE
1. (a) Name, street address; mailing address and telephone number of
entity that will lease or purchase the project (or borrow the bond
proceeds from the bond issuer): Ingersoll-Rand Oilfield Products
Subsidiary of Ingersoll-Rand Co. Phone: (201) 573-0123
.200 Chestnut Ridge Road
Woodcliff Lake, N.J. 07675
This entity is referred to as the "principal user"- of the project for
Re remainder fthis-euestlonnaire.
(b) Name, title, street address,
ber of representativet designated
nancing for the principal user:
David W. Lowrance
Manager - Domestic Finance
Ingersoll-Rand Company
mailing address and telephone'num-
to work on the project and the fi-
200 Chestnut Ridge Road
Woodcliff Lake, N.J. 07675
(201) 573-3173
(c) Name, title, street address, mailing address and telephone num-
ber of legal counsel who will represent the principal user for the
project and the financing:
J. A. Fogarty 200 Chestnut Ridge Road
Company Counsel Woodcliff Lake, N.J. 07675
Ingersoll-Rand Co. (201) 573-3383
(d) Name, title, ttreet address, mailing address and telephone num-
ber of the accounting firm of the principal user:
Price Waterhouse & Co. (201) 646-1550
Hackensack, N.J.-
2. (a) Form of organization of principal user (check one):
x corporation partnership sole proprietorship.
(b) State or other jurisdiction of incorporation or organization:
Ingersoll-Rand Oilfield Products Co, - Delaware
Ingersoll-Rand Co. - New -Jersey
(c) Brief description of the organizational structure, including
parent, subsidiaries and affiliates (state the degree of relation-
ship):
Ingersoll-Rand Oilfield Products Co. is a wholly-owned
subsidiary of Ingersoll-Rar"'Co.
Co.,.
3. Ownership: List all stockholders or partners having 10% or more int-
erest in the principal user:
Ingersoll-Rand Co. is a publicly held corporation traded on
the New York Stock Exchange. No stockholder owns 10% or
more of the company's shares. Ingersoll-Rand Co. owns 100$
of the capital stock of Ingersoll-Rand Oilfield Products Co..
-1
4.
If any of the above persons own more than 50% of the principal user,
list all other organizations which
are
thana50Xinterest insuch
related
principal
user
havin
by virtue of such persons g more
organizations:
None
5. (a) Attach the principal user's Form 10-K for each of the five pre-
ceding fiscal years, together with the principal user's most recent
form 10-Q. See attached 12/31/80 form 10-K and form 10-Q
for 3/31/81.
(b) If the forms listed in paragraph 5(a) have not been filed with
the Securities and Exchange Commission, furnish the following infor-
mation:
(i) a brief statement of the -history and type of business en-
gaged in by the principal user:
(ii) the names and ages of exeuctive or managing officers and
directors of the principal user and a brief account of all the
business experience of each such officer or director, including
his principal occupations and employment and the name and prin-
cipal business of the corporation or other organization in which
such occupations and employment were carried on;
Name and Position Acme Business Experience
See form 10--K ae of 12/31/80
(iii) if the principal user's debt securities are rated or
listed by.any published rating agency, give such ratings or,
listings:
Ingersoll-Rand co.'$: public debt is rated °',n b.X
Moodys Inc. and Standard &'j?oor1',s.
- 2 -
(iv) The principal user's audited financial statement for each
of the preceding five fiscal years; provided that this informa-
tion .need not be furnished if:
(A) a guarantor's audited finhnciai ttatements for each
of the guarantor's preceding.five fiscal years, or
(8) a governmental agency would be deemed to be a guarantor.
6. If appropriate, as to each guarantor, furnish the same information re-
quested in paragraphs 1 through 5 above.
N/A
7. Location of the
project:
Street Address City County State
Route 289 and Lubbock Lubbock. Texas
Plainview 9
8. Give a brief description of the project and its intended use. .
Indicate the following: approximate square feet of manufacturing,
office and warehouse space to be constructed; type of construction;
nature of equipment to be purchased from bond proceeds; products to
be produced:
Purchase of buildings w.. th. 254, QQQ civat e 'feet,' Puxchgise of
machine tools and other equipment to manufacture oilfield
products.
9. Estimate the number and types of jobs to be created as a result of the
project and the estimated annual payroll of employees working at the
project; and if there is any substantial probability that loss of ex-
isting jobs would occur if the project was not constructed, estimate
the number and types of existing jobs which would be lost and the es-
timated annual payroll of employees holding such jobs.
200 manufacturing !
10 administrative.'
10. Project site (land)
(a) Indicate approximate size (in acres. or square feet) of project
site.
ils gLcxeg,
(b) Are there buildings now on the project site?
x- yes _ no
(c) Indicate the present use of the project site.
'vacant and unoccupied,
-3-
(d) Indicate present owner of project site.
Clark Equipment Co.
Buchanan, Michigan
(e) Is the project site within the corporate limits of a city?
X yes no
11. If the principal user now owns the project site, indicate:
Not now owned by A principal user.
(a) date of purchase
(b) purchase price
(c) balance of. existing mortgage
(d) holder of mortgage
12. If the principal user is not now the owner of the project site, does the
principal user have an.option to purchase the site and any buildings on
the site? If yes, indicate:
(a) date option agreement signed with owner
(b) purchase price under option
(c) expiration date of option
13. Has the principal user entered into a contract to purchase the site?
If yes, indicate:
(a) date signed .Auqust 13. 1981
(b) purchase price s8.5 million
(c) settlement date September 15: 1981
14. If the principal user is not the owner of project site, does the princi-
pal user now lease the site or any buildings on the site?
No
15. Is there a relationship legally or by virtue of common control or owner-
ship between the principal user and the seller of the project? If yes,.
describe this relationship:
No
16. Describe any liens and encumbrances relating to the project site, to-
gether with evidence that.all necessary interests in real estate re-
-4-
•• quired for the construction installation and operation of the project
have been or can be acquired, that all necessary access roads, utili-
ties and drainage facilities have been or can be provided and that
all approvals, permits, consents or authorizations of any governmental
or public agency, authority or person required in connection with the
construction, installation and operation of the project have been or
can be obtained. ,
No known liens.. The company believes all permits necessary
to conduct business operations can be obtained.
17. Does the project involve acquisition of an existing building or other
facilities? If yes, indicate number and size of such buildings and
facilities:
Yes. Five buildings with 2541,000 square feet.
18. Does the project consist of the construction of a new building or
other facilities? If yes, indicate number and size of new buildings
and facilities:
No
19. Does the project consist of additions and/or renovations to existing
buildings or other facilities? If yes, indicate nature of expansion
and/or renovation:
Renovation of production lines and additional equipment
to produce oilfield products.
20. If any space in the project is to be leased to third parties, indicate
total square footage of the project, amount to be leased to each ten-
ant, and proposed use by each tenant.
N/A
21. Give the names of the architect, engineer and general contractor for
the project.
Not required.
22. (a) Give the approximate date of commencement and completion of the
project.
Estimated to begin 9/15/81 and be completed by 1/1/821
- 5 -
24. Has any of the above equipment been ordered or purchased? If yes, indi-
cate: No
Item
Date Ordered Delivery Date Price
25. List the face amount of all tax-exempt financing previously arranged by
or for the benefit of the principal user.
Name Original Current
of face outstanding
Issue Date amount amount Location
See attached'schedule of Ingersoll-Rand Co. tax
exempt debt outstanding,
26. Give a detailed showing of the estimated cost of the project together
with a list of the sources from which payment will be made, which shall
show estimated items of cost as follows:
(a) the acquisition of all land, right of way, property rights, ease-
ments and interests acquired or to be acquired;
Land..t. S60LOf000
- 6 -
(b) Is the construction work on this
project begun?
Complete the
following:
(a
site clearance
no
% completed
ate
commenced
(b,
foundation
___-yes
no
complete
date
commerced
(c)
footings
_yes
no
complete
date
commenced
(d)
steel
__yes
des no
% complete
date
commenced
(e)
masonry work
no
% complete
= ate
commenced
(f)
other (describe
__yes
_yes no
complete
T_date
commenced
below)
All construction work. completed
by, prion owner of but.1d#.g.
23.
List principal items
or categories of
equipment to be
acquired as
part of
the project.
Ma.chime tools.
and welding egaipment.
24. Has any of the above equipment been ordered or purchased? If yes, indi-
cate: No
Item
Date Ordered Delivery Date Price
25. List the face amount of all tax-exempt financing previously arranged by
or for the benefit of the principal user.
Name Original Current
of face outstanding
Issue Date amount amount Location
See attached'schedule of Ingersoll-Rand Co. tax
exempt debt outstanding,
26. Give a detailed showing of the estimated cost of the project together
with a list of the sources from which payment will be made, which shall
show estimated items of cost as follows:
(a) the acquisition of all land, right of way, property rights, ease-
ments and interests acquired or to be acquired;
Land..t. S60LOf000
- 6 -
(b)..machinery and equipment;
(c) building costs;
$1.3 Million
$6,600,000
(d) financing charges, including fees and 'expenses of original purch-
aser, underwriter, financial advisor or placement agent, bond counsel,
other legal counsel, bond delivery and printing expense, bond discount,
the costs of preparing and processing the application to the Texas In-
dustrial Commission, and any other fees and expenses in connection
with the financing of the project;
$75,000
(e) interest prior to and during construction and for one year after
completion of construction, if applicable
(f) any reserve funds;
None
None
(g) engineering, including among other costs the costs of estimates,
plans, specifications and surveys;
None
(h) architectural fees;
None
(i) administrative expense of the Industrial Development Authority;
$1;000
(j) any other enumerated expenses;
(k) contingencies.
None
None
-7-
27. Were any of the above expenditures made'by the applicant prior to the
date of the inducement resolution? If yes, indicate particulars:
No
28. Have any of the above expenditures been incurred but not paid by the
principal user? If yes, indicate particulars:
�7
29. Are costs of working capital, inventory, moving.expenses, work in pro-
cess, or stock in trade included in the proposed uses of bond proceeds?
No
30. Will any of the funds to be borrowed through the Authority be used to
repay or refinance an existing mortgage or outstanding loan?
LIC -1
(Complete questions 31 and 32 only if the proposed financing is an industrial
development financing in.excess of $1 million.)
31. List "capital expenditures" paid or.incurred by the principal user or
any other person with respect to this project:
Past 3 years Next 3 years
Land $ $
Buildings
'Equipment 1.000, 000
Engineering
Architecture
Research and development
Interest during construction
Other (please explain)
$ npne $ 1,0001000.
"Capital expenditures" means -any expenditures which could, under any
election provided in the Incomr ''ax Regulations, be treated as a capi-
tal expenditure rather than an ..`dinary expense for federal income tax
purposes. Examples of areas.requiring particular attention are:
Research and development expenses with respect to a facility must
be treated as capital expenditures with respect to it. This would
include research and development with respect to equipment to be
- 8 -
used there. Research and development expenses allocable to the
project under the foregoing rule must be treated as capital ex-
penditures with respect to it even though the research and de-
velopment work takes place in a different municipality or state.
Costs of molds,. etc. to be used at a facility are capital expend-
itures even if paid by the customer.
Costs of equipment to be moved to a facility are capital expend-
itures even if the purchase and initial use of the equipment oc-
curred outside the municipality.
32. List capital expenditures with respect to other facilities of the prin-
cipal user or any related person, if the facilities are located in the
same municipality.
Past 3 years_ Next 3 years
Land $ $
Buildings
Equipment
Engineering
Architecture
Research and development
Interest during construction
Other (please explain) _
$ none_ $ none
SCHEDULE OF TAX EXEMPT DEBT
INGERSOLL-RAND COMPANY
Amount
Outstanding
Rate
$(000) -
Industrial Revenue Bond Financings
Shippensburg Ind. Dev. Authority (1986)
1,209
Lackawanna Ind. Dev. Authority (1993)
153
Pennsylvania Ind. Dev. Authority (1989)
442
Lackawanna Ind*. Dev. Authority - Moosic (1984-94)
892
Tioga I.nd. Dev. Authority - Waverly (1985-95)
1,155
Ind. Dev. Auth. of Pima County -Tucson (1996)
1,840
Ind. Dev. Auth. of New Hampshire -Nashua (1996)
1,000
Millers Falls Inc. Dev. Authority (1997-01)
1,000
Lackawanna Ind. Dev. Auth.-Scranton (1985-95)
11000
New Hampshire Ind. Dev. Authority -(1995)
3,000
Orrville Ind. Dev. Authority (1982)
41500
Shippensburg Ind. Dev. Authority (1982)
5,000
Torrington Company (a wholly-owned subsidiary)
Screven County, Ga. IDA (1985-95)
3,500
Lumpkin County, Ga. IDA (1986-96)
1,000
Union County, S.C. IDA (1982)
1,000
S & S Corporation (a wholly-owned subsidiary)
IDA of Tazewell County, Va. (1988)
865
IDA of Tazewell County, Va. (1985)
71
Washington County IDA (1985-95)
2,600
Lee -Norse Company (a wholly-owned subsidiary)
Taylorville IDA (2001)
11000
Schlage Lock Company (a wholly-owned subsidiary)
Colorado Springs IDA (1992)
1,000
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended June 30, 1981 Commission File Number 1-98
INGERSOLL-RAND COMPANY
(Incorporated in New Jersey)
I.R.S. Employer Identification No. 13-5156640
Woodcliff Lake, New Jersey 07675
Telephone - (201) 573-0123
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 34 during the preceding 12 months (or for such
shorter period ti; -c 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 . . .
As of August 10, 1981, there were 19,251,684 shares of $2 par
value Common Stock outstanding.
INGERSOLL-RAND COMPANY AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
INDEX
PART I. FINANCIAL INFORMATION Page No.
Condensed Balance Sheets at June 30, 1981
and December 31, 1980 2
Income Statements for the three months and six
months ended June 30, 1981 and 1980 3
Condensed Statements of Changes in Financial
Position for the six months ended
June 30, 1981 and 1980 4
Notes to Financial Statements S
Management's Discussion and Analysis of Financial
Condition and Results of Operations 6
Exhibit "A" - Computations of Primary and
Fully -Diluted Earnings Per Share 7
PART II. OTHER INFORMATION
Legal Proceedings and Submission of Matters
to a Vote of Security Holders 8
Signatures 9
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2
INGERSOLL-RAND COMPANY AND CONSOLIDATED SUBSIDIARIES
CONDENSED STATEMENTS OF CHANGES IN FINANCIAL POSITION
in ,thousan s
Six Months Ended
June 30
1981 1980
FINANCIAL RESOURCES WERE PROVIDED BY:
Net earnings $ 760013
Depreciation and amortization 45,072
Other 5,665
Total funds provided 126,750
FINANCIAL RESOURCES WERE USED FOR:
Dividends 35,715
Expenditures for property, plant and
equipment 65,766
Increase in investments 159,624
Other 6,109
Total funds utilized 123,214
INCREASE (DECREASE) IN WORKING.CAPITAL 3,536
Working capital beginning of period 1,055,880
Working capital end of period $1,0591416
See accompanying notes to financial statements.'
-4-
INGERSOLL-RAND COMPANY.AND CONSOLIDATED SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
Note 1 - The accompanying financial statements, in the opinion of management
contain all adjustments (consisting only of normal recurring
accruals) necessary to presept fairly the consolidated unaudited
results of operations for the three months and six months ended
June 30, 1981 and 1980.
Note 2 - Inventories of appropriate domestic standard products are valued on
the last -in, first.out (LIFO) method, and all other inventories are
valued using the first -in, first -out (FIFO) method. The compositiol
of inventories at June 30, 1981 and December 31, 1980, respectively,
was as follows (in thousands):
Raw materials and supplies $217,410 $208,848
Work in process 395,292 381,697
Finished goods 375,527 351,649
Total Inventory $988,229 $942,194
Mork in process inventories are after deducting customer progress
payments of $103,374,000 at June 30, 1981 and $72,679,000 at
December 31, 1980.
Note 3 - The income of Ingersoll-Rand Financial Corporation, a wholly owned
finance subsidy, is inlcuded in other income in the Comparative
Income Statements and is summarized as follows (in thousands):
Income from operations
Interest expense
Operating expenses
Income before taxes on income
Provision , r -income taxes
Net incc.:-
-5-
Six Months Ended
June 30
1981 1980
$ 2r,-ST9 $ 1T,-9-56
(13,856) (9,988)
(4,725) (2,954)
6,928 4,994
2,800 2,120
$ $4
INGERSOLL-RAND COMPANY AND CONSOLIDATED SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Second quarter sales were 18% higher than the same period of 1980.
Sales of equipment for the oil and gas industries and international
markets, particularly for construction machinery, in Latin America,
Africa, and the Far East were strong while construction markets in
the United States and Europe were weak. Inclusion of the Company's
new Oilfield Products Group, acquired in the third quarter of 1980,
accounted for approximately one-third of the total gain.
Operating income increased by 17% as reported, but year-to-year ratio
comparisons were unfavorably impacted by the effect of currency
changes.
"Other Income", as reported, was. also impacted by currency effects.
A loss of $10.3 million in 1980 compares to a gain of $11.8 million
in 1981, or an improvement of $22.1 million. The principal cause of
this variance was the strengthening of.the dollar against foreign
currencies and the related exchange transactions.
Interest expense increased by 33%, the primary reason (for both the
quarter and six months) being higher borrowing levels reflecting cash
acquisitions and increasing operating requirements in 1980, although
higher average interest rates were also a factor.
For the six months to June 30, sales were up 17%, and operating
income increased by 100. As in the second quarter, operating margins
were unfavorably impacted by currency fluctuations.
Net earnings as reported increased 50% second quarter to second
quarter, reflecting in part the impact of a 270 per share special
charge to net earnings for a divestiture in 1980. For the six
months, reported earnings increased 22% to $76.0 million or $3.81 per
share.
The. Company's financial condition did not change materially during
the first six months of 1981, as the current ratio and amount of net
working capital were virtually unchanged at June 30 from December 31.
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INGERSOLL-RAND COMPANY AND CONSOLIDATED SUBSIDIARIES
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is not a party to any litigation which would have a
material adverse affect on its operations or financial condition.
In addition to the statements set forth in the Company's Annual
Report on Form 10-k for the year ended December 31, 1980 and the
Company's Quarterly Report on Form 10-Q for the quarter ended March
31, 1981, the Company and certain of its subsidiaries are presently
subject to additional notices or orders of state or local
authorities with respect to two plants- in two states pursuant to
existing regulations regarding correction to alleged violation of
water, air, health, or other environmental standards. In each
instance, the Company or its appropriate subsidiaries believe they
have taken corrective action or have submitted specified proposals
with respect to the subject matters, no penalties or fines have been
finally assessed by the authorities involved (except for two in the
aggregate amount of $1,200.), and the Company presently regards
itself as being in compliance with applicable environmental
standards. Management estimates that the total cost of compliance,
past and future, with respect to such notices or orders, will not
exceed $712,000.
The foregoing proceedings are not considered by the Company to be
material to its business or financial condition and are reported
herein because of the requirement of the Securities and Exchange
Commission that any environmentally -related administrative or
judicial proceedings by governmental authority shall be deemed
material and be described herein.
ITEM 7. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the Annual Meeting of Shareholders of the Company held on April
23, 1981, the shareholders voted on a shareholder proposal submitted
to the Company.from the floor by the General Board of Pensions of
the United Methodist Church. This resolution requested the
Company's Board of Directors to agree to adopt or cause to be
adopted the Sullivan Principles as corporate policy relative to
Ingersoll-Rand South Africa. This resolution was not approved by
the-'areholders. The total vote was 11,484 votes in favor of the
resolution and 17,325,923 votes against, with more than a majority
of the outstanding shares voting in the negative.
-8
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the under -signed thereunto duly authorized.
INGERSOLL-RAND COMPANY.
Registrant
Date August 13, 1981
Date August 13, 1981
ME
C.H.o ey, Senior Vice rest ent
& Chief Financial Officer
T.F.c ri e, Vice President
Comptroller
11
CERTIFICATE OF CITY SECRETARY
THE STATE OF TEXAS
COUNTY OF LUBBOCK
CITY OF LUBBOCK
I, the undersigned, City Secretary of the City of
Lubbock, Texas, DO HEREBY CERTIFY as follows:
1. That on the 10th day of September , 1981, the
City Council of the City of Lubbock Texas, convened in$Liar
session at its regular meeting place in the City Hall of
said City; the duly constituted members of the Council being
as follows:
BILL McALISTER
MAYOR
ALAN HENRY )
M. J. ADERTON )
E. JACK BROWN ) COUNCILMEMBERS
JOAN BAKER )
and all of said persons were present at said meeting, except
the following: l;eAmong
other business considered at said meeting, the attached
resolution entitled:
"A RESOLUTION Ng
"he City Council of the City of
Lubbock, Texas, ratifying, confirming and approving
a 'Memorandum of Agreement' pertaining to the
financing of an industrial development project
between the Lubbock Industrial Development. Corporation
and -Ingersoll-Rand Company."
was introduced and submitted to the Council for passage and
adoption.. After presentation and due consideration of the
resolution, a motion was made byrn!1nniJM2Mthat
the resolution be finally passed and adopted. -'"M motion
was seconded by Mayor Pro Tem Alan BPnr3 and carried by the
following vote:
5 voted "For" o_ voted "Against" n abstained
all as shown in the official Minutes of the Council for the
meeting held on the aforesaid date.
2. That the attached resolution is a true and correct
copy of the original on file in the official records of the
City; the duly qualified and acting members of the City
Council of said City on the date of the aforesaid meeting
are those persons shown above and, according to the records
of my office, each member of the Council was given actual
notice of the time, place and purpose of the meeting and had
actual notice that the matter would be considered; and that
said meeting, and deliberation of the aforesaid public
business, was open to the public and written -notice of said
meeting, including the subject of the entitled resolution,
was posted and given in advance thereof in compliance with.
the provisions of Article 6252-17, Section 3A, V.A.T.C.S..
IN WITNESS WHEREOF, I have hereunto signed my name
officially and affixed the seal of said City, this the
1.0th day . o f zeZt e��ses 1981.
c
(City Seals .
LP
City Secretary, C't
Lubbock, Texas