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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, 1999
Commission File Number: 1-5318
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
GREENFIELD INDUSTRIES, INC.
RETIREMENT INCOME SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
Kennametal Inc.
1600 Technology Way
P.O. Box 231
Latrobe, Pennsylvania 15650
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GREENFIELD INDUSTRIES, INC.
RETIREMENT INCOME SAVINGS PLAN
INDEX TO FINANCIAL STATEMENTS
Page
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Report of Independent Public Accountants.................................. 2
Financial Statements:
Statements of Net Assets Available for Plan Benefits
December 31, 1999 and 1998........................................... 3
Statements of Changes in Net Assets Available for Plan Benefits
Years ended December 31, 1999 and 1998............................... 4
Notes to Financial Statements........................................ 5
Supplemental Schedule:
Schedule H, Line 4i - Schedule of Assets Held for Investment
Purposes at End of Year
December 31, 1999................................................... 9
Signatures................................................................ 10
Exhibit 23 - Consent of Independent Public Accountants.................... 11
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of Kennametal Inc.
and to the Kennametal Inc. ERISA Compliance Committee:
We have audited the accompanying statements of net assets available for plan
benefits of Greenfield Industries, Inc. Retirement Income Savings Plan (the
Plan) as of December 31, 1999 and 1998, and the related statements of changes in
net assets available for plan benefits for the years then ended. These financial
statements and the schedule referred to below are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements and schedule based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the 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 plan benefits of the Plan as
of December 31, 1999 and 1998, and the changes in net assets available for plan
benefits for the years then ended, in conformity with accounting principles
generally accepted in the United States.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets held
for investment purposes 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. The supplemental schedule 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.
/s/ ARTHUR ANDERSEN LLP
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Arthur Andersen LLP
Pittsburgh, Pennsylvania
June 20, 2000
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GREENFIELD INDUSTRIES, INC. RETIREMENT INCOME SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1999 AND 1998
December 31, December 31,
1999 1998
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ASSETS
Cash and cash equivalents $ 270,738 $ 4,058
Receivables:
Participant contributions 125,578 207,465
Employer contributions 999,548 1,215,331
Accrued investment income 1,388 --
Amounts receivable under pending investment sales -- 119,482
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Total receivables 1,126,514 1,542,278
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Investments, at fair value 106,995,738 130,151,598
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TOTAL ASSETS 108,392,990 131,697,934
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LIABILITIES
Amounts payable under pending investment purchases (3,074) (108,481)
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NET ASSETS AVAILABLE FOR PLAN BENEFITS $108,389,916 $131,589,453
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The accompanying notes are an integral part of these statements.
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GREENFIELD INDUSTRIES, INC. RETIREMENT INCOME SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
YEARS ENDED DECEMBER 31, 1999 AND 1998
December 31, 1999
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Kennametal Inc.
Common All Other December 31,
Stock Fund Funds Total 1998
---------- ----- ----- ----
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Participant contributions $ 5,262 $ 6,956,854 $ 6,962,116 $ 8,661,059
Employer contributions 1,928,277 2,141,862 4,070,139 6,341,479
Dividends and interest 7,946 7,133,067 7,141,013 5,619,031
Net realized gains on disposition and unrealized
appreciation in fair value of investments 263,894 7,166,057 7,429,951 9,969,369
---------- ------------ ------------ ------------
Total additions 2,205,379 23,397,840 25,603,219 30,590,938
---------- ------------ ------------ ------------
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits paid to participants (11,136) (16,469,178) (16,480,314) (11,956,818)
Other distributions (751) (10,583) (11,334) (7,468)
Transfers to other plans -- (32,311,108) (32,311,108) (2,459,348)
---------- ------------ ------------ ------------
Total deductions (11,887) (48,790,869) (48,802,756) (14,423,634)
---------- ------------ ------------ ------------
NET TRANSFERS BETWEEN FUNDS 277,415 (277,415) -- --
---------- ------------ ------------ ------------
NET INCREASE (DECREASE) 2,470,907 (25,670,444) (23,199,537) 16,167,304
NET ASSETS AVAILABLE FOR PLAN BENEFITS:
Beginning of year -- 131,589,453 131,589,453 115,422,149
---------- ------------ ------------ ------------
End of year $2,470,907 $105,919,009 $108,389,916 $131,589,453
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The accompanying notes are an integral part of these statements.
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GREENFIELD INDUSTRIES, INC. RETIREMENT INCOME SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
1. DESCRIPTION OF PLAN
The following general description of the Greenfield Industries, Inc. Retirement
Income Savings Plan, as amended (the Plan), is provided for general information
purposes only. Participants should refer to the Plan document for complete
information.
The Plan is a defined contribution employee benefit plan, established for the
purpose of providing employees of Greenfield Industries, Inc. (the Company) the
opportunity to defer a portion of their annual base compensation for federal
income tax purposes in accordance with Section 401(k) of the Internal Revenue
Code, as amended (the Code). The Plan is subject to certain provisions of the
Employee Retirement Income Security Act of 1974, as amended (ERISA). The Company
serves as sponsor of the Plan.
On November 17, 1997, Kennametal Inc. purchased all of the issued and
outstanding shares of the Company. In June 1998, a portion of the Company's
operations were sold to ITT Industries. As a result of this sale, certain plan
assets were transferred to plans sponsored by ITT Industries.
Effective October 1, 1999, Company contributions are made in Kennametal Inc.
common stock. As a result of this change, a portion of Plan assets was
transferred to the GFI Retirement Income Savings Plan, a newly created separate
plan sponsored by the Company. These transfers are reflected as transfers to
other plans in the accompanying statements of changes in net assets available
for plan benefits.
ADMINISTRATION OF THE PLAN - The management of the Company has the authority and
responsibility for the general administration of the Plan. Key Trust Company of
Ohio, N.A., as Trustee, has the authority and responsibility to hold, manage and
protect the assets of the Plan in accordance with the provisions of the Plan and
the separate Trust Agreement.
ELIGIBILITY - The Plan covers all employees of the Company and employees may
become participants in the Plan as of the first entry date (January 1, April 1,
July 1, or October 1) after completing 500 hours of service within a six
consecutive month period. Under present federal income tax law, employer
contributions and all earnings of the Plan do not constitute taxable income to
the participants until withdrawn from the Plan by the participants.
VESTING - All participant and employer contributions vest immediately.
PARTICIPANT ACCOUNTS - A separate account is maintained for each participant in
the Plan, reflecting contributions, investments, investment gains and losses,
distributions, loans, withdrawals and transfers.
CONTRIBUTIONS - The Company contributes a base amount of 2% of each eligible
participant's annual base compensation plus additional discretionary amounts as
it may determine from Company profits. Participants may elect to contribute to
the Plan from 1% to 15% of their base compensation through payroll deductions.
In addition, the Company is required to make matching contributions equal to 50%
of the first 4% of a participant's contribution. Company contributions are made
quarterly. Effective October 1, 1999, Company contributions are made in
Kennametal Inc. common stock.
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DISTRIBUTIONS - If a participant's employment with the Company is terminated due
to retirement pursuant to the terms of the Plan, the total amount of a
participant's account shall be distributed in cash to the participant according
to one of the options as described in the Plan and as elected by the
participant. If a participant's employment with the Company is terminated for
any reason other than retirement pursuant to the terms of the Plan, the
participant will receive a lump sum amount equal to the value of the
participant's vested interest in his or her account; provided, however, that if
such account exceeds $5,000, a participant may elect to defer distribution to a
future date as more fully described in the Plan.
PARTICIPANT LOANS - Participants may withdraw certain basic contributions and
related earnings thereon only in the event of a financial hardship as defined by
the Plan or the Code. The Plan also permits participants to borrow from their
accounts a minimum of $1,000 up to a maximum equal to the lesser of $50,000 less
the excess of the highest outstanding loan balance during the previous one-year
period over the outstanding balance as of the date of the loan or 50% of their
account balance as defined by the Plan or the Code. Such borrowings are allowed
at the sole discretion of the Company. Loan terms range from one to five years
or up to 29 years for the purchase of a primary residence. Loans are secured by
the balance in the participant's account and bear interest at a rate
commensurate with the local prevailing rates. Principal and interest are paid
ratably through payroll deductions. At December 31, 1999, interest rates on
participant loans ranged from 6% to 10.5%, with maturity dates ranging from
January 2000 to June 2029.
INVESTMENTS - Participants direct their contributions by electing that such
contributions be placed in a single investment fund or allocated to any
combination of investment funds. Earnings derived from the assets of any
investment fund are reinvested in the fund to which they relate. Participants
may elect at any time to transfer all or a portion of the value of their
accounts among the investment funds. A participant may direct contributions to
any of the following investment options:
The Key Trust EB MaGIC Fund - The investment objective of this fund is to seek a
reasonable level of income together with stability of principal. The fund
invests primarily in a diversified portfolio of insurance company and other
investment contracts from an approved list of high-quality issuers.
The Bond Fund of America - This fund seeks as high a level of current income as
is consistent with preservation of capital.
American Balanced Fund - The fund seeks conservation of capital, current income
and long-term growth of capital and income by investing in stocks, bonds, and
other fixed-income securities.
Victory Stock Index Fund - This fund seeks to provide long-term capital
appreciation by attempting to match the investment performance of the S&P 500
Index.
Putnam New Opportunities Fund - This fund seeks to maximize long-term capital
appreciation by investing primarily in common stocks of companies within certain
emerging industry groups that Putnam management believes offer above-average
potential for growth.
Fidelity Advisor Growth Fund - This fund seeks to provide capital growth by
investing primarily in common stocks and securities convertible into common
stocks.
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Templeton Foreign Fund - This fund seeks long-term capital growth through a
flexible policy of investing in stocks and debt obligations of companies and
governments outside the United States.
Kennametal Inc. Common Stock - This fund consists entirely of Kennametal Inc.
common stock for investors who want to participate in the growth of Kennametal
Inc. as part owners of Kennametal Inc.
TRW Inc. Common Stock - This fund consists entirely of TRW Inc. common stock for
investors who want to participate in the growth of TRW Inc. as part owners of
TRW. This investment fund is closed to new participants.
2. ACCOUNTING POLICIES
BASIS OF ACCOUNTING - The financial statements of the Plan are maintained on the
accrual basis of accounting.
INVESTMENTS - Investment transactions are recorded on a trade date basis.
Investments in mutual funds, common stock, fixed income funds and other
short-term investments are stated at fair value as measured by readily available
market prices. Participant loans are valued at cost, which approximates fair
value.
PAYMENT OF BENEFITS - Benefit payments are recorded as distributed.
INVESTMENT INCOME - Interest and dividend income are recorded in the period
earned.
PLAN EXPENSES - Expenses attributable to the administration or operation of the
Plan and related Trust are allocated pro rata on the basis of account balances
to the accounts of participants unless the Board of Directors of the Company, at
its sole discretion, determines that such expenses are to be paid by the
Company. For the years ended December 31, 1999 and 1998, the Company paid all
expenses related to the operation of the Plan.
REALIZED/UNREALIZED GAINS AND LOSSES - Net appreciation (depreciation) of
investments is comprised of the change in market value compared to the cost of
investments retained in the Plan and realized gains or losses on security
transactions represent the difference between proceeds received and average
cost.
USE OF ESTIMATES IN PREPARATION OF FINANCIAL STATEMENTS - The preparation of
financial statements in conformity with generally accepted accounting principles
requires the plan administrator and sponsor to make estimates and assumptions
that affect the amounts reported in the financial statements and accompanying
notes. Actual results may differ from these estimates.
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3. INVESTMENTS EXCEEDING FIVE PERCENT OF NET ASSETS
The fair market values of individual investments that represent five percent or
more of the Plan's total plan assets as of December 31, 1999 and 1998, were as
follows:
1999 1998
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American Balanced Fund $13,153,572 $19,178,134
Victory Stock Index Fund 14,489,861 15,621,972
Fidelity Advisor Growth Opportunity Fund 17,624,302 21,358,654
Putnam New Opportunities Fund 26,732,781 17,953,329
The Key Trust EB MaGIC Fund 21,748,100 42,914,803
4. QUALIFICATION OF PLAN
The Plan, as amended, has been determined by the Internal Revenue Service to be
a qualified employee benefit plan under the Code. The Internal Revenue Service
issued a favorable determination on January 30, 1995. Plans that are qualified
under regulations of the Internal Revenue Service are not subject to federal
income taxes.
5. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right to
amend, suspend or terminate the Plan at any time, subject to the provisions of
the ERISA. In the event of Plan termination, the accounts of all participants
will become fully vested and non-forfeitable.
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GREENFIELD INDUSTRIES, INC. RETIREMENT INCOME SAVINGS PLAN
PLAN NUMBER: 001
GREENFIELD INDUSTRIES, INC.
EIN: 04-2917072
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT END OF YEAR
SCHEDULE H, Line 4i
DECEMBER 31, 1999
Identity
of Issue Description of Investment Current Value
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Mutual Funds
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*Key Trust American Balanced Fund $ 13,153,572
*Key Trust Victory Stock Index Fund 14,489,861
*Key Trust Fidelity Advisor Growth Opportunity Fund 17,624,302
*Key Trust Putnam New Opportunities Fund 26,732,781
*Key Trust Templeton Foreign Fund 1,485,164
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Total Mutual Funds 73,485,680
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Common Stock
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*Key Trust Kennametal Inc. Common Stock (a) 1,200,950
*Key Trust TRW Inc. Common Stock 118,263
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Total Common Stock 1,319,213
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Fixed Income Funds
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*Key Trust The Bond Fund of America 4,526,672
*Key Trust The Key Trust EB MaGIC Fund 21,748,100
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Total Fixed Income Funds 26,274,772
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Loans to Participants
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*Participants Loans to Participants, Maturities: from January 2000 to
June 2029, Interest rates 6% to 10.5% 5,916,073
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Total Investments $106,995,738
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* Party-in-interest.
(a) The cost of this investment is $963,611 at December 31, 1999.
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SIGNATURES
THE PLAN. Pursuant to the requirements of the Securities Exchange Act of 1934,
the plan administrator of the Greenfield Industries, Inc. Retirement Income
Savings Plan has duly caused this annual report to be signed on its behalf by
the undersigned, hereunto duly authorized, in the City of Augusta, Richmond
County, State of Georgia.
GREENFIELD INDUSTRIES, INC.
RETIREMENT INCOME SAVINGS PLAN
Date: June 26, 2000 By: /s/ SUZETTE PLETCHER
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Suzette Pletcher
Plan Administrator
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EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference of our reports, included in this Form 11-K, into the Company's
previously filed Registration Statement on Form S-8, Registration No. 333-88049
relating to the Greenfield Industries, Inc. Retirement Income Savings Plan.
/s/ ARTHUR ANDERSEN LLP
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ARTHUR ANDERSEN LLP
Pittsburgh, Pennsylvania
June 26, 2000
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