<PAGE> 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 NON-REPRESENTED HOURLY
RETIREMENT SAVINGS PLAN
ROCKWELL INTERNATIONAL CORPORATION
777 East Wisconsin Avenue, Suite 1400
Milwaukee, Wisconsin 53202
<PAGE> 2
ROCKWELL NON-REPRESENTED HOURLY RETIREMENT SAVINGS PLAN
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE NO.
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<S> <C>
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 Years Ended December 31, 1999 and 1998 3
Notes to Financial Statements 4
SUPPLEMENTAL SCHEDULE:
Schedule of Assets Held for Investment Purposes at End of Year
December 31, 1999 10
SIGNATURE S-1
EXHIBIT:
Independent Auditors' Consent S-2
</TABLE>
<PAGE> 3
INDEPENDENT AUDITORS' REPORT
To the Rockwell Non-Represented Hourly Retirement Savings Plan and to
Participants therein:
We have audited the accompanying statements of net assets available for
benefits of the Rockwell Non-Represented Hourly Retirement Savings Plan
(formerly Allen-Bradley Savings and Investment Plan for Hourly Employees) (the
"Plan") as of December 31, 1999 and 1998, 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,
1999 and 1998, 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 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 when considered in
relation to the basic financial statements taken as a whole.
Deloitte & Touche LLP
Milwaukee, Wisconsin
June 23, 2000
<PAGE> 4
ROCKWELL NON-REPRESENTED
HOURLY RETIREMENT SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
----------- -----------
<S> <C> <C>
INVESTMENTS:
Master Defined Contribution Trust $26,250,012 $19,019,092
Loan fund 4,496,938 553,036
----------- -----------
Total investments 30,746,950 19,572,128
----------- -----------
RECEIVABLES:
Transfer receivable 65,901,879 2,784,988
Income 192,635 193
----------- -----------
Total receivables 66,094,514 2,785,181
----------- -----------
TOTAL NET ASSETS AVAILABLE
FOR BENEFITS $96,841,464 $22,357,309
=========== ===========
</TABLE>
See notes to financial statements.
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<PAGE> 5
ROCKWELL NON-REPRESENTED
HOURLY RETIREMENT SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
----------- -----------
<S> <C> <C>
NET ASSETS AVAILABLE FOR BENEFITS,
BEGINNING OF YEAR $22,357,309 $17,671,638
----------- -----------
INCOME:
Earnings from investments:
Net earnings in Master Defined Contribution Trust 8,766,307 1,268,556
Interest 210,783 42,263
----------- -----------
Total earnings from investments 8,977,090 1,310,819
----------- -----------
Contributions:
Employer 2,044,757 658,191
Employee 4,613,847 1,887,338
----------- -----------
Total contributions 6,658,604 2,545,529
----------- -----------
Total income 15,635,694 3,856,348
----------- -----------
EXPENSES:
Payments to participants or beneficiaries 4,553,639 1,545,572
Administrative expenses 329,958 10,024
----------- -----------
Total expenses 4,883,597 1,555,596
----------- -----------
NET INCOME 10,752,097 2,300,752
----------- -----------
NET TRANSFERS TO THE PLAN 63,732,058 2,384,919
----------- -----------
NET INCREASE 74,484,155 4,685,671
----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS,
END OF YEAR $96,841,464 $22,357,309
=========== ===========
</TABLE>
See notes to financial statements.
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<PAGE> 6
ROCKWELL NON-REPRESENTED
HOURLY RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999 AND 1998
1. DESCRIPTION OF PLAN
The following brief description of the Rockwell Non-Represented Hourly
Retirement Savings Plan (formerly Allen-Bradley Savings and Investment Plan
for 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 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 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.
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 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.
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<PAGE> 7
Stock Funds C and D - Hold the common stock of The Boeing Company
("Boeing"). See Note 5.
Stock Funds E and F - Hold the common stock of Meritor Automotive,
Inc. ("Meritor").
Stock Funds G and H - Hold the common stock of Conexant Systems,
Inc. ("Conexant"). See Note 5.
Exxon Stock Fund - Holds the common stock of Exxon Mobil
Corporation ("Exxon").
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.
Stock Funds C, D, E, F, G, H, Exxon 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 received on behalf of these funds are paid to
Stock Fund A or 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, highly compensated
participants are limited on a pre-tax basis 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 in cash or in any combination of cash and Rockwell common
stock.
c. Investment Elections - Participants may elect to have their
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.
Participants' contributions to 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 crediting
interest rates ranged from 5.82% to 6.70% and from 5.84% to 6.47% at
December 31, 1999 and 1998, 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.
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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 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 at any time 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 any time from the Plan.
g. Forfeitures - When certain terminations of participation in the Plan
occur, the nonvested portion of the participants' 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.
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 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, participants may elect to 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 System's employees with an account balance as
of October 1, 1995 will be permitted to select payment as a life
annuity or as a reduced monthly annuity benefit with 50%
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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. 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, 1999 and 1998, 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"), 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
gain of the investment accounts to the various participating plans.
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. 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 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.
The net assets of the Master Trust at December 31, 1999 and 1998 are
summarized as follows:
<TABLE>
<CAPTION>
1999 1998
--------------- ---------------
<S> <C> <C>
Cash and equivalents $ 57,771,160 $ 74,351,351
U.S. Government securities -- 20,395,583
Corporate bonds and debentures 42,402,523 135,081,333
Common stocks 4,428,191,177 2,852,241,039
Mutual funds 503,123,568 --
Stable value fund 547,797,792 --
Guaranteed investment contracts 147,012,701 406,115,361
Accrued income 4,091,896 4,125,316
--------------- ---------------
Total net assets available for benefits $ 5,730,390,817 $ 3,492,309,983
=============== ===============
</TABLE>
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<PAGE> 10
The net earnings (loss) of the Master Trust for the years ended December
31, 1999 and 1998 are summarized as follows:
<TABLE>
<CAPTION>
1999 1998
--------------- ---------------
<S> <C> <C>
Interest $ 49,441,701 $ 38,579,864
Dividends 57,083,001 58,366,753
Net (depreciation) appreciation in fair value of
investments:
U.S. Government securities (375,707) 407,560
Corporate bonds and debentures (1,899,587) (625,459)
Common stocks 2,074,314,661 (103,309,401)
Mutual funds 151,108,840 --
Other (392,165) --
--------------- ---------------
Net earnings (loss) $ 2,329,280,744 $ (6,580,683)
=============== ===============
</TABLE>
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, 1999
and 1998. 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 appreciation and net
depreciation in 1999 and 1998, 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 qualify under Section 401(a) and
the related trust continues to be tax-exempt as of December 31, 1999.
Therefore, no provision for income taxes is included in the Plan's
financial statements.
5. CHANGES IN THE PLAN
Effective January 1, 1998, participants may elect to transfer all or a
portion of the participant account balances in Boeing Stock Funds C and D
to other investment funds within this Plan. Special rules apply on which
funds are available for transfer.
On December 31, 1998, Rockwell spun-off its Semiconductor Systems business
into an independent, publicly held company, Conexant Systems, Inc.
("Conexant"), and distributed all of the outstanding shares of common stock
of Conexant to holders of Rockwell common stock. As a result of this
distribution, the Plan received one share of Conexant common stock for
every two shares of Rockwell common stock held by Stock Funds A and B as of
the distribution date. The Conexant shares were received on January 4, 1999
by Stock Funds G and H, which were established as of the December 31, 1998
distribution date. Upon distribution, the value of each Conexant share was
approximately $16.75, which was twice the amount of the approximate $8.37
decline in the value of each Rockwell share at that same time. As such,
based on the distributing allocation of the shares (one share for every two
Rockwell shares held), the distribution of Conexant shares had no impact on
Plan participant account
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<PAGE> 11
balances. Participants may elect to transfer all or a portion of their
account balances in Stock Fund G and H to other investment funds within the
Plan. Special rules apply on which funds are available for transfer.
Effective January 1, 1999, the plan was renamed from the Allen-Bradley
Savings and Investment Plan for Hourly Employees to the Rockwell
Non-Represented Hourly Retirement Savings Plan.
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.
Effective on January 1, 1999, the Cedar Rapids Offsite employee group
participants of the Rockwell Retirement Savings Plan for Certain Employees,
and the participant's related account balances, transferred into the Plan.
This amount is recorded as a transfer receivable on the statement of net
assets available for benefits at December 31, 1998.
In addition, 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.
Participants should refer to the Plan document for more complete
information regarding changes in the Plan.
6. SUBSEQUENT EVENTS
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.
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 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 NON-REPRESENTED
HOURLY RETIREMENT SAVINGS PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AT END OF YEAR DECEMBER 31, 1999
<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
DESCRIPTION OF INVESTMENT,
IDENTITY OF ISSUER, INCLUDING COLLATERAL, RATE
BORROWER, LESSOR OR OF INTEREST, MATURITY DATE, CURRENT
SIMILAR PARTY PAR OR MATURITY VALUE COST VALUE
--------------- --------------------- ------------------------------ ------------ ------------
<S> <C> <C> <C> <C>
* Wells Fargo, N.A. Master Defined Contribution
Trust $ 20,262,793 $ 26,250,012
* Various participants Participant Loans; prime rate
plus 1%, due 2000 to 2009 4,496,938 4,496,938
------------ ------------
Total investments $ 24,759,731 $ 30,746,950
============ ============
</TABLE>
* 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 by the
undersigned, hereunto duly authorized.
ROCKWELL NON-REPRESENTED
HOURLY RETIREMENT SAVINGS PLAN
By
-----------------------------------
Alfred J. Spigarelli
Plan Administrator
Date: June 23, 2000
S-1
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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 23, 2000, appearing in this Annual
Report on Form 11-K of the Rockwell Non-Represented Hourly Retirement Savings
Plan for the year ended December 31, 1999.
Deloitte & Touche LLP
Milwaukee, Wisconsin
June 23, 2000
S-2
