11-K 1 sc0042.txt FORM 11-K UNITED STATES 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 (Mark one) [X] ANNUAL report pursuant to Section 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 2004 or [_] Transition report pursuant to Section 15(d) of the Securities Exchange Act For the transition period from _________ to ___________ Commission file number 001-10533 A. Full title of the plan and the address of the plan, if different from that of the issuer named below: KENNECOTT CORPORATION SAVINGS PLAN FOR HOURLY EMPLOYEES B. Name of issuer of the securities held pursuant to the Plan and the address of its principal executive office: Rio Tinto plc, 6 St. James's Square, London, SW1Y 4LD, England Page 1 of 20 KENNECOTT CORPORATION SAVINGS PLAN FOR HOURLY EMPLOYEES FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE AS OF DECEMBER 31, 2004 AND 2003 AND FOR THE YEAR ENDED DECEMBER 31, 2004 TOGETHER WITH REPORTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMS Page 2 of 20 KENNECOTT CORPORATION SAVINGS PLAN FOR HOURLY EMPLOYEES TABLE OF CONTENTS -------------------------------------------------------------------------------- PAGE ---- Report of Independent Registered Public Accounting Firm (Tanner LC) 4 Report of Independent Registered Public Accounting Firm (PricewaterhouseCoopers LLP) 5 Financial Statements: Statements of Assets Available for Benefits as of December 31, 2004 and 2003 6 Statement of Changes in Assets Available for Benefits for the year ended December 31, 2004 7 Notes to Financial Statements 8 - 14 Supplemental Schedule - Schedule H, Part IV, line 4i - Schedule of Assets (Held at End of Year) as of December 31, 2004 15 - 16 All other schedules required by Section 2520.103-10 of the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974 have been omitted because they are not applicable to the Kennecott Corporation Savings Plan for Hourly Employees. Page 3 of 20 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Plan Administrator (Vice President Human Resources of Kennecott Utah Copper Corporation) Kennecott Corporation Savings Plan for Hourly Employees We have audited the accompanying statement of assets available for benefits of the Kennecott Corporation Savings Plan for Hourly Employees (the Plan) as of December 31, 2004 and the related statement of changes in assets available for benefits for the year 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 audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). 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 audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the assets available for benefits of the Kennecott Corporation Savings Plan for Hourly Employees as of December 31, 2004, and the changes in assets available for benefits for the year then ended in conformity with U.S. generally accepted accounting principles. Our audit of the financial statements was performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental Schedule of Assets (Held at End of Year) as of December 31, 2004 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 United States Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedule has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ Tanner LC Salt Lake City, Utah February 22, 2006 Page 4 of 20 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Participants and Administrator of the Kennecott Corporation Savings Plan for Hourly Employees In our opinion, the accompanying statement of assets available for benefits presents fairly, in all material respects, the assets available for benefits of the Kennecott Corporation Savings Plan for Hourly Employees (the "Plan") at December 31, 2003, in conformity with accounting principles generally accepted in the United States of America. This financial statement is the responsibility of the Plan's management. Our responsibility is to express an opinion on this financial statement based on our audit. We conducted our audit of this statement in accordance with the standards of the Public Company Accounting Oversight Board (United States). 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, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. /s/ PricewaterhouseCoopers LLP PricewaterhouseCoopers LLP Salt Lake City, Utah September 23, 2005 Page 5 of 20 KENNECOTT CORPORATION SAVINGS PLAN FOR HOURLY EMPLOYEES STATEMENTS OF ASSETS AVAILABLE FOR BENEFITS DECEMBER 31, -------------------------------------------------------------------------------- 2004 2003 ------------------------------- ASSETS ------ Investments (note 2) $ 44,832,506 $ 44,184,371 ------------------------------- Receivables: Employee contributions 83,242 85,056 Employer contributions 25,203 25,771 ------------------------------- Total receivables 108,445 110,827 ------------------------------- Assets available for benefits $ 44,940,951 $ 44,295,198 =============================== -------------------------------------------------------------------------------- See accompanying notes to financial statements. Page 6 of 20 KENNECOTT CORPORATION SAVINGS PLAN FOR HOURLY EMPLOYEES STATEMENT OF CHANGES IN ASSETS AVAILABLE FOR BENEFITS YEAR ENDED DECEMBER 31, 2004 -------------------------------------------------------------------------------- ADDITIONS TO ASSETS ATTRIBUTED TO: Contributions: Employee $ 2,231,329 Employer 627,191 ------------ Total contributions 2,858,520 ------------ Investment income: Net appreciation in fair value of investments 2,516,167 Interest and dividends 1,035,586 ------------ Total investment income 3,551,753 ------------ Total additions 6,410,273 ------------ DEDUCTIONS FROM ASSETS ATTRIBUTED TO: Benefits paid to participants 5,764,414 Administrative expenses 106 ------------ Total deductions 5,764,520 ------------ Increase in assets available for benefits 645,753 ASSETS AVAILABLE FOR BENEFITS: Beginning of year 44,295,198 ------------ End of year $ 44,940,951 ============ -------------------------------------------------------------------------------- See accompanying notes to financial statements. Page 7 of 20 KENNECOTT CORPORATION SAVINGS PLAN FOR HOURLY EMPLOYEES NOTES TO FINANCIAL STATEMENTS -------------------------------------------------------------------------------- 1. DESCRIPTION OF The following brief description of the Kennecott THE PLAN Corporation Savings Plan for Hourly Employees (the Plan) is provided for general information purposes only. Participants should refer to the plan document and summary plan description for more complete information. GENERAL The Plan is a defined contribution plan covering all full-time hourly employees who are represented by or included in a collective bargaining unit of Kennecott Utah Copper Corporation and its affiliates (collectively, the Company), as defined in the Plan document. Eligible employees can participate in the Plan immediately after completing three months of continuous service. Kennecott Utah Copper Corporation is an indirect wholly owned subsidiary of Rio Tinto America Inc., which is an indirect wholly owned subsidiary of Rio Tinto plc (the Parent). The Plan is intended to be a qualified retirement plan under the Internal Revenue Code (IRC) and is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA), as amended. CONTRIBUTIONS Each year, participants may elect under a salary reduction agreement to contribute to the Plan an amount not less than 1% and not more than 19% of their eligible compensation on a before-tax basis through payroll deductions. Contributions are limited by the IRC, which established a maximum contribution of $13,000 ($16,000 for participants over age 50) for the year ended December 31, 2004. Participant contributions are recorded in the period during which the amounts are withheld from participant earnings. Participants may also contribute amounts representing distributions from other qualified defined benefit or defined contribution plans. The Company matches the participant's contributions to the Plan at 50%, up to the first 6% of their eligible compensation. Matching contributions are recorded on the date the related participant contributions are withheld. -------------------------------------------------------------------------------- Page 8 of 20 KENNECOTT CORPORATION SAVINGS PLAN FOR HOURLY EMPLOYEES NOTES TO FINANCIAL STATEMENTS CONTINUED -------------------------------------------------------------------------------- 1. DESCRIPTION OF PARTICIPANT ACCOUNTS THE PLAN Individual accounts are maintained for each Plan CONTINUED participant. Each participant's account is credited with the participant's contributions, the Company's matching contribution, and an allocation of the Plan's earnings, and is charged with withdrawals and an allocation of the Plan's losses and administrative expenses. Allocations are based on participant earnings or account balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participant's vested account. PARTICIPANT-DIRECTED OPTIONS FOR INVESTMENTS Participants direct the investment of their contributions and the Company matching contributions into various investment options offered by the Plan. Investment options include a money market fund, common collective trusts, mutual funds, synthetic guaranteed investment contracts and common stock of the Parent in the form of American Depository Receipts (ADRs). VESTING Participants are immediately vested in their contributions plus actual earnings thereon. Vesting in the Company's contribution portion of their accounts is based on years of continuous service. A participant is 100% cliff vested after three years of credited service. PAYMENT OF BENEFITS On termination of service due to death, disability, or retirement, participants or their beneficiaries may elect to receive a lump-sum distribution in an amount equal to the value of the participants' vested interests in their accounts. Under certain circumstances, participants may withdraw their contributions prior to the occurrence of these events. FORFEITED ACCOUNTS Forfeited non-vested participant account balances may be used to reduce future Company contributions to the Plan. Forfeitures utilized for these purposes during the year ended December 31, 2004 totaled $43,082. Forfeitures were $14,970 for the year ended December 31, 2004. As of December 31, 2004 and 2003, the balance of the forfeiture account was $13,828 and $41,940, respectively. -------------------------------------------------------------------------------- Page 9 of 20 KENNECOTT CORPORATION SAVINGS PLAN FOR HOURLY EMPLOYEES NOTES TO FINANCIAL STATEMENTS CONTINUED -------------------------------------------------------------------------------- 2. SUMMARY OF BASIS OF PRESENTATION SIGNIFICANT The financial statements of the Plan have been ACCOUNTING prepared on the accrual basis of accounting. POLICIES USE OF ESTIMATES The preparation of the Plan's financial statements in conformity with U.S. generally accepted accounting principles requires Plan management to make estimates and assumptions that affect the reported amounts of assets available for benefits at the date of the financial statements, the changes in assets available for benefit during the reporting period and, when applicable, the disclosures of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates. RISKS AND UNCERTAINTIES The Plan provides for investments in securities that are exposed to various risks, such as interest rate, currency exchange rate, credit and overall market fluctuation. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants' account balances and the amounts reported in the statements of assets available for benefits. INVESTMENT VALUATION AND INCOME RECOGNITION The Plan's investments are stated at fair value (generally quoted market price) except for its benefit-responsive guaranteed investment contracts, which are valued at contract value (see Note 6). Shares of mutual funds are valued at quoted market prices, which represent the net asset value of shares held by the Plan at year end. 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 ex-dividend date. The net appreciation (depreciation) in the fair value of investments which includes realized gains (losses) and unrealized appreciation (depreciation) on those investments is shown in the statement of changes in assets available for benefits of the Plan. -------------------------------------------------------------------------------- Page 10 of 20 KENNECOTT CORPORATION SAVINGS PLAN FOR HOURLY EMPLOYEES NOTES TO FINANCIAL STATEMENTS CONTINUED -------------------------------------------------------------------------------- 2. SUMMARY OF PAYMENTS OF BENEFITS SIGNIFICANT Benefits payments are recorded when paid by the Plan. ACCOUNTING POLICIES ADMINISTRATIVE EXPENSES CONTINUED The Company pays the majority of the costs and expenses incurred in administering the Plan. The Plan has several fund managers that manage the investments held by the Plan. During 2004, the Company paid all investment management fees related to these fund managers. The investment management fees related to transaction costs associated with the purchase or sale of Rio Tinto plc ADRs are paid by the participants. PARTICIPANT LOANS Loans are not permitted to be made to participants in the Plan. 3. PARTIES-IN- Certain Plan investments are managed by Putnam INTEREST Investments, the Plan trustee, therefore, these TRANSACTIONS transactions are exempt party-in-interest transactions. Fees paid by the Plan for investment management services were included as a reduction of the return earned on each fund. Transactions associated with Rio Tinto plc ADRs are considered exempt party-in-interest transactions because Rio Tinto plc is the parent of the Company. As of December 31, 2004 and 2003, the Plan held 30,627.477 and 33,554.390 shares, respectively, of common stock of Rio Tinto plc, with a cost basis of $2,144,056 and $2,215,912, respectively. During the year ended December 31, 2004, the Plan recorded dividend income of $85,054. -------------------------------------------------------------------------------- Page 11 of 20 KENNECOTT CORPORATION SAVINGS PLAN FOR HOURLY EMPLOYEES NOTES TO FINANCIAL STATEMENTS CONTINUED -------------------------------------------------------------------------------- 4. INVESTMENTS The Plan's investments that represented five percent or more of the Plan's assets available for benefits as of December 31, 2004 and 2003 are as follows: 2004 2003 ------------------------ SEI Stable Asset Fund $ 3,726,143 $ 4,697,103 Putnam S&P 500 Index Fund 3,606,189 3,558,411 Putnam International Equity Fund 2,623,143 2,429,618 Putnam Fund for Growth and Income 5,379,788 5,228,096 Putnam New Opportunities Fund 4,661,883 5,022,937 Putnam Voyager Fund 2,568,125 2,664,377 Monumental Life Insurance Company GIC 2,819,519 2,686,978 State Street Bank Synthetic GIC 4,920,475 4,731,914 Rio Tinto plc ADRs 3,651,102 3,734,939 During the year ended December 31, 2004, the Plan's investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated in value as follows: Mutual funds $ 1,951,298 Common stock 214,599 Common collective trusts 350,270 ----------- Net appreciation in investments $ 2,516,167 =========== -------------------------------------------------------------------------------- Page 12 of 20 KENNECOTT CORPORATION SAVINGS PLAN FOR HOURLY EMPLOYEES NOTES TO FINANCIAL STATEMENTS CONTINUED -------------------------------------------------------------------------------- 5. PLAN The terms of the Plan may be amended, modified or TERMINATION discontinued after the effective date of the Savings Plan Agreement. Such amendment, modification or discontinuance may occur pursuant to negotiations for employees at Kennecott Utah Copper Corporation who are represented by the labor organizations that are jointly referred to as the Union, or as required by law, or to gain Internal Revenue Service approval. No change, however, shall make it possible for any part of the funds of the Plan to be used for or diverted for purposes other than for the exclusive benefit of participants and/or their beneficiaries. In addition, no change shall adversely affect the rights of any participant with respect to contributions made prior to the date of the change. If the Plan is terminated in accordance with the terms described in the preceding paragraph, each participant's account shall become fully vested and nonforfeitable and distribution of Plan assets shall be made as directed by the Plan Administrator. 6. GUARANTEED The Plan's guaranteed investment contracts are in a INVESTMENT stable value fund. The guaranteed investment CONTRACTS contracts are fully benefit responsive and are stated at contract value (which represents contributions made under the contract, plus interest earned, less withdrawals and administrative expenses). The stable value fund is invested in a money market fund, a common/collective trust (the SEI Stable Asset Fund), and synthetic guaranteed investment contracts (GICs). The synthetic GICs are secured by underlying fixed income assets. The average crediting interest rates on the investment contracts were 4.54% and 4.53% for the years ended December 31, 2004 and 2003, respectively. Average duration for all investment contracts was 2.96 years and 3.01 years at December 31, 2004 and 2003, respectively. The average yield was 4.70% and 4.63% for the years ended December 31, 2004 and 2003, respectively. There are no reserves against the contract value for credit risk of the contracted issuer or otherwise. -------------------------------------------------------------------------------- Page 13 of 20 KENNECOTT CORPORATION SAVINGS PLAN FOR HOURLY EMPLOYEES NOTES TO FINANCIAL STATEMENTS CONTINUED -------------------------------------------------------------------------------- 6. GUARANTEED The contract or crediting interest rates for certain INVESTMENT stable value investment contracts are reset quarterly CONTRACTS and are based on the market value of the portfolio of CONTINUED assets underlying these contracts. Inputs used to determine the crediting interest rates include each contract's portfolio market value, current yield-to-date maturity, duration and market value relative to contract value. With respect to interest rate resets, all contracts are guaranteed that the rates will not be negative. A synthetic GIC provides for a guaranteed return on principal over a specified period of time through fully benefit-responsive wrap contracts, issued by a third party which are backed by underlying assets. The portfolio of assets underlying the synthetic GICs has an overall AAA credit quality and includes mortgages, fixed income securities and United States treasury notes and bonds. These wrap contracts provide benefit withdrawals and investment exchanges at the full contract value of the synthetic contracts (principal plus accrued interest) notwithstanding the actual market value of the underlying investments (fair value plus accrued interest). Wrap contracts are designed to smooth out the impact of normal market fluctuations associated with the performance of the underlying investments. The fair value of the synthetic GICs was $11,519,614 and $11,147,794 as of December 31, 2004 and 2003, respectively. The contract value of the synthetic GICs included $287,377 and $427,914 as of December 31, 2004 and 2003, respectively, attributable to the wrap contract providers representing the amounts by which the value of the contracts is less than the value of the underlying assets. 7. INCOME TAX The Internal Revenue Service has determined and STATUS informed the Company by a letter dated December 9, 2002, that the Plan and related trust were designed in accordance with the applicable requirements of the Internal Revenue Code. The Plan has been amended since receiving the determination letter; however, the Plan Administrator and the Plan's legal counsel believe that the Plan is currently designed and being operated in compliance with the applicable requirements of the Internal Revenue Code. Therefore, no provision for income taxes has been included in the Plan's financial statements. -------------------------------------------------------------------------------- Page 14 of 20
KENNECOTT CORPORATION SAVINGS PLAN FOR HOURLY EMPLOYEES EMPLOYER IDENTIFICATION NUMBER: 13-3108078 PLAN NUMBER: 204 SCHEDULE H, PART IV, LINE 4i SCHEDULE OF ASSETS (HELD AT END OF YEAR) DECEMBER 31, 2004 ----------------------------------------------------------------------------------------------------------------------------------- (a) (b) (c) (d) (e) PARTY IN NUMBER OF CURRENT INTEREST IDENTITY OF ISSUE DESCRIPTION OF INVESTMENT UNITS COST VALUE ---------- --------------------- ---------------------------------------------- ----------- -------- ------------------- MONEY MARKET FUND: Mellon Bank Mellon Bank - STIF Account 94,931 ** $ 94,931 -------------- COMMON COLLECTIVE TRUSTS: SEI Investments SEI Stable Asset Fund ** 3,726,143 * Putnam Putnam S&P 500 Index Fund 117,351 ** 3,606,189 -------------- Total Common Collective Trusts 7,332,332 -------------- MUTUAL FUNDS: Managers Managers Special Equity Fund 10,221 ** 924,083 Dreyfus Dreyfus Mid-Cap Value Fund 39,345 ** 1,276,758 PIMCO PIMCO Total Return Fund 149,301 ** 1,593,044 Morgan Stanley MSDW Institutional International Equity Fund 17,803 ** 373,691 Dodge and Cox Dodge and Cox Stock Fund 6,932 ** 902,716 UAM Trust Company UAM/ICM Small Company Fund 18,910 ** 694,001 * Putnam Putnam Asset Allocation: Growth Fund 30,765 ** 343,952 * Putnam Putnam Asset Allocation: Balanced Fund 37,733 ** 400,723 * Putnam Putnam Asset Allocation: Conservative Fund 26,969 ** 246,493 * Putnam Putnam International Equity Fund 110,170 ** 2,623,143 * Putnam Putnam Investors Fund 41,876 ** 533,504 * Putnam Putnam Fund for Growth and Income 276,738 ** 5,379,788 * Putnam Putnam New Opportunities Fund 108,846 ** 4,661,883 * Putnam Putnam Voyager Fund 149,832 ** 2,568,125 -------------- Total Mutual Funds 22,521,904 -------------- * denotes a party-in-interest as defined by ERISA ** not required as investments are participant directed
-------------------------------------------------------------------------------- See report of independent registered public accounting firm. Page 15 of 20
KENNECOTT CORPORATION SAVINGS PLAN FOR HOURLY EMPLOYEES EMPLOYER IDENTIFICATION NUMBER: 13-3108078 PLAN NUMBER: 204 SCHEDULE H, PART IV, LINE 4i SCHEDULE OF ASSETS (HELD AT END OF YEAR) CONTINUED DECEMBER 31, 2004 ----------------------------------------------------------------------------------------------------------------------------------- (a) (b) (c) (d) (e) PARTY IN NUMBER OF CURRENT INTEREST IDENTITY OF ISSUE DESCRIPTION OF INVESTMENT UNITS COST VALUE ---------- --------------------- ---------------------------------------------- ----------- -------- ------------------- SYNTHETIC GUARANTEED INVESTMENT CONTRACTS: Monumental Life Synthetic GIC, Dwight Managed Target 2, Insurance Company no specified maturity date, 5.15% ** 2,049,186 Monumental Life Synthetic GIC, Dwight Managed Target 5, Insurance Company no specified maturity date, 5.15% ** 853,315 Monumental Life Insurance Company Wrap Contract ** (82,982) -------------- 2,819,519 -------------- Transamerica Occidental Synthetic GIC, Dwight Managed Target 5, ** 1,869,703 Life Insurance Co. no specified maturity date, 5.54% Transamerica Occidental Life Insurance Co. Wrap Contract ** (103,871) -------------- 1,765,832 -------------- State Street Bank Synthetic GIC, Dwight Core Int Fund, no specified maturity date, 6.07% ** 1,801,009 State Street Bank Wrap Contract ** (74,598) -------------- 1,726,411 -------------- State Street Bank Synthetic GIC, Dwight Managed Target 2, no specified maturity date, 3.98% ** 4,383,904 State Street Bank Synthetic GIC, Dwight Managed Target 5, no specified maturity date, 3.98% ** 562,497 State Street Bank Wrap Contract ** (25,926) -------------- 4,920,475 -------------- Total Synthetic Guaranteed Investment Contracts 11,232,237 -------------- COMMON STOCK: * Rio Tinto plc ADRs Common Stock 30,627 ** 3,651,102 -------------- Total Investments $ 44,832,506 ============== * denotes a party-in-interest as defined by ERISA ** not required as investments are participant directed
-------------------------------------------------------------------------------- See report of independent registered public accounting firm. Page 16 of 20 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. KENNECOTT CORPORATION SAVINGS PLAN FOR HOURLY EMPLOYEES By: /s/ Robert S. Light ----------------------------------------- Name: Robert S. Light Title: Chief Financial Officer Kennecott Utah Copper Corporation Date: April 25, 2006 Page 17 of 20 Exhibit Description ------- ----------- 23.1 Consent of Tanner LC 23.2 Consent of PricewaterhouseCoopers LLP Page 18 of 20