1
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 EMPLOYEE SAVINGS AND INVESTMENT PLAN
FOR REPRESENTED HOURLY EMPLOYEES
ROCKWELL INTERNATIONAL CORPORATION
777 East Wisconsin Avenue, Suite 1400
Milwaukee, Wisconsin 53202
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ROCKWELL EMPLOYEE SAVINGS AND INVESTMENT
PLAN FOR REPRESENTED HOURLY EMPLOYEES
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, 9
December 31, 2000
SIGNATURE S-1
EXHIBIT:
Independent Auditors' Consent S-2
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INDEPENDENT AUDITORS' REPORT
To the Rockwell Employee Savings and Investment Plan for
Represented Hourly Employees and to Participants therein:
We have audited the accompanying statements of net assets available for benefits
of Rockwell Employee Savings and Investment Plan for Represented Hourly
Employees (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 EMPLOYEE SAVINGS AND INVESTMENT PLAN FOR
REPRESENTED HOURLY EMPLOYEES
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 $ 31,809,394 $ 30,700,204
Loan Fund 637,648 573,269
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Total investments 32,447,042 31,273,473
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TOTAL NET ASSETS AVAILABLE
FOR BENEFITS $ 32,447,042 $ 31,273,473
================ ================
See notes to financial statements.
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ROCKWELL EMPLOYEE SAVINGS AND INVESTMENT PLAN FOR
REPRESENTED HOURLY EMPLOYEES
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 $ 31,273,473 $ 31,079,149
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INCOME:
Earnings from investments:
Net earnings in Master Defined Contribution Trust 1,152,184 3,055,485
Interest 51,409 47,654
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Total earnings from investments 1,203,593 3,103,139
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Contributions:
Employer 797,992 1,033,529
Employee 2,682,843 3,499,904
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Total contributions 3,480,835 4,533,433
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Total income 4,684,428 7,636,572
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EXPENSES:
Payments to participants or beneficiaries 3,419,806 4,780,380
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NET INCOME 1,264,622 2,856,192
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NET TRANSFERS FROM THE PLAN (91,053) (2,661,868)
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NET INCREASE 1,173,569 194,324
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NET ASSETS AVAILABLE FOR BENEFITS,
END OF YEAR $ 32,447,042 $ 31,273,473
================== ==================
See notes to financial statements.
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ROCKWELL EMPLOYEE SAVINGS AND INVESTMENT PLAN
FOR REPRESENTED HOURLY EMPLOYEES
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 Employee Savings and
Investment Plan for Represented Hourly Employees (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
covering all represented hourly employees of Rockwell
International Corporation and its subsidiaries ("Rockwell") who
elect to participate in the Plan and who are employees at a
Rockwell location to which participation has been extended. 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 Note 5
which describes 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.
Stock Fund B (employee contributions) - Invests
principally in the common stock of Rockwell but may hold
Rockwell common stock and cash.
Other funds of the Plan include:
ArvinMeritor Stock Fund - Holds the common stock of
ArvinMeritor Automotive, Inc. ("ArvinMeritor").
Conexant Stock Fund - Holds the common stock of Conexant
Systems, Inc. ("Conexant").
Loan Fund - Represents outstanding participant loan
balances.
The ArvinMeritor and Conexant Stock Funds are closed to any
additional employee contributions. Additionally, there are
special rules regarding distribution from such funds. Any
dividends 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 on a pre-tax
basis up to a maximum of 9% of base compensation for non-highly
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compensated participants and up to 8% of base compensation for
highly-compensated participants, as defined in the Plan
document. In addition, participants may contribute up to an
additional 5% on a post-tax basis. Rockwell contributes out of
its current or accumulated earnings and profits, but not
otherwise, an amount equal to 50% of the first 5% of the
participant contribution . Rockwell contributions are made to
the Stable Value Fund.
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.
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 B. The 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 a participant's account plus
actual earnings thereon is based on the vesting schedule as
described in the Plan document. A participant is 100% vested
after 60 months of service.
f. Loans - A participant may obtain a loan in an amount as defined
in the Plan (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) from the remaining
balance of the participant's account. Loans are secured by the
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 after a minimum of 12 months.
Payments of principal and interest are credited to the
participant's account. Participants may have only one
outstanding loan at a time.
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. However, if the
participant is reemployed with Rockwell and fulfills certain
requirements, as defined in the Plan document, the participant's
account will be restored.
h. Plan Terminations - Although Rockwell has not expressed any
current intent to terminate the Plan, Rockwell has the authority
to terminate or modify the Plan or 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 contributions account will be fully
vested. Benefits under the Plan will be provided solely from the
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.
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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 up to 10 years.
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 are paid by the trustee from
Plan assets. Fees and expenses in connection with the provision
of administrative services by external service providers are
paid by Rockwell.
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.
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.
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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 fund 1,323,597 -
Guaranteed investment contracts 47,284,912 147,012,701
Accrued income - 4,091,896
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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 appreciation (depreciation) 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 less than 1% at both December 31,
2000 and 1999. 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 latest 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 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.
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5. 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.
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 EMPLOYEE SAVINGS AND INVESTMENT PLAN FOR
REPRESENTED HOURLY EMPLOYEES
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
------------- ------------------- ---------------------------- --------------- ---------------
* Wells Fargo, N.A. Master Defined
Contribution Trust $ 30,058,625 $ 31,809,394
* Various Participant Loans, prime
participants plus 1%, due 2001 to
2010 637,648 637,648
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Total investments $ 30,696,273 $ 32,447,042
=============== ================
*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 EMPLOYEE SAVINGS AND INVESTMENT PLAN
FOR REPRESENTED HOURLY EMPLOYEES
By /s/ Alfred J. Spigarelli
-------------------------------------
Alfred J. Spigarelli
Plan Administrator
Date: June 28, 2001
S-1
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EXHIBIT
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement No.
333-17405 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 Rockwell Employee Savings and Investment Plan for
Represented Hourly Employees for the year ended December 31, 2000.
/s/ Deloitte & Touche LLP
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Deloitte & Touche, LLP
Milwaukee, Wisconsin
June 25, 2001
S-2