11-K
Table of Contents

 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK
PURCHASE, SAVINGS AND SIMILAR PLANS
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One):
     
þ   ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2005
OR
     
o   TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     .
Commission file number 1-12383
           A. Full title of the plan and the address of the plan, if different from that of the issuer named below: Rockwell Automation Retirement Savings Plan For Represented Hourly Employees
           B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: Rockwell Automation, Inc., 1201 South 2nd Street, Milwaukee, Wisconsin 53204
 
 

 

 

ROCKWELL AUTOMATION
RETIREMENT SAVINGS PLAN FOR
REPRESENTED HOURLY EMPLOYEES
TABLE OF CONTENTS
 
     
    Page No.
 
  1
 
    
FINANCIAL STATEMENTS:
    
 
    
  2
 
    
  3
 
    
  4
 
    
SUPPLEMENTAL SCHEDULE:
    
 
    
  11
 
    
  12
 
    
EXHIBITS:
    
 
    
Consent of Independent Registered Public Accounting Firm
   13
 EX-99.A: CONSENT
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.

 

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Rockwell Automation Retirement Savings Plan for
     Represented Hourly Employees and Participants therein:
We have audited the accompanying statements of net assets available for benefits of the Rockwell Automation Retirement Savings Plan for Represented Hourly Employees (the “Plan”) as of December 31, 2005 and 2004, 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 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. The Plan is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also 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, 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, 2005 and 2004, 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 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 2005 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, 2006

 

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ROCKWELL AUTOMATION
RETIREMENT SAVINGS PLAN FOR
REPRESENTED HOURLY EMPLOYEES
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2005 AND 2004
 
                 
    2005     2004  
 
ASSETS
                
 
                
INVESTMENTS:
                
Defined Contribution Master Trust (Note 3)
   $ 9,687,795     $ 9,179,629  
Loan Fund
     239,711       216,499  
 
            
 
                
Total investments
     9,927,506       9,396,128  
 
            
 
                
NET ASSETS AVAILABLE FOR BENEFITS
   $ 9,927,506     $ 9,396,128  
 
            
See notes to financial statements.

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ROCKWELL AUTOMATION
RETIREMENT SAVINGS PLAN FOR
REPRESENTED HOURLY EMPLOYEES
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED DECEMBER 31, 2005 AND 2004
                 
    2005     2004  
 
NET ASSETS AVAILABLE FOR BENEFITS,
BEGINNING OF YEAR
   $ 9,396,128     $ 8,229,251  
 
            
 
                
ADDITIONS:
                
Income from investments:
                
Interest in income of Defined Contribution Master Trust
     785,036       1,051,376  
Interest
     12,300       10,172  
 
            
 
                
Total income from investments
     797,336       1,061,548  
 
            
 
                
Contributions:
                
Employer
     136,642       144,807  
Employee
     448,634       471,467  
 
            
 
                
Total contributions
     585,276       616,274  
 
            
 
                
Total additions
     1,382,612       1,677,822  
 
            
 
                
DEDUCTIONS:
                
Payments to participants or beneficiaries
     823,210       488,067  
Administrative expenses
     28,024       10,768  
 
            
 
                
Total deductions
     851,234       498,835  
 
            
 
                
NET INCREASE BEFORE TRANSFERS
     531,378       1,178,987  
 
            
 
                
NET TRANSFERS
     —       (12,110 )
 
                
NET INCREASE
     531,378       1,166,877  
 
            
 
                
NET ASSETS AVAILABLE FOR BENEFITS,
END OF YEAR
   $ 9,927,506     $ 9,396,128  
 
            
See notes to financial statements.

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ROCKWELL AUTOMATION
RETIREMENT SAVINGS PLAN FOR
REPRESENTED HOURLY EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2005 AND 2004
 
1.   DESCRIPTION OF THE PLAN
 
   
The following brief description of the Rockwell Automation Retirement Savings Plan for Represented 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 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. Wells Fargo, N.A. (“Wells Fargo”) was the trustee of the Master Trust through June 30, 2005. Effective July 1, 2005, all assets and trustee responsibilities of the Master Trust were transferred to Fidelity Management Trust Company. The assets of the Plan are managed by the Trustee and several other investment managers. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”).
 
     
Effective July 1, 2005, Rockwell Automation added new investment options, eliminated certain investment options, and consolidated the Rockwell Automation Stock Funds. The new investment options include common stock and debt investment options in addition to a mutual fund brokerage account window.
 
     
Participants in the Plan could have invested in seventeen investment funds through June 30, 2005. Effective July 1, 2005, the investment options expanded to include a suite of ten Lifestyle mutual funds, eleven core investment options and a mutual fund brokerage window. In addition, the following stock funds were available in 2004 and 2005 and are specific to the Plan:
     
Rockwell Automation Stock Fund A (employer contributions) - Invests principally in the common stock of Rockwell Automation but may also hold cash and cash equivalents. Effective July 1, 2005, this fund was combined with Rockwell Automation Stock Fund B and renamed Rockwell Automation Stock Fund.
 
     
Rockwell Automation Stock Fund B (employee contributions) - Invests principally in the common stock of Rockwell Automation but may also hold cash and cash equivalents. Effective July 1, 2005, this fund was combined with Rockwell Automation Stock Fund A and renamed Rockwell Automation Stock Fund.
 
     
ArvinMeritor Stock Fund - Invests principally in the common stock of ArvinMeritor, Inc. but may also hold cash and cash equivalents.
 
     
Conexant Stock Fund - Invests principally in the common stock of Conexant Systems, Inc. but may also hold cash and cash equivalents.
 
     
Rockwell Collins Stock Fund — Invests principally in the common stock of Rockwell Collins, Inc. but may also hold cash and cash equivalents.

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Skyworks Stock Fund – Invests principally in the common stock of Skyworks Solutions, Inc. but may also hold cash and cash equivalents.
 
     
Mindspeed Stock Fund – Invests principally in the common stock of Mindspeed Technologies, Inc. but may also hold cash and cash equivalents.
     
The ArvinMeritor, Conexant, Rockwell Collins, Skyworks and Mindspeed Stock Funds are closed to any additional employer and employee contributions. Any dividends received on behalf of the ArvinMeritor, Conexant, Skyworks and Mindspeed Stock Funds and any dividends related to employee contributions received on behalf of the Rockwell Collins Stock Fund are paid to the Rockwell Automation Stable Value Managed Fund (the “Stable Value Fund”). Any dividends on common stock related to employer contributions received on behalf of the Rockwell Collins Stock Fund are paid to the Rockwell Automation Stock Fund. Any dividends received on behalf of Rockwell Automation Stock Fund are paid to Rockwell Automation Stock Fund. See note 6 for additional information applicable to these stock funds.
 
  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, pre-tax contributions by highly compensated participants are limited to 12% of the participant’s base compensation.
 
     
The Rockwell Automation matching contribution is 50% of participant contributions up to the first 5% of the participant’s contribution for the Allen-Bradley IAM Union participant group and up to the first 6% of the participant’s contributions for the Madison, Indiana participant group. No Rockwell Automation contributions are made to the participant accounts of the Chicago Service Center, Hamilton, and Euclid participant groups. The Rockwell Automation matching contributions are made to Rockwell Automation Stock Fund. Participants who are vested may elect to transfer a portion or all of their holdings in Rockwell Automation Stock Fund to one or more of the investment funds.
 
     
Effective June 2002, the Plan was amended due to the Economic Growth and Tax Relief Reconciliation Act of 2001, which made provisions for catch-up contributions to 401(k) plans to give employees who are at least age 50 and older the opportunity to save more for retirement. Employees must have been at least age 50 at December 31, 2005 to be eligible to make catch-up contributions in the current year. The 2005 employee catch-up contribution amount allowed was an additional $4,000 in pre-tax contributions and this amount will increase by $1,000 each year until 2006 when it will be $5,000.
 
  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 were made to the Stable Value Fund through June 30, 2005. Effective July 1, 2005, contributions are made to one of the Fidelity Freedom Funds, based on the participant’s date of birth.
 
     
Participants may invest in the Stable Value Fund which invests primarily in guaranteed investment contracts (“GICs”) and money market investments. The GICs are benefit-responsive and are stated at contract value, which approximates fair value. The crediting interest rate for the Stable Value Fund was 4.14% and 4.36% at December 31, 2005 and 2004, 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, 2005 and 2004 was 4.33% and 4.70%, respectively.

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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 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 contribution and earnings thereon. Rockwell Automation’s matching contributions and earnings are vested after the participant has completed three years of vesting service.
 
  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 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%. The loans can be repaid through payroll deductions over terms of 12, 24, 36, 48 or 60 months or up to 120 months for the purchase of a primary residence, or repaid in full after a minimum of one month. Payments of principal and interest are credited to the participant’s account. Participants may have up to 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 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.
 
  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 or suspend contributions to the Plan in accordance with ERISA. In the event 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 or is able to demonstrate financial hardship. 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 - Investment in the Defined Contribution Master Trust is stated at fair value except for the benefit-responsive GICs, which are stated at contract value, which approximates fair value (Note 1c). 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 loan fund is stated at cost which approximates fair value.

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  b.  
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.
 
  c.  
Payment of Benefits - Benefits are recorded when paid.
 
  d.  
Risks and Uncertainties - The Plan invests in various investments. Investments, in general, 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.
3.  
DEFINED CONTRIBUTION MASTER TRUST
 
   
At December 31, 2004, with the exception of the participant loan fund, all of the Plan’s investment assets were held in a Defined Contribution Master Trust account at Wells Fargo, N.A. Effective July 1, 2005, Rockwell Automation transferred assets and trustee responsibility of the Master Trust to Fidelity Management Trust Company. At December 31, 2005, with the exception of the participant loan fund, all of the Plan’s investment assets, were held in a Defined Contribution Master Trust (“Master Trust”) account at Fidelity Management Trust Company. 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 except for the benefit-responsive GICs, which are valued at contract value, which approximates fair value (Note 1c). 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.

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    The net assets of the Master Trust at December 31, 2005 and 2004 are summarized as follows:
                 
    2005     2004  
 
Money market funds
   $ 42,987,654     $ 37,421,244  
Cash
     878,749       —  
Common stocks
     1,947,764,881       1,902,170,600  
Mutual funds
     322,044,256       455,508,743  
Brokeragelink account
     4,338,439       —  
Corporate debt investments
     48,488,390       —  
U.S. government securities
     9,058,239       —  
Other fixed income investments
     3,844,480       —  
Investments in common collective trusts –
                
Fidelity U.S. equity index fund
     130,213,723       133,981,640  
Rockwell Stable Value Managed Fund –
                
guaranteed investment contracts
     623,683,062       613,535,748  
Accrued income
     1,786,974       612,285  
Accrued fees
     (1,269,612 )     —  
Pending trades
     104,295       (979,318 )
 
            
 
                
Net assets
   $ 3,133,923,530     $ 3,142,250,942  
 
            
    The net investment income of the Master Trust for the years ended December 31, 2005 and 2004 is summarized as follows:
                 
    2005     2004  
 
Interest
   $ 28,518,879     $ 32,409,174  
Dividends
     29,517,117       31,991,722  
Net appreciation in fair value of investments:
                
Common stocks
     248,851,908       371,203,744  
Mutual funds
     27,810,954       26,429,103  
Investments in common collective trusts –
                
Fidelity US Equity Index Fund
     6,148,810       13,104,341  
 
            
 
                
Net investment income
   $ 340,847,668     $ 475,138,084  
 
            
   
The Plan’s interest in the Master Trust, as a percentage of net assets held by the Master Trust, was less than 1% at December 31, 2005 and 2004. 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 2005 and 2004.
 
   
The Master Trust’s investments that exceeded 5% of net assets as of December 31, 2005 and 2004 are as follows:
                 
Description of Investment   2005     2004  
 
Rockwell Automation, Inc. common stock
   $ 784,609,618     $ 754,857,187  
Rockwell Collins, Inc. common stock
     429,878,867       466,972,321  

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Certain Master Trust investments are shares of mutual funds managed by Wells Fargo or Fidelity Management Trust Company. Wells Fargo was the trustee for a portion of the year and Fidelity is now 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, 2005 and 2004, the Master Trust held 13,262,502 and 15,234,252 shares, respectively, of common stock of Rockwell Automation, the sponsoring employer, with a cost basis of $92,966,323 and $99,094,064, respectively, and a market value of $784,609,618 and $754,857,187, respectively.
 
   
During 2005 and 2004, dividends on Rockwell Automation common stock paid to eligible plan participants were $10,614,199 and $10,599,454, respectively.
 
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 year ended December 31, 2005 and Rockwell Automation Stock Fund A for the year ended December 31, 2004, respectively, is as follows:
                 
    2005     2004  
 
Net Assets, Beginning of Year
   $ 1,389,034     $ 902,530  
 
                
Changes in net assets:
                
Contributions
     136,642       144,807  
Dividends
     5,980       6,980  
Net appreciation
     262,647       384,948  
Benefits paid to participants
     (95,745 )     (44,160 )
Administrative expenses
     (4,603 )     (1,517 )
Transfers
     (36,067 )     (4,554 )
 
            
Total changes in net assets
     268,854       486,504  
 
            
 
                
Net Assets, End of Year*
   $ 1,657,888     $ 1,389,034  
 
            
 
*   These net assets are included in the Master Trust.
5.   TAX STATUS
 
   
The Internal Revenue Service has determined and informed Rockwell Automation by letter dated October 3, 2002, 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 and the Plan’s tax counsel believe 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.

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6.   SUBSEQUENT EVENTS
 
   
Effective January 1, 2006, a participant is eligible for employer contributions immediately upon participation in the plan. Prior to this change, there was a six month waiting period before an employee was eligible for employer contributions.
 
   
Effective March 31, 2006, Rockwell Automation removed the following Closed Stock Fund options from the Plan: ArvinMeritor Stock Fund, Conexant Stock Fund, MindSpeed Technology Stock Fund, Skyworks Solutions Stock Fund and Rockwell Collins Stock Fund. Participants had the option to redirect their investments in these Closed Stock Funds to any of the available investment options. If a participant did not take action by March 31, 2006, the participant’s investments in the Closed Stock Funds were automatically transferred to the appropriate Fidelity Freedom Fund based on the participant’s date of birth. The ExxonMobil Stock Fund, also a Closed Stock Fund, will be removed as an investment option as of June 29, 2007.
*   *   *   *   *

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ROCKWELL AUTOMATION
RETIREMENT SAVINGS PLAN FOR
REPRESENTED HOURLY EMPLOYEES
FORM 5500, SCHEDULE H, PART IV, LINE 4i -
SCHEDULE OF ASSETS (HELD AT END OF YEAR),
DECEMBER 31, 2005
                         
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,           Current
    or Similar Party   Par or Maturity Value   Cost   Value
 
*
  Fidelity Management. Trust Company   Defined Contribution
Master Trust 		  $ 6,200,884     $ 9,687,795  
 
*
  Various
participants 		  Participant Loans; rates ranging between 5% and 8%, due 2006 to 2011     239,711       239,711  
 
                       
    Total assets (held at end of year)   $ 6,440,595     $ 9,927,506  
 
                       
 
*   Party-in-interest

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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan Administrator has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.
ROCKWELL AUTOMATION
RETIREMENT SAVINGS PLAN FOR REPRESENTED HOURLY EMPLOYEES
         
By
       /s/ Roger Freitag
 
          Roger Freitag 		   
 
            Plan Administrator    
Date: June 23, 2006

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