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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT
Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended December 31, 2000
ROCKWELL
RETIREMENT SAVINGS PLAN
ROCKWELL INTERNATIONAL CORPORATION
777 East Wisconsin Avenue, Suite 1400
Milwaukee, Wisconsin 53202
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ROCKWELL RETIREMENT SAVINGS PLAN
TABLE OF CONTENTS
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PAGE NO.
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INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits
December 31, 2000 and 1999 2
Statements of Changes in Net Assets Available for Benefits
Years Ended December 31, 2000 and 1999 3
Notes to Financial Statements 4
FORM 5500 SUPPLEMENTAL SCHEDULE:
Schedule of Assets Held for Investment Purposes,
December 31, 2000 11
SIGNATURE S-1
EXHIBIT:
Independent Auditors' Consent S-2
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INDEPENDENT AUDITORS' REPORT
To the Rockwell Retirement Savings Plan and to Participants therein:
We have audited the accompanying statements of net assets available for
benefits of Rockwell Retirement Savings Plan (formerly Rockwell
Non-Represented Hourly Retirement Savings Plan) (the "Plan") as of December
31, 2000 and 1999, and the related statements of changes in net assets
available for benefits for the years then ended. These financial statements
are the responsibility of the Plan's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan as of December 31,
2000 and 1999, and the changes in net assets available for benefits for the
years then ended in conformity with accounting principles generally accepted
in the United States of America.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule listed in the
Table of Contents is presented for the purpose of additional analysis and is
not a required part of the basic financial statements, but is supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. This schedule is the responsibility of the Plan's management. Such
schedule has been subjected to the auditing procedures applied in our audit of
the basic 2000 financial statements and, in our opinion, is fairly stated in
all material respects when considered in relation to the basic financial
statements taken as a whole.
/s/ Deloitte & Touche LLP
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Deloitte & Touche LLP
Milwaukee, Wisconsin
June 25, 2001
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ROCKWELL RETIREMENT SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2000 AND 1999
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2000 1999
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ASSETS
INVESTMENTS:
Master Defined Contribution Trust $ 82,026,909 $ 26,442,647
Loan fund 4,704,736 4,496,938
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Total investments 86,731,645 30,939,585
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RECEIVABLES:
Transfer receivable - 65,901,879
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TOTAL NET ASSETS AVAILABLE
FOR BENEFITS $ 86,731,645 $ 96,841,464
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See notes to financial statements.
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ROCKWELL RETIREMENT SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED DECEMBER 31, 2000 AND 1999
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2000 1999
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NET ASSETS AVAILABLE FOR BENEFITS,
BEGINNING OF YEAR $ 96,841,464 $ 22,357,309
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INCOME:
(Loss) earnings from investments:
Net (loss) earnings in Master Defined
Contribution Trust (3,114,368) 8,766,307
Interest 355,962 210,783
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Total (loss) earnings from investments (2,758,406) 8,977,090
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Contributions:
Employer 2,516,894 2,044,757
Employee 5,921,526 4,613,847
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Total contributions 8,438,420 6,658,604
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Total income 5,680,014 15,635,694
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EXPENSES:
Payments to participants or beneficiaries 6,954,527 4,553,639
Administrative expenses 294,592 329,958
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Total expenses 7,249,119 4,883,597
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NET (LOSS) INCOME (1,569,105) 10,752,097
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NET TRANSFERS (FROM) TO THE PLAN (8,540,714) 63,732,058
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NET (DECREASE) INCREASE (10,109,819) 74,484,155
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NET ASSETS AVAILABLE FOR BENEFITS,
END OF YEAR $ 86,731,645 $ 96,841,464
============== ==============
See notes to financial statements.
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ROCKWELL RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2000 AND 1999
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1. DESCRIPTION OF PLAN
The following brief description of the Rockwell Retirement Savings Plan
(formerly the Rockwell Non-Represented Hourly Retirement Savings Plan)
(the "Plan") is provided for general information purposes only.
Participants should refer to the Plan document for more complete
information.
a. General - The Plan is a defined contribution savings plan sponsored
by Rockwell International Corporation ("Rockwell"). The Central
Retirement Committee and the Plan Administrator control and manage
the operation and administration of the Plan. Wells Fargo, N.A. is
the trustee of the Plan. The assets of the Plan are managed by the
trustee and several other investment managers. The Plan is subject
to the provisions of the Employee Retirement Income Security Act of
1974 ("ERISA"). See Notes 5 and 6 which describe changes to the
Plan.
Participants in the Plan may invest in any of the following
investment funds:
Diversified Fund - Invests principally in common stocks and
convertible securities.
Aggregate Bond Index Fund - Invests in fixed income securities
included in the Lehman Brothers Aggregate Bond Index.
Stable Value Fund - Invests in insurance contracts and fixed
income securities.
Balanced Fund - Invests in a diversified mix of fixed income and
equity securities.
S&P 500 Index Fund - Invests principally in the stocks of
companies that comprise the Standard & Poor's 500 Index.
Mid-Cap Equity Fund - Invests principally in equity securities of
companies with medium market capitalizations.
International Equity Fund - Invests principally in equity
securities of companies located outside the United States.
Stock Fund B (employee contributions) - Invests principally in
the common stock of Rockwell but may hold Rockwell common stock
and cash.
High Yield Bond Fund - Invests principally in debt instruments
and convertible securities, with an emphasis on lower quality,
higher yielding securities.
Large-Cap Value Equity Fund - Invests principally in equity
securities of companies with large market capitalizations that
are generally viewed as "undervalued" by the market.
Large-Cap Growth Equity Fund - Invests principally in equity
securities of growth companies with large market capitalizations.
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Small-Cap Stock Fund - Invests principally in equity securities
of companies with small market capitalizations.
Horizon Retirement Fund - Invests principally in Plan stable
value and fixed income funds but will also invest in Plan equity
funds.
Horizon 2010 Fund - Invests principally in Plan equity funds but
will also invest in Plan fixed income and stable value funds.
Horizon 2020 Fund - Invests principally in Plan equity funds but
will also invest in Plan fixed income funds.
Horizon 2030 Fund - Invests principally in Plan equity funds but
will also invest in Plan fixed income funds.
Other funds of the Plan include:
Stock Fund A (employer contributions) - Invests principally in
the common stock of Rockwell but may hold Rockwell common stock
and cash.
Boeing Stock Fund - Holds the common stock of The Boeing Company
("Boeing").
ArvinMeritor Stock Fund - Holds the common stock of ArvinMeritor
Automotive, Inc. ("ArvinMeritor").
Conexant Stock Fund - Holds the common stock of Conexant Systems,
Inc. ("Conexant").
Exxon Mobil Stock Fund - Holds the common stock of Exxon Mobil
Corporation ("Exxon Mobil").
Guaranteed Return Fund - Invests in contracts with insurance
companies providing a guarantee of principal (backed by the
general assets of the insurance company) and a specified rate of
interest.
Loan Fund - Represents outstanding participant loan balances.
The Boeing, ArvinMeritor, Conexant, and Exxon Mobil Stock Funds and
the Guaranteed Return Fund are closed to any additional employer and
employee contributions. Additionally, there are special rules
regarding distribution from such funds. Any dividends on common
stock related to employer contributions received on behalf of these
funds are paid to Stock Fund A. Any dividends on common stock
related to employee contributions received on behalf of these funds
are paid to the Stable Value Fund.
b. Participation - The Plan provides that eligible employees electing
to become participants may contribute up to a maximum of 16% of base
compensation, as defined in the Plan document. Participant
contributions can be made either before or after United States
federal taxation of a participant's compensation. However, pre-tax
contributions by highly compensated participants are limited to 12%
of the participant's base compensation.
Rockwell contributes an amount equal to 50% of the first 6% of base
compensation contributed by Rockwell Automation participants, and
50% of the first 8% of base compensation contributed by non-Rockwell
Automation participants. Rockwell contributions are made to Rockwell
Stock Fund A, which holds a combination of cash and Rockwell common
stock.
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Participants who are vested may elect one time per year to transfer
a maximum of 25% of the participant's interest in Rockwell Stock
Fund A to one or more of the investment funds.
c. Investment Elections - Participants may elect to have participant
contributions made to any of the funds indicated in Note 1.a. that
are available to participant contributions in 1% increments among
any or all of these funds. Participants may change such investment
elections on a daily basis. If a participant does not have an
investment election on file, contributions will be made to the
Stable Value Fund.
Participants' contributions in the Guaranteed Return Fund are
invested in insurance contracts with John Hancock Mutual Life
Insurance Company and the Prudential Insurance Company of America
with various guaranteed annual returns to participants for the
contract periods. The contract with John Hancock Mutual Life
Insurance Company expired March 31, 2000. The crediting interest
rates for the contracts were 5.82% at December 31, 2000 and ranged
from 5.82% to 6.70% at December 31, 1999.
Upon expiration of a Guaranteed Return Fund contract (GIC), the
funds invested in the GIC are automatically transferred into the
Stable Value Fund. If a participant who has an interest in an
expiring GIC does not want to invest these funds in the Stable Value
Fund, then the participant may elect to transfer these funds to any
other employee investment funds within the Plan that are available
for contribution.
d. Unit Values - Participants do not own specific securities or other
assets in the various funds, but have an interest therein
represented by units valued as of the end of each business day.
However, voting rights are extended to participants in proportion to
their interest in Rockwell common stock held in Stock Fund A and
Stock Fund B, as represented by common units. Participants' accounts
are charged or credited, as the case may be, with the number of
units properly attributable to each participant.
e. Vesting - Each participant is fully vested at all times in the
portion of a participant's account that relates to the participant's
contributions and earnings thereon. Vesting in the Rockwell
contribution portion of participant accounts plus actual earnings
thereon is based on years of vested service. A participant is 100%
vested after three years of vested service. Until a participant
reaches three years of vesting service, the participant is not
vested in amounts related to Rockwell contributions.
f. Loans - A participant may obtain a loan in an amount as defined in
the Plan document (not less than $1,000 and not greater than $50,000
reduced by the participant's highest outstanding loan balance during
the 12 month period before the date of the loan or 50% of the
participant's vested account balance less any outstanding loans)
from the balance of the participant's account. Loans are secured by
the remaining balance in the participant's account. Interest is
charged at a rate equal to the prime rate plus 1%. The loans can be
repaid through payroll deductions over terms of 12, 24, 36, 48 or 60
months or up to 120 months for the purchase of a primary residence,
or repaid in full at any time after a minimum of one month. Payments
of principal and interest are credited to the participant's account.
Participants may have up to two outstanding loans at any time from
the Plan.
g. Forfeitures - When certain terminations of participation in the Plan
occur, the nonvested portion of the participant's account represents
a forfeiture, as defined in the Plan document. Forfeitures remain in
the Plan and subsequently are used to reduce Rockwell's
contributions to the Plan in accordance with ERISA. However, if the
participant is reemployed and fulfills certain requirements, as
defined in the Plan document, the participant's account will be
restored.
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h. Plan Termination - Although Rockwell has not expressed any current
intent to terminate the Plan, Rockwell has the authority to
terminate or modify the Plan or to suspend contributions to the Plan
in accordance with ERISA. In the event that the Plan is terminated
or contributions by Rockwell are discontinued, each participant's
employer contribution account will be fully vested. Benefits under
the Plan will be provided solely from Plan assets.
i. Withdrawals and Distributions - Active participants may withdraw
certain amounts up to their entire vested interest when the
participant attains the age of 59-1/2 or is able to demonstrate
financial hardship. Participant vested amounts are payable upon
retirement, death or other termination of employment.
Upon termination of employment, other than retirement, participants
receive the vested portion of their account balance (employee and
employer contributions) in the form of a lump sum.
Upon retirement, participants may elect to receive the vested
portion of their account balance (employee and employer
contributions) in the form of a lump sum or in annual installment
payments for up to 10 years.
Upon retirement, Control Systems and Anorad employees with an
account balance are permitted to select payment as a life annuity or
as a reduced monthly annuity benefit with 50% of the amount payable
after the participant's death to the participant's spouse at the
time the option is elected. Payments will continue to the spouse
until the spouse's death.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Valuation of Investments - Investment in the Master Defined
Contribution Trust is stated at fair value. Purchases and sales of
securities are recorded on a trade date basis. Interest income is
recorded as earned. Dividends are accrued upon Rockwell Board of
Directors' approval. See Note 3. The loan fund is stated at cost
which approximates fair value.
b. Expenses - Plan fees and expenses, including fees and expenses
connected with the provision of administrative services by external
service providers, are paid from Plan assets.
c. Use of Estimates - Estimates and assumptions made by the Plan's
management affect the reported amount of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of increases and
decreases to the Plan during the reporting period. Actual results
could differ from those estimates.
3. MASTER DEFINED CONTRIBUTION TRUST
At December 31, 2000 and 1999, with the exception of the participant loan
fund, all of the Plan's investment assets were held in a Master Defined
Contribution Trust ("Master Trust") account, at Wells Fargo, N.A. Use of
the Master Trust permits the commingling of the trust assets of a number
of benefit plans of Rockwell and its subsidiaries for investment and
administrative purposes. Although assets are commingled in the Master
Trust, Wells Fargo, N.A. maintains supporting records for the purpose of
allocating the net (loss) earnings of the investment accounts to the
various participating plans.
The Master Trust investments are valued at fair value at the end of each
day. If available, quoted market prices are used to value investments. If
quoted market prices are not available, the fair value of investments is
estimated primarily by independent investment brokerage firms and
insurance companies. The investment funds held by the Master Trust are
discussed in Note 1.
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The net earnings or loss of the accounts for each day is allocated by the
trustee to each participating plan based on the relationship of the
interest of each plan to the total of the interests of all participating
plans.
The net assets of the Master Trust at December 31, 2000 and 1999 are
summarized as follows:
2000 1999
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Cash and equivalents $ 42,606,035 $ 57,771,160
Corporate bonds and debentures 49,898,290 42,402,523
Common stocks 2,443,409,074 4,428,191,177
Mutual funds 629,966,165 503,123,568
Preferred/convertible securities 3,548,531 -
Stable value fund 555,014,288 547,797,792
Diversified funds 1,323,597 -
Guaranteed investment contracts 47,284,912 147,012,701
Accrued income - 4,091,896
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Total net assets available for benefits $ 3,773,050,892 $ 5,730,390,817
================ ===============
The net (loss) earnings of the Master Trust for the years ended December
31, 2000 and 1999 is summarized as follows:
2000 1999
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Interest $ 42,346,692 $ 49,441,701
Dividends 71,814,777 57,083,001
Net (depreciation) appreciation in fair value of
investments:
U. S. Government securities - (375,707)
Corporate bonds and debentures 1,615,477 (1,899,587)
Common stocks (1,247,539,797) 2,074,314,661
Mutual funds (25,188,187) 151,108,840
Other (354,963) (392,165)
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Net (loss) earnings $ (1,157,306,001) $ 2,329,280,744
================= ===============
The Plan's interest in the total Master Trust, as a percentage of net
assets held by the Master Trust was approximately 2% and 1% at December
31, 2000 and 1999, respectively. While the Plan participates in the
Master Trust, the investment portfolio is not ratable between the various
participating plans. As a result, those plans with smaller participation
in the common stock funds recognized a disproportionately lesser amount
of net depreciation and net appreciation in 2000 and 1999, respectively.
4. TAX STATUS
The Plan obtained its most recent tax determination letter in 1996, in
which the Internal Revenue Service stated that the Plan, as then
designed, was in compliance with the applicable requirements of the
Internal Revenue Code. The Plan has been amended since receiving the
determination letter. Rockwell believes that the Plan currently is
designed and being operated in compliance with the applicable
requirements of the Internal Revenue Code and that, therefore, the Plan
continues to
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qualify under Section 401(a) and the related trust continues to be
tax-exempt as of December 31, 2000. Therefore, no provision for income
taxes is included in the Plan's financial statements.
5. CHANGES IN THE PLAN
Effective January 1, 1999, certain participants of the Reliance Electric
Company Savings and Investment Plan transferred into the Plan. The
account balances related to these participants were transferred during
April 1999.
In January 1999, Rockwell approved a series of changes to the Plan that
became effective on April 1, 1999. These changes included increasing the
maximum percentage of employee compensation eligible to be contributed to
the Plan to 16%, increasing the investment opportunities available under
the Plan, adding flexibility to certain participant transactions such as
investment of future participant contributions, fund transfers,
participant loans, etc., and providing an ongoing investment education
program to Plan participants.
In January 2000, the participant account balances related to certain
employees were transferred from the Rockwell International Corporation
Salaried Retirement Savings Plan. The effective date of the participant
transfer was prior to December 31, 1999, and, accordingly, the Plan had
recorded a transfer receivable of $65,901,879 at December 31, 1999.
Effective June 1, 2000, Rockwell made changes to the Plan that included:
increasing the number of investment options, payment in cash of quarterly
dividends earned from Rockwell common stock to participants, allowing for
transfers of non-Rockwell stock funds to any of the investment funds,
allowing for cash or stock to be received for distributions or in-service
withdrawals from the plan and allowing participants who are 55 years old
with at least five years of service to transfer a portion of Rockwell
contribution funds (Stock Fund A) to other investment funds within the
plan.
Effective September 1, 2000, vested participants (three years of service)
are eligible to transfer a portion of Rockwell contribution funds (Stock
Fund A) to other investment funds within the Plan.
Effective September 2, 2000, the name of the plan has been changed to the
Rockwell Retirement Savings Plan.
Participants should refer to the Plan document for more complete
information regarding changes in the Plan.
6. SUBSEQUENT EVENTS
In December 2000, Rockwell announced its intention to spinoff its
Rockwell Collins avionics and communications business into a separately
traded, publicly held company. The transaction is expected to be
completed on June 29, 2001. After the spinoff, Rockwell Collins, Inc.
and Rockwell Automation will each own a 50% equity interest in the
Rockwell Scientific Company LLC.
Following the transaction, Rockwell will retain sponsorship of the Plan
and the trusts related thereto. Rockwell will cause each Rockwell
Collins, Inc. employee and each Rockwell Scientific Company LLC employee
to have a fully nonforfeitable right to such employee's account
balances, if any, under the Plan. The account balances of each such
employee will be maintained under the Plan. However, such employees will
not be entitled to make additional contributions under the Plan and
matching contributions will no longer be made by either Rockwell,
Rockwell Collins, Inc. or Rockwell Scientific Company LLC to the Plan on
behalf of such employees.
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Rockwell Collins, Inc. and Rockwell Scientific Company LLC will
separately establish new savings plans for their active employees. The
Rockwell Collins, Inc. savings plans and Rockwell Scientific Company LLC
savings plans will allow active employees to transfer their account
balances from the Plan to their respective company's savings plans.
* * * * *
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ROCKWELL RETIREMENT SAVINGS PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES,
DECEMBER 31, 2000
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COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
Description Of Investment
Identity Of Issuer, Including Collateral, Rate
Borrower, Lessor Of Interest, Maturity Date, Current
Or Similar Party Par Or Maturity Value Cost Value
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* Wells Fargo, N.A. Master Defined Contribution
Trust $ 70,089,797 $ 82,026,909
* Various Participant Loans; prime
participants rate plus 1%, due 2001
to 2010 4,704,736 4,704,736
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Total investments $ 74,794,533 $ 86,731,645
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*Party-in-interest
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan
Administrator has duly caused this annual report to be signed on its behalf by
the undersigned, hereunto duly authorized.
ROCKWELL RETIREMENT SAVINGS PLAN
By /s/ Alfred J. Spigarelli
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Alfred J. Spigarelli
Plan Administrator
Date: June 28, 2001
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EXHIBIT
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement No.
333-17031 of Rockwell International Corporation on Form S-8 and the Prospectus
related thereto of our report dated June 25, 2001, appearing in this Annual
Report on Form 11-K of the Rockwell Retirement Savings Plan for the year ended
December 31, 2000.
/s/ Deloitte & Touche LLP
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Deloitte & Touche LLP
Milwaukee, Wisconsin
June 25, 2001
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