-----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, NaYDztwje6YLkmobSpy4ZbFjtMEZ9YvxPuAmHYy6Sro3WEIp4q5v6CH9NS8LAZzy 7a7uTSoOlsFbb6m6jKi9Hg== 0000903594-03-000081.txt : 20030711 0000903594-03-000081.hdr.sgml : 20030711 20030630181833 ACCESSION NUMBER: 0000903594-03-000081 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20021231 FILED AS OF DATE: 20030630 DATE AS OF CHANGE: 20030710 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: 1934 Act SEC FILE NUMBER: 001-05828 FILM NUMBER: 03765882 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 r11k.txt 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, 2002 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) 2 Meridian Drive Treeview Corporate Center Wyomissing, PA 19610 (Address of principal executive office of the issuer) 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 23 Consent of Independent Accountants 99.1 Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 99.2 Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 1 DYNAMET INCORPORATED DEFINED CONTRIBUTION PLAN INDEX TO FINANCIAL STATEMENTS FORM 11-K ANNUAL REPORT Form 11-K Pages Report of Independent Auditors 3 Financial Statements: Statements of Net Assets Available For Plan Benefits December 31, 2002 and 2001 - 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 4 Statements of Changes in Net Assets Available For Plan Benefits for the year ended: December 31, 2002 - 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 Funds Participant Loan Fund 5 Notes to Financial Statements 6-11 **Note** Schedules required by 29 CFR 2520.103.10 of the Department of Labor's Rules and Regulations for Reporting and Disclosure under ERISA have been omitted as they are not applicable. 2 Report of Independent Auditors To the Participants and Administrator of the Dynamet Incorporated Defined Contribution Plan In our opinion, the accompanying statements 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 Dynamet Incorporated Defined Contribution Plan (the "Plan") at December 31, 2002 and 2001, and the changes in net assets available for benefits for the year ended December 31, 2002 in conformity with accounting principles generally accepted in the United States of America. 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 auditing standards generally accepted in the United States of America, 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 our opinion. As discussed in Note 1, effective December 31, 2002, the Plan was merged with and into the Savings Plan of Carpenter Technology Corporation. June 10, 2003 /s/ PricewaterhouseCoopers LLP 3 Dynamet Incorporated Defined Contribution Plan Statements of Net Assets Available for Benefits December 31, 2002 and 2001 2002 2001 (in thousands of dollars) Investments, at estimated fair value Common/Collective trusts with PNC Bank Investment Contract Fund* $ - $ 1,786 Aggressive Profile Fund - 472 - 2,258 Investments, at quoted market value Mutual funds with PNC Bank Intermediate Government Bond Fund - 7 BlackRock Balanced Fund* - 3,845 BlackRock Large Cap Growth Equity Fund* - 2,231 BlackRock Index Equity Fund* - 3,754 BlackRock International Equity Fund - 260 BlackRock Small Cap Value Equity Fund - 688 BlackRock Intermediate Government Bond Fund* - 726 - 11,511 Carpenter Technology Common Stock Fund - 278 Participant Loan Fund - 207 - 11,996 Net assets available for benefits $ - $14,254 *Individual investments that represent 5 percent or more of the net assets available for benefits. The accompanying notes are an integral part of these financial statements. 4 Dynamet Incorporated Defined Contribution Plan Statement of Net Assets Available for Benefits December 31, 2002 (in thousands of dollars) Additions Investment income Interest and dividends $ 275 Less: Investment expenses (13) 262 Contributions Participants 458 Employer 751 1,209 Total additions 1,471 Deductions Net depreciation in the value of investments at estimated fair value 2,124 Net depreciation in the value of investments at quoted market value 567 Benefits paid to participants 2,614 Administrative expenses 30 Total deductions 5,335 Transfer to other plan (Note 1) (10,390) Net decrease (14,254) Net assets available for benefits Beginning of year 14,254 End of year $ - The accompanying notes are an integral part of these financial statements. 5 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 and, effective January 1999, non-union hourly employees of Dynamet, not covered by a collective bargaining agreement. In February 1997, Dynamet became a wholly owned subsidiary of Carpenter Technology Corporation ("CTC"). Effective July 1, 2001, certain domestic Dynamet employees became employees of Carpenter Power Products ("CPP"), a wholly owned subsidiary of CTC. These employees remained participants in the Plan. All domestic CPP employees not covered by a collective bargaining agreement may become participants in the Plan upon completion of the eligibility requirements of the Plan. All full-time and part-time 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 ("ERISA"), as amended. Amendments Effective January 1, 2002, under authorization by the Economic Growth and Tax Relief Reconciliation Act of 2001, the maximum annual elective deferral was increased from 15 percent to 35 percent. Additionally, plans from which an eligible rollover will be accepted will include all non-CTC plans qualified under Sections 401(a), 403(b), and 457 of the Internal Revenue Code of 1986, as amended ("IRC"). 6 The Plan has also been amended to remove and nullify all distributions with an annuity starting date that is on or after January 1, 2003. Plan Merger On December 31, 2002, the Plan merged into the Savings Plan of Carpenter Technology Corporation ("CTC Savings Plan"), sponsored by the parent company, CTC. Employees currently participating in the Dynamet Incorporated Defined Contribution Plan automatically became participants in the CTC Savings Plan and are entitled to receive accrued benefits immediately after the merger that are at least equal to their accrued benefits under the Plan immediately prior to the effective date of the merger. Plan assets totaling $10,390,000 were transferred to the CTC Savings Plan on January 2, 2003. Effective with the Plan merger, participants will no longer receive the 6 percent Dynamet profit-sharing contribution. Contributions The Plan permits participants to contribute up to 35 percent of their pre-tax annual compensation, subject to IRS limitations. 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 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. 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. 7 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. As a result of the share class change implemented by PNC Bank, effective November 2001, any monies invested in the previously offered BlackRock "service class" funds were automatically moved to their respective BlackRock "investor A class" replacement funds. Available investment options are as follows: Carpenter Technology Corporation Common Stock Fund PNC Bank managed mutual fund accounts BlackRock Balanced Fund BlackRock Index Equity Fund BlackRock Large Cap Growth Equity Fund BlackRock International Equity Fund BlackRock Intermediate Government Bond Fund BlackRock Small Cap Value Equity Fund PNC Bank Investment Contract Fund PNC Bank Aggressive Profile Fund Participants may change their investment options daily. Participant Loan Fund 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 are generally 60 months; however, participants may repay their entire balance at any time. 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. 8 Payment of Benefits Participants or their beneficiaries are entitled to benefits in the form of an annuity or lump-sum distribution, equal to the vested amount in their accounts upon retirement, total and permanent disability, death, or termination of service. Forfeited Accounts At December 31, 2002, there were no forfeited nonvested accounts. At December 31, 2001, forfeited nonvested accounts totaled $32,766 as a result of non-vested participants terminated prior to July 1, 1998. These accounts were allocated, in accordance with the Plan, to active participants accounts on an annual basis after the nonvested participant has been terminated for a five-year period. As a result of the Plan's merger with the CTC Savings Plan during 2002, all remaining forfeitures were reallocated to participants' accounts. 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 recorded when received rather than when earned, and investment expenses and the related payables are recorded when paid. 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. Actual results could differ from these estimates. Risks and Uncertainties Investment securities are exposed to various risks, such as interest rate, market and credit risks. Due to the level of risk associated with certain investment securities and the level of uncertainty related to changes in the value of investment securities, it is at least reasonably possible 9 that changes in risks in the near term could materially affect participants' account balances and the amounts reported in the statements of net assets available for benefits and the statement of changes in net assets available for benefits. 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 common stock of Carpenter Technology Corporation are valued at quoted market prices which represent the net asset value of shares held by the Plan at year-end. Purchases and sales of investments are reflected on a trade-date basis. Gain or loss on sales of investments is based on average cost. Payments of Benefits Benefits are recorded when paid. Expenses Administrative expenses are paid by the Plan. 3. Related-Party Transactions Certain Plan investments are shares of mutual funds issued BlackRock, a subsidiary of PNC Bank. PNC Bank is the trustee as defined by the Plan and, therefore, these transactions qualify as party-in-interest. Fees paid by the Plan for investment management services amounted to $13,552 for the year ended December 31, 2002. Shares of CTC common stock were purchased and sold through the open market during 2002. 4. Tax Status The Internal Revenue Service has determined and informed Dynamet by letter dated December 20, 1999, that the Plan as of October 10, 1999 is designed in accordance with applicable sections of the IRC. Although the Plan has been amended since receiving the determination letter, the plan administrator believes that the Plan is designed and is 10 currently being operated in compliance with the applicable requirements of the IRC. 5. Plan Termination Although it has not expressed any intent to do so, Dynamet has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, funds will be distributed in accordance with the Plan's provisions. 11 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: June 30, 2003 By: /s/ Terrence E. Geremski Terrence E. Geremski Senior Vice President - Finance and Chief Financial Officer 12 EXHIBIT INDEX Exhibit Number 23 Consent of Independent Accountants 99.1 Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 99.2 Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 13 EX-23 3 r23.txt Exhibit 23 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 333-55669) of Carpenter Technology Corporation of our Report dated June 10, 2003 relating to the financial statements of the Dynamet Incorporated Defined Contribution Plan, which appears in this Form 11-K. /s/ PricewaterhouseCoopers LLP PricewaterhouseCoopers LLP Pittsburgh, Pennsylvania Date: June 26, 2003 EX-99.1 4 r99-1.txt Exhibit 99.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Annual Report of the Dynamet Defined Contribution Plan (the "Plan") on Form 11-K for the period ending December 31, 2002, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Dennis M. Draeger, in my capacity as Chief Executive Officer of the Plan and Chairman of the Board of Dynamet Incorporated ("Dynamet"), administrator of the Plan, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002, that, to my knowledge: (1) the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) the information contained in the Report fairly presents, in all material respects, the net assets available for benefits and changes in net assets available for benefits of the Plan. /s/Dennis M. Draeger ----------------------------------- Dennis M. Draeger Chief Executive Officer June 30, 2003 A signed original of this written statement has been provided to Dynamet, as administrator of the Plan, and will be retained by Dynamet and furnished to the Securities and Exchange Commission or its staff upon request. EX-99.2 5 r99-2.txt Exhibit 99.2 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Annual Report of the Dynamet Defined Contribution Plan (the "Plan") on Form 11-K for the period ending December 31, 2002, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Terrence E. Geremski, in my capacity as Chief Financial Officer of the Plan and member of the Board of Directors of Dynamet Incorporated ("Dynamet"), administrator of the Plan, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge: (1) the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) the information contained in the Report fairly presents, in all material respects, the net assets available for benefits and changes in net assets available for benefits of the Plan. /s/Terrence E. Geremski ----------------------------------- Terrence E. Geremski Chief Financial Officer June 30, 2003 A signed original of this written statement has been provided to Dynamet, as administrator of the Plan, and will be retained by Dynamet and furnished to the Securities and Exchange Commission or its staff upon request. -----END PRIVACY-ENHANCED MESSAGE-----