<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 INTERNATIONAL CORPORATION
SALARIED RETIREMENT SAVINGS PLAN
ROCKWELL INTERNATIONAL CORPORATION
777 East Wisconsin Avenue, Suite 1400
Milwaukee, Wisconsin 53202
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ROCKWELL INTERNATIONAL CORPORATION
SALARIED RETIREMENT SAVINGS PLAN
TABLE OF CONTENTS
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<TABLE>
<CAPTION>
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 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 11
SIGNATURE S-1
EXHIBIT:
Independent Auditors' Consent S-2
</TABLE>
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INDEPENDENT AUDITORS' REPORT
To the Rockwell International Corporation Salaried
Retirement Savings Plan and to Participants therein:
We have audited the accompanying statements of the net assets available for
benefits of the Rockwell International Corporation Salaried Retirement Savings
Plan (formerly Allen-Bradley Savings and Investment Plan for Salaried 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
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ROCKWELL INTERNATIONAL CORPORATION
SALARIED RETIREMENT SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1999 AND 1998
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<TABLE>
<CAPTION>
1999 1998
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<S> <C> <C>
ASSETS
INVESTMENTS:
Master Defined Contribution Trust $ 5,651,337,578 $ 391,745,990
Loan fund 81,373,888 6,261,811
--------------- ---------------
Total investments 5,732,711,466 398,007,801
--------------- ---------------
RECEIVABLES:
Transfer receivable -- 3,071,918,905
Income 2,355,699 2,643
--------------- ---------------
Total receivables 2,355,699 3,071,921,548
--------------- ---------------
Total assets 5,735,067,165 3,469,929,349
--------------- ---------------
LIABILITIES:
Transfer payable 65,901,879 --
--------------- ---------------
TOTAL NET ASSETS AVAILABLE FOR BENEFITS $ 5,669,165,286 $ 3,469,929,349
=============== ===============
</TABLE>
See notes to financial statements.
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ROCKWELL INTERNATIONAL CORPORATION
SALARIED RETIREMENT SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED DECEMBER 31, 1999 AND 1998
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<TABLE>
<CAPTION>
1999 1998
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<S> <C> <C>
NET ASSETS AVAILABLE FOR BENEFITS,
BEGINNING OF YEAR $ 3,469,929,349 $ 344,316,810
--------------- ---------------
INCOME:
Earnings from investments:
Net earnings in Master Defined Contribution Trust 2,314,828,566 33,344,486
Interest 5,992,526 544,118
--------------- ---------------
Total earnings from investments 2,320,821,092 33,888,604
--------------- ---------------
Contributions:
Employer 45,000,355 9,179,570
Employee 86,358,519 27,887,348
--------------- ---------------
Total contributions 131,358,874 37,066,918
--------------- ---------------
Total income 2,452,179,966 70,955,522
--------------- ---------------
EXPENSES:
Payments to participants or beneficiaries 658,483,690 17,093,580
Administrative expenses 6,565,620 275,974
--------------- ---------------
Total expenses 665,049,310 17,369,554
--------------- ---------------
NET INCOME 1,787,130,656 53,585,968
--------------- ---------------
NET TRANSFERS TO THE PLAN 412,105,281 3,072,026,571
--------------- ---------------
NET INCREASE 2,199,235,937 3,125,612,539
--------------- ---------------
NET ASSETS AVAILABLE FOR BENEFITS,
END OF YEAR $ 5,669,165,286 $ 3,469,929,349
=============== ===============
</TABLE>
See notes to financial statements.
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ROCKWELL INTERNATIONAL CORPORATION
SALARIED RETIREMENT SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999 AND 1998
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1. DESCRIPTION OF PLAN
The following brief description of the Rockwell International Corporation
Salaried Retirement Savings Plan (formerly Allen-Bradley Savings and
Investment Plan for Salaried 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 Notes 5&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 & 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.
Stock Funds C and D - Hold the common stock of The Boeing
Company ("Boeing"). See Note 5.
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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 base 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 75%
of the first 8% of base compensation contributed by non-Rockwell
Automation participants, except for Rockwell Software, Inc.
participants. Rockwell contributions are made to Rockwell Stock Fund
A, but may be made in cash or in any combination of cash and
Rockwell common stock.
Rockwell may make a discretionary profit sharing contribution to the
plan on an annual basis on behalf of Rockwell Software, Inc.
participants. Investments of such participant's profit sharing
contribution will be consistent with the participant's investment
elections. If a participant does not have an investment election on
file, contributions will be 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.
Participants' contributions to the Guaranteed Return Fund are
invested in 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 for the contracts ranged from 5.82% to
6.70% and 5.84% to 6.47% at December 31, 1999 and 1998,
respectively.
Upon expiration of the Guaranteed Return Fund contract (GIC), the
funds in the GIC automatically roll into the Stable Value Fund. If
a participant who has an expiring GIC does not
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want to leave these funds in the Stable Value Fund, then the
participant may elect to transfer these funds to any other employee
investment fund within the Plan.
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 except for
Control System employees who are 20% vested in year 1, 40% vested in
year 2 and 100% vested in year 3.
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 remaining balance in
the participants' 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 and 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 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
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 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.
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.
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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% 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 Master Trust investments 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 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 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
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Total net assets available for benefits $ 5,730,390,817 $ 3,492,309,983
=============== ===============
</TABLE>
The net earnings (loss) of the Master Trust for the years ended December 31,
1999 and 1998 is 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 appreciation (depreciation) 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 approximately 99% and 11% at
December 31, 1999 and 1998, respectively. While the Plan participates in
the Master Trust, the investment portfolio is not ratable between the
various participating plans. As a result, those plans with smaller
participation in the common stock funds recognized a disproportionately
lesser amount of net appreciation and net depreciation in 1999 and 1998,
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,
1999. Therefore, no provision for income taxes is included in the Plan's
financial statements.
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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 the 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 distribution allocation of the shares (one
Conexant share for every two Rockwell shares held), the distribution of
Conexant shares had no impact on Plan participant account balances.
Participants may elect to transfer all or a portion of their account
balances in Stock Funds G and H to other investment funds within this
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 Salaried Employees to the Rockwell
International Corporation Salaried Retirement Savings Plan.
Effective on January 1, 1999, the Rockwell International Corporation
Savings Plan ("RIC Plan"), including all of its Plan assets, was merged
into the Plan. As a result, the Plan had a transfer receivable of
$3,071,918,905 due from the RIC Plan at December 31, 1998.
Effective January 1, 1999, the Reliance Electric Company Savings and
Investment Plan merged into the Plan. The account balances related to
these participants transferred during April 1999.
In January 1999, Rockwell approved a series of changes to the Plan that
became effective on April 1, 1999. These changes included: increasing the
maximum percentage of employee compensation eligible to be contributed to
the Plan to 16 percent, 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.
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 to the Rockwell Non-Represented Hourly
Retirement Savings Plan. The effective date of the participant transfer
was prior to December 31, 1999, and, accordingly, the plan had recorded a
transfer payable 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
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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
SALARIED RETIREMENT SAVINGS PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AT END OF YEAR DECEMBER 31, 1999
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<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 $ 2,455,742,107 $ 5,651,337,578
Trust
* Various Participants Participant Loans; prime rate
plus 1%, due 2000 to 2009 81,373,888 81,373,888
--------------- ---------------
Total investments $ 2,537,115,995 $ 5,732,711,466
=============== ===============
</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 INTERNATIONAL CORPORATION
SALARIED 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 International Corporation Salaried
Retirement Savings Plan for the year ended December 31, 1999.
Deloitte & Touche LLP
Milwaukee, Wisconsin
June 23, 2000
S-2
