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
AMETEK 401(K) PLAN FOR ACQUIRED BUSINESSES
(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)
AMETEK 401(k) Plan for Acquired Businesses
Financial Statements and Supplemental Schedule
Years ended December 31, 2006 and 2005
CONTENTS
Report of Independent Registered Public Accounting Firm.................... 2
Audited Financial Statements:
Statements of Assets Available for Benefits............................. 3
Statements of Changes in Assets Available for Benefits.................. 4
Notes to Financial Statements........................................... 5
Supplemental Schedule:
Schedule H, Line 4i - Schedule of Assets (Held at End of Year).......... 13
Signatures................................................................. 14
Exhibit Index.............................................................. 15
1
Report of Independent Registered Public Accounting Firm
Plan Administrative Committee
AMETEK 401(k) Plan for Acquired Businesses
We have audited the accompanying statements of assets available for benefits of
the AMETEK 401(k) Plan for Acquired Businesses as of December 31, 2006 and 2005,
and the related statements of changes in assets available for benefits for the
years then ended. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. We were not engaged to perform an
audit of the Plan's internal control over financial reporting. Our audits
included consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the Plan's
internal control over financial reporting. Accordingly, we express no such
opinion. An audit also includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the assets available for benefits of the Plan at December
31, 2006 and 2005, and the changes in its assets available for benefits for the
years then ended, in conformity with U.S. generally accepted accounting
principles.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule of assets
(held at end of year) as of December 31, 2006, is presented for purposes of
additional analysis and is not a required part of the financial statements but
is supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. This supplemental schedule is the responsibility of the
Plan's management. The supplemental schedule has been subjected to the auditing
procedures applied in our audits of the financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/ Ernst & Young LLP
Philadelphia, Pennsylvania
June 20, 2007
2
AMETEK 401(k) Plan for Acquired Businesses
Statements of Assets Available for Benefits
DECEMBER 31,
-------------------------
2006 2005
----------- -----------
ASSETS:
Investments, at fair value $56,897,097 $50,564,578
----------- -----------
Receivables:
Employer contributions 36,109 32,952
Participants contributions 77,283 71,245
----------- -----------
Total receivables 113,392 104,197
----------- -----------
Assets available for benefits, at fair value 57,010,489 50,668,775
Adjustment from fair value to contract value
for Common Collective Trust 48,543 69,201
----------- -----------
Assets available for benefits $57,059,032 $50,737,976
=========== ===========
See accompanying notes.
3
AMETEK 401(k) Plan for Acquired Businesses
Statements of Changes in Assets Available for Benefits
YEARS ENDED DECEMBER 31,
-------------------------
2006 2005
----------- -----------
ADDITIONS:
Contributions:
Employer $ 1,189,174 $ 1,123,647
Participants 2,797,616 2,602,946
Participant rollovers from other plans 130,452 193,795
----------- -----------
4,117,242 3,920,388
----------- -----------
Investment income:
Net appreciation in fair value of investments 4,409,766 1,730,212
Interest and dividend income 2,267,884 1,496,948
----------- -----------
6,677,650 3,227,160
----------- -----------
Total additions 10,794,892 7,147,548
----------- -----------
DEDUCTIONS:
Benefits paid to participants (4,473,836) (2,545,296)
----------- -----------
Total deductions (4,473,836) (2,545,296)
----------- -----------
Net increase 6,321,056 4,602,252
Assets available for benefits:
Beginning of year 50,737,976 46,135,724
----------- -----------
End of year $57,059,032 $50,737,976
=========== ===========
See accompanying notes.
4
AMETEK 401(k) Plan for Acquired Businesses
Notes to Financial Statements
December 31, 2006
1. DESCRIPTION OF PLAN
GENERAL
The following brief description of the AMETEK 401(K) Plan for Acquired
Businesses ("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. The Plan
provides eligible employees of businesses acquired by AMETEK, Inc. ("AMETEK", or
"the Company"), an opportunity to invest a portion of their compensation, as
defined by the Plan, in one or a combination of investment programs (see Note
3).
PARTICIPANT ELIGIBILITY
Each employee, who is employed at a business location whose employees have been
designated by the Board of Directors as eligible to participate in this Plan,
and who is not an ineligible employee as defined by the Plan, shall become a
participant in the Plan as of the effective date of participation for such
business location provided that the participant is at least age eighteen on that
date and provided further, that he/she was employed by the business immediately
prior to the acquisition date.
CONTRIBUTIONS
Each year, participants have an opportunity to invest up to 50% of their annual
compensation, as defined by the Plan, in multiples of one percent, except for
certain highly compensated participants who may be subject to certain regulatory
limitations. Certain groups of participants have an opportunity to invest
catch-up contributions up to 75% of their compensation. Participants may also
contribute amounts representing rollovers from other qualified plans. Also in
connection with business acquisitions by AMETEK, account balances from certain
other plans may be transferred into the Plan, or into a separate 401(k)
retirement and savings plan sponsored by AMETEK. No such transfers were made
during 2006 and 2005. The Plan provides for Company contributions which vary by
location and range between 50% to 100% of the amount contributed by each
participant, up to a maximum percentage ranging from 2% to 8% of the
participants' compensation as determined by the Board of Directors for each
business. 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 anytime prior
to the due date prescribed by law for filing the Company's federal income tax
return for that Plan year.
5
AMETEK 401(k) Plan for Acquired Businesses
Notes to Financial Statements
December 31, 2006
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 account.
VESTING
Participants are fully vested at all times in both their contributions to the
Plan and in Company contributions.
PARTICIPANT LOANS
Participants may borrow a minimum of $1,000 or up to a maximum equal to the
lesser of $50,000 or 50% of their account balance. Participants may have up to
two loans outstanding at any time, although only one loan may be for a primary
residence, the sum of which may not exceed the maximum allowable under the Plan.
Repayment terms of the loans are generally limited to no longer than 60 months
from inception or for a reasonable period of time in excess of 60 months for the
purchase of a principal residence, as fixed by the Plan's Administrative
Committee. The loans are secured by the balance in the participant's account,
and bear interest at rates established by the Plan's administrative committee,
which approximate rates charged by commercial lending institutions for
comparable loans. Interest rates on loans outstanding at December 31, 2006 and
2005 ranged between 5% and 11%. Principal and interest is paid ratably through
payroll deductions. Participant loans outstanding at December 31, 2006 and 2005,
respectively, totaled $1,517,649 and $1,492,853 are included in investments in
the accompanying statements of assets available for benefits.
6
AMETEK 401(k) Plan for Acquired Businesses
Notes to Financial Statements
December 31, 2006
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 or elect to receive
payment in installments up to a 15 year period, subject to certain restrictions
based on life expectancy. When a participant attains age 59 1/2 while still an
employee, he or she can elect to withdraw a specified portion of his or her
vested account balance without incurring an income tax penalty. Also, in certain
cases of financial hardship, a participant may elect to withdraw up to a
specified portion of his or her vested account balance, regardless of age.
PLAN TERMINATION
The Plan is subject to the provisions of the Employee Retirement Income Security
Act of 1974 ("ERISA"). While the Company has not expressed any intent to
terminate the Plan, it is free to do so at any time subject to the provisions of
ERISA, and applicable labor agreements. In the event of Plan termination, each
participant will receive the value of his or her separate vested account.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF FINANCIAL STATEMENTS AND PRESENTATION FORMAT
The accompanying financial statements have been prepared on the accrual basis of
accounting, except, if applicable, 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. At December 31,
2006 and 2005, there was no outstanding liability for amounts owed to
withdrawing participants.
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.
7
AMETEK 401(k) Plan for Acquired Businesses
Notes to Financial Statements
December 31, 2006
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
RISKS AND UNCERTAINTIES
The Plan invests in various investment securities. Investment securities are
exposed to various risks such as interest rate, market fluctuation and credit
risks. Due to the level of risk associated with certain investment securities,
it is at least reasonably possible that changes in the values of investment
securities will occur in the near term and that such changes could materially
affect participants' account balances and the amounts reported in the statements
of assets available for benefits.
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. 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 value, 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 or depreciation of investments represents the sum of the
change in the difference between year-end market value and cost of investments,
and the difference between the proceeds received and the cost of investments
sold during the year.
8
AMETEK 401(k) Plan for Acquired Businesses
Notes to Financial Statements
December 31, 2006
3. INVESTMENT PROGRAMS
At December 31, 2006 and 2005, the Vanguard Fiduciary Trust Company was the
Trustee and a party-in-interest 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 Trust
- Registered investment companies:
- Vanguard Total Bond Market Index Fund
- Vanguard LifeStrategy Funds
- Vanguard Wellington Fund
- Vanguard Windsor II Fund
- Vanguard PRIMECAP Fund
- Vanguard Small-Cap Index Fund
- Vanguard 500 Index Fund
- Evergreen Small Cap Value Fund
- Julius Baer International Equity Fund
- BlackRock Small Cap Fund
Participants may change their investment options or transfer existing account
balances to other investment options daily.
9
AMETEK 401(k) Plan for Acquired Businesses
Notes to Financial Statements
December 31, 2006
3. INVESTMENT PROGRAMS (CONTINUED)
The fair values of individual investments that represent 5% or more of the
Plan's assets at year-end are as follows:
DECEMBER 31,
-------------------------
2006 2005
----------- -----------
Vanguard PRIMECAP Fund $10,895,438 $10,081,585
Vanguard 500 Index Fund 9,557,741 8,643,772
Vanguard LifeStrategy Moderate Growth Fund 6,027,978 5,445,794
Vanguard Retirement Savings Trust
(stated at contract value) 5,109,787 5,323,146
Vanguard Wellington Fund 4,204,177 3,415,097
Vanguard LifeStrategy Growth Fund 3,916,621 3,293,100
Vanguard Windsor II Fund 3,493,624 3,007,567
AMETEK Stock Fund 3,014,848 2,602,471
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 $ 326,629 $ 408,761
Registered investment companies 4,083,137 1,321,451
---------- ----------
$4,409,766 $1,730,212
========== ==========
10
AMETEK 401(k) Plan for Acquired Businesses
Notes to Financial Statements
December 31, 2006
4. INCOME TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
dated October 24, 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. From inception of the Plan to the
present, the Company has elected to pay such expenses directly.
6. PLAN AMENDMENTS
Effective September 25, 2006, the Plan was amended to designate the U.S.
employees of HCC, a division of AMETEK, Inc., as participating employees in the
Plan. Effective November 20, 2006, the Plan was amended to designate the U.S.
employees of AMETEK, Precitech, Inc. as participating employees in the Plan.
7. DIFFERENCES BETWEEN FINANCIAL STATEMENTS AND FORM 5500
The following is a reconciliation of assets available for benefits per the
financial statements to the Plan's Form 5500:
DECEMBER 31,
-------------------------
2006 2005
----------- -----------
Assets available for benefits per the financial statements $57,059,032 $50,737,976
Adjustment from contract value to fair value for
Common Collective Trust (48,543) --
----------- -----------
Assets available for benefits per Form 5500 $57,010,489 $50,737,976
=========== ===========
11
AMETEK 401(k) Plan for Acquired Businesses
Notes to Financial Statements
December 31, 2006
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.
12
AMETEK 401(k) Plan for Acquired Businesses
EIN 14-1682544 Plan# 045
Schedule H, Line 4i--
Schedule of Assets (Held at End of Year)
December 31, 2006
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 $ 3,014,848
Vanguard Retirement Savings Trust* Common/Collective Trust 5,061,244
Vanguard Total Bond Market Index Fund* Registered Investment Company 2,202,667
Vanguard LifeStrategy Conservative
Growth Fund* Registered Investment Company 1,010,517
Vanguard LifeStrategy Growth Fund* Registered Investment Company 3,916,621
Vanguard LifeStrategy Moderate
Growth Fund* Registered Investment Company 6,027,978
Vanguard Wellington Fund* Registered Investment Company 4,204,177
Vanguard Windsor II Fund* Registered Investment Company 3,493,624
Vanguard PRIMECAP Fund* Registered Investment Company 10,895,438
Vanguard Small-Cap Index Fund* Registered Investment Company 2,225,140
Vanguard 500 Index Fund* Registered Investment Company 9,557,741
Evergreen Small Cap Value Fund Registered Investment Company 184,448
Julius Baer International Equity Fund Registered Investment Company 2,373,829
BlackRock Small Cap Fund Registered Investment Company 1,211,176
Participant Loans* Interest rates ranging from
5.0% to 11.0% 1,517,649
-----------
$56,897,097
===========
* Indicates party-in-interest to the Plan
Historical cost column is not included as all investments are
participant-directed.
13
SIGNATURES
THE PLAN. Pursuant to the requirements of the Securities Exchange Act of 1934,
the Members of the Administrative Committee have duly caused this annual report
to be signed on its behalf by the undersigned hereunto duly authorized.
AMETEK 401(K) Plan
for Acquired Businesses
(Name of Plan)
Dated: June 25, 2007 By: /s/ John J. Molinelli
-----------------------------------
John J. Molinelli, Member,
Administrative Committee
14
THE AMETEK 401(K) PLAN FOR ACQUIRED BUSINESSES
EXHIBIT INDEX
Exhibit Number Description
-------------- -----------
23 Consent of Independent Registered Public Accounting Firm
15