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
SOLIDSTATE CONTROLS, INC. HOURLY EMPLOYEES' (CWA)
RETIREMENT 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)
Solidstate Controls, Inc.
Hourly Employees' (CWA) Retirement Plan
Financial Statements and Supplemental Schedule
Years ended December 31, 2006 and 2005
CONTENTS
Financial Statements (Unaudited):
Statements of Assets Available for Benefits............................. 2
Statements of Changes in Assets Available for Benefits.................. 3
Notes to Financial Statements........................................... 4
Supplemental Schedule:
Schedule H, Line 4i - Schedule of Assets (Held at End of Year).......... 12
Signatures................................................................. 13
1
Solidstate Controls, Inc.
Hourly Employees' (CWA) Retirement Plan
Statements of Assets Available for Benefits
December 31, 2006 and 2005
(Unaudited)
DECEMBER 31,
-----------------------
2006 2005
---------- ----------
ASSETS:
Investments, at fair value $1,329,667 $1,072,146
---------- ----------
Receivables:
Employer contributions 80,863 77,904
Participants contributions 4,982 6,135
---------- ----------
Total receivables 85,845 84,039
---------- ----------
Assets available for benefits, at fair value 1,415,512 1,156,185
Adjustment from fair value to contract value for
Common Collective Trust 2,197 2,709
---------- ----------
Assets available for benefits $1,417,709 $1,158,894
========== ==========
See accompanying notes.
2
Solidstate Controls, Inc.
Hourly Employees' (CWA) Retirement Plan
Statements of Changes in Assets Available for Benefits
Years ended December 31, 2006 and 2005
(Unaudited)
YEARS ENDED
DECEMBER 31,
-----------------------
2006 2005
---------- ----------
ADDITIONS:
Contributions:
Employer $ 81,793 $ 79,048
Participants 62,459 63,285
Participant rollovers and transfers from other plans 1,825 --
---------- ----------
146,077 142,333
---------- ----------
Investment income:
Net appreciation in fair value of investments 78,141 43,689
Interest and dividend income 47,502 31,617
---------- ----------
125,643 75,306
---------- ----------
Total additions 271,720 217,639
---------- ----------
DEDUCTIONS:
Benefits paid to participants (12,905) (44,498)
---------- ----------
Total deductions (12,905) (44,498)
---------- ----------
Net increase 258,815 173,141
Assets available for benefits:
Beginning of year 1,158,894 985,753
---------- ----------
End of year $1,417,709 $1,158,894
========== ==========
See accompanying notes.
3
Solidstate Controls, Inc.
Hourly Employees' (CWA) Retirement Plan
Notes to Financial Statements
December 31, 2006
(Unaudited)
1. DESCRIPTION OF PLAN
GENERAL
The following brief description of 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 which
provides eligible employees (whose employment is governed by the terms of a
collective bargaining agreement with the Communications Workers of America
(CWA)) of Solidstate Controls, Inc., 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).
CONTRIBUTIONS
Each year, participants have an opportunity to invest up to 16% (maximum 6%
before tax and maximum 10% after tax) 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. Participants
may also contribute amounts representing rollovers from other qualified plans.
The Plan provides for Company contributions equal to 40% of the amount
contributed by each participant, up to a maximum percentage ranging from 1% to
6% of the participants' compensation as determined by the terms of the
collective bargaining agreement. Retirement and matching company contributions
are paid to the Plan at anytime prior to the due date prescribed by law for
filing the Company's federal income tax return for that Plan year.
The Plan has a retirement feature for eligible participants, AMETEK makes
contributions to the Plan on behalf of such participants at a rate $0.35 for
each hour that an active participants is paid compensation. Participant
contributions under the retirement feature of the Plan are not permitted.
Investment programs and transfer and exchange privileges available under the
retirement feature of the Plan are the same as the savings feature under the
Plan.
Forfeited Company contributions, which are insignificant in amount, are used to
reduce future employer retirement contributions or to pay Plan administration
expenses.
4
Solidstate Controls, Inc.
Hourly Employees' (CWA) Retirement Plan
Notes to Financial Statements
December 31, 2006
(Unaudited)
1. DESCRIPTION OF PLAN (CONTINUED)
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 their contributions to the Plan.
Company contributions under the savings provisions of the Plan and 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
ranged between 5% and 9.25%. Principal and interest is paid ratably through
payroll deductions. Participant loans outstanding at December 31, 2006 and 2005,
respectively, totaled $106,142 and $117,915 are included in investments in the
accompanying statements of assets available for benefits.
5
Solidstate Controls, Inc.
Hourly Employees' (CWA) Retirement Plan
Notes to Financial Statements
December 31, 2006
(Unaudited)
1. DESCRIPTION OF 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, elect to receive
payment in installments for life, subject to certain restrictions based on life
expectancy or direct rollover to an eligible retirement plan. 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 are unaudited because the number of
participants in the Plan are fewer than the number of participants which would
require audited financial statements under ERISA. The accompanying financial
statements have been prepared on the accrual basis of accounting, in accordance
with U.S. generally accepted accounting principles.
6
Solidstate Controls, Inc.
Hourly Employees' (CWA) Retirement Plan
Notes to Financial Statements
December 31, 2006
(Unaudited)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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 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 net
assets available for benefits.
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. 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 8. 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 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.
7
Solidstate Controls, Inc.
Hourly Employees' (CWA) Retirement Plan
Notes to Financial Statements
December 31, 2006
(Unaudited)
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 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.
8
Solidstate Controls, Inc.
Hourly Employees' (CWA) Retirement Plan
Notes to Financial Statements
December 31, 2006
(Unaudited)
3. INVESTMENT PROGRAMS (CONTINUED)
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) $231,278 $208,421
AMETEK Stock Fund 220,055 203,779
Vanguard 500 Index Fund 156,174 97,414
Vanguard Total Bond Market Index Fund 139,853 128,293
Loan Fund 106,142 117,915
Vanguard Wellington Fund 100,023 66,600
Vanguard LifeStrategy Growth Fund 72,939 59,898
During 2006 and 2005 the Plan's investments (including gains and losses on
investments bought, sold, as well as held during the year) appreciated in value
as follows:
DECEMBER 31,
-----------------
2006 2005
------- -------
Common stock $27,420 $32,300
Registered investment companies 50,721 11,389
------- -------
$78,141 $43,689
======= =======
9
Solidstate Controls, Inc.
Hourly Employees' (CWA) Retirement Plan
Notes to Financial Statements
December 31, 2006
(Unaudited)
4. INCOME TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
dated November 1, 2002, 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.
5. ADMINISTRATIVE EXPENSES
The expenses of administering the Plan are payable from the trust funds, unless
the Company elects to pay such expenses. At present, the Company has elected to
pay such expenses directly.
6. 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 $1,417,709 $1,158,894
Adjustment from contract value to fair value for
Common Collective Trust (2,197) --
---------- ----------
Assets available for benefits per Form 5500 $1,415,512 $1,158,894
========== ==========
10
Solidstate Controls, Inc.
Hourly Employees' (CWA) Retirement Plan
Notes to Financial Statements
December 31, 2006
(Unaudited)
7. PLAN AMENDMENTS
Effective January 1, 2007, the Company will match $.50 on each dollar
contributed by the employee to the Plan. The match will apply to contributions
of up to 6% of the employee's income.
Ongoing, the Company will contribute to the Plan as follows:
- Effective January 1, 2007, the Company's contribution will be
increased by $.05 per hour to $.55 per hour worked
- Effective January 1, 2008, the Company's contribution will be
increased by $.05 per hour to $.60 per hour worked
- Effective January 1, 2009, the Company's contribution will be
increased by $.05 per hour to $.65 per hour worked
8. 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.
11
Solidstate Controls, Inc.
Hourly Employees' (CWA) Retirement Plan
EIN 31-0648695 Plan # 050
Schedule H, Line 4i
Schedule of Assets (Held at end of Year)
December 31, 2006
(Unaudited)
Description of investment, including
Identity of issue, borrower, lessor maturity date, rate of interest, Current
or similar party collateral, par, or maturity value Value
----------------------------------- ------------------------------------ ----------
AMETEK Stock Fund* Common Stock Fund $ 220,055
Vanguard Retirement Savings Trust* Common/Collective Trust 229,081
Vanguard Total Bond Market Index Fund* Registered Investment Company 139,853
Vanguard LifeStrategy Conservative Growth Fund* Registered Investment Company 48,263
Vanguard LifeStrategy Growth Fund* Registered Investment Company 72,939
Vanguard LifeStrategy Moderate Growth Fund* Registered Investment Company 61,760
Vanguard Wellington Fund* Registered Investment Company 100,023
Vanguard Windsor II Fund* Registered Investment Company 26,986
Vanguard PRIMECAP Fund* Registered Investment Company 59,302
Vanguard Small-Cap Index Fund* Registered Investment Company 38,560
Vanguard 500 Index Fund* Registered Investment Company 156,174
Evergreen Small Cap Value Fund Registered Investment Company 5,076
Julius Baer International Equity Fund Registered Investment Company 49,367
BlackRock Small Cap Fund Registered Investment Company 16,086
Loan Fund* Interest rates ranging from
5.0% to 9.25% 106,142
----------
$1,329,667
==========
----------------
* Indicates party-in-interest to the Plan.
Historical cost column is not included as all investments are
participant-directed.
12
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.
Solidstate Controls, Inc.
Hourly Employees'(CWA) Retirement Plan
(Name of Plan)
Dated: June 25, 2007 By: /s/ John J. Molinelli
------------------------------------
John J. Molinelli, Member,
Administrative Committee
13