FORM 11-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the fiscal year ended December 31, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from _____________ to _____________
Commission File Number 1-3970
HARSCO CORPORATION SAVINGS PLAN
(Full title of the Plan)
HARSCO CORPORATION
(Name of issuer of the securities held pursuant to the Plan)
Camp Hill, PA 17001-8888
(Address of principal executive office)
Telephone - (717) 763-7064
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HARSCO CORPORATION SAVINGS PLAN
INDEX TO
FORM 11-K ANNUAL REPORT
Form 11-K
Pages
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Report of Independent Accountants 3
Financial Statements:
Statements of Net Assets Available for Benefits -
December 31, 2001 and December 31, 2000 4
Statement of Changes in Net Assets Available for Benefits -
For the Year Ended December 31, 2001 5
Notes to Financial Statements 6-12
Supplemental Schedules:
Assets Held for Investment Purposes as of December 31, 2001 - 4(I)* 13
Reportable Transactions for the year ended December 31, 2001 - 4(j)* 14
Exhibit:
Exhibit 23 - Consent of Independent Accounts 1
* Refers to item numbers in Form 5500 (Annual Return/Report of Employee
Benefit Plan) for the plan year ended December 31, 2001.
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REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and the Plan Administrative Committee of
the Harsco Corporation Savings 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 Harsco Corporation Savings Plan (the "Plan") at December 31, 2001 and
2000, and the changes in net assets available for benefits for the year ended
December 31, 2001 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.
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. These supplemental
schedules are the responsibility of the Plan's management. The supplemental
schedules 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.
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
June 26, 2002
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HARSCO CORPORATION SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
(dollars in thousands)
December 31, 2001 and December 31, 2000
Assets December 31 December 31
2001 2000
----------- -----------
Investments, at fair value:
Participant directed $162,053 $159,247
Non-participant directed 36,521 25,888
-------- --------
Total investments 198,574 185,135
-------- --------
Contributions Receivable:
Employer's 77 86
Participants' 336 374
-------- --------
Total receivables 413 460
-------- --------
Net assets available for benefits $198,987 $185,595
======== ========
The accompanying notes are in integral part of the financial statements.
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HARSCO CORPORATION SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
(dollars in thousands)
For the Year Ended December 31, 2001
Additions (reductions) to net assets attributed to:
Investment income
Net appreciation in the fair value of investments $ 6,594
Dividends 3,823
Interest - money market fund 1,228
Interest - participant loans 783
---------
12,428
Contributions:
Employer's 4,076
Participants' 14,864
---------
Total additions 31,368
Deductions:
Withdrawals (17,976)
---------
Net increase in net assets available for benefits 13,392
Net assets available for benefits:
December 31, 2000 185,595
---------
December 31, 2001 $ 198,987
=========
The accompanying notes are an integral part of the financial statements.
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NOTES TO FINANCIAL STATEMENTS
1. General Description of Plan:
The following description of the Harsco Corporation Savings Plan (the
"Plan") provides only general information. Participants should refer to
the Summary Plan Description for a more complete description of the Plan's
provisions.
The Plan is a defined contribution plan designed to comply with the
requirements of the Employee Retirement Income Security Act of 1974
("ERISA") and with the requirements for qualification under Sections
401(a) and 401(k) of the Internal Revenue Code (the "Code").
All U.S. employees (including officers) who receive a stated weekly,
hourly, monthly, or annual rate of compensation and are employed by Harsco
Corporation (the "Company") or any subsidiary of either the Company or a
subsidiary which adopts this Plan with the approval of the Company shall
be covered by, or remain covered by this Plan, are deemed "Eligible
Employees." Also eligible are employees covered by a collective bargaining
agreement where the agreement provides for the employees' eligibility to
participate in the Plan. New employees deemed Eligible Employees under
this Plan are eligible to participate in the Plan as of the first payroll
of January, April, July or October after the date of hire.
To participate in the Plan, an Eligible Employee must elect to contribute
to the Plan through payroll deductions each pay period. Contributions are
in whole percentages from 1% to 16% of compensation received for services
as an employee of the Company or any subsidiary of the Company. The
participant shall designate what percentage of such contributions will be
"Pre-Tax Contributions" and what percentage will be "After-Tax
Contributions." A participant who makes Matched Pre-Tax and/or Matched
After-Tax Contributions in an aggregate amount of 6% of his or her
compensation may also elect to contribute from 1% to 10% of his or her
compensation as an Unmatched Pre-Tax and/or Unmatched After-Tax
Contribution. In no event during the year may (a) Matched Pre-Tax and
Matched After-Tax Contributions exceed 6% of compensation, (b) Unmatched
Pre-Tax and Unmatched After-Tax Contribution exceed 10% of compensation or
(c) Pre-Tax Contributions exceed the amount specified by the Internal
Revenue Service (IRS) code which was $10,500 for the years ended December
31, 2001 and 2000. Pre-Tax Contributions shall constitute a reduction in
the participant's taxable income for purposes of Section 401(k) of the
Code. After-Tax Contributions will be considered to be the participant's
contributions to the Plan and shall not constitute a reduction in the
participant's taxable income for the purposes of Section 401(k) of the
Code.
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NOTES TO FINANCIAL STATEMENTS, continued
1. General Description of Plan: (Continued)
Pursuant to the Plan, the Company will make contributions in cash to the
Trustee for the account of each participant in an amount equal to 50% of
the first 6% of such participant's compensation designated as Matched
Pre-Tax Contributions and/or Matched After-Tax Contributions. These
contributions are referred to as "Company Matching Contributions".
Participants are immediately vested in their contributions plus actual
earnings thereon. Vesting in the Company's Matching Accounts is based on
years of vesting service. A participant is 100% vested after five years
of credited service. Effective January 1, 2002, a participant is 100%
vested after three years of credited service.
The Company pays all administrative fees related to maintaining the Plan
as a whole. Fees for investment management are subtracted from fund
performance reported by each fund. Participant directed investment fund
change fees and Plan record keeping fees are paid by the Company. Loan
setup fees are paid by the participant.
Participants may borrow from their fund accounts a minimum of $500 to a
maximum of 50% of their vested account balance, not to exceed $50,000.
Loan transactions are treated as a transfer to (from) the respective
investment fund(s) from (to) the Participant Loans fund. The participant
may choose the loan repayment period, not to exceed five years. However,
the term may be for any period not to exceed 15 years if the purpose of
the loan is to acquire the participant's principal residence. The loans
are collateralized only by the portion of the participant's Account from
which the loan is made and bear interest at a rate commensurate with
local prevailing rates as determined periodically by the Plan
administrator. Interest rates on outstanding loans, based on the
Trustee's prime rate plus one percent, ranged from 6.00% to 10.5% at
December 31, 2001. Principal and interest is paid ratably through payroll
deductions.
On termination of service due to death, disability, or retirement, a
participant or beneficiary may elect one of three options. The
participant or beneficiary may elect to receive either a lump-sum amount
equal to the value of the participant's vested interest in his or her
account; a portion paid in a lump-sum, and the remainder paid later; or
annual installments over not more than fifteen years. For termination of
service for other reasons, a participant may receive the value of the
vested interest in his or her account as a lump-sum distribution.
While the Company has not expressed any intent to discontinue the Plan,
it reserves the right to terminate the Plan at any time or discontinue
contributions thereunder. In the event such discontinuance resulted in
the termination of the Plan, the accounts of each affected employee who
has not yet incurred a break in service shall be fully vested. Complete
distributions or withdrawals would be
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NOTES TO FINANCIAL STATEMENTS, continued
distributed to Plan participants and beneficiaries in proportion to their
respective account balances.
2. Summary of Significant Accounting Policies:
Basis of Accounting:
The financial statements of the Plan are prepared under the accrual basis
of accounting.
Investment Valuation:
The Harsco Corporation Common Stock is stated at market value, which
represents the closing price of the stock on the Composite Reporting Tape
of the stock exchanges on the last day of trading of the calendar year.
Shares in the Neuberger Berman Genesis Fund, PIMCO Total Return Fund,
Vanguard Institutional Index Fund, Putnam Fund for Growth and Income,
Putnam Income Fund, Putnam Voyager Fund, Putnam New Opportunities Fund,
Putnam Asset Allocation Growth - Portfolio, Putnam Asset Allocation -
Balanced Portfolio, Putnam Asset Allocation - Conservative Portfolio,
Putnam International Growth Fund, and Putnam Money Market Fund, are all
stated at fair value, which represents the closing price on the last day
of trading of the calendar year. Cash, which represents funds held until
purchases of common stock are completed, is stated at fair value.
Participant loans are valued at cost which approximates fair value.
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 and liabilities
and disclosures of contingent assets and liabilities at the date of the
financial statements and the reported amounts of additions and deductions
during the reporting period. Actual results could differ from those
estimates.
Other:
The Plan presents in the Statement of Changes in Net Assets Available for
Benefits the net appreciation (depreciation) in the market value of its
investments which consists of the realized gains or losses and the
unrealized appreciation (depreciation) on those investments.
The purchase and sale of investments are recorded on a trade-date basis.
Dividend income is recorded on the ex-dividend date. Income from other
investments is recorded as earned on an accrual basis.
Both participant and Company contributions are accrued in the period of
the related payroll deductions. Forfeitures, a result of participant
withdrawals prior to their full vesting in the Plan, are used to reduce
the amount of future Company matching contributions.
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NOTES TO FINANCIAL STATEMENTS, continued
3. Investment Options:
The Plan, comprised of participant and Company contributions, contains the
following investment options:
(1) Harsco Common Stock Fund - (consisting of Common Stock purchased
with Company and participant directed contributions): a fund
consisting of Common Stock of Harsco Corporation purchased in the
open market or through privately negotiated transactions to the
extent permitted by rules of the New York Stock Exchange and the
Securities and Exchange Commission.
(2) Neuberger Berman Genesis Fund - (consisting of investments purchased
with participant directed contributions): a fund consisting mainly
of common stock of small capitalization companies that offer
potential for capital growth.
(3) PIMCO Total Return Fund - (consisting of investments purchased with
participant directed contributions): a fund consisting, under normal
circumstances, of at least 65% of its assets in a diversified
portfolio of fixed income instruments of varying maturities. The
fund seeks maximum total returns, consistent with preservation of
capital and prudent investment management.
(4) Vanguard Institutional Index Fund - (consisting of investments
purchased with participant directed contributions): a fund
consisting of investments in the same stocks and in substantially
the same percentages as the S&P 500 Index.
(5) Putnam Fund for Growth and Income - (consisting of investments
purchased with participant directed contributions): a fund
consisting primarily of common stocks located mainly in the United
States that offer potential for capital growth, current income, or
both.
(6) Putnam Income Fund - (consisting of investments purchased with
participant directed contributions): a fund consisting principally
of investments in bonds and other debt securities. Bonds include
both corporate and government bonds.
(7) Putnam Voyager Fund - (consisting of investments purchased with
participant directed contributions): a fund consisting mainly of
investments in stock of midsized to large companies expected to grow
over time. The fund invests all or a portion of its assets in
companies located mainly inside the United States.
(8) Putnam New Opportunities Fund - (consisting of investments purchased
with participant directed contributions): a fund consisting
primarily of investments in common stock of companies within certain
industry groups that Putnam management believes offer above-average
long-term growth potential.
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NOTES TO FINANCIAL STATEMENTS, continued
3. Investment Options (continued):
(9) Putnam Asset Allocation : Growth Portfolio - (consisting of
investments purchased with participant directed contributions): a
fund consisting of 55 - 85% investments in stock that Putnam
Management believes have the potential for capital appreciation and
consisting of 15 - 45% investments in a diversified portfolio of
fixed-income securities, including both government and corporate
bonds.
(10) Putnam Asset Allocation - Balanced Portfolio - (consisting of
investments purchased with participant directed contributions): a
fund consisting of 45 - 75% investments in stocks and 25 - 55%
investments in a diversified portfolio of fixed-income securities,
including both government and corporate bonds.
(11) Putnam Asset Allocation : Conservative Portfolio - (consisting of
investments purchased with participant directed contributions): a
fund consisting of 0 - 30% investments in stocks and 70 - 100%
investments in a diversified portfolio of fixed-income securities,
including both government and corporate bonds.
(12) Putnam International Growth Fund - (consisting of investments
purchased with participant directed contributions): a growth
oriented fund consisting of investments in a diversified portfolio
of stocks of companies located mainly outside the United States.
(13) Putnam Money Market Fund - (consisting of investments purchased with
participant directed contributions): a fund consisting of short-term
high-quality money market securities. Investments in this fund are
neither insured nor guaranteed by the U.S. government.
The Plan provides for various investment options as described above.
Investment securities are exposed to various risks, such as interest rate,
market, and credit. 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
that changes in risks in the near term could materially affect
participants' account balances and the amounts reported in the statement
of net assets available for plan benefits and the statement of changes in
net assets available for plan benefits.
There were 5,843 participants at December 31, 2001 who participated in one
or more of the 13 investment funds. At December 31, 2001 the number of
participants selecting each of the investment funds for their
contributions was as follows:
Harsco Corporation Common Stock Fund................. 5,614
Neuberger Berman Genesis Fund........................ 210
PIMCO Total Return Fund.............................. 138
Vanguard Institutional Index Fund.................... 3,132
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NOTES TO FINANCIAL STATEMENTS, continued
3. Investment Options (continued):
Putnam Fund for Growth and Income...................... 1,343
Putnam Income Fund..................................... 753
Putnam Voyager Fund.................................... 2,726
Putnam New Opportunities Fund.......................... 2,576
Putnam Asset Allocation - Growth Portfolio............. 827
Putnam Asset Allocation - Balanced Portfolio........... 1,205
Putnam Asset Allocation - Conservative Portfolio....... 402
Putnam International Growth Fund....................... 1,563
Putnam Money Market Fund............................... 3,023
The following table separately identifies those investments which represent five
percent or more of the Plan's net assets at December 31, 2001 with comparable
information for 2000:
(in thousands) December 31, December 31,
2001 2000
-------------- --------------
Harsco Corporation Common Stock (1) $ 86,403 $ 65,027
Vanguard Institutional Index Fund 23,815 -
Putnam Voyager Fund 19,648 26,676
Putnam New Opportunities Fund 12,160 16,663
Putnam Money Market Fund 19,661 13,493
Other 36,887 63,276
----------- ----------
$ 198,574 $ 185,135
=========== ==========
(1) Harsco Corporation Common Stock includes $36,521 at December 31, 2001 and
$25,888 at December 31, 2000 that is non-participant directed.
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NOTES TO FINANCIAL STATEMENTS, continued
The following table summarizes the change in the non-participant directed
portion of the Harsco Corporation Common Stock Fund:
Balance at January 1, 2001 $ 25,888
Net appreciation in fair value 9,656
Dividends 766
Contributions (net of forfeitures) 3,451
Termination payments (2,127)
Transfers to participant directed investments (1,113)
----------------
Balance at December 31, 2001 $ 36,521
================
4. Related-Party Transactions:
Certain Plan investments are shares of mutual funds managed by Putnam
Investments. Putnam Investments is the trustee as defined by the Plan,
and therefore, transactions in these funds qualify as party-in-interest
transactions. Transactions in the Harsco Stock Fund also qualify as
party-in-interest transactions.
5. Plan amendment:
The Company amended the Plan effective October 1, 2001, to convert the
Company Stock Fund into an employee stock ownership plan ("ESOP") and to
permit participants and beneficiaries to elect, with regard to dividends
paid on Company stock in their accounts, to reinvest those amounts in the
Company Stock Fund or to receive cash distributions of such dividends.
6. Federal Income Taxes:
The Company received a determination letter from the Internal Revenue
Service on December 26, 2000, that the Plan, as amended January 6, 1999,
is a qualified plan under Sections 401(a) and 401(k) of the Internal
Revenue Code and is therefore exempt from Federal income taxes under the
provisions of Section 501(a). 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 designed and is currently being
operated in compliance with the applicable provisions of the Internal
Revenue Code.
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HARSCO CORPORATION SAVINGS PLAN
LINE 4i - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
FORM 5500
December 31, 2001
(dollars in thousands)
(a) (b) & (c) (d) (e)
Party Shares or Current
In Interest Units Identity of Issue and Description of Investment Cost Value
----------- ----- ----------------------------------------------- ---- -----
Common Stock:
* 2,519,043 Harsco Corp. Common Stock, par value $1.25 $ 53,723 $ 86,403
------------- -------------
N/A Participant Loans (1) 9,554 9,554
------------- -------------
Mutual Funds:
47,666 Neuberger Berman Genesis Fund 1,335 1,387
77,793 PIMCO Total Return Fund 830 814
227,046 Vanguard Institutional Index Fund 24,933 23,815
* 281,815 Putnam Fund for Growth and Income 5,503 4,994
* 484,141 Putnam Income Fund 3,217 3,142
* 1,135,755 Putnam Voyager Fund 25,875 19,648
* 296,723 Putnam New Opportunities Fund 18,001 12,160
* 270,459 Putnam Asset Allocation-Growth Portfolio 3,369 2,588
* 787,452 Putnam Asset Allocation-Balanced Portfolio 9,256 7,725
* 158,075 Putnam Asset Allocation-Conservative Portfolio 1,562 1,374
* 261,978 Putnam International Growth Fund 5,865 5,192
* 19,660,794 Putnam Money Market Fund 19,661 19,661
------------- -------------
Total Mutual Funds 119,407 102,500
------------- -------------
N/A Cash 117 117
------------- -------------
Total Assets Held for Investment Purposes $ 182,801 $ 198,574
============= =============
(1) Participant Loans range up to 15 years to maturity and interest rates on
these loans ranged from 6.00% to 10.5%.
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HARSCO CORPORATION SAVINGS PLAN
LINE 4j - SCHEDULE OF REPORTABLE (5%) TRANSACTIONS
FORM 5500
For the year ended December 31, 2001
(dollars in thousands)
(a) (b) (c), (d) (e) (f) (g) (h) (i)
Total Dollar Current Value
Total Number of Value of of Asset on Net Gain
Identity of Description Purchases (P) Purchases Lease Cost of Transaction or
party involved of Asset and/or Sales (S) and/or Sales Rental Expenses Asset Date (Loss)
-------------- -------- ---------------- ------------ ------ -------- ----- ---- ------
None
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Plan Administrative Committee has duly caused this annual report to be signed by
the undersigned thereunto duly authorized.
HARSCO CORPORATION SAVINGS PLAN
BY /S/ P. C. Coppock
-------------------------------------------
P. C. Coppock
Senior Vice President, Chief Administrative
Officer, General Counsel and Secretary
June 28, 2002
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