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 year ended December 31, 2004
Commission File Number 1-5828
Savings Plan of
Carpenter Technology Corporation
Carpenter Technology Corporation
(Name of issuer of the securities held pursuant to the plan)
2 Meridian Drive
Treeview Corporate Center
Wyomissing, Pennsylvania 19610
(Address of principal executive office of the issuer)
Financial Statements and Exhibits
The financial statements filed as part of this report are listed in the Index to Financial Statements included herein.
23.1 Consent of Independent Registered Public Accounting Firm
Carpenter Technology Corporation Savings Plan
Index to Financial Statements
FORM 11-K ANNUAL REPORT
Form 11-K Pages |
|
Report of Independent Registered Public Accounting Firm |
4 |
Financial Statements: |
|
Statements of Net Assets Available for Benefits as of December |
5 |
Statements of Changes in Net Assets Available for Benefits for the |
6 |
Notes to Financial Statements |
7-11 |
Supplementary Schedule: |
|
Schedule of Assets (Held at End of Year) |
12 |
Report of Independent Registered Public Accounting Firm
To the Participants and Administrator of the Savings Plan of Carpenter Technology Corporation
Reading, Pennsylvania
We have audited the accompanying statements of net assets available for benefits of the Savings Plan of Carpenter Technology Corporation (Plan) as of December 31, 2004 and 2003, and the related statements of changes in net 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. 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.
In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Savings Plan of Carpenter Technology Corporation as of December 31, 2004 and 2003, and the changes in net assets available for benefits for the years then ended 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 supplementary schedule of assets (held at end of year) as of December 31, 2004 is presented for the purpose of additional analysis and is not a required part of the basic 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 supplementary schedule is the responsibility of the Plan's management. The supplementary schedule has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/s/ BEARD MILLER COMPANY LLP
Reading, Pennsylvania
May 13, 2005
Savings Plan of
Carpenter Technology Corporation
Statements of Net Assets Available for Benefits
Assets |
2004 |
2003 |
Investments, at fair value |
$344,885 |
$306,503 |
Receivables: |
||
Investment income receivable |
622 |
744 |
Receivable for securities sold |
- |
26 |
Total receivables |
622 |
770 |
Total assets |
345,507 |
307,273 |
Liabilities |
||
Refundable contributions |
86 |
54 |
Accrued administration expenses |
60 |
85 |
Total liabilities |
146 |
139 |
Net assets available for benefits |
$345,361 |
$307,134 |
The accompanying notes are an integral part of these financial statements.
Savings Plan Of
Carpenter Technology Corporation
Statements of Changes in Net Assets Available for Benefits
for the years ended December 31, 2004 and 2003
(dollars in thousands)
2004 |
2003 |
||
Additions to net assets attributed to: |
|||
Investment income: |
|||
Interest |
$ 4,080 |
$ 4,735 |
|
Dividends |
4,270 |
2,824 |
|
Net appreciation in fair value of investments |
47,652 |
57,072 |
|
56,002 |
64,631 |
||
Contributions: |
|||
Salary deferral |
9,162 |
7,986 |
|
Participant |
1,660 |
1,496 |
|
Rollover |
252 |
131 |
|
Company basic |
4,595 |
4,542 |
|
15,669 |
14,155 |
||
Total additions |
71,671 |
78,786 |
|
Deductions from net assets attributed to: |
|||
Benefits paid to participants |
33,075 |
24,103 |
|
Administrative expenses |
369 |
340 |
|
Transfers to successor Trustee |
- |
163 |
|
Total deductions |
33,444 |
24,606 |
|
Net increase |
38,227 |
54,180 |
|
Net assets available for benefits: |
|||
Beginning of year |
307,134 |
252,954 |
|
End of year |
$345,361 |
$307,134 |
|
The accompanying notes are an integral part of these financial statements.
Savings Plan of
Carpenter Technology Corporation
Notes to Financial Statements
The following description of the Savings Plan of Carpenter Technology Corporation (the "Plan") provides only general information. A more comprehensive description of the Plan's provisions can be found in the Plan document, which is available to participants upon request from Carpenter Technology Corporation or any participating affiliate (collectively referred to as the "Company").
General:
The Plan is a profit-sharing and stock bonus plan which covers substantially all domestic employees of the Company. It is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA), as amended.
Plan Transfer:
Two of the Company's subsidiaries, Z-tech (division of Carpenter Advanced Ceramics, Inc.) and Parmatech Corporation, were sold effective December 31, 2002 and January 31, 2003, respectively. Pursuant to the sales, the assets of the participants of these subsidiaries, having a fair market value of $163,000, were transferred to successor trustees in 2003.
Contributions:
Each year, participants may contribute up to 35 percent of annual compensation on a pretax basis (known as salary deferral contributions), and up to 35 percent of annual compensation on an after-tax basis (known as participant contributions), as defined in the Plan. The combined contributions cannot exceed 35 percent of total compensation. Participants who are age 50 or older may make "catch-up contributions", which are additional pretax contributions. Participants may also contribute amounts representing distributions from other qualified defined contribution plans (known as rollovers). The Company contributes an amount equal to three percent of each employee's base pay (known as company basic contributions). Contributions are subject to certain limitations.
Participant's Accounts:
Several accounts are maintained for each participant which are credited with contributions and Plan net earnings on funds invested within the respective accounts, as follows:
- Employee pretax salary deferral account - credited with salary deferral contributions on a before tax basis, which are participant directed;
- Employee after tax account - credited with participant contributions after tax, which are participant directed;
- Company basic contribution account - Company contributions which are participant directed;
- Rollover contribution account - credited with rollover contributions, which are participant directed;
- Inter-plan transfer accounts - transfers from other Carpenter Plans, which are participant directed;
- Profit sharing account - credited with Company contributions prior to 1988, which were non-participant directed. No further contributions may be made to this account, and participants are able to transfer amounts to other investment funds.
- Prior plan money purchase plan account - transferred from the Retirement Plan of Talley Metals and are participant directed and not eligible for loan or withdrawal.
Vesting:
All contributions and Plan earnings thereon are 100 percent vested and nonforfeitable.
Investment Funds:
The Plan maintains nineteen investment funds. Each participant may designate separately the investment fund or funds in which their monies are to be invested.
Participant Loans:
Loans are available from various participant accounts in a particular hierarchy for active employees of the Company. Participants are subject to certain restrictions on their number of loans, amount and terms of repayment. Interest is charged at the prime rate for commercial lenders at the time the loan is initiated, plus one percent. Loan repayments are required with each pay, and payment in full is required at the time of the participant's separation.
Benefits Paid to Participants:
Benefits paid to participants include participant distributions and withdrawals. Participants are entitled to a lump sum distribution upon separation from service. Upon separation, a participant may elect to defer such distribution, provided the account balance is at least $5,000. The total distribution of benefits to all separated participants must occur by December 31st of the year in which the participant attains age 70-1/2. Hardship and non-hardship in-service withdrawals are permitted subject to certain restrictions. Upon reaching age 59-1/2, the following hierarchy applies to withdrawals: 1) Rollover account, 2) Profit sharing account, 3) Employee pre-tax account, 4) Company basic contribution account, 5) Inter-plan transfer accounts. The Money purchase plan account is not available for withdrawal. Benefits paid to participants are in cash, except that distribution of accounts which consist of investments in the Carpenter Technology Stock Fund shall be made in shares of the Company's common stock or cash, at the participant's option.
Administrative Expenses:
Investment management fees and trustee fees are paid by the Plan. All other fees are paid by the Company.
Plan Termination:
The Company has the right under the Plan to discontinue or change its contributions at any time and to terminate the Plan subject to the provisions of ERISA and any contractual obligations.
The following presents investments that represent 5 percent or more of the Plan's net assets.
December 31 |
||
2004 |
2003 |
|
(in thousands) |
||
Certus Stable Value Fund |
$89,144 |
$84,126 |
Carpenter Technology Stock Fund |
$49,715 |
$39,222 |
Fidelity Dividend Growth Fund |
$46,780 |
$51,857 |
Dreyfus MidCap Value Fund |
$28,223 |
$23,385 |
Mellon EB DL S&P 500 Index Fund |
$25,404 |
$22,685 |
Dodge & Cox Stock Fund |
$21,986 |
* |
American Balanced Fund |
$21,458 |
$19,924 |
* Investment was less than 5% of the Plan's net assets for the applicable year.
During 2004 and 2003, the Plan's investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated in value by $47,652,000 and $57,072,000, respectively, as follows:
2004 |
2003 |
|
(in thousands) |
||
Common stock |
$13,109 |
$25,832 |
Registered investment companies |
34,543 |
31,240 |
$47,652 |
$57,072 |
The Internal Revenue Service has determined and informed the Company by letter dated March 21, 2003, that the Plan and related trust as of February 20, 2002 are designed in accordance with applicable sections of the Internal Revenue Code (IRC). Although the Plan has been amended since receiving the determination letter, the Plan administrator believes that the Plan is designed and is currently being operated in compliance with the applicable requirements of the IRC.
Certain Plan investments are shares of registered investment companies managed by Mellon Bank. Mellon Bank was the trustee as defined by the Plan and, therefore, these transactions qualify as party-in-interest. Fees paid by the Plan for the investment management services amounted to $355,000 and $352,000 for the years ended December 31, 2004 and 2003, respectively.
Contributions received from participants are net of payments made to certain active participants to return to them excess contributions as required to satisfy the relevant nondiscrimination provisions of the Plan. The amount of excess contributions for 2004 and 2003 are $86,000 and $54,000, respectively. This amount is reflected as a refundable contribution in the Statement of Net Assets Available for Benefits.
Effective with plan year 2005, a safe-harbor plan design for discrimination testing was adopted.
Effective January 1, 2005, The Vanguard Group replaced Mellon Trust and Mellon HR Solutions as Trustee and Recordkeeper, respectively, of the Plan.
Schedule H, line 4i - Schedule of Assets (Held at End of Year)
Savings Plan of Carpenter Technology Corporation
as of December 31, 2004
EIN: 23-0458500
PN: 001
(A) |
(B) |
(C) |
(E) |
* |
Certus Stable Value Fund |
Registered Investment Company |
$89,144,000 |
Carpenter Technology Corporation |
Corporate Stocks - Common |
49,715,000 |
|
Fidelity Dividend Growth Fund |
Registered Investment Company |
46,780,000 |
|
* |
Dreyfus MidCap Value Fund |
Registered Investment Company |
28,223,000 |
* |
Mellon EB DL S&P 500 Index Fund |
Registered Investment Company |
25,404,000 |
Dodge & Cox Stock Fund |
Registered Investment Company |
21,986,000 |
|
American Balanced Fund |
Registered Investment Company |
21,458,000 |
|
Vanguard Small Cap Index Fund |
Registered Investment Company |
11,244,000 |
|
American Funds EuroPacific Growth Fund |
Registered Investment Company |
10,894,000 |
|
* |
Dreyfus Government Cash Management Fund |
Registered Investment Company |
9,833,000 |
PIMCO Total Return Fund |
Registered Investment Company |
9,147,000 |
|
Managers Special Equity Fund |
Registered Investment Company |
3,616,000 |
|
MFS Strategic Growth Fund |
Registered Investment Company |
2,929,000 |
|
Fidelity Freedom 2010 Fund |
Registered Investment Company |
1,401,000 |
|
Fidelity Freedom 2020 Fund |
Registered Investment Company |
712,000 |
|
Fidelity Freedom Income Fund |
Registered Investment Company |
359,000 |
|
Fidelity Freedom 2040 Fund |
Registered Investment Company |
335,000 |
|
Fidelity Freedom 2030 Fund |
Registered Investment Company |
259,000 |
|
Fidelity Freedom 2000 Fund |
Registered Investment Company |
89,000 |
|
Participant Loans |
Loans to Participants |
11,357,000 |
|
TOTAL |
$344,885,000 |
* Party-in-Interest
Note: Cost information has not been presented as investments are participant directed.
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.
SAVINGS PLAN OF CARPENTER TECHNOLOGY CORPORATION |
|
(Name of Plan) |
|
Date: June 24, 2005 |
By: /s/ Terrence E. Geremski |
Terrence E. Geremski |
Exhibit Index
Exhibit Number
23.1 Consent of Independent Registered Public Accounting Firm
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (number 2-83780) of Carpenter Technology Corporation of our report dated May 13, 2005 relating to the financial statements for the year ended December 31, 2004, of the Savings Plan of Carpenter Technology Corporation, which appears in this Form 11-K.
/s/BEARD MILLER COMPANY LLP
Reading, Pennsylvania
June 23, 2005