-----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, TT/Kcw/yyiNcq/yF6VENFN0yjPKibR6tZnmDkLQaXtAZssKYDOer4DBS6hh5mDUB YzCzr2PJ81uTOkYyo4k6Iw== 0000017843-99-000027.txt : 19990715 0000017843-99-000027.hdr.sgml : 19990715 ACCESSION NUMBER: 0000017843-99-000027 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990714 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: 99664272 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 RETIREMENT PLAN OF TALLEY METALS TECHNOLOGY, INC. (Full title of the plan) CARPENTER TECHNOLOGY CORPORATION (Name of issuer of the securities held pursuant to the plan) 1047 N. Park Rd. Wyomissing, Pennsylvania 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. RETIREMENT PLAN OF TALLEY METALS TECHNOLOGY, INC. (Name of Plan) Date July 14, 1999 By /s/ G. Walton Cottrell -------------------------- --------------------------------- 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 RETIREMENT PLAN OF TALLEY METALS TECHNOLOGY, INC. INDEX TO FINANCIAL STATEMENTS FORM 11-K ANNUAL REPORT Form 11-K Pages --------- Report of Independent Accountants 5 Financial Statements: Statement of Net Assets Available for Benefits December 31, 1998 and 1997 - Participant Directed: Stable Principal Fund, Vanguard Wellington Fund, Vanguard Windsor II, Vanguard Index 500 Fund, Vanguard U.S. Growth Fund, American Century Fund, Neuberger & Berman Equity Trust, Carpenter Technology Stock Fund, and Participant Loans 6 Statement of Changes in Net Assets Available for Benefits for the years ended December 31, 1998 and 1997 - Participant Directed: Stable Principal Fund, Vanguard Wellington Fund, Vanguard Windsor II, Vanguard Index 500 Fund, Vanguard U.S. Growth Fund, American Century Fund, Neuberger & Berman Equity Trust, Carpenter Technology Stock Fund, and Participant Loans 7-8 Notes to Financial Statements 9-13 Supplemental Schedules: Assets Held for Investment as of December 31, 1998 14 Reportable Transactions for the year ended December 31, 1998 15 Report of Independent Accountants To the Participants and Administrator of the Retirement Plan of Talley Metals Technology, Inc.: In our opinion, the accompanying statement of net assets available for benefits and the related statement of changes in net assets available for benefits present fairly, in all material respects, the net assets available for benefits of the Retirement Plan of Talley Metals Technology, Inc. (the Plan) at December 31, 1998, and the changes in net assets available for benefits for the year then ended, in conformity with generally accepted accounting principles. 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 of these statements in accordance with generally accepted auditing standards which 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, 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 the opinion expressed above. Our audits were conducted 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. The fund information in the statements of net assets available for benefits and the statements of changes in net assets available for benefits is presented for purposes of additional analysis rather than to present the net assets available for benefits and changes in net assets available for benefits of each fund. These supplemental schedules and fund information are the responsibility of the Plan's management. 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. July 9, 1999 s/PricewaterhouseCoopers LLP PricewaterhouseCoopers LLP Philadelphia, PA RETIREMENT PLAN OF TALLEY METALS TECHNOLOGY, INC. Statements of Net Assets Available for Benefits as of December 31, 1998 and 1997 1997 ASSETS 1998 (Unaudited) ---- ---- Investments, at fair value $ 6,007,477 $ 1,930,538 Employer contributions receivable - 485,022 ------------- ------------- Total Assets 6,007,477 2,415,560 ------------- ------------- Net assets available for benefits $ 6,007,477 $ 2,415,560 ============= ============= The accompanying notes are an integral part of the financial statements. RETIREMENT PLAN OF TALLEY METALS TECHNOLOGY, INC. Statement of Changes in Net Assets Available for Benefits, with Fund Information for the year ended December 31, 1998
Vanguard Vanguard Neuberger Carpenter Stable Vanguard Equity Windsor Vanguard Vanguard American & Technology Principal Wellington Income II Index 500 U.S. Century Berman Corp.Stock Fund Fund Fund Fund Fund Growth Fund Genesis Fund Loans Total --------- ---------- --------- --------- --------- --------- -------- --------- ---------- -------- --------- Additions: Investment income: Net appreciation (depreciation) in market value of investments $ - $ 16,131 $ 16,946 $ 42,449 $ 187,974 $120,034 $ 571 $ (4,138) $ (15,078) $ - $ 364,889 Interest and dividends 78,201 13,396 6,707 19,228 7,542 2,920 44 - - 233 128,271 ---------- -------- -------- -------- ---------- -------- ------- --------- --------- ------- ---------- Net investment income 78,201 29,527 23,653 61,677 195,516 122,954 615 (4,138) (15,078) 233 483,160 ---------- -------- -------- -------- ---------- -------- ------- --------- --------- ------- ---------- Employer contributions 469,999 45,862 31,289 103,380 154,916 64,893 3,928 5,202 17,312 - 896,781 Participant contributions 181,817 21,152 14,047 57,419 82,337 35,082 2,667 3,556 18,159 - 416,582 Transfers from Talley Savings Plus 679,154 222,181 161,347 417,656 402,540 203,704 - - - - 2,086,582 ---------- -------- -------- -------- ---------- -------- ------- --------- --------- ------- ---------- Total contributions 1,330,970 289,195 206,683 578,455 639,793 303,679 6,595 8,758 35,471 - 3,399,589 ---------- -------- -------- -------- ---------- -------- ------- --------- --------- ------- ---------- Total additions 1,409,171 318,722 230,336 640,132 835,309 426,633 7,210 4,620 20,393 233 3,892,759 ---------- -------- -------- -------- ---------- -------- ------- --------- --------- ------- ---------- Deductions: Benefits paid to participants 124,340 315 7,959 316 16,275 16,817 - - - - 166,022 Transfer to Waterbury Independence Plan 124,362 3,336 4,972 133 131 130 - - - - 133,064 Administration fees 887 40 39 158 442 115 - 25 50 - 1,756 ---------- -------- -------- -------- ---------- -------- ------- --------- --------- ------- ---------- Total deductions 249,589 3,691 12,970 607 16,848 17,062 - 25 50 - 300,842 ---------- -------- -------- -------- ---------- -------- ------- --------- --------- ------- ---------- Interfund transfers (299,465) (53,134) (39,583) (34,631) 81,360 44,647 6,241 65,594 189,322 39,649 - ---------- -------- -------- -------- ---------- -------- ------- --------- --------- ------- ---------- Net increase 860,117 261,897 177,783 604,894 899,821 454,218 13,451 70,189 209,665 39,882 3,591,917 Net assets available for benefits: Beginning of year 1,087,289 185,411 122,060 393,245 446,510 181,045 - - - - 2,415,560 ---------- -------- -------- -------- ---------- -------- ------- --------- --------- ------- ---------- End of year $1,947,406 $447,308 $299,843 $998,139 $1,346,331 $635,263 $13,451 $ 70,189 $ 209,665 $39,882 $6,007,477 ========== ======== ======== ======== ========== ======== ======= ========= ========= ======= ==========
The accompanying notes are an integral part of the financial statements. RETIREMENT PLAN OF TALLEY METALS TECHNOLOGY, INC. Statement of Changes in Net Assets Available for Benefits for the year ended December 31, 1997 (Unaudited)
Vanguard Stable Vanguard Equity Vanguard Vanguard Vanguard Principal Wellington Income Windsor II Index 500 US Growth Fund Fund Fund Fund Fund Fund Total ---------- ---------- --------- ---------- ---------- --------- ---------- Additions: Investment income: Net appreciation in market value of investments $ - $ 7,961 $ 8,963 $ 25,481 $ 33,426 $ 8,970 $ 84,801 Interest and dividends 68,341 5,615 2,941 8,731 10,595 4,858 101,081 ---------- ---------- --------- --------- ---------- --------- ---------- 68,341 13,576 11,904 34,212 44,021 13,828 185,882 Employer contributions 295,330 32,434 23,366 65,469 79,870 32,182 528,651 ---------- ---------- --------- --------- ---------- --------- ---------- Total additions 363,671 46,010 35,270 99,681 123,891 46,010 714,533 Deductions: Benefits paid to participants 78,162 - - 2,294 90 2,326 82,872 Return of forfeitures 30,966 1,247 1,309 1,290 6,718 2,099 43,629 ---------- ---------- --------- --------- ----------- -------- ---------- Total deductions 109,128 1,247 1,309 3,584 6,808 4,425 126,501 ---------- ---------- --------- --------- ----------- -------- ---------- Interfund transfers (994,782) 140,648 88,099 297,148 329,427 139,460 - ---------- ---------- --------- --------- ----------- -------- ---------- Net increase/ (decrease) (740,239) 185,411 122,060 393,245 446,510 181,045 588,032 Net assets available for benefits: Beginning of year 1,827,528 - - - - - 1,827,528 ---------- ---------- --------- --------- ----------- -------- ---------- End of year $1,087,289 $ 185,411 $ 122,060 $ 393,245 $ 446,510 $181,045 $2,415,560 ========== ========== ========= ========= =========== ======== ==========
The accompanying notes are an integral part of the financial statements. RETIREMENT PLAN OF TALLEY METALS TECHNOLOGY, INC. Notes to Financial Statements 1. Description of Plan: The following brief description of the Retirement Plan of Talley Metals Technology, Inc. (the Plan) is provided for general information purposes only. Participants should refer to the Plan document for more complete information. General: The Plan is a defined contribution plan covering all employees of Talley Metals Technology, Inc. and AMCAN, Inc. (the Company) who have one year of service and are age eighteen or older. It is subject to provisions of the Employee Retirement Income Security Act of 1974 (ERISA). Prior to June 1, 1998, the Plan had been designed as a money purchase pension plan. Any contributions made prior to that date will be subject to the terms of those plan documents. The Company was acquired on February 19, 1998 by Carpenter Technology Corporation (Carpenter) as a result of Carpenter's acquisition of Talley Industries, Inc. During 1998, funds were transferred from the Talley Savings Plus Plan, which has been terminated. In addition, funds were transferred from the Plan to the Waterbury Independence Plan for the participants who are employees of Waterbury Companies, Inc. - Louisiana facility. These employees are no longer eligible participants in the Plan. Contributions: Each participant may, at their discretion, contribute between 1% and 15% of their compensation through elective deferrals. The Company makes annual Guaranteed Contributions to the Plan on behalf of participants. The amount of such contributions is five percent of each participant's earnings during the calendar year. In addition, the employer also makes a matching contribution of 100% of the first 3% of a participant's contribution. During 1997, Guaranteed Contributions of the Company were invested in a Master Trust managed and administered by the trustee, M&I Marshall & Ilsley Trust Company of Arizona (M&I). The Master Trust invested in M&I Stable Principal Fund, which invested in Guaranteed Investment Contracts, which guarantee the principal of the investment and a specified rate of return thereon. Participants may now direct all contributions in one or more of the following investment options in five percent increments as directed by the participants based on their personal investment goals: Notes to Financial Statements, Continued 1. Description of Plan, continued: Contributions, continued: M&I Stable Principal Fund - Funds are invested in guaranteed investment contracts of fixed interest rate with insurance companies, banks or federally insured institutions. Vanguard Wellington Fund - Funds are invested in a diversified portfolio of stocks and bonds to provide a combination of long-term growth and income. Vanguard Equity Income Fund - Funds are invested in a broadly diversified portfolio of stocks of large, established companies that pay higher than average dividends to provide income and modest long-term growth. Vanguard Windsor II Fund - Funds are invested in a broadly diversified portfolio of large, established companies believed to be undervalued relative to their current prices to provide long-term growth and modest dividend income. Vanguard Index Trust (500 Portfolio) - Funds are invested in the same stocks that are in the Standard & Poor's 500 Composite Stock Price Index (S&P 500) to provide long-term growth by attempting to match the performance and risk characteristics of the unmanaged S&P 500 Index, a broad measure of the U.S. stock market. Vanguard U.S. Growth Portfolio - Funds are invested in a portfolio of large, established companies that have good growth records, strong market positions and have exhibited long-term financial strength to provide potential long-term growth with dividends. American Century Fund - Holds equity securities of foreign companies in developed countries that exhibit accelerating growth. Neuberger & Berman Genesis Trust - Holds primarily stocks of companies with small market capitalizations (up to $1.5 billion at the time of the portfolio's investment) which are selling at attractive prices, with a history of solid performance and a proven management team. Carpenter Technology Corporation Stock Fund - Consists of investments in Carpenter Technology common stock, with a small portion of the fund invested in a money market fund to provide liquidity requirements of daily valuation. Participant Accounts: Participant accounts are maintained and updated by the recordkeeper, M&I, which also acts as the trustee. Each participant's account is credited with the participant's contribution, the Company's contributions and an allocation of Plan investment earnings. Notes to Financial Statements, Continued 1. Description of Plan, continued: Vesting: Participants are 100% vested in all contributions. Payment of Benefits: On termination of service due to death, disability, retirement, a participant is entitled to full distribution of all amounts credited to his or her account. For termination of service due to other reasons, a participant is entitled to the amount credited to his or her account. Payments will be paid out in a lump sum or under a variety of annuity forms available for election by the participant. Benefit payments are recorded upon distribution. 2. Summary of Significant Accounting Policies: The following are the significant accounting policies followed by the Plan: Basis of Accounting: The accompanying financial statements are prepared on the accrual method of accounting. Use of Estimates: The preparation of financial statements in conformity with generally accepted accounting principles 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. Valuation of Investments: Investments in securities held by the trustee or Vanguard Investments are traded on national securities exchanges and are valued at the last reported sales price on the last business day of each calendar month. The Plan's Guaranteed Investment Contract is valued at contract value. Contract value represents contributions made under terms of the contract, plus interest at the contract rate, less funds used to purchase annuities. Funds which have been used to purchase annuities (that is, an insurance company is obligated to pay the related pension benefits) are excluded from the Plan's assets. At contract termination, the market value of the contract would differ from the carrying value. Notes to Financial Statements, Continued 3. Investments: The fair value of investments at December 31, 1998 are: M&I Stable Principal Fund $1,947,406 Vanguard Wellington Fund 447,308 Vanguard Equity Income Fund 299,843 Vanguard Windsor II Fund 998,139 Vanguard Index 500 Fund 1,346,331 Vanguard U.S. Growth Fund 635,263 American Century Mutual Fund 13,451 Neuberger & Berman Genesis Trust 70,189 Carpenter Technology Corporation Common Stock Fund 209,665 Loans 39,882 ---------- Total Investments $6,007,477 ========== During 1997, the assets of certain Talley Industries, Inc. and its subsidiaries' defined contribution retirement plans were maintained in a consolidated pension trust, administered by a trustee. Each plan was allocated a portion of revenues, expenses and year-end assets by the trustee, determined by the market value of the assets held by the Plan at the end of the period. At December 31, 1997, the Plan's interest in the net assets of the Master Trust was approximately 13%. The investments of the Defined Contribution Master Trust at December 31, 1997 were as follows: Master Plan's Trust Allocated ----------- Portion at Market Market Value Value ----------- ---------- M&I Stable Principal Fund $ 9,451,203 $ 893,054 Equity Fund 199,270 - Fidelity Puritan Fund 1,237,225 - Fidelity Mutual Beacon Fund 1,519,209 - Fidelity Spartan Equity Fund 738,702 - Fidelity Adv. High Yield Fund 87,563 - Money Market Fund 65,485 - Marshall Lg. Cap. Growth & Income Fund 602,135 - Janus Fund 117,564 - Vanguard Wellington Fund 138,524 138,524 Vanguard Equity Income Fund 87,021 87,021 Vanguard Windsor II Fund 277,889 277,889 Vanguard Index 500 Fund 366,779 366,779 Vanguard U.S. Growth Fund 167,270 167,271 ----------- ---------- Total Investments $15,055,839 $1,930,538 =========== ========== Notes to Financial Statements, Continued 4. Certification of Financial Information: Investment information for the year ended December 31, 1997 included in the accompanying financial statements and supplemental schedules was certified by the trustee, M&I, as complete and accurate. This information includes investments, at fair value, and investment income. 5. Tax Status of the Plan: The Internal Revenue Service has determined and informed the Company by a letter dated September 5, 1995, that the Plan is qualified and that the trust established under the Plan is tax- exempt, under the appropriate sections of the Code. 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 Code. Therefore, they believe that the Plan was qualified and the related trust was tax-exempt as of the financial statement date. 6. Administrative Expenses: The participants are assessed a fee for loan originations and lump sum distributions. In addition, investment income is shown net of investment management fees. All other expenses are paid by the Company. 7. Plan Termination: Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. RETIREMENT PLAN OF TALLEY METALS TECHNOLOGY, INC. Item 27(a) - Schedule of Assets Held for Investment Purposes as of December 31, 1998 Description of Current Identity of Issuer Investment Cost Value - ------------------------------ ------------------ ---------- ---------- *M&I Stable Principal Fund Fixed income funds $1,947,406 $1,947,406 Vanguard Wellington Fund Mutual fund 467,463 447,308 Vanguard Equity Income Fund Mutual fund 285,361 299,843 Vanguard Windsor II Fund Mutual fund 1,025,485 998,139 Vanguard Index Trust (500 Portfolio) Mutual fund 1,154,480 1,346,331 Vanguard U.S. Growth Portfolio Mutual fund 562,318 635,263 American Century Fund Mutual fund 13,113 13,451 Neuberger & Berman Genesis Trust Mutual fund 69,002 70,189 *Carpenter Technology Corporation Stock Fund Mutual fund 216,735 209,665 Participant Loans (Interest Rate 9.5%) - 39,882 ---------- ---------- Total investments $5,741,363 $6,007,477 ========== ========== *Party-in-interest RETIREMENT PLAN OF TALLEY METALS TECHNOLOGY, INC. Item 27(d) - Schedule of Reportable (5%) Transactions for the year ended December 31, 1998
Number of Cost of Selling Cost of Realized Description Transactions Purchase Price Asset Gain/(Loss) - --------------------------- -------------- ---------- --------- --------- ---------- Marshall and Ilsley Stable Principal Fund Purchases 73 $1,213,632 - - - Sales 68 - $ 734,177 $ 734,177 - Vanguard Wellington Fund Purchases 15 159,690 - - - Sales 18 - 148,018 111,057 $ 36,961 Vanguard Equity Income Fund Purchases 13 84,285 - - - Sales 6 - 99,382 91,258 8,124 Vanguard Windsor II Fund Purchases 46 376,023 - - - Sales 283 - 307,812 232,139 75,673 Vanguard Index Trust 500 Portfolio Purchases 17 677,370 - - - Sales 165 - 400,128 374,133 25,995 Vanguard U. S. Growth Portfolio Purchases 41 372,964 - - - Sales 9 - 233,951 183,505 50,446 Neuberger & Berman Genesis Trust Purchases 1 153,721 - - - Sales 26 - 79,394 84,719 (5,325) Carpenter Technology Corporation Stock Fund Purchases 805 336,771 - - - Sales 5 - 112,078 120,036 (7,958)
CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in the Registration Statement of Carpenter Technology Corporation on Form S-8 (number 333- 55667) of our report dated July 9, 1999 on our audit of the financial statements of the Retirement Plan of Talley Metals Technology, Inc. as of December 31, 1998 and for the year then ended, which report is included in this Annual Report on Form 11-K. s/PricewaterhouseCoopers LLP PricewaterhouseCoopers LLP July 14, 1999 -----END PRIVACY-ENHANCED MESSAGE-----