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, 2003
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
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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, 2003 and 2002
CONTENTS
Report of Independent Registered Public Accounting Firm.............. 2
Audited Financial Statements:
Statements of Net Assets Available for Benefits...................... 3
Statements of Changes in Net Assets Available for Benefits........... 4
Notes to Financial Statements........................................ 5
Supplemental Schedule:
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)....... 11
Signatures........................................................... 12
Exhibit Index........................................................ 13
1
Report of Independent Registered Public Accounting Firm
Plan Administrative Committee
The AMETEK Retirement and Savings Plan
We have audited the accompanying statements of net assets available for benefits
of The AMETEK Retirement and Savings Plan (the Plan) as of December 31, 2003 and
2002, and the related statements of changes in net assets available for benefits
for the years then ended. These financial statements and schedule 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. 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 audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 2003 and 2002, and the changes in its net 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 basic
financial statements taken as a whole. The accompanying schedule of assets (held
at end of year) as of December 31, 2003, 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 9, 2004
2
The AMETEK Retirement and Savings Plan
Statements of Net Assets Available for Benefits
DECEMBER 31,
2003 2002
------------ ------------
ASSETS:
Investments, at fair value $196,514,051 $150,297,624
------------ ------------
Receivables:
Employer contributions - 409,976
Participants contributions - 862,857
------------ ------------
Total receivables - 1,272,833
------------ ------------
Total Assets 196,514,051 151,570,457
LIABILITIES:
Liability for Insurance Contribution 679 1,053
------------ ------------
Net assets available for benefits $196,513,372 $151,569,404
============ ============
See accompanying notes.
3
The AMETEK Retirement and Savings Plan
Statements of Changes in Net Assets Available for Benefits
YEAR ENDED DECEMBER 31,
2003 2002
------------- -------------
ADDITIONS:
Contributions:
Employer $ 5,269,344 $ 5,362,655
Participants 10,481,175 11,300,472
Participant rollovers and transfers from other plans 9,231,392 4,794,055
------------- -------------
24,981,911 21,457,182
------------- -------------
Investment income (loss):
Net appreciation (depreciation) in fair value of investments 27,171,581 (17,964,876)
Interest and dividend income 4,069,244 4,101,959
------------- -------------
31,240,825 (13,862,917)
------------- -------------
Total additions 56,222,736 7,594,265
------------- -------------
DEDUCTIONS:
Benefits paid to participants 11,260,446 12,948,867
Insurance premiums and commissions 18,322 20,178
------------- -------------
Total deductions 11,278,768 12,969,045
------------- -------------
Net increase (decrease) 44,943,968 (5,374,780)
Net assets available for benefits:
Beginning of year 151,569,404 156,944,184
------------- -------------
End of year $ 196,513,372 $ 151,569,404
============= =============
See accompanying notes.
4
THE AMETEK RETIREMENT AND SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003
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).
CONTRIBUTIONS
Each year, participants have an opportunity to invest up to 50% (14% prior to
July 1, 2002) 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. Beginning January 1, 2004, certain
groups of participants will have an opportunity to invest up to 75% of their
compensation, as defined by the Plan. 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. 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.
The Plan has a retirement feature for eligible salaried and hourly employees
hired by AMETEK after December 31, 1996. AMETEK 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 current-year Company contributions.
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.
5
THE AMETEK RETIREMENT AND SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003
1. DESCRIPTION OF THE PLAN (CONTINUED)
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 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, the sum of which may not exceed the maximum
allowable. 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, 2003 ranged between 5.0% and 10.5%. Principal and interest is paid
ratably through payroll deductions.
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. Participants with a vested account value
of less than $5,000 will be paid in a lump sum as soon as practicable after
retirement, termination, disability or death of the participant. 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. 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.
6
THE AMETEK RETIREMENT AND SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003
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, 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). The accompanying
financial statements have been prepared in accordance with Statement of Position
(SOP) 99-3, "Accounting for and Reporting of Certain Defined Contribution
Benefit Plan Investments and Other Disclosure Matters.
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 net assets available for benefits.
INVESTMENT VALUATION AND INCOME RECOGNITION
The 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. The fair value of the participation units in the common/collective
trust is based on quoted redemption values on the last business day of the plan
year. 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 balances, which approximates
fair value.
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.
7
THE AMETEK RETIREMENT AND SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003
3. INVESTMENT PROGRAMS
At December 31, 2003 and 2002, the Vanguard Fiduciary Trust Company was the
Trustee and party-in-interest of 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 Master Trust
Registered investment companies:
- Vanguard Prime Money Market Fund
- Vanguard Total Bond Market Index Fund
- Vanguard LifeStrategy Funds
- Vanguard Wellington Fund
- Vanguard Windsor II Fund
- Vanguard PRIMECAP Fund
- Vanguard International Growth Fund
- Vanguard Small-Cap Index Fund
- Vanguard 500 Index Fund
- Fidelity Magellan 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,
2003 2002
----------- -----------
Vanguard Retirement Savings Master Trust $45,080,545 $42,626,969
Vanguard Wellington Fund 14,960,583 10,880,329
Vanguard Windsor II Fund 20,513,651 14,901,143
Vanguard PRIMECAP Fund 21,023,849 13,633,584
Vanguard 500 Index Fund * 12,043,216 6,161,461
Fidelity Magellan Fund 17,566,596 14,355,825
BlackRock Small Cap. Fund * 10,968,418 6,763,796
AMETEK Stock Fund 14,410,104 11,435,232
* At December 31, 2002, this investment represented less than 5% of the fair
value of the Plan's net assets.
8
THE AMETEK RETIREMENT AND SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003
3. INVESTMENT PROGRAMS (CONTINUED)
During 2003 and 2002, the Plan's investments (including gains and losses on
investments bought, sold, as well as held during the year) appreciated
(depreciated) in value, as follows:
DECEMBER 31,
2003 2002
------------ ------------
Common Stock $ 2,910,363 $ 2,071,112
Registered investment companies 24,261,218 (20,035,988)
------------ ------------
$ 27,171,581 ($17,964,876)
============ ============
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 qualified under Section 401(a)
of the Internal Revenue Code (the "Code") and, therefore, the related trust is
exempt from taxation. Subsequent to issuance of the above determination letter,
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
Administrator believes the Plan is being operated in compliance with the
applicable requirements of the Code and, therefore, believes that the Plan, as
amended and restated, continues to be qualified and the related trust is tax
exempt.
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 elected to pay such expenses directly.
9
THE AMETEK RETIREMENT AND SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003
7. DIFFERENCES BETWEEN FINANCIAL STATEMENTS AND FORM 5500
The following is a reconciliation of net assets available for benefits per the
financial statements to the Plan's Form 5500:
DECEMBER 31,
2003 2002
------------- -------------
Net assets available for benefits per the
Financial statements $ 196,513,372 $ 151,569,404
Amounts owed to withdrawing participants (339,831) (469,941)
------------- -------------
Net assets available for benefits per Form 5500 $ 196,173,541 $ 151,099,463
============= =============
The following is a reconciliation of benefits paid to participants for the year
ended December 31, 2003 per the financial statements to the Form 5500:
YEAR ENDED
DECEMBER 31,
2003
------------
Benefits paid to participants per the financial statements $ 11,260,466
Add: Amounts allocated to withdrawing participants
at December 31, 2003 339,831
Less: Amounts allocated to withdrawing participants
at December 31, 2002 (469,941)
------------
Benefits paid to participants per Form 5500 $ 11,130,356
============
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.
10
The AMETEK Retirement and Savings Plan
Form 5500, Schedule H, Line 4i--
Schedule of Assets (Held at End of Year)
December 31, 2003
DESCRIPTION OF INVESTMENT, INCLUDING
IDENTITY OF ISSUE, BORROWER, LESSOR, OR SIMILAR MATURITY DATE, RATE OF INTEREST, CURRENT
PARTY COLLATERAL, PAR, OR MATURITY VALUE VALUE
- ------------------------------------------------- ------------------------------------- -----------
AMETEK Stock Fund* Common Stock Fund $14,410,104
Vanguard Retirement Savings Master Trust* Common/Collective Trust 45,080,545
Vanguard Prime Money Market Fund* Registered Investment Company 8,644,390
Vanguard Total Bond Market Index Fund* Registered Investment Company 6,620,258
Vanguard LifeStrategy Conservative Growth Fund* Registered Investment Company 2,185,741
Vanguard LifeStrategy Growth Fund* Registered Investment Company 3,626,728
Vanguard LifeStrategy Moderate Growth Fund* Registered Investment Company 4,521,261
Vanguard Wellington Fund* Registered Investment Company 14,960,583
Vanguard Windsor II Fund* Registered Investment Company 20,513,651
Vanguard PRIMECAP Fund* Registered Investment Company 21,023,849
Vanguard International Growth Fund* Registered Investment Company 5,768,687
Vanguard Small-Cap Index Fund* Registered Investment Company 2,826,971
Vanguard 500 Index Fund* Registered Investment Company 12,043,216
Fidelity Magellan Fund Registered Investment Company 17,566,596
BlackRock Small Cap. Fund Registered Investment Company 10,968,418
First Colony Life Insurance Company Life Insurance Policies 364,789
Participant Loans* Interest rates ranging
From 5.0% to 10.5% 5,388,264
------------
$196,514,051
============
* Indicates party-in-interest to the Plan
11
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 23, 2004 By: /s/ John J. Molinelli
----------------------------
John J. Molinelli, Member,
Administrative Committee
12
THE AMETEK RETIREMENT AND SAVINGS PLAN
EXHIBIT INDEX
Exhibit Number Description
- -------------- -----------
23 Consent of Independent Auditors
13
Exhibit 23
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the Registration Statements on
Form S-8 (File Nos. 333-34789, 333-80449, 333-97969, 333-87491, and 333-91507)
pertaining to the 1997 Stock Incentive Plan of AMETEK, Inc., the 1999 Stock
Incentive Plan of AMETEK, Inc., the 2002 Stock Incentive Plan of AMETEK, Inc.,
the AMETEK Retirement and Savings Plan and the AMETEK 401(K) Plan for Acquired
Businesses, and the AMETEK Inc. Deferred Compensation Plan, respectively, and to
the incorporation by reference in the Registration Statement on Form S-3 (File
No. 333-75892), and in the related Prospectuses, of our report dated June 9,
2004, with respect to the financial statements of the AMETEK Retirement and
Savings Plan included in this Annual Report (Form 11-K) for the year ended
December 31, 2003.
Philadelphia, Pennsylvania
June 21, 2004
