CARPENTER TECHNOLOGY CORP — Annual Report 2002

Jun 20, 2002

11-K 1 dyn11k.htm DYNAMET DC PLAN Dynamet Incorporated December 31, 2001 11-K

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, 2001

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.

| Date June 20,
2002 | By | DYNAMET
INCORPORATED DEFINED CONTRIBUTION PLAN (Name of Plan) — / s/ Terrence E.
Geremski Terrence E. Geremski Senior Vice President - Finance and Chief Financial Officer |
| --- | --- | --- |

Financial Statements and Exhibits

(a) Financial Statements

(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, 2001and 2000

Common/Collective trusts with PNC Bank:

Investment Contract Fund Aggressive Profile Fund

Mutual Funds with PNC Bank: Balanced Fund Index Equity Fun 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, 2001and 2000:

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, 2001 12

• Other 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.

Report of Independent Accountants

To the Participants and Administrator of the

Dynamet Incorporated Defined Contribution Plan

We have audited the accompanying statements of net assets available for benefits (modified cash basis) of the Dynamet Incorporated Defined Contribution Plan (the "Plan") at December 31, 2001 and 2000, and the related changes in net assets available for benefits (modified cash basis) for the year ended December 31, 2001. 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 of these statements. 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 described in Note 2, the financial statements and supplemental schedule were prepared on a modified cash basis of accounting, which is a comprehensive basis of accounting other than generally accepted accounting principles in the United States of America.

In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2001 and 2000, and changes in net assets available for benefits for the year ended December 31, 2001, on the basis of accounting described in Note 2.

Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets (held at end of year) (modified cash basis) 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 supplemental schedule is the responsibility of the Plan’s management. The supplemental 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.

PricewaterhouseCoopers LLP Pittsburgh, PA May 31, 2002

Dynamet Incorporate Defined Contribution Plan Statements of Net Assets Available for Benefits December 31, 2001 and 2000

( in thousands of dollars)	2001	2000
Investments, at estimated fair value:
Common/collective trusts with PNC Bank:
Investment Contract Fund	$ 1,786	$ 1,625
Aggressive Profile Fund	472	667
	2,258	2,292
Investments, at quoted market value:
Mutual funds with PNC Bank:
Balanced Fund*	-	4,268
Index Equity Fund*	-	4,205
Large Cap Growth Equity Fund*	-	3,062
Intermediate Government Bond Fund	7	432
International Equity Fund	-	303
Small Cap Value Equity Fund	-	460
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	12,730
Carpenter Technology Common Stock Fund	278	292
Participant Loan Fund	207	232
	11,996	13,254
Net assets available for benefits	$ 14,254	$ 15,546

• Individual investments that represent 5% or more of the net assets available for benefits.

Dynamet Incorporated Defined Contribution Plan Statement of Changes in Net Assets Available for Benefits Year Ended December 31, 2001

(in thousands of dollars)

Additions:
Investment
income:
Interest and dividends	$ 232
Less - investment expenses	(13)
	219
Contributions:
Participants	466
Employer	774
	1,240
Total additions	1,459
Deductions:
Net depreciation in the value of
investments at estimated fair value	2,273
Net depreciation in the value of
investments at quoted market value	139
Benefits
paid to participants	339
Total deductions	2,751
Net decrease	(1,292)
Net assets
available for benefits:
Beginning of
year	15,546
End of year	$ 14,254

The accompanying notes are an integral part of these financial statements.

Dynamet Incorporated Defined Contribution Plan

Notes to Financial Statements

1. Description of the Plan

1. Summary of Accounting Policies

2. 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 $12,776 for the year ended December 31, 2001.

Shares of CTC common stock were purchased and sold through the open market during 2001.

1. Tax Status

The Internal Revenue Service has determined and informed Dynamet by letter dated December 20, 1999, that the Plan is 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 and the Plan’s tax counsel believe that the Plan is designed and is currently being operated in compliance with the applicable requirements of the IRC.

1. 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.

Dynamet Incorporated Defined Contribution Plan Schedule of Assets (Held at End of Year) December 31, 2001

	Issuer	Description	Shares or Units	Cost	Fair Value
*	PNC Bank	Investment Contract Fund	753,510	$ 1,403,346	$ 1,786,044
*	PNC Bank	Aggressive Profile Fund	25,843	554,325	472,082
*	BlackRock	Balanced Fund - Class A	273,649	3,893,435	3,844,770
*	BlackRock	Index Equity Fund - Class A	170,575	3,727,048	3,754,354
*	BlackRock	Large Cap Growth Equity Fund - Class A	220,638	2,250,490	2,230,646
*	BlackRock	Intermediate Government Bond Fund - Class A	69,728	729,288	725,869
*	BlackRock	International Equity Fund - Class A	30,567	259,102	259,530
*	BlackRock	Small Cap Value Equity Fund - Class A	44,182	659,065	688,355
*	PNC Bank	Intermediate
Government Bond
		Fund	697	6,526	7,230
*	PNC Bank	Balanced Fund	-	80	-
*	PNC Bank	Large Cap Growth Equity Fund	-	386	-
*	PNC Bank	International Equity Fund	-	81	-
*	PNC Bank	Small Cap Value & Equity Fund	-	181	-
*	PNC Bank	Index Equity Fund	-	185	-
*	Carpenter Technology Corporation	Carpenter Technology Common Stock Fund	44,250	286,584	278,322
	Participant Loans	Interest Rate 1% over prime with rates ranging from 6.5% to 10.5%; no loans due past 9/22/2006	-	-	206,476
	Total investments			$ 13,770,122	$ 14,253,678

*Designates party-in-interest transactions.

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 May 31, 2002 relating to the financial statements of the Dynamet Incorporated Defined Contribution Plan, which appears in this Form 11-K.

PricewaterhouseCoopers LLP Pittsburgh, Pennsylvania Dated: June 20, 2002