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, 1999
ROCKWELL INTERNATIONAL CORPORATION RETIREMENT SAVINGS PLAN
FOR REPRESENTED HOURLY EMPLOYEES
ROCKWELL INTERNATIONAL CORPORATION
777 East Wisconsin Avenue, Suite 1400
Milwaukee, Wisconsin 53202
2
ROCKWELL INTERNATIONAL CORPORATION
RETIREMENT SAVINGS 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, 1999 and 1998 2
Statements of Changes in Net Assets Available for Benefits for the Year Ended
December 31, 1999 and the Nine Month Period Ended December 31, 1998 3
Notes to Financial Statements 4
SUPPLEMENTAL SCHEDULES:
Schedule of Assets Held for Investment Purposes at End of Year December 31, 1999 11
SIGNATURE S-1
EXHIBIT:
Independent Auditors' Consent S-2
3
INDEPENDENT AUDITORS' REPORT
To the Rockwell International Corporation Retirement Savings Plan for
Represented Hourly Employees and to Participants therein:
We have audited the accompanying statements of net assets available for benefits
of the Rockwell International Corporation Retirement Savings Plan for
Represented Hourly Employees (formerly Reliance Electric Company Savings and
Investment Plan for Hourly Employees-Madison, Indiana) (the "Plan") as of
December 31, 1999 and 1998 and the statements of changes in net assets available
for benefits for the year ended December 31, 1999 and the nine month period
ended December 31, 1998. 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, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits as of December 31,
1999 and 1998, and the changes in net assets available for benefits for the year
ended December 31, 1999 and the nine month period ended December 31, 1998 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 as of December
31, 1999 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 1999 financial statements and, in our opinion, is
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
Deloitte & Touche LLP
Milwaukee, Wisconsin
June 23, 2000
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ROCKWELL INTERNATIONAL CORPORATION
RETIREMENT SAVINGS PLAN FOR
REPRESENTED HOURLY EMPLOYEES
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1999 AND 1998
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1999 1998
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INVESTMENTS:
Master Defined Contribution Trust $7,039,089 $ --
Aetna Growth & Income Equity Account -- 48,300
Bankers Trust Pyramid Equity Index Fund -- 78,702
Merrill Lynch Basic Value Fund -- 64,210
Bankers Trust Pyramid Stable Value GIC -- 15,327
Merrill Lynch Retirement Preservation Trust -- 214,014
Short-term investments -- 11,141
Loan fund 49,078 --
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Total investments 7,088,167 431,694
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RECEIVABLES:
Contributions receivable -- 26,107
Interest and dividends receivable -- 73
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Total receivables -- 26,180
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TOTAL NET ASSETS
AVAILABLE FOR BENEFITS $7,088,167 $ 457,874
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See notes to financial statements.
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ROCKWELL INTERNATIONAL CORPORATION
RETIREMENT SAVINGS PLAN FOR
REPRESENTED HOURLY EMPLOYEES
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1999 AND THE NINE MONTH
PERIOD ENDED DECEMBER 31, 1998
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1999 1998
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NET ASSETS AVAILABLE FOR BENEFITS,
BEGINNING OF PERIOD $ 457,874 $ --
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INCOME:
Earnings from investments:
Net earnings in Master Defined Contribution Trust 107,494 --
Interest 4,760 5,284
Dividends -- 1,237
Net appreciation in fair value of investments 5,495 13,252
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Total earnings from investments 117,749 19,773
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Contributions:
Employer 167,230 107,020
Employee 474,546 331,081
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Total contributions 641,776 438,101
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Total income 759,525 457,874
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EXPENSES:
Payments to participants or beneficiaries 57,008 --
Administrative expenses 25,681 --
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Total expenses 82,689 --
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NET INCOME 676,836 457,874
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NET TRANSFERS TO THE PLAN 5,953,457 --
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NET INCREASE 6,630,293 457,874
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NET ASSETS AVAILABLE FOR BENEFITS,
END OF PERIOD $7,088,167 $ 457,874
========== ==========
See notes to financial statements.
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ROCKWELL INTERNATIONAL CORPORATION
RETIREMENT SAVINGS PLAN FOR
REPRESENTED HOURLY EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 1999 AND
THE NINE MONTH PERIOD ENDED DECEMBER 31, 1998
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1. DESCRIPTION OF THE PLAN
The following brief description of the Rockwell International Corporation
Retirement Savings Plan for Represented Hourly Employees (formerly
Reliance Electric Company Savings and Investment Plan for Hourly
Employees-Madison, Indiana) (the "Plan") is provided for general
information purposes only. Participants should refer to the Plan document
for complete information.
Effective January 1, 1999, the name of the Plan was changed from the
Reliance Electric Company Savings and Investment Plan for Hourly Employees
- Madison, Indiana to the Rockwell International Corporation Retirement
Savings Plan for Represented Hourly Employees. See Note 6 which describes
changes to the Plan.
a. General - The Plan is a defined contribution 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. (the
"Trustee") 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").
Effective April 1, 1999, the Plan's investments have been
transferred into the Rockwell International Master Defined
Contribution Trust (the "Master Trust"). See Note 4 for further
information. Participants may direct contributions to the investment
options available to the participants as described in the Plan
document.
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 & Poors 500 Index.
Mid-Cap Equity Fund - Invests principally in equity securities
of companies with medium market capitalizations.
International Equity Fund - Invests in equity securities of
companies outside the United States.
Stock Fund B (employee contributions) - Effective November 1,
1999 invests principally in the common stock of Rockwell but may
hold Rockwell common stock and cash.
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Other funds of the Plan include:
Stock Fund F - Holds the common stock of Meritor Automotive,
Inc. ("Meritor").
Stock Fund H - Holds the common stock of Conexant Systems, Inc.
("Conexant"). See Note 6
Stock Fund A (employer contributions) - Invests principally in
the common stock of Rockwell but may hold Rockwell common
stock and cash.
Loan Fund - Represents outstanding participant loan balances.
Stock Funds F and H are closed to any additional employer and
employee contributions. Additionally, there are special rules
regarding distributions from such funds. Any dividends received on
behalf of these funds are paid to the Stable Value Fund.
b. Participation - Open to participants at certain locations as defined
in the Plan document. Eligible employees may elect to contribute
from 1% to 16% of their pre-tax base compensation. Certain
participants who have completed six months of service are eligible
to receive matching company contributions. The Rockwell matching
contribution is 50% of participant contributions, up to the first 5%
of the participant's contribution for the Allen-Bradley IAM Union
participant group and 50% of participant contributions up to the
first 6% of the participant's contributions for the Madison
participant group. No Rockwell contributions are made to the
participant accounts of the Chicago Service Center, Hamilton, and
Euclid participant groups. The Rockwell matching contributions are
made to the Stock Fund A and the Interest Accumulation Fund in 1999
and 1998, respectively. Plan participants can elect to have their
contributions invested in 1% increments in the different funds
available.
c. Vesting - Employee contributions are fully vested. Rockwell matching
contributions for the former participants in the Employee Savings
and Investment Plan for Represented Hourly Employees (formerly
Allen-Bradley IAM Union) are vested 20% after the participant has
completed one year of service, 40% after two years of service and
are fully vested after the participant has completed three years of
vested service. Rockwell matching contributions for the Madison,
Indiana groups of participants are vested after the participant has
completed three years of vesting service.
d. Short-term Investments - The trustee makes short-term investments of
available cash until amounts are invested or disbursed in accordance
with Plan participant elections.
e. 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.
f. 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, participants may elect to receive
the vested portion of their account balance (employee and employer
contributions), in the form of a lump sum.
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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 they may elect to
receive annual installment payments for up to 10 years.
g. 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 contribution to the Plan in
accordance with ERISA. In the event 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.
h. 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
or 50% of the participant's account balance) from the 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 one month. Payments of principal and interest are
credited to the participant's account. Participants may have two
outstanding loans at a time.
i. 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
and fulfills certain requirements, as defined in the Plan document,
the participant's account will be restored.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Valuation of Investments - Investments in securities and short-term
investments are stated at fair value as measured by readily
available market prices; investments in contracts with insurance
companies, included in general accounts, are stated at contract
value. According to the provisions of AICPA Statement of Position
94-4 "Reporting of Investment Contracts Held by Health and Welfare
Benefit Plans and Defined Contribution Plans," the Guaranteed
Investment Contracts are deemed to be fully benefit responsive; as
such the contracts are presented at contract value on the face of
the financial statements. The crediting interest rate was 6.01% at
December 31, 1998. The average yield for the contract was 4.2% at
December 31, 1998. The Plan did not hold any guaranteed investment
contracts as of December 31, 1999. Mutual fund investments are
valued at net asset value at which shares of the fund may be
purchased or redeemed. The loan fund is stated at cost which
approximates fair value.
b. Security Transactions and Investment Income - Purchase and sales of
securities are reported on a trade date basis. Dividend income is
recorded on the ex-dividend date and interest income is recorded on
the accrual basis.
c. Expenses - The 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.
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e. Reclassification - As permitted by AICPA Statement of Position 99-3
"Accounting for and Reporting of Certain Defined Contribution
Benefit Plan Investments and Other Disclosure Matters" ("SOP No.
99-3"), the Plan's 1998 statement of net assets available for
benefits and statement of changes in net assets available for
benefits were reclassified to eliminate the by-fund reporting.
3. TAX STATUS
The Plan has not yet obtained a determination letter from the Internal
Revenue Service. Rockwell, however, believes that the Plan currently is
designed and being operated in compliance with the applicable requirements
of the Internal Revenue Code and that the Plan qualifies under Section
401(a) to be tax-exempt as of December 31, 1999. Therefore, no provision
for income taxes has been included in the Plan's financial statements.
4. MASTER DEFINED CONTRIBUTION TRUST
At December 31, 1999, with the exception of the participant loan fund, the
Plan's investment assets are held in the Master Defined Contribution Trust
("Master Trust"), 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 of the purpose of allocating the net earnings of the
investment accounts to the various participating trusts.
The investment accounts of the Master Trust are valued at fair value at
the end of each day. If available, quoted market prices are used to value
investments at fair value. 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 the same as those discussed in Note 1.
The net gain 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, 1999 is summarized as
follows:
Cash and equivalents $ 57,771,160
Corporate bonds and debentures 42,402,523
Common stocks 4,428,191,177
Mutual Funds 503,123,568
Stable Value Fund 547,797,792
Guaranteed investment contracts 147,012,701
Accrued income 4,091,896
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Net assets available for benefits $ 5,730,390,817
==============
The net earnings of the Master Trust for the year ended December 31, 1999 is
summarized as follows:
Interest $ 49,441,701
Dividends 57,083,001
Net appreciation (depreciation) in fair value of investments:
U.S. Government securities (375,707)
Corporate bonds and debentures (1,899,587)
Common stocks 2,074,314,661
Mutual funds 151,108,840
Other (392,165)
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Net earnings $ 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 December 31, 1999. While
the Plan participates in the Master Trust, the portfolio of investments 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 appreciation in 1999. Prior to the
transfer of assets to the Master Trust in April 1999, income of $4,760 and
net appreciation of $5,495 occurred in the various investment funds.
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5. NON PARTICIPANT-DIRECTED INVESTMENTS
In the period January 1, 1999 through March 31, 1999, prior to the
inclusion of the Plan's assets into the Master Trust (see Note 4), and for
the nine month period ended December 31, 1998, the interest accumulation
fund was considered to be a nonparticipant-directed fund under SOP
No.99-3. Information about the significant components of the changes in
net assets for the three-month period ended March 31, 1999 relating to
nonparticipant-directed investments is as follows:
Contributions $ 48,903
Interest 3,728
Transfers to participant-directed investments (649)
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Changes in net assets $ 51,982
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Information about the net assets at December 31, 1998 and the significant
components of the changes in net assets for the nine-month period then
ended relating to non-participant-directed investments is as follows:
Net Assets:
Guaranteed investment contract $213,949
Short-term investments 29
Contributions receivable 10,744
Interest and dividends receivable 73
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Net assets available for benefits $224,795
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Changes in Net Assets:
Contributions $220,177
Interest 4,618
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Changes in net assets $224,795
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6. CHANGES IN THE PLAN
In January 1999, Rockwell approved a series of changes to the Plan that
became effective April 1, 1999. These changes included transferring the
Plan's investments into the Master Trust (Note 4), changing the investment
options under the Plan to those discussed in Note 1, permitting two
concurrent participant loans, permitting participants to invest employee
contributions in 1% increments among all eight investment funds (described
in Note 1c), and allowing employees to elect pre-tax or after-tax employee
contributions daily.
In December 1999, the Reliance Electric Industrial Company Voluntary
Contributory Retirement Savings Plan with total assets of $3,162,659 was
merged with the Plan and $2,708,480 in assets
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belonging to certain participant groups of the Rockwell Employee Savings
and Investment Plan for Represented Hourly Employees were transferred into
the Plan.
7. SUBSEQUENT EVENTS
Effective June 1, 2000, Rockwell made changes to the Plan that included:
increasing the number of investment options, paying quarterly dividends 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 5 years of service to
transfer a portion of Rockwell contributions funds to other investment
funds within the plan. Participants should refer to the Plan document for
more information on these changes.
* * * * * *
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ROCKWELL INTERNATIONAL CORPORATION
RETIREMENT SAVINGS PLAN FOR
REPRESENTED HOURLY EMPLOYEES
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AT END OF YEAR DECEMBER 31, 1999
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COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
IDENTITY OF ISSUER, DESCRIPTION OF INVESTMENT, INCLUDING
BORROWER, LESSOR COLLATERAL, RATE OF INTEREST, CURRENT
OR SIMILAR PARTY MATURITY DATE, PAR MATURITY VALUE COST VALUE
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* Wells Fargo, N.A. Master Defined Contribution Trust $6,980,832 $7,039,089
* Various Participants Participant Loans; prime rate plus 1%, due
2000 to 2009 49,078 49,078
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$7,029,910 $7,088,167
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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
Administer has duly caused this annual report to be signed by the undersigned,
hereunto duly authorized.
ROCKWELL INTERNATIONAL CORPORATION
RETIREMENT SAVINGS PLAN FOR REPRESENTED HOURLY EMPLOYEES
By
-------------------------------------
Alfred J. Spigarelli
Plan Administrator
Date: June 23, 2000
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INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement No.
333-89219 of Rockwell International Corporation on Form S-8 and the Prospectus
related thereto of our report dated June 23, 2000, appearing in the Annual
Report on Form 11-K of the Rockwell International Corporation Retirement Savings
Plan for Represented Hourly Employees for the year ended December 31, 1999.
Deloitte & Touche LLP
Milwaukee, Wisconsin
June 23, 2000
S-2