Rockwell
Collins Retirement
Savings
Plan
Financial Statements as of and for the
Years Ended December 31, 2008 and 2007,
Supplemental Schedule as of
December 31, 2008 and Report of
Independent
Registered Public Accounting
Firm
ROCKWELL
COLLINS RETIREMENT SAVINGS PLAN
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REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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1
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FINANCIAL
STATEMENTS:
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Statements of Net Assets
Available for Benefits
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December 31, 2008 and
2007
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2
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Statements of Changes in Net
Assets Available for Benefits
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Years Ended December 31, 2008 and
2007
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3
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Notes to Financial
Statements
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4
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SUPPLEMENTAL
SCHEDULE:
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Form 5500, Schedule H, Part IV,
Line 4i
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Schedule of Assets (Held at End
of Year) as of December 31, 2008
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13
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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.
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the
Trustee and Participants of
Rockwell
Collins Retirement Savings Plan
We have
audited the accompanying statements of net assets available for benefits of the
Rockwell Collins Retirement Savings Plan (the “Plan”) as of December 31, 2008
and 2007, 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, 2008 and 2007,
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 of assets (held
at end of year) 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 2008 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.
/s/
DELOITTE & TOUCHE LLP
Minneapolis,
Minnesota
June 24,
2009
ROCKWELL
COLLINS RETIREMENT SAVINGS PLAN
STATEMENTS
OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER
31, 2008 AND 2007
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2008
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2007
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ASSETS:
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Investments at fair
value:
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Rockwell Collins Defined
Contribution Master Trust:
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Participant-directed
investments
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$ |
765,369,305 |
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$ |
964,967,666 |
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Partially nonparticipant-directed
investment - Rockwell Collins Stock
Fund
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243,504,542 |
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423,721,148 |
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Participant loan
fund
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21,992,601 |
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20,301,006 |
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Total
assets
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1,030,866,448 |
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1,408,989,820 |
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LIABILITIES:
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Accrued
expenses
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(111,042
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) |
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(108,000
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) |
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NET
ASSETS AVAILABLE FOR BENEFITS AT FAIR VALUE
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1,030,755,406 |
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1,408,881,820 |
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Adjustment
from fair value to contract value for fully benefit-responsive
stable value fund
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5,875,171 |
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1,081,442 |
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NET
ASSETS AVAILABLE FOR BENEFITS
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$ |
1,036,630,577 |
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$ |
1,409,963,262 |
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See notes
to financial statements.
ROCKWELL
COLLINS RETIREMENT SAVINGS PLAN
STATEMENTS
OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR
THE YEARS ENDED DECEMBER 31, 2008 AND 2007
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2008
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2007
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Investment income
(loss):
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Plan interest in net investment
income (loss) of Rockwell Collins Defined Contribution
Master Trust
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$ |
(507,974,499 |
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$ |
105,101,188 |
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Interest from participant loan
fund
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1,639,276 |
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1,481,058 |
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Total investment income
(loss)
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(506,335,223
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) |
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106,582,246 |
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Contributions:
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Participants
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99,689,887 |
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90,083,888 |
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Employer:
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Matching
contributions
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50,058,595 |
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45,289,648 |
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Retirement
contributions
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35,615,260 |
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33,540,171 |
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Rollovers
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4,997,495 |
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10,945,476 |
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Total
contributions
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190,361,237 |
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179,859,183 |
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Other
income
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199,955 |
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35,322 |
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Total
investment income (loss), contributions, and other income
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(315,774,031
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286,476,751 |
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Deductions:
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Payments to participants or
beneficiaries
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(66,725,487
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) |
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(73,421,362
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Deemed distributions and loan
defaults
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(915,943
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(1,027,896
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Administrative
expenses
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(202,997
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(296,289
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Total
deductions
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(67,844,427
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(74,745,547
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Transfers:
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Net transfers between affiliated
plans
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181,275 |
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848,549 |
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Transfers in from Plan
merger
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10,104,498 |
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2,528,062 |
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Total
transfers
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10,285,773 |
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3,376,611 |
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NET
INCREASE (DECREASE) IN NET ASSETS AVAILABLE FOR
BENEFITS
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(373,332,685
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215,107,815 |
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NET
ASSETS AVAILABLE FOR BENEFITS, BEGINNING OF YEAR
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1,409,963,262 |
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1,194,855,447 |
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NET
ASSETS AVAILABLE FOR BENEFITS, END OF YEAR
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$ |
1,036,630,577 |
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$ |
1,409,963,262 |
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See notes
to financial statements.
ROCKWELL
COLLINS RETIREMENT SAVINGS PLAN
NOTES
TO FINANCIAL STATEMENTS
FOR
THE YEARS ENDED DECEMBER 31, 2008 AND 2007
This
brief description of the Rockwell Collins Retirement Savings Plan (the “Plan”)
is provided for general information purposes only. Participants should refer to
the Plan document for more complete information.
Rockwell
Collins, Inc. (the “Company” or the “Plan Administrator”) maintains two defined
contribution savings plans in the U.S. for the benefit of its employees. The
investment assets of these plans are held and administered by the Rockwell
Collins Defined Contribution Master Trust (the “Master Trust”). These plans are
the Rockwell Collins Retirement Savings Plan and the Rockwell Collins Retirement
Savings Plan for Bargaining Unit Employees. Each of the participating plans has
an interest in the net assets of the Master Trust and changes therein. The
Master Trust provides segregated accounting for each plan and exists primarily
to allow a single investment fund for the participants in the common stock of
the Company at an administrative cost less than if each plan had a separate
fund.
The Plan
has a payment option related to the investments in Company stock to reflect an
Employee Stock Ownership Plan feature as defined by the Internal Revenue Code
(“IRC”). This option allows the participants whose accounts hold shares in the
Rockwell Collins Stock Fund to either receive the dividends paid on these shares
in cash as taxable compensation or to have the dividends reinvested in the Plan
with taxes deferred. Participants are offered the opportunity to elect their
choice of treatment regarding dividends paid on Company stock held in the Plan,
with dividend reinvestment as the default. Participants may change this election
at any time.
General –
The Plan is a defined contribution plan sponsored by the Company. Substantially
all U.S. based salaried, hourly and certain union employees are eligible to
participate in the Plan immediately upon hire. The Rockwell Collins Employee
Benefit Plan Committee controls and manages the operation and administration of
the Plan. The assets are held in custody with Fidelity Management Trust Company
(the “Trustee”). The Employee Benefit Plan Committee of the Company selects the
investment options available to participants. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”), as
amended.
Contributions
– The Plan provides that eligible employees electing to become
participants may contribute up to a maximum of 50 percent of base compensation.
Participant contributions can be made either pre-tax, up to IRC specified
limits, or after-tax. However, pre-tax contributions by highly compensated
participants are limited to 20 percent of the participant’s base
compensation. Participants age 50 and over are allowed to contribute an
additional amount as pre-tax catch-up contributions to the Plan, as specified in
the IRC.
The
Company contributes an amount equal to 75 percent of the first eight percent of
base compensation contributed by participants except that the Company
contributes an amount equal to 50 percent of the first six percent of base
compensation to participants in the Rockwell Collins Simulation and Training
Solutions unit. Company matching contributions are not made on the catch-up
contributions discussed above. Participant contributions are allocated according
to the fund choices of the participant while Company matching contributions are
made to the Rockwell Collins Stock Fund. Participants may elect to transfer all
or a portion of their balances in the Rockwell Collins Stock Fund to any of the
available investment alternatives at any time.
Employees
hired after October 1, 2006 are automatically enrolled in the Plan with a two
percent pre-tax contribution rate. For those participants that do not select an
investment option, participant contributions are made to the Fidelity Freedom
Fund closest to the date the participant reaches age 65. Participants may
elect to change their contribution rate or transfer all or a portion of their
balances to any of the available investment alternatives at any time.
Beginning
October 1, 2006, the Plan added a Company retirement contribution. The Company
retirement contribution is calculated as a percentage of eligible compensation
based on points corresponding to age plus years and months of credited service
as follows:
|
Points
|
Contribution
%
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|
0 -
34 |
0.5
% |
| 35
-
44 |
1.0
% |
| 45
-
54 |
2.0
% |
| 55
-
64 |
3.5
% |
| 65
-
74 |
5.0
% |
|
75
& over
|
6.0
%
|
Company
retirement contributions are invested in the same fund choices, and in the same
percentages, as the participant’s contributions to the Plan.
Participant
Accounts – Individual accounts are maintained for each Plan
participant. Each participant’s account is credited with the participant’s
contribution, the Company’s matching contribution, the Company retirement
contribution and an allocation of Plan earnings. Each participant’s account is
charged with withdrawals, directly attributable expenses (such as loan fees) and
an allocation of Plan losses and administrative expenses. Allocations are based
on participant earnings or account balances, as defined by the Plan.
The benefit to which a participant is entitled is the benefit that can be
provided from the participant’s vested account.
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 Rockwell Collins, Inc. common stock held in the Rockwell Collins
Stock Fund. Participants’ accounts are charged or credited, as the case may be,
with the number of units properly attributable to each participant.
Investments –
Participants may elect to have participant contributions made to any of the
funds that are available to participant contributions in one percent increments.
Participants may change such investment elections on a daily basis. If a
participant does not have an investment election on file, contributions will be
made to the Fidelity Freedom Fund closest to the date the participant reaches
age 65.
Investment
options available to participants to direct the investment of their account
balances and future contributions include various mutual funds, common
collective trust funds, and the following stock fund specific to the Plan:
Rockwell
Collins Stock Fund – Invests principally in the common stock of
Rockwell Collins, Inc. and may hold cash. Participants may elect to transfer all
or a portion of their balances in Company contributions in the Rockwell Collins
Stock Fund to any of the various fund alternatives at any time.
Vesting –
Each participant is fully vested at all times in the portion of a participant’s
account that relates to the participant’s contributions and earnings thereon.
Vesting in the Company contribution portion of participant accounts plus actual
earnings thereon is based on years of vested service. Generally, a participant
is 100 percent vested after three years of vested service or when the
participant reaches age 55.
Participant
Loans –
Loans may be obtained from the balance of a participant’s account in amounts not
less than $1,000 and not greater than the lesser of $50,000 reduced by the
participant’s highest outstanding loan balance during the 12-month period before
the date of the loan or 50 percent of the participant’s vested account balance
less any outstanding loans. Participants may have up to two outstanding loans at
a time. Loans are collateralized by the remaining balance in the participant’s
account. Interest is charged at a rate equal to the prime rate plus one percent
on the last day of the month before the loan is requested. Loan repayments of
principal and interest are collected 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 at any time. Payments of principal and interest are
credited to the participant’s account.
The Plan
has loans outstanding with terms that differ from those above as a result of
previous acquisitions made by the Company that had 401(k) plans that were merged
into the Plan. Such loans will continue under their original terms until repaid.
A deemed
distribution results when a participant, who is classified as an active
employee, has defaulted on a loan. Loan defaults occur when a participant, who
is no longer an active employee, defaulted on a loan or received an actual
distribution that was offset by the loan amount.
Rollovers –
Participants may contribute amounts representing distributions from other
qualified defined benefit or defined contribution plans.
Payment
of Benefits –
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.
Upon
retirement or termination after reaching age 55, participants may elect to
receive the vested portion of their account balance (employee and Company
contributions) in the form of a lump sum or in annual installment payments for
up to 10 years, subject to the distribution rules of the IRC.
Upon
termination of employment other than retirement prior to reaching age 55,
participants may receive the vested portion of their account balance (employee
and Company contributions) in the form of a lump sum, subject to the
distribution rules of the IRC or the balance may remain in the Plan without
further contributions.
Forfeited
Accounts –
The non-vested portion of a participant’s account is forfeited when certain
terminations described in the Plan occur. Forfeitures remain in the Plan and are
used to reduce the Company’s contributions to the Plan. The Plan contains
specific break in service provisions that enable a participant’s account to be
restored upon re-employment and fulfillment of certain requirements. At December
31, 2008 and 2007, forfeited non-vested accounts totaled $259,080 and $279,978,
respectively. During the years ended December 31, 2008 and 2007, Company
contributions were reduced by $792,549 and $398,096, respectively, from
forfeited non-vested accounts.
Plan
Termination – Although the Company has not expressed any intent to
terminate the Plan, the Company has the authority to terminate or modify the
Plan or suspend contributions to the Plan in accordance with ERISA. In the event
that the Plan is terminated, each participant’s account will be fully vested.
Benefits under the Plan will be provided solely from the Plan assets.
Acquisitions – During
April 2008, the Company acquired Athena Technologies, Inc. ("Athena"). The
employees of Athena, who participated in the Athena 401(k) Plan, became eligible
to participate in the Plan on April 5, 2008. In connection with the acquisition
of Athena, the Plan received transfers from the Athena 401(k) Plan of $3,686,644
on July 31, 2008.
During
August 2007, the Company acquired Information Technology and Applications
Corporation (“ITAC”). The employees of ITAC, who participated in the ITAC 401(k)
Plan, became eligible to participate in the Plan on August 13, 2007. In
connection with the acquisition of ITAC, the Plan received transfers from the
ITAC 401(k) Plan of $6,417,854 on January 31, 2008.
During
September 2006, the Company acquired Anzus, Inc (“Anzus”). The employees of
Anzus, who participated in the Anzus 401(k) Plan, became eligible to participate
in the Plan on September 25, 2006. In connection with the acquisition of Anzus,
the Plan received transfers from the Anzus 401(k) Plan of $2,528,062 on April
16, 2007.
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of Accounting – The accompanying financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States of America.
Use
of Estimates – The preparation of financial statements in conformity
with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets, liabilities, and changes therein and disclosure of contingent
assets and liabilities. Actual results could differ from those
estimates.
Risks
and Uncertainties – The Plan utilizes various investment instruments.
Investment securities, 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 investment securities, it is reasonably possible that
changes in the values of investment securities may occur and that such changes
could materially affect the amounts reported in the financial statements.
Investment
Valuation and Income Recognition – The
Plan’s investments are stated at fair value. Shares of mutual funds are valued
at quoted market prices, which represent the net asset value of shares held by
the Plan at year end. The Rockwell Collins Stock Fund is stated at fair value
based on the underlying Rockwell Collins, Inc. common stock, which is valued at
quoted market prices, and also includes cash. Common collective trust funds are
stated at fair value as determined by the issuer of the common collective trust
funds based on the fair market value of the underlying investments, which are
generally readily marketable. The common collective trust fund with underlying
investments in investment contracts is valued at the fair market value of the
underlying investments and then adjusted by the issuer to the contract
value for those investment contracts that are fully benefit-responsive.
Participant loans are valued at the outstanding loan balances, which approximate
fair value.
In
accordance with Financial Accounting Standards Board (“FASB”) Staff Position AAG
INV-1 and SOP 94-4-1, Reporting
of Fully Benefit-Responsive Contracts Held by Certain Investment Companies
Subject to the AICPA Investment Company Guide and Defined-Contribution Health
and Welfare and Pension Plans, the stable value fund is included at fair
value in participant-directed investments in the statements of net assets
available for benefits, and an additional line item is presented representing
the adjustment from fair value to contract value. The statement of changes in
net assets available for benefits is presented on a contract value basis.
Purchases
and sales of securities are recorded on a trade-date basis. Interest income is
recorded as earned. Dividends are recorded on the ex-dividend date.
Management
fees and operating expenses charged to the Plan for investments in the mutual
funds are deducted from income earned on a daily basis and are not separately
reflected. Consequently, management fees and operating expenses are reflected as
a reduction of investment return for such investments.
Administrative
Expenses – Administrative expenses of the Plan are paid by the Plan
as provided in the Plan document. Expenses are allocated to the participants as
a percentage of their account balance. Beginning with the year ended December
31, 2007, the Trustee provided the Plan Administrator with a service credit that
can be used by the Plan to offset the cost of Trustee provided services. During
the years ended December 31, 2008 and 2007, the Plan received a service
credit of $25,297 and $35,322, respectively, which was used to offset Trustee
administrative expenses incurred during those years and is recorded within other
income.
For the
year ending December 31, 2008, in addition to a service credit, the Trustee
provided the Plan Administrator with an expense credit of $174,658 that was used
by the Plan to offset third party expenses such as audit and legal fees and is
recorded within other income.
Payment
of Benefits – Benefit payments are recorded when paid. There were no
account balances of persons who had elected to withdraw from the Plan but have
not been paid at December 31, 2008 and 2007.
Net
Transfers Between Affiliated Plans – Along with this Plan, the Company
also sponsors a 401(k) plan for bargaining unit employees. If employees change
their status between bargaining unit and nonbargaining unit during the year,
their account balances are transferred into the corresponding plan. For the
years ended December 31, 2008 and 2007, net transfers between affiliated Plans
were $181,275 and $848,549, respectively.
Excess
Contributions Payable – The Plan is required to return contributions
received during the Plan year in excess of the IRC limits.
Adoption
of New Accounting
Guidance – The Plan adopted Statement of Financial Accounting
Standards
No. 157, Fair
Value Measurements (“SFAS 157”) as of January 1, 2008. There was no
impact on the Statement of Net Assets Available for Benefits or the Statement of
Changes in Net Assets Available for Benefits, but additional disclosures were
required and are included in Note 4.
3.
DEFINED CONTRIBUTION MASTER TRUST
As of
December 31, 2008 and 2007, the Plan’s investment assets, with the exception of
the Participant Loan Fund, are held in the Master Trust account at the Trustee.
This Plan participates in the Master Trust along with the Rockwell Collins
Retirement Savings Plan for Bargaining Unit Employees (collectively, the
“participating plans”). Each of the participating plans has an interest in the
net assets of the Master Trust and changes therein. The Trustee maintains
supporting records for the purpose of allocating the net assets and net gain or
loss of the investment accounts to each of the participating plans.
The
Master Trust investments are valued at fair value at the end of each
day.
The net
earnings or loss of the accounts for each day are allocated by the Trustee to
each participating plan investment fund based on the relationship of the
interest of each plan to the total of the interests of all participating
plans.
The
Master Trust holds an investment in a collective trust fund (the “Fund”)
sponsored by the Trustee that is a stable value fund. The beneficial interest of
each participant in the net assets of the Fund is represented by units. Units
are issued and redeemed daily at the Fund’s constant net asset value (NAV) of $1
per unit. Distribution to the Fund’s unit holders are declared daily from the
net investment income and automatically reinvested in the Fund on a monthly
basis, when paid. It is the policy of the Fund to use its best efforts to
maintain a stable NAV of $1 per unit, although there is no guarantee that the
Fund will be able to maintain this value.
The Fund
imposes certain restrictions on the Plan, and the Fund itself may be subject to
circumstances that impact its ability to transact at contract value, as
described in the following paragraphs. Plan management believes that the
occurrence of events that would cause the Fund to transact at less than contract
value is not probable.
Restrictions
on
the Plan — Participant-initiated transactions are those transactions
allowed by the Plan, including withdrawals for benefits, loans, or transfers to
noncompeting funds within a plan, but excluding withdrawals that are deemed to
be caused by the actions of the Plan Sponsor. The following employer initiated
events may limit the ability of the Fund to transact at contract
value:
|
s
|
A
failure of the Plan or its trust to qualify for exemption from federal
income taxes or any required prohibited transaction exemption under ERISA
|
| |
|
|
s
|
Any
communication given to Plan participants designed to influence a
participant not to invest in the Fund or to transfer assets out of the
Fund
|
| |
|
|
s
|
Any
transfer of assets from the Fund directly into a competing investment
option
|
| |
|
|
s
|
The
establishment of a defined contribution plan that competes with the Plan
for employee contributions
|
| |
|
|
s
|
Complete
or partial termination of the Plan or its merger with another
plan
|
Circumstances
That Impact the Fund — The Fund invests in assets, typically fixed
income securities or bond funds, and enters into “wrapper” contracts issued by
third parties. A wrap contract is an agreement by another party, such as a bank
or insurance company to make payments to the Fund in certain circumstances. Wrap
contracts are designed to allow a stable value portfolio to maintain a constant
NAV and protect a portfolio in extreme circumstances. In a typical wrap
contract, the wrap issuer agrees to pay a portfolio the difference
between the contract value and the market value of the underlying assets
once the market value has been totally exhausted.
The wrap
contracts generally contain provisions that limit the ability of the Fund to
transact at contract value upon the occurrence of certain events. These events
include:
|
s
|
Any
substantive modification of the Fund or the administration of the Fund
that is not consented to by the wrap issuer
|
| |
|
|
s
|
Any
change in law, regulation, or administrative ruling applicable to a plan
that could have a material adverse effect on the Fund’s cash flow
|
| |
|
|
s
|
Employer-initiated
transactions by participating plans as described
above
|
In the
event that wrap contracts fail to perform as intended, the Fund’s NAV may
decline if the market value of its assets declines. The Fund’s ability to
receive amounts due pursuant to these wrap contracts is dependent on the
third-party issuer’s ability to meet their financial obligations. The wrap
issuer’s ability to meet its contractual obligations under the wrap contracts
may be affected by future economic and regulatory developments.
The Fund
is unlikely to maintain a stable NAV if, for any reason, it cannot obtain or
maintain wrap contracts covering all of its underlying assets. This could result
from the Fund’s inability to promptly find a replacement wrap contract following
termination of a wrap contract. Wrap contracts are not transferable and have no
trading market. There are a limited number of wrap issuers. The Fund may lose
the benefit of wrap contracts on any portion of its assets in default in excess
of a certain percentage of portfolio assets.
The net
assets of the Master Trust at December 31, 2008 and 2007 consisted of the
following:
|
|
|
2008
|
|
|
2007
|
|
|
Mutual
funds
|
|
$ |
591,517,245 |
|
|
$ |
816,489,773 |
|
|
Rockwell
Collins Stock Fund
|
|
|
252,802,111 |
|
|
|
438,294,053 |
|
|
Common
collective trust funds
|
|
|
202,567,289 |
|
|
|
184,145,673 |
|
|
Total
assets at fair value
|
|
|
1,046,886,645 |
|
|
|
1,438,929,499 |
|
Adjustment
from fair value to contract value for fully benefit responsive
investment contracts
|
|
|
6,152,312 |
|
|
|
1,132,429 |
|
|
Net
assets
|
|
$ |
1,053,038,957 |
|
|
$ |
1,440,061,928 |
|
| |
|
|
|
|
|
|
|
|
|
Plan's
interest in Master Trust net assets
|
|
$ |
1,014,749,018 |
|
|
$ |
1,389,770,256 |
|
| |
|
|
|
|
|
|
|
|
|
Plan's
percentage interest in Master Trust net assets
|
|
|
96.4
|
% |
|
|
96.5
|
% |
In the
prior year, the Plan's interest in the Master Trust was presented based on the
total assets of the Master Trust at fair value. In the current year, the Plan's
interest in the Master Trust is presented based on the net assets of the Master
Trust, and the prior year amount was changed to conform to the current year
presentation.
The net
investment income (loss) of the Master Trust for the years ended December 31,
2008 and 2007 consisted of the following:
|
|
|
2008
|
|
|
2007
|
|
|
Net
appreciation (depreciation) of investments:
|
|
|
|
|
|
|
|
Mutual
funds
|
|
$ |
(342,714,757 |
) |
|
$ |
(16,349,129 |
) |
|
Rockwell Collins Stock
Fund
|
|
|
(199,696,170
|
) |
|
|
52,893,001 |
|
|
Common collective trust
funds
|
|
|
(28,894,070
|
) |
|
|
3,597,520 |
|
|
Net
appreciation (depreciation)
|
|
|
(571,304,997
|
) |
|
|
40,141,392 |
|
|
Interest
and dividends
|
|
|
44,701,218 |
|
|
|
68,191,519 |
|
|
Net
investment income (loss)
|
|
$ |
(526,603,779 |
) |
|
$ |
108,332,911 |
|
The
Master Trust’s investments at fair value that exceeded 5 percent of Master Trust
net assets as of December 31, 2008 and 2007 were as follows:
|
Description of
Investment
|
|
2008
|
|
|
2007
|
|
|
Rockwell
Collins Stock Fund*
|
|
$ |
252,802,111 |
|
|
$ |
438,294,053 |
|
|
Fidelity
Managed Income Portfolio Fund II*
|
|
|
150,417,007 |
|
|
|
113,057,177 |
|
|
Fidelity
Dividend Growth Fund*
|
|
|
85,815,832 |
|
|
|
150,715,664 |
|
|
Fidelity
U.S. Bond Index Fund*
|
|
|
74,603,229 |
|
|
|
- |
|
|
Fidelity
U.S. Equity Index Commingled Pool*
|
|
|
58,302,594 |
|
|
|
- |
|
|
Fidelity
Mid-Cap Stock Fund*
|
|
|
55,221,466 |
|
|
|
103,474,392 |
|
*Represents
a party-in-interest to the Master Trust.
Information
about the net assets and the significant components of the changes in net assets
relating to the partially nonparticipant-directed investments held in the Master
Trust as of December 31, 2008 and 2007, and for the years then ended, is as
follows:
|
|
|
2008
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
Net
Assets - Rockwell Collins Stock Fund - Beginning of
year
|
|
$ |
438,294,053 |
|
|
$ |
385,332,007 |
|
|
Change
in Net Assets:
|
|
|
|
|
|
|
|
|
|
Net appreciation (depreciation)
in fair value of investments
|
|
|
(199,696,170
|
) |
|
|
52,893,001 |
|
|
Dividends
|
|
|
5,428,709 |
|
|
|
3,862,735 |
|
|
Contributions
|
|
|
63,897,385 |
|
|
|
58,598,507 |
|
|
Benefit
payments
|
|
|
(14,539,612
|
) |
|
|
(22,024,008
|
) |
|
Net transfers to
participant-directed investments
|
|
|
(40,582,254
|
) |
|
|
(40,368,189
|
) |
| |
|
|
|
|
|
|
|
|
|
Net
change
|
|
|
(185,491,942
|
) |
|
|
52,962,046 |
|
| |
|
|
|
|
|
|
|
|
Net
Assets - Rockwell Collins Stock Fund - End of
year
|
|
$ |
252,802,111 |
|
|
$ |
438,294,053 |
|
4.
FAIR VALUE MEASUREMENTS
The Plan
adopted SFAS 157 as of January 1, 2008. SFAS 157 defines fair value, establishes
a framework for measuring fair value and expands the related disclosure
requirements. The statement indicates, among other things, that a fair value
measurement assumes that the transaction to sell an asset or transfer a
liability occurs in the principal market for the asset or liability or, in the
absence of a principal market, the most advantageous market for the asset or
liability. SFAS 157 establishes a valuation hierarchy for disclosure of the
inputs to valuation techniques used to measure fair value. This hierarchy
prioritizes the inputs into three broad levels as follows:
Level 1 -
quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2 -
quoted prices for similar assets and liabilities in active markets or inputs
that are observable for the asset or liability, either directly or indirectly
through market corroboration, for substantially the full term of the financial
instrument
Level 3 -
unobservable inputs based on the Plan’s own assumptions used to measure assets
and liabilities at fair value
A
financial asset or liability’s classification within the hierarchy is determined
based on the lowest level input that is significant to the fair value
measurement. The fair value of the Master Trust assets and participant loans as
of December 31, 2008 was as follows:
|
|
|
Fair
Value Measurements
|
|
|
|
|
at December
31, 2008, using
|
|
|
|
|
|
|
|
Significant
other
|
|
|
Significant
|
|
|
|
|
|
|
|
Quoted
prices in
|
|
|
observable
|
|
|
unobservable
|
|
|
|
|
|
|
|
active
markets
|
|
|
inputs
|
|
|
inputs
|
|
|
|
|
|
|
|
(Level
1)
|
|
|
(Level
2)
|
|
|
(Level
3)
|
|
|
Total
|
|
|
Mutual
funds
|
|
$ |
591,517,245 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
591,517,245 |
|
|
Rockwell
Collins Stock Fund
|
|
|
252,802,111 |
|
|
|
- |
|
|
|
- |
|
|
|
252,802,111 |
|
|
Common
collective trust funds
|
|
|
- |
|
|
|
202,567,289 |
|
|
|
- |
|
|
|
202,567,289 |
|
Total
Master Trust assets at fair value
|
|
$ |
844,319,356 |
|
|
$ |
202,567,289 |
|
|
$ |
- |
|
|
$ |
1,046,886,645 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Participant
loans
|
|
$ |
- |
|
|
$ |
21,992,601 |
|
|
$ |
- |
|
|
$ |
21,992,601 |
|
5.
FEDERAL INCOME TAX STATUS
The
Internal Revenue Service has determined and informed the Company by a letter
dated July 22, 2002, that the Plan and the related trust are designed in
accordance with applicable sections of the IRC. The Plan Administrator and the
Plan’s tax counsel believe that the Plan is currently designed and being
operated in compliance with the applicable provisions of the IRC and the related
trust continues to be tax exempt. As a result, no provision for income taxes has
been included in the Plan’s financial statements.
6.
EXEMPT PARTY-IN-INTEREST TRANSACTIONS
At
December 31, 2008 and 2007, the Master Trust held $252,190,894 and $434,177,737,
respectively, of Company common stock which is stated at fair value. During the
years ended December 31, 2008 and 2007, the Master Trust recorded dividend
income from the Company of $5,428,709 and $3,862,735, respectively.
Certain
Plan investments are managed by the Trustee and these transactions qualify as
exempt party-in-interest transactions. Fees paid by the Plan for investment
management services are included as a reduction of the return earned on each
investment fund.
ROCKWELL
COLLINS RETIREMENT SAVINGS PLAN
FORM
5500, SCHEDULE H, PART IV, LINE 4iSCHEDULE
OF ASSETS (HELD AT END OF YEAR) AS OF DECEMBER 31, 2008
|
|
Description
of Investment
|
|
|
Identity
of Issue,
|
including
Collateral, Rate
|
|
|
Borrower,
Lessor
|
of
Interest, Maturity Date,
|
Current
|
|
or
Similar Party
|
Par
or Maturity Value
|
Value
|
| |
|
|
|
Various
participants*
|
Participant loans; (interest
rates of
|
|
|
|
5.0%
- 10.5%) due 2009 to 2019
|
$21,992,601 |
*Represents
a party-in-interest to the Plan.