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, 2005
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, 2005 and 2004
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 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 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 net assets available for benefits of the Plan at
December 31, 2005 and 2004, 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 financial
statements taken as a whole. The accompanying supplemental schedule of assets
(held at year end) as of December 31, 2005, 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 12, 2006
2
The AMETEK Retirement and Savings Plan
Statements of Net Assets Available for Benefits
DECEMBER 31,
---------------------------
2005 2004
------------ ------------
ASSETS:
Investments, at fair value $255,005,668 $236,967,737
------------ ------------
Receivables:
Employer contributions 122,358 --
Participant contributions 263,741 --
------------ ------------
Total receivables 386,099 --
------------ ------------
Total assets 255,391,767 236,967,737
LIABILITIES:
Liability for Insurance Contribution -- 723
------------ ------------
Net assets available for benefits $255,391,767 $236,967,014
============ ============
See accompanying notes.
3
The AMETEK Retirement and Savings Plan
Statements of Changes in Net Assets Available for Benefits
YEARS ENDED DECEMBER 31,
---------------------------
2005 2004
------------ ------------
ADDITIONS:
Contributions:
Employer $ 6,686,656 $ 6,475,909
Participants 12,771,989 12,565,409
Participant rollovers and transfers from other plans 3,296,252 8,414,021
------------ ------------
22,754,897 27,455,339
------------ ------------
Investment income:
Net appreciation in fair value of investments 9,395,281 21,177,468
Interest and dividend income 7,955,109 5,249,367
------------ ------------
17,350,390 26,426,835
------------ ------------
Total additions 40,105,287 53,882,174
------------ ------------
DEDUCTIONS:
Benefits paid to participants (21,664,410) (13,410,136)
Insurance premiums and commissions (16,124) (18,396)
------------ ------------
Total deductions (21,680,534) (13,428,532)
------------ ------------
Net increase 18,424,753 40,453,642
Net assets available for benefits:
Beginning of year 236,967,014 196,513,372
------------ ------------
End of year $255,391,767 $236,967,014
============ ============
See accompanying notes.
4
THE AMETEK RETIREMENT AND SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2005
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% 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 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, or
into a separate 401(k) Plan for businesses acquired by AMETEK. During 2005, the
net assets of the Taylor Hobson 401(k) Savings Plan, in the amount of
approximately $1.7 million, were transferred into the Plan. During 2004, the net
assets of the Chandler Engineering Company L.L.C. Investment Plan, in the amount
of approximately $4.7 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.
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 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
5
THE AMETEK RETIREMENT AND SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2005
1. DESCRIPTION OF THE PLAN (CONTINUED)
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 become fully
vested after five 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 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, 2005 and 2004 ranged between 5.0% and 10.5%. Principal and interest
is paid ratably through payroll deductions. Participant loans outstanding at
December 31, 2005 and 2004, respectively, totaled $5,843,612 and $5,983,269 are
included in investments in the accompanying statements of net assets available
for benefits.
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.
6
THE AMETEK RETIREMENT AND SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2005
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
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
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. 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 book values, 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, 2005
3. INVESTMENT PROGRAMS
At December 31, 2005 and 2004, 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 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
net assets at year-end are as follows:
DECEMBER 31,
-------------------------
2005 2004
----------- -----------
Vanguard Retirement Savings Master Trust $56,883,317 $47,644,448
Vanguard 500 Index Fund 32,258,685 13,737,084
Vanguard Windsor II Fund 28,672,487 25,103,020
Vanguard PRIMECAP Fund 28,253,373 27,428,099
AMETEK Stock Fund 26,857,898 23,019,609
Vanguard Wellington Fund 20,827,535 18,012,531
Fidelity Magellan Fund * -- 18,885,358
BlackRock Small Cap Fund ** -- 12,310,855
* Effective March 31, 2005, all balances in this fund were rolled into the
Vanguard 500 Index Fund.
** At December 2005, 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, 2005
3. INVESTMENT PROGRAMS (CONTINUED)
During 2005 and 2004, the Plan's investments (including gains on investments
bought, sold, as well as, held during the year) appreciated in value, as
follows:
DECEMBER 31,
------------------------
2005 2004
---------- -----------
Common stock $4,437,144 $ 7,172,489
Registered investment companies 4,958,137 14,004,979
---------- -----------
$9,395,281 $21,177,468
========== ===========
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, 2005
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,
---------------------------
2005 2004
------------ ------------
Net assets available for benefits per the
financial statements $255,391,767 $236,967,014
Amounts owed to withdrawing participants (393,725) --
------------ ------------
Net assets available for benefits per Form 5500 $254,998,042 $236,967,014
============ ============
The following is a reconciliation of benefits paid to participants for the year
ended December 31, 2005 per the financial statements to the Form 5500:
YEAR ENDED
DECEMBER 31,
2005
------------
Benefits paid to participants per the
financial statements $21,664,410
Add: Amounts allocated to withdrawing
participants at December 31, 2005 393,725
Less: Amounts allocated to withdrawing
participants at December 31, 2004 --
-----------
Benefits paid to participants per Form 5500 $22,058,135
===========
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.
8. PLAN AMENDMENTS
Effective January 1, 2005 the Plan was amended to designate Taylor Hobson 401(k)
Savings Plan as participating employees in the Plan. Effective January 1, 2004,
the Plan was amended to designate Chandler Instruments Company L.L.P., and
Petrolab, L.L.C. as participating employers in the Plan. Effective September 3,
2004, AMETEK, Thermal Instruments, Inc. (Salaried Employees Only) was also
designated as a participating employer in the Plan.
10
The AMETEK Retirement and Savings Plan
Form 5500, Schedule H, Line 4i--
Schedule of Assets (Held at End of Year)
December 31, 2005
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 $ 26,857,898
Vanguard Retirement Savings Master Trust * Common/Collective Trust 56,883,317
Vanguard Total Bond Market Index Fund* Registered Investment Company 8,868,626
Vanguard LifeStrategy Conservative Growth Fund* Registered Investment Company 3,338,999
Vanguard LifeStrategy Growth Fund* Registered Investment Company 5,750,880
Vanguard LifeStrategy Moderate Growth Fund* Registered Investment Company 8,491,338
Vanguard Prime Money Market* Registered Investment Company 58,016
Vanguard Wellington Fund* Registered Investment Company 20,827,535
Vanguard Windsor II Fund* Registered Investment Company 28,672,487
Vanguard PRIMECAP Fund* Registered Investment Company 28,253,373
Vanguard Small-Cap Index Fund* Registered Investment Company 6,275,043
Vanguard 500 Index Fund* Registered Investment Company 32,258,685
Evergreen Small Cap Value Fund Registered Investment Company 1,121,824
Julius Baer International Equity Fund Registered Investment Company 9,934,229
BlackRock Small Cap Fund Registered Investment Company 11,229,219
First Colony Life Insurance Company Life Insurance Policies 340,587
Participant Loans* Interest rates ranging from
5.0% to 10.5% 5,843,612
------------
$255,005,668
============
* 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 16, 2006 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 Registered Public Accounting Firm
13