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 RETIREMENT SAVINGS PLAN
FOR CERTAIN EMPLOYEES
ROCKWELL INTERNATIONAL CORPORATION
777 East Wisconsin Avenue, Suite 1400
Milwaukee, Wisconsin 53202
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ROCKWELL RETIREMENT
SAVINGS PLAN FOR CERTAIN 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,
December 31, 2000 10
SIGNATURE S-1
EXHIBIT:
Independent Auditors' Consent S-2
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INDEPENDENT AUDITORS' REPORT
To the Rockwell Retirement Savings Plan
for Certain Employees and to Participants therein:
We have audited the accompanying statements of net assets available for benefits
of Rockwell Retirement Savings Plan for Certain 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 RETIREMENT
SAVINGS PLAN FOR CERTAIN 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 $ 13,226,750 $ 10,857,708
Loan Fund 248,950 176,888
---------------- ---------------
Total investments 13,475,700 11,034,596
---------------- ---------------
TOTAL NET ASSETS AVAILABLE
FOR BENEFITS $ 13,475,700 $ 11,034,596
================ ===============
See notes to financial statements.
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ROCKWELL RETIREMENT
SAVINGS PLAN FOR CERTAIN EMPLOYEES
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED DECEMBER 31, 2000 AND 1999
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2000 1999
------------------- -----------------
NET ASSETS AVAILABLE FOR BENEFITS,
BEGINNING OF YEAR $ 11,034,596 $ 6,646,438
------------------- -----------------
INCOME:
(Loss) earnings from investments:
Net (loss) earnings in Master Defined
Contribution Trust (656,013) 2,522,891
Interest 17,348 7,684
------------------- -----------------
Total (loss) earnings from investments (638,665) 2,530,575
-------------------- -----------------
Contributions:
Employer 571,390 490,504
Employee 3,301,374 2,694,643
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Total contributions 3,872,764 3,185,147
------------------- -----------------
Total income 3,234,099 5,715,722
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EXPENSES:
Payments to participants or beneficiaries 414,400 195,044
Administrative expenses - 16,333
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Total expenses 414,400 211,377
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NET INCOME 2,819,699 5,504,345
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NET TRANSFERS (FROM) THE PLAN (378,595) (1,116,187)
-------------------- -----------------
NET INCREASE 2,441,104 4,388,158
------------------- -----------------
NET ASSETS AVAILABLE FOR BENEFITS,
END OF YEAR $ 13,475,700 $ 11,034,596
=================== =================
See notes to financial statements.
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ROCKWELL RETIREMENT
SAVINGS PLAN FOR CERTAIN 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 Retirement Savings Plan
for Certain 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
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. serves as trustee for 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 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.
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"). See Note 5.
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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 and Conexant 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 - Participation in the Plan is extended to certain
employees within Rockwell's Collins Radio Division who are
eligible to participate, as defined in the Plan document. 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.
Participants who have attained age 65 and retired and elected to
defer distribution until a later date, may elect on a daily
basis to transfer in 1% increments or specified dollar amounts
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,
respectively.
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. Employer Contributions - Rockwell contributions will be made as
a decreasing percentage of employee contributions to 50% and an
increasing maximum contribution of $750 by 2003. During 2000,
Rockwell contributed to the Plan an amount equal to 60% of the
participants' contributions up to a maximum of $450. During
1999, the Company contributed to the Plan an amount equal to 70%
of the participants' contributions up to a maximum of $350 per
year.
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Rockwell contributions are made to Stock Fund A, which holds a
combination of cash and Rockwell common stock.
f. 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 five years of vesting service.
Until a participant reaches five years of vesting service, the
participant is not vested in amounts related to Rockwell
contributions.
g. Loans - A participant may obtain a loan in the 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
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 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 a time.
h. Forfeitures - When certain terminations of participation in the
Plan occur, the nonvested portion of a 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.
i. 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 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 the
Plan assets.
j. 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
contribution) in the form of a lump sum or in annual installment
payments for 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 expenses are paid by Rockwell as provided in the
Plan document.
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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 the 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.
The net assets of the Master Trust at December 31, 2000 and 1999 are
summarized as follows:
2000 1999
------------------- -----------------
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
=================== ==================
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The net (loss) earnings of the Master Trust for the years ended December
31, 2000 and 1999 is summarized as follows:
2000 1999
------------------- -----------------
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 (1,247,593,797) 2,074,314,661
Mutual Funds (25,188,187) 151,108,840
Other (354,963) (392,165)
-------------------- -----------------
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 of 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 appreciation in 2000 and 1999, respectively.
4. TAX STATUS
The Plan has not yet obtained a tax determination letter, however,
Rockwell believes that the Plan, as in effect on December 31, 2000, was
designed and operated in compliance with the applicable requirements of
the Internal Revenue Code and that, therefore, the Plan qualified under
Section 401(a) and the related trust was 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
On December 31, 1998, Rockwell spun-off its Semiconductor Systems
business into an independent, publicly held company, Conexant, and
distributed all of the outstanding shares of common stock of Conexant to
holders of Rockwell common stock. In connection with the Conexant
spinoff, account balances totaling approximately $1.1 million relating
to Conexant participants of the Plan were transferred into a Conexant
savings plan in April 1999.
In August 1999, Rockwell and certain union groups approved a series of
changes to the Plan that became effective on October 1, 1999. These
changes include increasing to 16% the percentage of employee
compensation eligible to be contributed to the Plan, increasing the
investment options available under the Plan and 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.
Participants should refer to the Plan document for more information on
these changes.
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.
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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 RETIREMENT
SAVINGS PLAN FOR CERTAIN 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 $ 11,362,407 $ 13,226,750
* Various participants Participant Loans;
prime rate plus 1%,
due 2001 to 2010 248,950 248,950
--------------- ----------------
Total investments $ 11,611,357 $ 13,475,700
=============== ================
*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 FOR CERTAIN 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.
333-17031 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 Rockwell Retirement Savings Plan for Certain 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