-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PyyU2jFG3uI9xiYjHfSGUXpEtGdvSzmHXNDYEhCORz8BFA71Kt1CMM59wnrzr76y vilEZQ5ZZ/OKee/etW8LfA== 0000017843-99-000025.txt : 19990702 0000017843-99-000025.hdr.sgml : 19990702 ACCESSION NUMBER: 0000017843-99-000025 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990701 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CARPENTER TECHNOLOGY CORP CENTRAL INDEX KEY: 0000017843 STANDARD INDUSTRIAL CLASSIFICATION: STEEL WORKS, BLAST FURNACES ROLLING MILLS (COKE OVENS) [3312] IRS NUMBER: 230458500 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 001-05828 FILM NUMBER: 99657489 BUSINESS ADDRESS: STREET 1: 1047 N PARK ROAD CITY: WYOMISSING STATE: PA ZIP: 19610-1339 BUSINESS PHONE: 6102082000 MAIL ADDRESS: STREET 1: 1047 N PARK ROAD CITY: WYOMISSING STATE: PA ZIP: 19610 11-K 1 Form 11-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ANNUAL REPORT Pursuant to Section 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 1998 Commission File Number 1-5828 DYNAMET INCORPORATED DEFINED CONTRIBUTION PLAN (Full Title of the Plan) CARPENTER TECHNOLOGY CORPORATION (Name of issuer of the securities held Pursuant to the plan) 1047 North Park Road Wyomissing, PA 19610-1339 (Address of principal executive Office of the issuer) SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, Carpenter Technology Corporation has duly caused this annual report to be signed on its behalf by the undersigned thereunto duly authorized. DYNAMET INCORPORATED DEFINED CONTRIBUTION PLAN (Name of Plan) Date: __________________ By: ____________________________________ G. Walton Cottrell Senior Vice President - Finance and Chief Financial Officer Financial Statements and Exhibits (a) Financial Statements The financial statements filed as part of this report are listed in the Index to Financial Statements included herein. (b) Exhibits (1) Consent of Independent Accountants DYNAMET INCORPORATED DEFINED CONTRIBUTION PLAN INDEX TO FINANCIAL STATEMENTS FORM 11-K ANNUAL REPORT - ----------------------------------------------------------------------------- Form 11-K Pages --------- Report of Independent Accountants 5 Financial Statements: Statements of Net Assets Available for Plan Benefits December 31, 1998 and 1997 - Common/Collective trusts with PNC Bank: Investment Contract Fund Aggressive Profile Fund - Mutual Funds with PNC Bank: Balanced Fund Index Equity Fund Large Cap Growth Equity Fund Intermediate Government Fund International Equity Fund Small Cap Value Equity Fund Carpenter Technology Common Stock Fund Participant Loan Fund 6 Statements of Changes in Net Assets Available for Plan Benefits for the years ended December 31, 1998 and 1997 - Common/Collective trusts with PNC Bank: Investment Contract Fund Aggressive Profile Fund - Mutual Funds with PNC Bank: Balanced Fund Index Equity Fund Large Cap Growth Equity Fund Intermediate Government Fund International Equity Fund Small Cap Value Equity Fund Carpenter Technology Common Stock Fund Participant Loan Fund 7 Notes to Financial Statements 8-11 Supplemental Schedules: Assets Held For Investment Purposes as of December 31, 1998 12 Reportable Transactions for the year ended December 31, 1998 13 CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in the Registration Statement of Carpenter Technology Corporation on Form S-8 (number 2-83780) of our report dated June 2, 1999 on our audits of the financial statements of the Dynamet Incorporated Defined Contribution Plan as of December 31, 1998 and 1997, which report is included in this Annual Report on Form 11-K. /s/ PricewaterhouseCoopers LLP PRICEWATERHOUSECOOPERS LLP Dated: June 29, 1999 Report of Independent Accountants To the Participants and Administrator of the Dynamet Incorporated Defined Contribution Plan We have audited the accompanying statement of assets available for benefits (modified cash basis) of the Dynamet Incorporated Defined Contribution Plan (the Plan) as of December 31, 1998 and 1997, and the related statement of changes in assets available for benefits (modified cash basis) for the year ended December 31, 1998. 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 generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. As described in Note 2, these financial statements and supplemental schedules were prepared on a modified cash basis of accounting, which is a comprehensive basis of accounting other than generally accepted accounting principles. In our report dated July 20, 1998 (except for Note 9 which was as of August 3, 1998), we were unable to, and did not, express an opinion on the 1997 financial statements because, at the instruction of the Plan Administrator, we did not perform any auditing procedures with respect to the information summarized in Note 3. In conjunction with our audit of the 1998 financial statements, the Plan Administrator instructed us to perform, and we did perform, an audit of the 1997 financial statements in accordance with generally accepted auditing standards. Accordingly, we are now able to express an opinion on the 1997 financial statements. In our opinion, the financial statements referred to above present fairly, in all material respects, the assets available for benefits of the Plan as of December 31, 1998 and 1997, and changes in assets available for benefits for the year ended December 31, 1998, on the basis of accounting described in Note 2. To the Participants and Administrator of the Dynamet Incorporated Defined Contribution Plan continued... Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of assets held for investment purposes and reportable transactions 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 supplemental schedules are the responsibility of the Plan's management. The Fund Information in the statement of changes in assets available for benefits is presented for purposes of additional analysis rather than to present the changes in assets available for plan benefits of each fund. The supplemental schedules and Fund Information have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. June 2, 1999 Dynamet Incorporated Defined Contribution Plan Statement of Assets Available for Plan Benefits December 31, 1998 and 1997 - ----------------------------------------------------------------------------- (in thousands of dollars) 1998 1997 Investments, at estimated fair value - Common/collective trusts with PNC Bank: Investment Contract Fund $1,689 $1,366 Aggressive Profile Fund 309 347 ------- ------- 1,998 1,713 ------- ------- Investments, at quoted market value - Mutual funds with PNC Bank: Balanced Fund 3,925 3,014 Index Equity Fund 3,507 2,657 Large Cap Growth Equity Fund 3,049 2,097 Intermediate Government Fund 478 583 International Equity Fund 125 138 Small Cap Value Equity Fund 249 309 Carpenter Technology Common Stock Fund 34 - Participant Loan Fund 60 - ------- ------ 11,427 8,798 ------- ------ Assets available for Plan benefits $13,425 $10,511 ======= ======= The accompanying notes are in integral part of these financial statements. Dynamet Incorporated Defined Contribution Plan Statement of Changes in Assets Available for Plan Benefits w/ Fund Information December 31, 1998 and 1997
(in thousands of dollars) PNC PNC Carpenter PNC PNC PNC Large Cap PNC PNC Sm Cap Tech Invest Aggress PNC Index Growth Inter- Intern'l Value Common Participant Contract Profile Bal'd Equity Equity Mediate Equity Equity Stock Loan Fund Fund Fund Fund Fund GovFund Fund Fund Fund Fund Total Additions: Additions to assets attributed to: Investment income: Net appreciation/depreciation in fair value of investments $ 102 $ 51 $ 457 $ 733 $ 624 $ 8 $ 7 $ (59) $ (3) $ - $1,920 Interest and dividends - 1 219 36 219 33 14 13 - 2 537 ----------------------------------------------------------------------------------------- 102 52 676 769 843 41 21 (46) (3) 2 2,457 Less - Investment expenses (9) - - - - - - - - - (9) ----------------------------------------------------------------------------------------- 93 52 676 769 843 41 21 (46) (3) 2 2,448 ----------------------------------------------------------------------------------------- Contributions: Participants 7 9 39 50 50 9 4 13 2 - 183 Employer 84 67 248 225 240 34 17 55 10 - 980 Other - Rollover - 3 1 1 3 - - - 1 - 9 ----------------------------------------------------------------------------------------- 91 79 288 276 293 43 21 68 13 - 1,172 ----------------------------------------------------------------------------------------- Total additions 184 131 964 1,045 1,136 84 42 22 10 2 3,620 ----------------------------------------------------------------------------------------- Deductions: Deductions from assets attributed to: Benefits paid to participants 179 21 35 257 23 179 - 22 - - 716 ----------------------------------------------------------------------------------------- Total deductions 179 21 35 257 23 179 - 22 - - 716 ----------------------------------------------------------------------------------------- Net increase prior to interfund transfers 5 110 929 788 1,113 (95) 42 - 10 2 2,904 Transfers, net 318 (148) (18) 62 (161) (10) (55) (60) 24 58 10 ----------------------------------------------------------------------------------------- Net increase(decrease) 323 (38) 911 850 952 (105) (13) (60) 34 60 2,914 Assets available for plan benefits: Beginning of year 1,366 347 3,014 2,657 2,097 583 138 309 - - 10,511 ----------------------------------------------------------------------------------------- End of year $1,689 $309 $3,925 $3,507 $3,049 $478 $125 $249 $34 $60 $13,425 ========================================================================================= Percentage of total at end of year 12.6% 2.3% 29.2% 26.1% 22.7% 3.6% 0.9% 1.9% 0.3% 0.4% 100.0%
The accompanying notes are an integral part of these financial statements. Dynamet Incorporated Defined Contribution Plan December 31, 1998 and 1997 Notes to Financial Statements - ----------------------------------------------------------------------------- 1. Description of the Plan The following brief description of the Dynamet Incorporated Defined Contribution Plan (the Plan) is provided for general information purposes only. Participants should refer to the Summary Plan Description for a more complete description of the Plan's provisions. The Plan Administrator is Dynamet Incorporated (Dynamet). The Trustee and Plan Custodian is PNC Bank. General The Plan is a defined contribution plan covering salaried employees of Dynamet. In February 1997, the shareholders of Dynamet sold all of their shares of common stock to Carpenter Technology Corporation (CTC), and Dynamet became a wholly-owned subsidiary of CTC. All full-time and, effective July 1, 1998, part-time salaried employees not participating in another Dynamet pension plan are eligible to participate upon the completion of one year of credited service as defined in the Plan Agreement and upon attainment of age 21. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 as amended (ERISA). Contributions Prior to July 1, 1998, only contributions by Dynamet were permitted to the Plan. Dynamet could contribute up to 15 percent of compensation (excluding bonuses and other such compensation, if any) paid to participants for the Plan year. For the year ended December 31, 1997, 10 percent of eligible compensation was contributed to the Plan. In addition, for the six months ended June 30, 1998, Dynamet made a contribution to the Plan equivalent to 10 percent of the eligible compensation for all eligible employees as of June 30, 1998. This represented the final profit-sharing contribution prior to implementation of the amended plan provisions. Effective July 1, 1998, the Plan was amended to permit participants to contribute up to 15 percent of their pre-tax annual compensation. Participants may also contribute amounts representing distributions from other qualified defined benefit or defined contribution plans. Dynamet will contribute an amount equal to 6 percent of participants' eligible compensation and will match participant contributions up to the first 4 percent. Participant Accounts Prior to July 1, 1998, each participant's account was credited with an allocation of Dynamet's contribution, the Plan's investment earnings and forfeiture of terminated participants' nonvested accounts. Dynamet's contribution and the forfeiture of terminated participants' nonvested accounts were allocated to each participant's account based on the number of units each participant earned in the current year in the Plan in comparison to total Plan units. Each participant earned a unit for every $100 of compensation and a unit for every year of service. Investment income is allocated to each participant's account based on the participant's account balance and the actual investment return. Effective July 1, 1998, each participant's account is credited with the participant's contribution and allocations of (a) the Company's contribution and, (b) Plan earnings. Allocations are based on participant 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. Dynamet Incorporated Defined Contribution Plan December 31, 1998 and 1997 Notes to Financial Statements - ----------------------------------------------------------------------------- Vesting Prior to July 1, 1998, participants vested 20 percent after 3 years, 40 percent after 4 years, 60 percent after 5 years, 80 percent after 6 years, and 100 percent after 7 years. Participants also became 100 percent vested upon total and permanent disability or death. Effective July 1, 1998, participants fully vest immediately, and all active participants as of that date became fully vested. Investment Options Upon enrollment in the Plan, a participant may direct contributions in 1 percent increments in any of nine investment options. Available investment options are as follows: Carpenter Technology Corporation Common Stock Fund (effective 7/1/98) PNC Bank managed mutual fund accounts: Balanced Fund Index Equity Fund Large Cap Growth Equity Fund Intermediate Government Bond Fund International Equity Fund Small Cap Value Equity Fund PNC Bank Investment Contract Fund PNC Bank Aggressive Profile Fund Participants may change their investment options daily. Participant Notes Receivable Effective July 1, 1998, participants may borrow from their account a minimum of $1,000 up to a maximum amount equal to the lesser of $50,000 or 50 percent of their account balance. Loan transactions are treated as a transfer (from) to the investment fund(s) (to) from the Participant Loan Fund. Loan terms range from 1 to 5 years. The loans are secured by the balance in the participant's account and bear interest at a fixed rate based on the prime rate plus 1 percent at the time the loans are made. Principal and interest are paid ratably through payroll deductions. Payment of Benefits Participants or their beneficiaries are entitled to benefits equal to the vested amount in their accounts upon retirement, total and permanent disability, death, or termination of service. 2.Summary of Accounting Policies Basis of Accounting The accompanying financial statements are prepared on the modified cash basis of accounting; consequently, investment income and contributions and the related assets are recognized when received rather than when earned, and benefit payments and investment expenses are recognized when paid. Dynamet Incorporated Defined Contribution Plan December 31, 1998 and 1997 Notes to Financial Statements - ----------------------------------------------------------------------------- Use of Estimates The preparation of financial statements in conformity with the basis of accounting described herein 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 at the date of the financial statements. Actual results could differ from these estimates. Investment Valuation Investments in common/collective trusts are valued at estimated fair value as reported to the Plan by the Plan Custodian. Investments in mutual funds and the Carpenter Technology Common Stock Fund are valued at quoted market prices. Expenses Prior to July 1, 1998, administrative expenses of the Plan were paid by Dynamet. Effective July 1, 1998, administrative expenses are paid by the Plan. 3.Certified Financial Data The following is a summary of the Plan's financial information and data certified by the trustee. December 31, 1997 (in thousands of dollars) Investment at estimated fair value $ 1,713 Investments at quoted market value 8,798 ------- Total investments $10,511 ======= 4. Investments The following is a summary of the number of units or shares on hand at December 31, 1998 and 1997, of investments held in common/collective trusts and the Carpenter Technology Common Stock Fund. December 31 December 31 1998 1997 -------------- --------------- Number Number units/ Unit/ units/ Unit/ shares share shares share Investment account held value held value ---------------------------------- Common/collective trusts with PNC Bank: Investment Contract Fund 848,907.86 $ 1.99 729,460.56 $ 1.87 Aggressive Profile Fund 14,574.51 $21.23 18,822.51 $18.41 Carpenter Technology Common Stock Fund 4,743.47 $7.21 - - Dynamet Incorporated Defined Contribution Plan December 31, 1998 and 1997 Notes to Financial Statements - ----------------------------------------------------------------------------- 5. Qualification of the Plan The Plan received a favorable determination letter from the Internal Revenue Service (IRS) dated January 17, 1996. The Plan has since been amended; however, the Plan Administrator and Plan's tax counsel believe that the Plan is designed and is currently being operated in compliance with the applicable requirements of the Internal Revenue Code. 6. Plan Termination It is the current intention of Dynamet to continue the Plan in accordance with the Plan's provisions. However, Dynamet reserves the right to terminate the Plan at any time. In the event the Plan terminates, funds will be distributed in accordance with the Plan's provisions. 7. Subsequent Event Effective January 1, 1999, the Dynamet Incorporated Retirement Plan for Non-Union Hourly Employees (the Hourly Plan) was merged into the Plan. In connection with this merger, 43 participants of the Hourly Plan became participants in the Plan and account balances in the Hourly Plan of approximately $383,000 were transferred into the Plan. Dynamet Incorporated Defined Contribution Plan Schedule of Assets Held for Investment Purposes - Form 5500, Item 27(a) December 31, 1998 Additional Information - Schedule I - ------------------------------------------------------------------------------ Shares Current Issuer Description and units Cost Value - ------------------------------------------------------------------------------ * PNC Bank Investment Contract Fund 848,907.86 $1,502,017 $1,688,987 * PNC Bank Aggressive Profile Fund 14,574.51 233,196 309,463 * PNC Bank Balanced Fund 198,050.99 2,877,803 3,925,371 * PNC Bank Index Equity Fund 147,903.99 2,104,036 3,506,804 * PNC Bank Large Cap Growth Equity Fund 145,174.53 2,164,845 3,048,665 * PNC Bank Intermediate Government Fund 46,506.95 467,111 477,626 * PNC Bank International Equity Fund 8,624.49 116,707 125,228 * PNC Bank Small Cap Value Equity Fund 15,472.72 244,892 248,956 * Carpenter Carpenter Technology Tech Corp Common Stock Fund 4,743.47 37,686 34,206 Participant Interest Rate 1% over prime - 60,194 60,194 Loans ----------------------- Total $9,808,487 $13,425,500 ======================= *Designates party-in-interest. Dynamet Incorporated Defined Contribution Plan Schedule of Reportable Transactions - Form 5500, Item 27(d) Year Ended December 31, 1998 Additional Information - Schedule II - ------------------------------------------------------------------------------ Total Total No of dollar value dollar value Party Description trans- of purchases/ of sales/ involved of assets actions trfs in trfs out Net gain Purchases: PNC Bank Balanced Fund 32 $ 672,787 - - PNC Bank Intermediate Government Fd 35 $ 352,959 - - PNC Bank Index Equity Fund 42 $ 996,664 - - PNC Bank Growth Equity Fund 37 $1,069,079 - - PNC Bank Investment Contract Fund 22 $1,061,961 - - PNC Bank Small Cap Value Equity Fund 25 $ 301,710 - - Sales: PNC Bank Balanced Fund 25 - $218,340 $ 42,525 PNC Bank Intermediate Government Fd 15 - $466,599 $ 12,771 PNC Bank Index Equity Fund 33 - $879,856 $133,295 PNC Bank Growth Equity Fund 33 - $741,420 $ 25,497 PNC Bank Investment Contract Fd 36 - $841,440 $ 64,759 PNC Bank Small Cap Value Equity Fund 27 - $303,460 $(28,165) -----END PRIVACY-ENHANCED MESSAGE-----