| þ | ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| o | TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| Page No. | ||||
| 1 | ||||
FINANCIAL STATEMENTS: |
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| 2 | ||||
| 3 | ||||
| 4 | ||||
SUPPLEMENTAL SCHEDULE: |
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| 15 | ||||
| 16 | ||||
EXHIBIT: |
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Consent of Independent Registered Public Accounting Firm |
17 | |||
| 2010 | 2009 | |||||||
ASSETS |
||||||||
Investments in Master Trust (Note 3) |
$ | 2,229,245,044 | $ | 2,002,849,727 | ||||
Notes receivable from participants |
14,920,816 | 14,872,443 | ||||||
Total assets |
2,244,165,860 | 2,017,722,170 | ||||||
Adjustment from fair value to contract value
for interest in Master Trust relating to
fully benefit-responsive investment contracts |
(13,804,890 | ) | (6,013,246 | ) | ||||
NET ASSETS AVAILABLE FOR BENEFITS |
$ | 2,230,360,970 | $ | 2,011,708,924 | ||||
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| 2010 | 2009 | |||||||
NET ASSETS AVAILABLE FOR BENEFITS,
BEGINNING OF YEAR |
$ | 2,011,708,924 | $ | 1,714,348,986 | ||||
ADDITIONS: |
||||||||
Income: |
||||||||
Interest in income of Master Trust |
315,764,526 | 377,683,545 | ||||||
Interest on notes receivable from participants |
849,003 | 1,095,763 | ||||||
Total income |
316,613,529 | 378,779,308 | ||||||
Contributions: |
||||||||
Employer |
15,195,798 | 13,556,107 | ||||||
Employee |
54,846,428 | 53,367,513 | ||||||
Total contributions |
70,042,226 | 66,923,620 | ||||||
Total additions |
386,655,755 | 445,702,928 | ||||||
DEDUCTIONS: |
||||||||
Payments to participants or beneficiaries |
166,976,130 | 147,947,504 | ||||||
Administrative expenses |
368,084 | 255,671 | ||||||
Total deductions |
167,344,214 | 148,203,175 | ||||||
NET INCREASE BEFORE TRANSFERS |
219,311,541 | 297,499,753 | ||||||
NET TRANSFERS BETWEEN AFFILIATED PLANS |
(659,495 | ) | (139,815 | ) | ||||
NET INCREASE |
218,652,046 | 297,359,938 | ||||||
NET ASSETS AVAILABLE FOR BENEFITS,
END OF YEAR |
$ | 2,230,360,970 | $ | 2,011,708,924 | ||||
- 3 -
| 1. | DESCRIPTION OF THE PLAN |
The following brief description of the Rockwell Automation Retirement Savings Plan for
Salaried Employees (the “Plan”) is provided for general information purposes only.
Participants should refer to the Summary Plan Description and Plan document for more complete
information. |
| a. | General — The Plan is a defined contribution savings plan sponsored by Rockwell
Automation, Inc. (“Rockwell Automation”). The Rockwell Automation Employee Benefit Plan
Committee and the Plan Administrator control and manage the operation and administration
of the Plan. Fidelity Management Trust Company (the “Trustee”) is the trustee of the
Rockwell Automation, Inc. Defined Contribution Master Trust (the “Master Trust”). 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”). |
Participants in the Plan may invest in a suite of twelve lifestyle mutual funds, nine
core investment options and a brokerage option. In addition, the Rockwell Automation
Stock Fund was available in 2010 and 2009 and is specific to the Plan. |
| b. | Participation — The Plan provides that eligible employees electing to become
participants may contribute up to a maximum of 50% of base compensation, as defined in
the Plan document. However, contributions by highly compensated participants are limited
to 16% of the participant’s base compensation. Participant contributions can be made
either before or after United States federal taxation of a participant’s base
compensation. |
Rockwell Automation contributes an amount equal to 50% of the first 6% of base
compensation contributed by the participants. Prior to January 1, 2011,
Rockwell Automation could make a discretionary profit sharing contribution to the Plan on
an annual basis on behalf of certain Rockwell Software, Inc. (“Rockwell Software”)
participants. This contribution, if made, was the only employer contribution Rockwell
Software participants received. With the exception of profit sharing contributions on
behalf of certain Rockwell Software participants, all Rockwell Automation contributions
are made to the Rockwell Automation Stock Fund. Rockwell Software profit sharing
contributions are made to the funds consistent with the participant’s investment election
for employee contributions to the Plan. Effective January 1, 2011, the profit sharing
contribution to certain Rockwell Software participants was eliminated. Rockwell
Automation contributes an amount equal to 50% of the first 6% of base compensation
contributed to the Plan by the Rockwell Software participants. Participants may elect to
transfer a portion or all of their holdings in the Rockwell Automation Stock Fund to one
or more of the other investment funds. |
In April 2009, Rockwell Automation amended the Plan to suspend the matching contribution
for the period of April 24, 2009 through September 30, 2009, Rockwell Automation’s fiscal
year end. In September 2009, the Plan was again amended to suspend the matching
contributions through March 2010. In December 2009, Rockwell Automation contributed a
non-elective contribution equal to 1.69% of year-to-date base compensation and overtime
through September 25, 2009 for eligible employees. Also in December 2009, Rockwell
Automation amended the Plan to reinstate the matching contribution effective January 1,
2010. |
- 4 -
Effective July 1, 2010, the Company closed participation in the Rockwell Automation
Pension Plan to certain employees hired after June 30, 2010. The affected employees
became eligible for a Non-Elective contribution to the Plan. The Non-Elective
contribution is based on age and years of service as of December 31st each year
and ranges from 3% to 7% of eligible compensation. The contribution is paid by Rockwell
Automation annually, at the end of the first quarter of the following calendar year.
These participants are also eligible for the matching contribution of 50% of the first 6%
of base compensation contributed to the Plan by the participants. The contribution
schedule is as follows: |
| Age + Years of | Company Contribution in | |||
| Service | % of Compensation | |||
< 40 |
3 | % | ||
40 to 59 |
4 | % | ||
60 to 79 |
5 | % | ||
80 + |
7 | % | ||
| c. | Investment Elections — Participants may contribute to any or all of the funds that
are available for contributions in 1% increments. Participants may change such
investment elections on a daily basis. If a participant does not have an investment
election on file, contributions are made to one of the Fidelity Freedom K Funds during
2010 and one of the Fidelity Freedom Funds during 2009, based on the participant’s
projected retirement date. |
| 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 each stock fund and each mutual fund, as represented by common units.
Participants’ accounts are charged or credited for Plan earnings or loss from
investments, 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 the
participant’s account that relates to the participant’s contributions and earnings
thereon. Rockwell Automation’s matching contributions, non-elective contributions and
earnings are vested after the participant has completed three years of vesting service. |
| f. | Notes Receivable From Participants — A participant may obtain a loan in an amount
as defined in the Plan document (not less than $1,000 and not greater than the lower of
$50,000, reduced by the participant’s highest outstanding loan balance during the 12
month period before the date of the loans, or 50% of the participant’s vested account
balance less any 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% as of the last day of the month before the loan
is requested. 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 up to two
outstanding loans at any time from the Plan. |
- 5 -
| 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 Automation’s
contributions to the Plan in accordance with ERISA. However, if the participant is
re-employed with Rockwell Automation and fulfills certain requirements, as defined in the
Plan document, the participant’s account will be restored. As of December 31, 2010 and
2009, forfeited nonvested accounts totaled $185,057 and $616,332, respectively. During
the year ended December 31, 2010, Rockwell Automation’s contributions were reduced by
$868,586 from forfeited nonvested accounts. During the year ended December 31, 2009,
Rockwell Automation’s contributions were not reduced by the forfeited nonvested accounts
as these contributions were suspended for a portion of the year. |
| h. | Plan Termination — Although Rockwell Automation has not expressed any current
intent to terminate the Plan, Rockwell Automation has the authority to terminate or
modify the Plan and to suspend contributions to the Plan in accordance with ERISA. If
the Plan is terminated or contributions by Rockwell Automation 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. Active
participants may also withdraw certain amounts when financial hardship is demonstrated.
Participant vested amounts are payable upon retirement, death or other termination of
employment. |
| j. | Expenses — Plan fees and expenses, including fees and expenses associated with the
provision of administrative services by external service providers, are paid from Plan
assets. |
| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
| a. | Valuation of Investments — The Plan has an interest in the net assets of the Master
Trust. The net assets of the Master Trust are stated at fair value. Benefit responsive
investment contracts held in the Master Trust are then adjusted and stated at contract
value. Investment contracts held by a defined contribution plan are required to be
reported at fair value. However, contract value is the relevant measurement attribute for
that portion of the net assets available for benefits of a defined contribution plan
attributable to fully benefit-responsive investment contracts because contract value is
the amount participants would receive if they were to initiate permitted transactions
under the terms of the plan. The Plan invests in investment contracts through a common
collective trust (the “Stable Value Fund”) held by the Master Trust. The Statements of
Net Assets Available for Benefits present the fair value of the investment in the common
collective trust as well as the adjustment of the investment in the common collective
trust from fair value to contract value relating to the investment contracts. The
Statements of Changes in Net Assets Available for Benefits are presented on a contract
value basis. |
Purchases and sales of securities are recorded on a trade date basis. Interest income is
recorded on an accrual basis. Dividends are recorded on the dividend payable date. |
- 6 -
| b. | Notes Receivable From Participants — In September 2010, the Financial Accounting
Standards Board (“FASB”) released Accounting Standards Update (“ASU”) 2010.25, Reporting
Loans to
Participants by Defined Contribution Pension Plans. The ASU clarifies how loans to
participants should be classified and measured by defined contribution benefit plans.
Participant loans were previously classified as investments at fair value. The ASU
requires that participant loans be classified as notes receivable from participants, which
are segregated from plan investments and measured at their unpaid principal balance plus
any accrued but unpaid interest. As required under the ASU, the Plan has retrospectively
adopted the ASU as of December 31, 2009. |
The adoption of the ASU impacted the classification of participant loans on the statements
of net assets available for benefits, but had no impact on net assets available for
benefits. |
| c. | Fair Value Measurements — Accounting Standards Codification (“ASC”) Topic 820
establishes a framework for measuring fair value. That framework provides a fair value
hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.
The hierarchy gives the highest priority to unadjusted quoted prices in active markets
for identical assets or liabilities (level 1 measurements) and the lowest priority to
unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy
under ASC Topic 820 are described below: |
| Level 1 — Valuation based on quoted prices in active markets for identical assets or liabilities that the Master Trust has the ability to access. Since the valuation is based on quoted prices that are readily and regularly available in the active market, valuation of these investments does not entail a significant degree of judgment. |
| Level 2 — Valuation based on quoted prices in markets that are not active or for which all significant inputs are observable, directly or indirectly. Valuation methodology for these assets include: |
| • | Quoted prices for similar assets or liabilities in active markets; |
| • | Quoted prices for identical or similar assets or liabilities in
inactive markets; |
| • | Inputs other than quoted prices that are observable for the asset or
liability; |
| • | Inputs that are derived principally from or corroborated by observable
market data by correlation or other means. |
If the asset or liability has a specified (contractual) term, the level 2 input must
be observable for substantially the full term of the asset or liability. |
| Level 3 — Valuation based on inputs that are unobservable and significant to the overall fair value measurement. |
The asset’s or liability’s fair value measurement level within the fair value hierarchy is
based on the lowest level of any input that is significant to the fair value measurement.
Valuation techniques used need to maximize the use of observable inputs and minimize the
use of unobservable inputs. |
| d. | 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 Plan assets during the reporting period. Actual results could differ
from those estimates. |
| e. | Payment of Benefits — Benefits are recorded when paid. |
| f. | Risks and Uncertainties — The Plan invests in various investments. In general,
investments are exposed to various risks, such as interest rate, credit and overall
market volatility. Due to the level of risk associated with certain investments, it is
reasonably possible that changes in the
values of certain investments will occur in the near term and that such changes could
materially affect the amounts reported in the financial statements. |
| g. | Subsequent Events — Management has evaluated the impact of all subsequent events
through June 22, 2011, the date the Plan’s financial statements were issued, and
determined that all subsequent events have been appropriately recognized and disclosed in
the accompanying financial statements. |
- 7 -
| 3. | MASTER TRUST |
The Plan’s investments are held in the Master Trust account at the Trustee. Use of the Master
Trust permits the commingling of the trust assets of a number of benefit plans of Rockwell
Automation and its subsidiaries for investment and administrative purposes. Although assets
are commingled in the Master Trust, the Trustee maintains supporting records for the purpose
of allocating the net earnings or loss 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 net earnings or loss of the accounts for each day are 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, 2010 and 2009 are summarized as follows: |
| 2010 | 2009 | |||||||
Cash |
$ | 192,228 | $ | 69,111 | ||||
Money market fund |
10,439,504 | 9,470,565 | ||||||
Common stocks |
717,492,067 | 587,735,446 | ||||||
Mutual funds |
851,405,336 | 788,544,912 | ||||||
Brokeragelink accounts |
26,389,927 | 18,307,519 | ||||||
Corporate debt investments |
14,832,924 | 12,411,311 | ||||||
Asset and mortgage backed securities |
25,159,382 | 19,215,703 | ||||||
U.S. government securities |
3,094,743 | 6,828,368 | ||||||
Other fixed income investments |
3,122,209 | 1,963,222 | ||||||
Investments in common collective trusts: |
||||||||
Fidelity U.S. Equity Index Commingled Pool |
92,824,020 | 83,914,214 | ||||||
Mellon Rockwell EB Daily Fund |
31,111,912 | 22,031,160 | ||||||
Stable Value
Fund – guaranteed investment contracts |
532,448,255 | 531,083,774 | ||||||
Total investments at fair value |
2,308,512,507 | 2,081,575,305 | ||||||
Accrued income |
121 | 252 | ||||||
Accrued fees |
(394,349 | ) | (742,531 | ) | ||||
Pending trades (net) |
(496,022 | ) | (1,282,714 | ) | ||||
Net assets at fair value |
2,307,622,257 | 2,079,550,312 | ||||||
Adjustment from fair value to contract value
for fully benefit-responsive investment contracts |
(14,926,893 | ) | (6,541,235 | ) | ||||
Net assets |
$ | 2,292,695,364 | $ | 2,073,009,077 | ||||
The following is a description of the valuation methodologies used for the Master Trust’s
investments measured at fair value. There have been no changes in the methodologies during the
years ended December 31, 2010 and 2009. |
Money market fund — Valued at cost, which approximates the fair value of the net asset value
of shares held at year end. |
- 8 -
Common stocks — Valued at the closing price reported on the active market on which the
individual securities are traded. |
Mutual funds — Valued at the net asset value of shares held at year end. |
Brokeragelink accounts — Valued at the most recent closing price reported on the market on
which the individual securities are traded. |
Corporate debt investments — Valued at the most recent closing price reported on the market on
which the individual securities are traded. |
Asset and mortgage backed securities and other fixed income investments — Valued at the most
recent closing price reported on the market on which individual securities are traded. |
U.S. government securities — Valued at the closing price reported on the active market on
which the individual securities are traded. |
Common collective trust; Stable Value Fund — Valued at fair value, based on information
provided by the trustee, by discounting the related cash flows based on current yields of
similar instruments with comparable durations and considering the credit-worthiness of the
issuer of the specific instruments held by the fund at year end. |
Common collective trusts; Other — Valued at the net asset value of shares held at year end. |
The methods described above may produce a fair value calculation that may not be indicative of
net realizable value or reflective of future fair values. Furthermore, while the Master Trust
believes its valuation methods are appropriate and consistent with other market participants,
the use of different methodologies or assumptions to determine the fair value of certain
financial instruments could result in a different fair value measurement at the reporting date. |
- 9 -
The following tables set forth by level, within the fair value hierarchy, the fair value of the
Master Trust’s investments as of December 31, 2010 and 2009: |
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Cash |
$ | 192,228 | $ | — | $ | — | $ | 192,228 | ||||||||
Money market fund |
— | 10,439,504 | — | 10,439,504 | ||||||||||||
Common stocks |
717,492,067 | — | — | 717,492,067 | ||||||||||||
Mutual funds |
851,405,336 | — | — | 851,405,336 | ||||||||||||
Brokeragelink
accounts |
— | 26,389,927 | — | 26,389,927 | ||||||||||||
Corporate debt |
— | 14,832,924 | — | 14,832,924 | ||||||||||||
Asset and mortgage
backed securities |
— | 25,159,382 | — | 25,159,382 | ||||||||||||
U.S. government
securities |
3,094,743 | — | — | 3,094,743 | ||||||||||||
Other fixed income
investments |
— | 3,122,209 | — | 3,122,209 | ||||||||||||
Common collective
trusts |
— | 123,935,932 | 532,448,255 | 656,384,187 | ||||||||||||
Total Master Trust
Investments |
$ | 1,572,184,374 | $ | 203,879,878 | $ | 532,448,255 | $ | 2,308,512,507 | ||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Cash |
$ | 69,111 | $ | — | $ | — | $ | 69,111 | ||||||||
Money market fund |
— | 9,470,565 | — | 9,470,565 | ||||||||||||
Common stocks |
587,735,446 | — | — | 587,735,446 | ||||||||||||
Mutual funds |
788,544,912 | — | — | 788,544,912 | ||||||||||||
Brokeragelink
accounts |
— | 18,307,519 | — | 18,307,519 | ||||||||||||
Corporate debt |
— | 12,411,311 | — | 12,411,311 | ||||||||||||
Asset and mortgage
backed securities |
— | 19,215,703 | — | 19,215,703 | ||||||||||||
U.S. government
securities |
6,828,368 | — | — | 6,828,368 | ||||||||||||
Other fixed income
investments |
— | 1,963,222 | — | 1,963,222 | ||||||||||||
Common collective
trusts |
— | 105,945,374 | 531,083,774 | 637,029,148 | ||||||||||||
Total Master Trust
Investments |
$ | 1,383,177,837 | $ | 167,313,694 | $ | 531,083,774 | $ | 2,081,575,305 | ||||||||
- 10 -
The table below sets forth a summary of changes in fair market value of the Master Trust’s level
3 investments for the years ended December 31, 2010 and 2009: |
| Common | Common | |||||||
| collective trust – | collective trust – | |||||||
| Stable Value Fund | Stable Value Fund | |||||||
| December 31, | December 31, | |||||||
| 2010 | 2009 | |||||||
Balance, beginning of year |
$ | 531,083,774 | $ | 535,052,749 | ||||
Change in adjustment to fair value from contract value |
8,385,658 | 14,123,728 | ||||||
Purchases, sales, issuances, and settlements, net |
(7,021,177 | ) | (18,092,703 | ) | ||||
Balance, end of year |
$ | 532,448,255 | $ | 531,083,774 | ||||
The Plan offers a Stable Value Fund option which, through the Master Trust, invests primarily
in guaranteed investment contracts (“GICs”) and money market investments. The GICs are
benefit-responsive and are designed to allow the Stable Value Fund to maintain a constant net
asset value (“NAV”) and to protect the funds in extreme circumstances. The contracts accrue
interest using a formula called the “crediting rate.” The contracts use the crediting rate
formula to convert fair value changes in the covered assets into income distributions in order
to minimize the difference between the fair and contract value of the covered assets over time.
Using the crediting rate formula, an estimated future fair value is calculated by compounding
the fund’s current fair value at the fund’s current yield to maturity for a period equal to the
fund’s duration. The crediting rate is the discount rate that equates that estimated future
fair value with the fund’s current contract value. Crediting rates are reset quarterly. The
contracts provide a guarantee that the crediting rate will not fall below 0%. The crediting
interest rate for the Stable Value Fund was 2.38% and 2.48% at December 31, 2010 and 2009,
respectively. The crediting interest rates on the underlying investments are reviewed on a
quarterly basis for resetting. The average yield for the years ended December 31, 2010 and
2009 was 2.45% and 2.99%, respectively. |
The fair value of the Stable Value Fund equals the fair value of the underlying assets in the
related common collective trust fund reported to the Plan by the Trustee. In determining the
net assets available for benefits, the Stable Value Fund is recorded at contract value. An
investment contract is generally valued at contract value, rather than fair value, to the
extent it is fully benefit-responsive. Contract value represents contributions made under the
contract, plus earnings, less participant withdrawals and administrative expenses.
Participants may ordinarily direct the withdrawal or transfer of all or a portion of their
investment at contract value. There are currently no reserves against contract values for
credit risk of the contract issuers or otherwise. |
Certain events limit the ability of the Plan to transact at contract value with the issuer.
Such events include the following: (i) amendments to the Plan documents (including complete or
partial plan termination or merger with another plan); (ii) changes to the Plan’s prohibition
on competing investment options or deletion of equity wash provisions; (iii) bankruptcy of the
plan sponsor or other plan sponsor events (e.g. divestitures or spin-offs of a subsidiary)
which cause a significant withdrawal from the Plan; or (iv) the failure of the trust to qualify
for exemption from federal income taxes or any required prohibited transaction exemption under
Employee Retirement Income Security Act of 1974. The Plan Administrator does not believe that
the occurrence of any such event, which would limit the Plan’s ability to transact at contract
value with participants, is probable. |
An issuer may terminate a contract at any time. In the event that the fair value of the fund’s
covered assets is below their contract value at the time of such termination, the Trustee may
elect to keep the wrap contract in place until such time as the fair value of the fund’s
covered assets is equal to their
contract value. A wrap issuer may also terminate a wrap contract if the Trustee’s investment
management authority over the fund is limited or terminated as well as if all of the terms of
the wrap contract fail to be met. In the event that the fair value of the fund’s covered assets
is below their contract value at the time of such termination, the terminating wrap provider
would not be required to make a payment to the fund. |
- 11 -
The Plan’s interest in the Stable Value Fund was approximately 92% at December 31, 2010 and
2009. |
The net investment income of the Master Trust for the years ended December 31, 2010 and 2009 is
summarized as follows: |
| 2010 | 2009 | |||||||
Interest |
$ | 12,711,688 | $ | 16,249,521 | ||||
Dividends |
24,167,763 | 24,714,876 | ||||||
Net appreciation in fair value of investments: |
||||||||
Common stocks |
173,587,324 | 158,317,629 | ||||||
Mutual funds |
88,692,897 | 156,895,589 | ||||||
Debt investments |
4,377,811 | 6,192,495 | ||||||
Investment in common collective trust – |
||||||||
Fidelity U.S. Equity Index Commingled Pool |
12,208,149 | 17,351,246 | ||||||
Mellon Rockwell EB Daily Fund |
5,414,708 | 4,478,111 | ||||||
Brokeragelink accounts |
2,877,593 | 3,216,750 | ||||||
Net investment income |
$ | 324,037,933 | $ | 387,416,217 | ||||
The Plan’s interest in the Master Trust, as a percentage of net assets held by the Master
Trust, was approximately 97% at December 31, 2010 and 96% at December 31, 2009. While the
Plan participates in the Master Trust, the investment portfolio is not ratable among 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 2010
and 2009. |
The Master Trust’s investments that exceeded 5% of net assets as of December 31, 2010 and 2009
are as follows: |
| Description of Investment | 2010 | 2009 | ||||||
Stable Value Fund |
$ | 532,448,255 | $ | 531,083,774 | ||||
Rockwell Automation, Inc. common stock |
334,856,657 | 234,897,476 | ||||||
Fidelity International Discovery K Fund |
115,502,146 | 114,588,275 | ||||||
Fidelity Freedom K 2020 Fund |
132,816,947 | — | ||||||
Fidelity Freedom 2020 Fund |
— | 120,745,109 | ||||||
- 12 -
| 4. | NON-PARTICIPANT DIRECTED INVESTMENTS |
Information about the net assets and the significant components of the changes in net assets
relating to the non-participant directed investments in the Rockwell Automation Stock Fund for
the years ended December 31, 2010 and 2009 is as follows: |
| 2010 | 2009 | |||||||
Net Assets, Beginning of Year* |
$ | 167,892,435 | $ | 123,408,396 | ||||
Changes in net assets: |
||||||||
Contributions |
15,657,409 | 4,978,117 | ||||||
Dividends |
4,376,583 | 4,304,596 | ||||||
Net appreciation |
84,875,499 | 55,070,559 | ||||||
Benefits paid to participants |
(12,496,963 | ) | (8,495,975 | ) | ||||
Administrative expenses |
(41,282 | ) | (29,065 | ) | ||||
Transfers |
(19,354,773 | ) | (11,344,193 | ) | ||||
Total changes in net assets |
73,016,473 | 44,484,039 | ||||||
Net Assets, End of Year* |
$ | 240,908,908 | $ | 167,892,435 | ||||
| * | These net assets are included in the Master Trust. |
| 5. | TAX STATUS |
The Internal Revenue Service (the “IRS”) has determined and informed Rockwell Automation by
letter dated September 28, 2009, that the Plan and related trust are designed in accordance
with applicable sections of the Internal Revenue Code of 1986, as amended (the “IRC”). The
Plan has been amended since receiving the determination letter. The Plan Administrator
believes that the Plan is currently designed and is being operated in compliance with the
applicable provisions of the IRC and the Plan continues to be tax-exempt. Therefore, no
provision for income taxes has been included in the Plan’s financial statements. |
Accounting principles generally accepted in the United States of America require the Plan’s
management to evaluate uncertain tax positions taken by the Plan. The financial statement
effects of a tax position are recognized when the position is more likely than not, based on
the technical merits to be sustained upon examination by the IRS. The Plan Administrator has
analyzed the tax positions taken by the Plan, and has concluded that as of December 31, 2010
and 2009, there were no uncertain positions taken or expected to be taken. The Plan has
recognized no interest or penalties related to uncertain tax positions. The Plan is subject
to routine audits by taxing jurisdictions; however, there are currently no audits for any tax
periods in progress. The Plan Administrator believes the Plan is no longer subject to income
tax examinations for years prior to 2007. |
| 6. | RELATED-PARTY TRANSACTIONS |
Certain Master Trust investments are shares of mutual funds managed by Fidelity Management
Trust Company. Fidelity is the trustee and recordkeeper as defined by the Master Trust;
therefore, these transactions qualify as party-in-interest transactions. Fees paid by the
Master Trust for investment management services were included as a reduction of the return
earned on each fund. |
At December 31, 2010 and 2009, the Master Trust held 4,669,595 and 4,999,946 shares,
respectively, of common stock of Rockwell Automation, the sponsoring employer, with a cost
basis of $68,144,899 and $65,637,369, respectively, and a fair value of $334,856,657 and
$234,897,476, respectively. |
During 2010 and 2009, dividends on Rockwell Automation common stock, held in the Master Trust,
paid and/or credited to eligible plan participants’ accounts totaled $6,193,369 and
$6,038,846, respectively. |
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| 7. | RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500 |
Reconciliation of net assets available for benefits reported in the financial statements to
the net assets reported on line 1(l) of the 2010 Form 5500 Schedule H, Part I is presented
below. |
| 2010 | 2009 | |||||||
Net assets available for benefits
reported in the financial statements |
$ | 2,230,360,970 | $ | 2,011,708,924 | ||||
Adjustment from contract value to fair value
for interest in Master Trust relating to
fully benefit-responsive investment contracts |
13,804,890 | 6,013,246 | ||||||
Net assets reported on Form 5500 |
$ | 2,244,165,860 | $ | 2,017,722,170 | ||||
Reconciliation of total additions to plan assets reported in the financial statements to the
total income reported on line 2(d) of the 2010 Form 5500 Schedule H, Part II is presented
below. |
| 2010 | ||||
Total additions reported in the financial statements |
$ | 386,655,755 | ||
Adjustment from contract value to fair value
for interest in Master Trust relating to
fully benefit-responsive investment contracts |
7,791,644 | |||
Total income as reported on Form 5500 |
$ | 394,447,399 | ||
| 8. | SUBSEQUENT EVENT |
On May 4, 2011, the Rockwell Automation Employee Benefit Policy Committee approved a plan of
consolidation under which the Rockwell Automation Retirement Savings Plan for Hourly Employees,
Rockwell Automation Retirement Savings Plan for Represented Hourly Employees, and Rockwell
Automation Savings and Investment Plan for Represented Hourly Employees would be merged with
and into the Rockwell Automation Retirement Savings Plan for Salaried Employees. The merger is
anticipated by the Plan Administrator to occur on July 21, 2011, at which time the Plan name
will change to Rockwell Automation Retirement Savings Plan. The net assets of the Plans that
would be merged with and into the Rockwell Automation Retirement Savings Plan for Salaried
Employees totaled $75,671,090 as of December 31, 2010. |
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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, | Fair | |||||||||||||||
| or Similar Party | Par or Maturity Value | Cost | Value | ||||||||||||||
| * | Fidelity Management |
Rockwell Automation, Inc. | |||||||||||||||
Trust Company |
Defined Contribution | ||||||||||||||||
| Master Trust | $ | 1,751,419,243 | $ | 2,229,245,044 | |||||||||||||
| * | Various |
Notes Receivable From | |||||||||||||||
participants |
Participants; rates ranging | ||||||||||||||||
| between 3.25% and | |||||||||||||||||
| 10.25%, due 2011 to 2024 | — | 14,920,816 | |||||||||||||||
Total assets (held at end of year) |
$ | 1,751,419,243 | $ | 2,244,165,860 | |||||||||||||
| * | Party-in-interest |
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| ROCKWELL AUTOMATION RETIREMENT SAVINGS PLAN FOR SALARIED EMPLOYEES |
||||
By
|
/s/ Teresa E. Carpenter
|
|||
| Plan Administrator | ||||
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