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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 as of December 31, 2004 and 2003 | | |
| 2 |
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| Statement of Changes in Net Assets Available for Benefits for the Year Ended | | |
| December 31, 2004 | | |
| 3 |
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| Notes to Financial Statements | | |
| 4-7 |
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| SUPPLEMENTAL SCHEDULES AS OF AND FOR THE YEAR ENDED DECEMBER 31, 2004: | | |
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| Schedule H, Line 4i - Schedule of Assets (Held at End of Year) | | |
| 8 |
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| Schedule H, Line 4j - Schedule of Reportable Transactions | | |
| 9 |
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| SIGNATURES | | |
| 10 |
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| EXHIBIT - Consent of Independent Registered Public Accounting Firm | | |
| 11 |
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REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
To ArvinMeritor, Inc., Hourly Employees Savings Plan and Participants:
We have audited the accompanying statements of net assets available for benefits of ArvinMeritor, Inc. Hourly
Employees Savings Plan (the “Plan”) as of December 31, 2004 and 2003, and the related statement of changes in
net assets available for benefits for the year ended December 31, 2004. 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, 2004 and 2003, and the changes in net assets available for
benefits for the year ended December 31, 2004 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 schedules of (1) assets (held at end of year) as of December 31, 2004, and (2)
transactions in excess of five percent of the current value of plan assets for the year ended December 31,
2004, are presented for the purpose of additional analysis and are not a required part of the basic financial
statements, but are 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. These schedules are the
responsibility of the Plan's management. Such schedules have been subjected to the auditing procedures
applied in our audit of the basic 2004 financial statements and, in our opinion, are fairly stated in all
material respects when considered in relation to the basic financial statements taken as a whole.
DELOITTE & TOUCHE LLP
Detroit, Michigan
June 29, 2005
ARVINMERITOR, INC.
HOURLY
EMPLOYEES SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE
FOR BENEFITS
AS OF DECEMBER 31, 2004 AND 2003
|
2004
|
2003
|
| ASSETS |
|
|
|
|
|
|
|
|
| Investments | | |
$ | 51,908,468 |
|
$ | 52,122,117 |
|
| Accrued receivables | | |
| 35,426 |
|
| — |
|
|
| |
| |
| TOTAL ASSETS | | |
| 51,943,894 |
|
| 52,122,117 |
|
| LIABILITIES - Accrued expenses | | |
| 27,500 |
|
| 33,019 |
|
|
| |
| |
| NET ASSETS AVAILABLE FOR BENEFITS | | |
$ | 51,916,394 |
|
$ | 52,089,098 |
|
|
| |
| |
| See accompanying notes to financial statements | | |
2
ARVINMERITOR, INC.HOURLY
EMPLOYEES SAVINGS PLAN
STATEMENT OF CHANGES IN
NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 2004
|
2004
|
| ADDITIONS: |
|
|
|
|
|
| Employee contributions |
|
|
$ |
2,799,149 |
|
| Employer contributions |
|
|
|
851,338 |
|
|
| |
|
| | | |
| 3,650,487 |
|
| |
| Net appreciation in fair value of investments | | |
| 1,419,248 |
|
| Dividends and interest | | |
| 1,371,622 |
|
| Net transfers | | |
| 1,002,478 |
|
|
| |
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| Total additions | | |
| 7,443,835 |
|
| |
|
|
|
|
|
| DEDUCTIONS: | | |
| Benefits paid to participants | | |
| (7,551,708 |
) |
| Administrative expenses |
|
|
|
(64,831 |
) |
|
| |
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| Total deductions | | |
| (7,616,539 |
) |
|
| |
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| Net decrease in net assets available for benefits | | |
| (172,704 |
) |
| |
|
|
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| NET ASSETS AVAILABLE FOR BENEFITS, |
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|
|
|
|
| beginning of year |
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|
$ |
52,089,098 |
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|
| |
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| NET ASSETS AVAILABLE FOR BENEFITS, |
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|
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|
|
| end of year |
|
|
$ |
51,916,394 |
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| |
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| |
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| See accompanying notes to financial statements | | |
3
ARVINMERITOR, INC.
HOURLY
EMPLOYEES SAVINGS PLAN
NOTES TO FINANCIAL
STATEMENTS
1. DESCRIPTION OF THE
PLAN
| |
The
following general description of the ArvinMeritor, Inc., Hourly Employees Savings Plan
(the “Plan”) is provided for general information purposes only. Participants
should refer to the Plan document for complete information. |
| |
General
— The Plan is a defined contribution retirement savings plan covering all eligible
hourly employees of ArvinMeritor, Inc (the “Company”). The Plan is administered
by the Company’s Employee Benefit Plan Committee and the Plan Administrator. The
trustee for the Plan assets is T. Rowe Price Trust Company. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974. |
| |
The
employer matching account held under the Plan is an employee stock ownership plan (ESOP).
As a result, when participants’ accounts receive cash dividends on ArvinMeritor stock
they have the option of reinvesting the dividend in ArvinMeritor stock or receiving the
dividend as a cash distribution. In addition the ESOP allows participants who have attained
either age 55 with 10 years of vesting service or age 60, the right to transfer funds out
of Company stock and into one of the other investment options under the Plan. |
| |
The
Plan allows participants who are over age 50 by the end of the plan year to make
additional pre-tax contributions up to the limits prescribed under recent changes to the
Internal Revenue Code. |
| |
On
April 1, 2003, total assets of $1,756,959 related to Roll Coater Retirement and Savings
Plan for Bargaining Unit Associates were transferred into the Plan, in connection with a
merger of the plans. |
| |
Effective
May 1, 2003, hourly employees of the Kenton, Ohio facility became eligible for
participation in the Plan. |
| |
Contributions
and Vesting – Eligible employees may elect to contribute up to 20% of
pay, both before and after tax or a combination of both. The participants are immediately
eligible for company matching contributions. Matching contributions and participant
contributions are immediately vested. The Company’s match calculation varies by
location within the Plan. All Company match contributions are payable in Company stock,
except for a non-consolidated joint venture whereby the contribution match for employees
is made in cash (see Note 7. Subsequent Event for information on recent changes to
investment options for Company matching contributions). |
4
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Plan
Withdrawals – Amounts contributed may be withdrawn by, or distributed
to, a participant only upon (1) termination of employment or (2) attaining the age of 59
½. Pre-tax withdrawals prior to attaining age 59 ½ are not permitted except
in the event of retirement, disability or as a hardship distribution. Certain income tax
penalities may apply to withdrawals or distributions prior to age 59 ½. |
| |
Transfers
– The Plan allows for transfers for employees changing status between
hourly and salary to move invested assets to the Plan that correlates to their current status. |
| |
Payment
of Benefits – On termination of service due to death, disability,
retirement or other reasons, a participant would generally receive an amount equal to the
value of the participant’s vested interest in their account as a lump-sum
distribution. |
| |
Loans
to Participants – A participant may obtain
a loan in an amount as defined by the Plan document (not less than $1,000 and not greater
than the lesser of $50,000 or 50% of the participant’s vested account balance) from
the balance of his/her account. Interest is charged at a rate that is comparable to rates
charged by commercial lending institutions. The loans are repaid through payroll
deductions over periods not to exceed 60 months unless for the purchase of a primary
residence. Payments of principal and interest are reinvested into the participants’
current investment options. Participants may have only one outstanding loan at a time. |
| |
Participant
Accounts – Each participant’s account is credited with the
participant’s contribution and an allocation of the Company’s contribution and
Plan earnings and charged with an allocation of administrative expenses. Allocations are
based on a participant’s earnings or account balances as defined. The benefit to
which a participant is entitled is the benefit that can be provided from the
participant’s vested account. |
| |
Plan
Termination – Although the Company has not expressed any intent to
terminate the Plan, it reserves the right to do so at any time. |
2. SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES
| |
Basis
of Accounting – The financial statements of the Plan are prepared
under the accrual method of accounting. |
| |
Investment
Valuation – Investments, other than benefit-responsive investment
contracts, are stated at fair value as measured by readily available market prices. The T.
Rowe Price Stable Value Common Trust Fund is comprised of individual investment contracts,
including synthetic investment contracts, and is stated at contract value. The investment
contracts are nontransferable, but provide for benefit-responsive withdrawals by plan
participants at contract value. Benefit-responsive withdrawals are provided on a
proportional basis by the issuers of the investment contracts. The trustee’s
valuation committee primarily considers factors such as the benefit responsiveness of the
investment contract and the ability of the parties to the investment contract to perform
in accordance with the terms of the contract. Generally, contract value approximates fair
value (contributions made plus interest accrued at the contract rate, less withdrawals and
fees). If, however, an event has occurred that may impair the ability of the contract
issuer to perform in accordance with the contract terms, fair value may be less than
contract value. |
| |
Security
Transactions and Investment Income – Purchases and sales of securities are
reported on trade date basis. Dividends are recorded on the ex-dividend date and interest
income is recorded on the accrual basis. |
5
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Plan
Expenses – Administrative expenses of the Plan are paid by either the
Company or the Plan, as provided by the Plan document. |
| |
Benefit
Payments – Benefits are recorded when paid. |
| |
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
and liabilities and changes therein, and disclosure of contingent assets and liabilities.
Actual results could differ from those estimates. |
| |
Market
Risk – The Plan utilizes various investments, which are exposed to
various risks such as interest rate, foreign currency, 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 will occur in the
near term and that such changes could materially affect the amounts reported in the
Statement of Net Assets Available for Benefits. |
3. INVESTMENTS
| |
The
following presents investments that represent 5 percent or more of the Plan’s net
assets available for benefits: |
|
December 31, |
December 31, |
|
2004
|
2003
|
| Mutual Funds: |
|
|
|
|
|
|
|
|
| T. Rowe Price Balanced Fund | | |
$ | 4,808,445 |
|
$ | 4,874,270 |
|
| Common Stock: | | |
| ArvinMeritor* | | |
| 5,964,430 |
|
| 6,204,616 |
|
| ArvinMeritor | | |
| 873,494 |
|
| 764,641 |
|
| T. Rowe Price Stable Value Common Trust Fund - at contract value | | |
| 21,292,272 |
|
| 22,695,715 |
|
| T. Rowe Price Equity Index Trust Fund | | |
| 9,627,971 |
|
| 10,141,694 |
|
| |
* Nonparticipant - directed as of December 31, 2004 and 2003 (see Note 7.
Subsequent Event for information on recent changes to this provision of the
Plan). |
| |
During
2004, the Plan’s investments (including gains and losses on investments bought and
sold, as well as held during the year) appreciated (depreciated) in value as follows: |
|
Year Ended |
|
December 31, 2004
|
| Mutual Funds |
|
|
$ |
1,895,312 |
|
| Common Stock | | |
| (476,064 |
) |
|
| |
|
| Net appreciation | | |
$ | 1,419,248 |
|
|
| |
|
6
4. NONPARTICIPANT –
DIRECTED INVESTMENTS
| |
Information
about the net assets available for benefits and the significant components of the changes
in net assets available for benefits relating to the nonparticipant-directed investments
is as follows: |
|
2004
|
| Net assets - ArvinMeritor Common Stock Fund - December 31, 2003 |
|
|
$ |
6,204,616 |
|
| Changes in net assets available for benefits: | | |
| Employer contributions | | |
| 699,390 |
|
| Net depreciation | | |
| (426,249 |
) |
| Dividends | | |
| 106,068 |
|
| Benefits paid to participants or beneficiaries | | |
| (810,445 |
) |
| Other - exchanges out and fees | | |
| 191,050 |
|
|
| |
| Net decrease in net assets available for benefits | | |
| (240,186 |
) |
|
| |
| Net assets - ArvinMeritor Common Stock Fund - December 31, 2004 | | |
$ | 5,964,430 |
|
|
| |
See Note 7. Subsequent Event for
information on recent changes to investment options for Company matching contributions.
5. TAX STATUS
| |
The
Internal Revenue Service determined and informed the Company by a letter dated July 15,
2002, that the Plan was designed in accordance with applicable sections of the Internal
Revenue Code (“IRC”). The Plan has been amended since receiving the
determination letter. However, the plan administrator and the Plan’s tax counsel
believe that the Plan is currently designed and being operated in compliance with the
applicable requirements of the Internal Revenue Code. Therefore, no provision for income
taxes has been included in the Plan’s financial statements. |
6. RELATED PARTY
TRANSACTIONS
| |
Plan
investments are shares of mutual funds managed by T. Rowe Price. T. Rowe Price is the
trustee as defined by the Plan and, therefore, these transactions qualify as
party-in-interest transactions. The Plan paid T. Rowe Price trustee, administrative and
other fees of $36,535 during the Plan year ended December 31, 2004. |
7. SUBSEQUENT EVENT
| |
Effective
June 1, 2005, the Plan was amended to remove restrictions on investment of Company matched
contributions. Participants may now elect to diversify into other investment funds all or
any portion of Company stock received prior to June 1, 2005 as a Company match. Subsequent
to June 1, 2005, Company matched contributions are no longer required to be invested in
ArvinMeritor, Inc., stock. Instead, the Company match is invested according to the
investment mix participants have elected for their own contributions. |
7
ARVINMERITOR, INC.
HOURLY
EMPLOYEES SAVINGS PLAN
SCHEDULE H, LINE 4I
— SCHEDULE OF ASSETS (HELD AT END OF YEAR)
AS OF DECEMBER 31, 2004
|
Description of Investment |
|
| Identity of Issuer, |
Including Maturity Date, |
|
| Borrower, Lessor |
Rate of Interest, Collateral, |
Current |
or Similar Party
|
Par or Maturity Value
|
Value
|
| * T. Rowe Price |
|
|
Stable Value Common Trust Fund |
|
|
$ |
21,292,272 |
|
| Franklin | | |
Small-Cap Stock Fund | | |
| 1,412,974 |
|
| * T. Rowe Price | | |
Equity Index Trust Fund | | |
| 9,627,971 |
|
| * T. Rowe Price | | |
International Stock Fund | | |
| 783,415 |
|
| * T. Rowe Price | | |
Growth and Income Fund | | |
| 1,729,736 |
|
| * T. Rowe Price | | |
Mid-Cap Growth Fund | | |
| 1,377,219 |
|
| Janus Fund | | |
Large-Cap Growth Fund | | |
| 1,135,150 |
|
| Pimco | | |
U.S. Treasury Intermediate Fund | | |
| 1,061,643 |
|
| * T. Rowe Price | | |
Retirement 2010 Fund | | |
| 204,619 |
|
| * T. Rowe Price | | |
Retirement 2020 Fund | | |
| 207,679 |
|
| * T. Rowe Price | | |
Retirement 2030 Fund | | |
| 205,340 |
|
| * T. Rowe Price | | |
Retirement 2040 Fund | | |
| 114,357 |
|
| * T. Rowe Price | | |
Retirement Income Fund | | |
| 37,714 |
|
| | | |
Cash | | |
| 159 |
|
| * T. Rowe Price | | |
Balanced Fund | | |
| 4,808,445 |
|
| * ArvinMeritor | | |
ArvinMeritor Stock | | |
| 6,837,924 |
|
| * Participant loans | | |
Rates ranging from 6.5% to 10.5%, | | |
| | | |
maturities up to 60 months | | |
| 1,071,851 |
|
|
|
| |
| | | |
| | |
$ | 51,908,468 |
|
|
|
| |
| | |
8
ARVINMERITOR, INC.
HOURLY EMPLOYEES SAVINGS PLAN
SCHEDULE H, LINE 4J — SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 2004
| |
Series of transactions, when
aggregated, involving an amount in excess of 5% of beginning plan net assets. |
|
|
|
|
|
(h) |
|
| (a) |
|
|
|
|
Current Value |
|
| Identity |
|
(c) |
(d) |
(g) |
of Asset on |
|
| of Party |
(b) |
Purchase |
Selling |
Cost of |
Transaction |
(l) |
Involved
|
Description of Asset
|
Price
|
Price
|
Asset
|
Date
|
Loss
|
| T. Rowe Price |
|
|
Stable Value Common Trust Fund |
|
|
$ |
2,347,044 |
|
$ |
— |
|
$ |
2,347,044 |
|
$ |
2,347,044 |
|
$ |
— |
|
| T. Rowe Price | | |
Stable Value Common Trust Fund | | |
$ | — |
|
$ | 3,815,723 |
|
$ | 3,815,723 |
|
$ | 3,815,723 |
|
$ | — |
|
| T. Rowe Price | | |
Equity Index Trust Fund | | |
$ | 1,046,350 |
|
$ | — |
|
$ | 1,046,350 |
|
$ | 1,046,350 |
|
$ | — |
|
| T. Rowe Price | | |
Equity Index Trust Fund | | |
$ | — |
|
$ | 2,610,179 |
|
$ | 2,680,706 |
|
$ | 2,610,179 |
|
$ | (70,527 |
) |
9
SIGNATURES
| |
The
Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan
Administrator has duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized. |
ARVINMERITOR, INC. HOURLY
EMPLOYEES SAVINGS PLAN
By: /s/ Richard D. Greb, Plan Administrator
Richard D. Greb, Plan Administrator
June 29, 2005
10
EXHIBIT
EX NO. DESCRIPTION
23 CONSENT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
11