United States
Securities and Exchange Commission
Washington, D.C. 20549
FORM 11-K
(Mark one)
[X] ANNUAL REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year ended December 31, 2006
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from ____________ to ____________
Commission file number 1-12981
THE AMETEK RETIREMENT AND SAVINGS PLAN
(Full title of the plan)
AMETEK, INC.
37 NORTH VALLEY ROAD, BUILDING 4, P.O. BOX 1764
PAOLI, PENNSYLVANIA 19301-0801
(Name of issuer of the securities held pursuant to the plan
and the address of its principal executive office)
The AMETEK Retirement and Savings Plan
Financial Statements and Supplemental Schedule
Years ended December 31, 2006 and 2005
CONTENTS
Report of Independent Registered Public Accounting Firm.................... 2
Audited Financial Statements:
Statements of Assets Available for Benefits............................. 3
Statements of Changes in Assets Available for Benefits.................. 4
Notes to Financial Statements........................................... 5
Supplemental Schedule:
Schedule H, Line 4i - Schedule of Assets (Held at End of Year).......... 13
Signatures................................................................. 14
Exhibit Index.............................................................. 15
1
Report of Independent Registered Public Accounting Firm
Plan Administrative Committee
The AMETEK Retirement and Savings Plan
We have audited the accompanying statements of assets available for benefits of
The AMETEK Retirement and Savings Plan as of December 31, 2006 and 2005, and the
related statements of changes in 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 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. We were not engaged to perform an
audit of the Plan's 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, and
evaluating the overall financial statement presentation. We believe that our
audits provide 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 Plan at December
31, 2006 and 2005, and the changes in its assets available for benefits for the
years then ended, in conformity with U.S. generally accepted accounting
principles.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule of assets
(held at end of year) as of December 31, 2006, is presented for purposes of
additional analysis and is not a required part of the 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 supplemental schedule is the responsibility of the
Plan's management. The supplemental schedule has been subjected to the auditing
procedures applied in our audits of the financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/ Ernst & Young LLP
Philadelphia, Pennsylvania
June 20, 2007
2
The AMETEK Retirement and Savings Plan
Statements of Assets Available for Benefits
DECEMBER 31,
---------------------------
2006 2005
------------ ------------
ASSETS:
Investments, at fair value $291,346,967 $254,266,185
------------ ------------
Receivables:
Employer contributions 165,178 122,358
Participant contributions 309,034 263,741
------------ ------------
Total receivables 474,212 386,099
------------ ------------
Assets available for benefits, at fair value 291,821,179 254,652,284
Adjustment from fair value to contract value for
Common Collective Trust 571,438 739,483
------------ ------------
Assets available for benefits $292,392,617 $255,391,767
============ ============
See accompanying notes.
3
The AMETEK Retirement and Savings Plan
Statements of Changes in Assets Available for Benefits
YEARS ENDED DECEMBER 31,
---------------------------
2006 2005
------------ ------------
ADDITIONS:
Contributions:
Employer $ 7,755,295 $ 6,686,656
Participants 13,649,850 12,771,989
Participant rollovers and transfers from other plans 4,893,501 3,296,252
------------ ------------
26,298,646 22,754,897
------------ ------------
Investment income:
Net appreciation in fair value of investments 20,748,788 9,395,281
Interest and dividend income 11,803,708 7,955,109
------------ ------------
32,552,496 17,350,390
------------ ------------
Total additions 58,851,142 40,105,287
------------ ------------
DEDUCTIONS:
Benefits paid to participants (21,815,444) (21,664,410)
Insurance premiums and commissions (34,848) (16,124)
------------ ------------
Total deductions (21,850,292) (21,680,534)
------------ ------------
Net increase 37,000,850 18,424,753
Assets available for benefits:
Beginning of year 255,391,767 236,967,014
------------ ------------
End of year $292,392,617 $255,391,767
============ ============
See accompanying notes.
4
THE AMETEK RETIREMENT AND SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2006
1. DESCRIPTION OF THE PLAN
GENERAL
The following brief description of The AMETEK Retirement and Savings Plan ("the
Plan") provides only summarized information. Participants should refer to the
Plan document for a more complete description of the Plan's provisions.
The Plan is a tax-deferred 401(k) defined contribution savings plan, with a
separate retirement feature described below. The Plan provides eligible
employees of AMETEK, Inc. ("AMETEK", or "the Company"), and certain of its
subsidiaries, an opportunity to invest a portion of their compensation, as
defined by the Plan, in one or a combination of investment programs (see Note
3).
PARTICIPANT ELIGIBILITY
Any employee, who is not specifically an ineligible employee as defined by the
Plan, shall become a participant in the Plan as of the entry date that follows
his or her date of hire by at least thirty--one days and is on or after the date
on which the participant first attains age eighteen.
CONTRIBUTIONS
Each year, participants have an opportunity to invest up to 50% of their annual
compensation, as defined by the Plan, in multiples of one percent, except for
certain highly compensated participants who may be subject to certain regulatory
limitations. Certain groups of participants have an opportunity to invest
catch-up contributions up to 75% of their compensation. Participants may also
contribute amounts representing rollovers from other qualified plans. Also in
connection with business acquisitions by AMETEK, account balances from certain
other plans may be transferred into the Plan, or into a separate 401(k) Plan for
businesses acquired by AMETEK. Subsequent to December 31, 2006 (June 1, 2007),
the net assets of the U.S. participants from the Spectro Analytical Instruments
401(k) Savings Plan in the amount of approximately $3.9 million, were
transferred into the Plan. During 2005, the net assets of the U.S. based Taylor
Hobson 401(k) Savings Plan, in the amount of approximately $1.7 million, were
transferred into the Plan. The Plan provides for Company contributions equal to
33 1/3% of the first 6% of compensation contributed by each participant, to a
maximum annual Company contribution of $1,200 per participant. Matching Company
contributions are credited to participants' accounts at the same time their
contributed compensation is invested. However, the Company may make its matching
contribution payment to the Plan at any time prior to the due date prescribed by
law for filing the Company's federal income tax return for that Plan year.
5
THE AMETEK RETIREMENT AND SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2006
1. DESCRIPTION OF THE PLAN (CONTINUED)
CONTRIBUTIONS (CONTINUED)
The Plan has a retirement feature for eligible salaried and hourly employees of
AMETEK. The Company makes contributions to the Plan on behalf of such employees
equal to a specified percentage of their compensation earned based upon each
participant's age and years of service, up to predetermined limits. Employee
contributions under the retirement feature of the Plan are not permitted.
Investment programs and transfer and exchange privileges available under the
retirement feature are the same as for the savings feature under the Plan.
Forfeited Company contributions from the retirement feature, which are
insignificant in amount, are used to reduce future employer retirement
contributions or to pay Plan administrative expenses.
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's contributions and
allocations of (a) the Company's contributions and (b) Plan net earnings.
Allocations are based on participant earnings and/or account balances, as
defined. The benefit to which a participant is entitled is the balance in the
participant's vested account.
VESTING
Participants are fully vested at all times in both their contributions to the
Plan and in Company contributions under the savings provisions of the Plan.
Company contributions under the retirement feature of the Plan, through December
31, 2006, become fully vested after five years of service. Effective January 1,
2007, Employer Retirement Feature contributions and earnings contributed on or
after January 1, 2007, will become fully vested after three years of service.
PARTICIPANT LOANS
Participants may borrow a minimum of $1,000 or up to a maximum equal to the
lesser of $50,000 or 50% of their account balance. Participants may have up to
two loans outstanding at any time, although only one loan may be for a primary
residence, the sum of which may not exceed the maximum allowable under the Plan.
Repayment terms of the loans are generally limited to no longer than 60 months
from inception or for a reasonable period of time in excess of 60 months for the
purchase of a principal residence, as fixed by the Plan's Administrative
Committee. The loans are secured by the balance in the participant's account,
and bear interest at rates established by the Plan's administrative committee,
which approximate rates charged by commercial lending institutions for
comparable loans. Interest rates on loans outstanding at December 31, 2006 and
2005 ranged between 5.0% and 10.5%. Principal and interest is paid ratably
through payroll deductions. Participant loans outstanding at December 31, 2006
and 2005, respectively, totaled $5,909,283 and $5,843,612 are included in
investments in the accompanying statements of assets available for benefits.
6
THE AMETEK RETIREMENT AND SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2006
1. DESCRIPTION OF THE PLAN (CONTINUED)
PAYMENT OF BENEFITS
On termination of service, death, disability or retirement, a participant may
receive a lump-sum amount equal to his or her vested account or elect to receive
payment in installments up to a 15-year period but subject to certain
restrictions based on life expectancy. When a participant attains age 59 1/2
while still an employee, he or she can elect to withdraw a specified portion of
his or her vested account balance without incurring an income tax penalty. Also,
in certain cases of financial hardship, a participant may elect to withdraw up
to a specified portion of his or her vested account balance, regardless of age.
PLAN TERMINATION
The Plan is subject to the provisions of the Employee Retirement Income Security
Act of 1974 ("ERISA"). While the Company has not expressed any intent to
terminate the Plan, it is free to do so at any time subject to the provisions of
ERISA, and applicable labor agreements. In the event of Plan termination, each
participant will receive the value of his or her separate vested account.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF FINANCIAL STATEMENTS AND PRESENTATION FORMAT
The accompanying financial statements have been prepared on the accrual basis of
accounting, if applicable, except for the non-accrual of a liability for amounts
owed to withdrawing participants, which are reflected in plan equity in
accordance with U.S. generally accepted accounting principles (see Note 7).
USE OF ESTIMATES
The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates and
assumptions.
RISKS AND UNCERTAINTIES
The Plan invests in various investment securities. Investment securities are
exposed to various risks such as interest rate, market fluctuation and credit
risks. Due to the level of risk associated with certain investment securities,
it is at least 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.
7
THE AMETEK RETIREMENT AND SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2006
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INVESTMENT VALUATION AND INCOME RECOGNITION
Investments in shares of registered investment companies are valued at quoted
market prices, which represent the net asset values of shares held by the Plan
at year-end. Money market and short-term investments are carried at the fair
value established by the issuer and/or the trustee. Life Insurance Contracts are
carried at the cash surrender value of such policies at year-end. The
participant loans are valued at their outstanding book values, which
approximates fair value.
The Vanguard Retirement Savings Trust is a common collective trust ("CCT") fund
which invests in fully benefit--responsive investment contracts. The fair value
of the participation units in the CCT is based on quoted redemption values on
the last business day of the plan year. The fair value of the CCT is adjusted to
contract value in accordance with the FSP described in Note 9. Contract value
represents contributions made plus interest accrued at the contract value, less
withdrawals.
Purchases and sales of investments are reflected on trade dates. Realized gains
and losses on sales of investments are based on the average cost of such
investments. Interest income is recorded on the accrual basis. Dividend income
is recorded on the ex-dividend date. Income from other investments is recorded
as earned.
The net appreciation or depreciation of investments represents the sum of the
change in the difference between year-end market value and cost of investments,
and the difference between the proceeds received and the cost of investments
sold during the year.
8
THE AMETEK RETIREMENT AND SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2006
3. INVESTMENT PROGRAMS
At December 31, 2006 and 2005, the Vanguard Fiduciary Trust Company was the
Trustee and a party-in-interest to the Plan.
A participant may direct contributions (up to certain specified limits) in any
of the following investment options:
- AMETEK Stock Fund
- Vanguard Retirement Savings Trust
- Registered investment companies:
- Vanguard Total Bond Market Index Fund
- Vanguard LifeStrategy Funds
- Vanguard Wellington Fund
- Vanguard Windsor II Fund
- Vanguard PRIMECAP Fund
- Vanguard Small-Cap Index Fund
- Vanguard 500 Index Fund
- Evergreen Small Cap Value Fund
- Julius Baer International Equity Fund
- BlackRock Small Cap Fund
Participants may change their investment options or transfer existing account
balances to other investment options daily.
The fair value of individual investments that represent 5% or more of the Plan's
assets at year-end are as follows:
DECEMBER 31,
-------------------------
2006 2005
----------- -----------
Vanguard Retirement Savings Trust
(stated at contract value) $60,151,351 $56,833,317
Vanguard 500 Index Fund 35,791,963 32,258,685
Vanguard Windsor II Fund 32,774,651 28,672,487
Vanguard PRIMECAP Fund 30,418,105 28,253,373
AMETEK Stock Fund 29,756,466 26,857,898
Vanguard Wellington Fund 24,188,481 20,827,535
Julius Baer International Equity Fund * 16,109,211 --
* At December 2005, this investment represented less than 5% of the fair
value of the Plan's assets.
9
THE AMETEK RETIREMENT AND SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2006
3. INVESTMENT PROGRAMS (CONTINUED)
During 2006 and 2005, the Plan's investments (including gains on investments
bought, sold, as well as, held during the year) appreciated in value, as
follows:
DECEMBER 31,
------------------------
2006 2005
----------- ----------
Common stock $ 3,270,345 $4,437,144
Registered investment companies 17,478,443 4,958,137
----------- ----------
$20,748,788 $9,395,281
=========== ==========
4. INSURANCE CONTRACTS
Some employee contributions are presently used to maintain previously purchased
life insurance policies underwritten by First Colony Life Insurance Company of
Lynchburg, Virginia. Commissions paid on Insurance Contracts are charged
directly against the participants' insurance accounts. This fund continues to be
closed to new participants.
5. INCOME TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
dated September 26, 2003, stating that the Plan is qualified under Section
401(a) of the Internal Revenue Code (the "Code") and, therefore, the related
trust is exempt from taxation. Subsequent to this determination by the Internal
Revenue Service, the Plan was amended and restated. Once qualified, the Plan is
required to operate in conformity with the Code to maintain its qualification.
The Plan Sponsor will take all steps necessary, if any, to maintain the Plan's
qualified status.
6. ADMINISTRATIVE EXPENSES
The expenses of administering the Plan are payable from the trust funds, unless
the Company elects to pay such expenses. From inception of the Plan to the
present, the Company has elected to pay such expenses directly.
10
THE AMETEK RETIREMENT AND SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2006
7. DIFFERENCES BETWEEN FINANCIAL STATEMENTS AND FORM 5500
The following is a reconciliation of assets available for benefits per the
financial statements to the Plan's Form 5500:
DECEMBER 31,
---------------------------
2006 2005
------------ ------------
Assets available for benefits per the financial statements $292,392,617 $255,391,767
Amounts owed to withdrawing participants -- (393,725)
Adjustment from contract value to fair value for
Common Collective Trust (571,438) --
------------ ------------
Assets available for benefits per Form 5500 $291,821,179 $254,998,042
============ ============
The following is a reconciliation of benefits paid to participants for the year
ended December 31, 2006 per the financial statements to the Form 5500:
YEAR ENDED
DECEMBER 31,
2006
------------
Benefits paid to participants per the financial statements $21,815,444
Less: Amounts allocated to withdrawing participants at December 31, 2005 (393,725)
-----------
Benefits paid to participants per Form 5500 $21,421,719
===========
Amounts allocated to withdrawing participants are recorded on the Plan's Form
5500 for benefit claims that have been processed and approved for payment prior
to December 31 but not yet paid as of that date.
11
THE AMETEK RETIREMENT AND SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2006
8. PLAN AMENDMENTS
Effective January 1, 2006, the Plan was amended to designate the U.S. employees
of Spectro Analytical Instruments as participating employees in the Plan.
Effective March 6, 2006, the Plan was amended to designate the U.S. employees of
Power Instruments' Pulsar Group as participating employees in the Plan.
Effective May 29, 2006, the Plan was amended to designate the U.S. employees of
AMETEK Pittman, Inc., as participating employees in the Plan. Effective December
25, 2006, the Plan was amended to designate the U.S. employees of AMETEK Land,
Inc., as participating employees in the Plan. Effective December 25, 2006, the
Plan was amended to designate the U.S. employees of AMETEK SAI Holdings, Inc.
and subsidiaries as participating employees in the Plan. Effective January 1,
2005 the Plan was amended to designate the U.S. employees of Taylor Hobson
401(k) Savings Plan as participating employees in the Plan.
9. RECENT ACCOUNTING PRONOUNCEMENTS
In December 2005, the Financial Accounting Standards Board (FASB) issued Staff
Position AAG INV-1 and SOP 94-4-1, Reporting of Fully Benefit-Responsive
Investment Contracts Held by Certain Investment Companies Subject to the AICPA
Investment Company Guide and Defined-Contribution Health and Welfare and Pension
Plans (the FSP). The FSP defines the circumstances in which an investment
contract is considered fully benefit responsive and provides certain reporting
and disclosure requirements for fully benefit responsive investment contracts in
defined contribution health and welfare and pension plans. The financial
statement presentation and disclosure provisions of the FSP are effective for
financial statements issued for annual periods ending after December 15, 2006
and are required to be applied retroactively to all prior periods presented for
comparative purposes. The Plan has adopted the provisions of the FSP at December
31, 2006.
As required by the FSP, investments in the accompanying Statements of Assets
Available for Benefits include fully benefit responsive investment contracts
recognized at fair value. AICPA Statement of Position 94-4-1, Reporting of
Investment Contracts Held by Health and Welfare Benefit Plans and Defined
Contribution Pension Plans, as amended, requires fully benefit responsive
investment contracts to be reported at fair value in the Plan's Statement of
Assets Available for Benefits with a corresponding adjustment to reflect these
investments at contract value. The requirements of the FSP have been applied
retroactively to the Statement of Assets Available for Benefits as of December
31, 2005 presented for comparative purposes. Adoption of the FSP had no effect
on the Statement of Changes in Assets Available for Benefits for any period
presented.
12
THE AMETEK RETIREMENT AND SAVINGS PLAN
EIN 14-1682544 Plan # 078
Schedule H, Line 4i--
Schedule of Assets (Held at End of Year)
December 31, 2006
Description of investment, including
maturity date, rate of interest, Current
Identity of issue, borrower, lessor or similar party collateral, par, or maturity value Value
---------------------------------------------------- ------------------------------------ ------------
AMETEK Stock Fund* Common Stock Fund $ 29,756,466
Vanguard Retirement Savings Trust* Common/Collective Trust 59,579,913
Vanguard Total Bond Market Index Fund* Registered Investment Company 9,013,711
Vanguard LifeStrategy Conservative Growth Fund* Registered Investment Company 4,485,756
Vanguard LifeStrategy Growth Fund* Registered Investment Company 8,820,362
Vanguard LifeStrategy Moderate Growth Fund* Registered Investment Company 12,243,010
Vanguard Wellington Fund* Registered Investment Company 24,188,481
Vanguard Windsor II Fund* Registered Investment Company 32,774,651
Vanguard PRIMECAP Fund* Registered Investment Company 30,418,105
Vanguard Small-Cap Index Fund* Registered Investment Company 7,834,129
Vanguard 500 Index Fund* Registered Investment Company 35,791,963
Evergreen Small Cap Value Fund Registered Investment Company 1,410,535
Julius Baer International Equity Fund Registered Investment Company 16,109,211
BlackRock Small Cap Fund Registered Investment Company 12,669,411
First Colony Life Insurance Company* Life Insurance Policies 341,980
Participant Loans* Interest rates ranging from
5.0% to 10.5% 5,909,283
------------
$291,346,967
============
* Indicates party-in-interest to the Plan
Historical cost column is not included as all investments are
participant-directed.
13
SIGNATURES
THE PLAN. Pursuant to the requirements of the Securities Exchange Act of 1934,
the Members of the Administrative Committee have duly caused this annual report
to be signed on its behalf by the undersigned hereunto duly authorized.
The AMETEK Retirement and Savings Plan
(Name of Plan)
Dated: June 25, 2007 By: /s/ John J. Molinelli
------------------------------------
John J. Molinelli, Member,
Administrative Committee
14
THE AMETEK RETIREMENT AND SAVINGS PLAN
EXHIBIT INDEX
Exhibit Number Description
-------------- --------------------------------------------------------
23 Consent of Independent Registered Public Accounting Firm
15