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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, 2000
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, 2000 and 1999.................................................................. 3
Statements of Changes in Net Assets Available for Plan Benefits
Year ended December 31, 2000................................................................ 4
Year ended December 31, 1999................................................................ 5
Notes to Financial Statements............................................................... 6
Supplemental Schedules:
Schedule H, Line 4i - Schedule of Assets Held for Investment Purposes at End of Year
December 31, 2000........................................................................... 11
Schedule H, Line 4j - Schedule of Reportable Transactions
Year ended December 31, 2000................................................................ 12
Signatures....................................................................................... 13
Exhibit 23 - Consent of Independent Public Accountants........................................... 14
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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, 2000 and 1999, and the related statements of changes in
net assets available for plan benefits for the years then ended. These financial
statements and the schedules referred to below are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements and schedules 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, 2000 and 1999, 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 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. The supplemental schedules
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 29, 2001
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GREENFIELD INDUSTRIES, INC. RETIREMENT INCOME SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 2000 AND 1999
December 31, December 31,
2000 1999
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ASSETS
Cash and cash equivalents $ -- $ 270,738
Receivables:
Participant contributions 50,825 125,578
Employer contributions 993,606 999,548
Accrued investment income -- 1,388
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Total receivables 1,044,431 1,126,514
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Investments 98,913,200 106,995,738
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TOTAL ASSETS 99,957,631 108,392,990
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LIABILITIES
Amounts payable under pending investment purchases -- (3,074)
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NET ASSETS AVAILABLE FOR PLAN BENEFITS $99,957,631 $108,389,916
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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
YEAR ENDED DECEMBER 31, 2000
Kennametal Inc.
Common All Other
Stock Fund Funds Total
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ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Participant contributions $ 115,349 $ 6,358,111 $ 6,473,460
Employer contributions 3,996,316 -- 3,996,316
Dividends and interest 100,316 5,359,657 5,459,973
Net gains (losses) realized on disposition and
unrealized on change in fair value of investments 488,542 (13,229,893) (12,741,351)
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Total net additions 4,700,523 (1,512,125) 3,188,398
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DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits paid to participants (244,915) (8,058,482) (8,303,397)
Other distributions (1,731) (24,846) (26,577)
Transfers to other plans (52,389) (3,238,320) (3,290,709)
----------- ------------ ------------
Total deductions (299,035) (11,321,648) (11,620,683)
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NET TRANSFERS BETWEEN FUNDS 551,728 (551,728) --
----------- ------------ ------------
NET INCREASE (DECREASE) 4,953,216 (13,385,501) (8,432,285)
NET ASSETS AVAILABLE FOR PLAN BENEFITS:
Beginning of year 2,470,907 105,919,009 108,389,916
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End of year $ 7,424,123 $ 92,533,508 $ 99,957,631
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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
YEAR ENDED DECEMBER 31, 1999
Kennametal Inc.
Common All Other
Stock Fund Funds Total
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ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Participant contributions $ 5,262 $ 6,956,854 $ 6,962,116
Employer contributions 1,928,277 2,141,862 4,070,139
Dividends and interest 7,946 7,133,067 7,141,013
Net gains realized on disposition and unrealized
on change in fair value of investments 263,894 7,166,057 7,429,951
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Total additions 2,205,379 23,397,840 25,603,219
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DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits paid to participants (11,136) (16,469,178) (16,480,314)
Other distributions (751) (10,583) (11,334)
Transfers to other plans -- (32,311,108) (32,311,108)
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Total deductions (11,887) (48,790,869) (48,802,756)
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NET TRANSFERS BETWEEN FUNDS 277,415 (277,415) --
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NET INCREASE (DECREASE) 2,470,907 (25,670,444) (23,199,537)
NET ASSETS AVAILABLE FOR PLAN BENEFITS:
Beginning of year -- 131,589,453 131,589,453
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End of year $2,470,907 $105,919,009 $108,389,916
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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, 2000 AND 1999
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 eligible employees of Greenfield Industries, Inc. (the
Company), a wholly-owned subsidiary of Kennametal Inc., the opportunity to defer
a portion of their annual 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.
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.
On October 1, 2000, several participant accounts were transferred to other
defined contribution plans sponsored by Kennametal Inc. to consolidate these
participant accounts in one plan.
ADMINISTRATION OF THE PLAN - The management of the Company has the authority and
responsibility for the general administration of the Plan. Effective October 1,
2000, Putnam Fiduciary Trust Company serves as the Trustee of the Plan and
Putnam Investment functions as the recordkeeper for the Plan. These functions
were previously performed by Key Trust Company of Ohio, N.A. As a result,
portions of participant accounts were directed into new investment options as
more fully described herein. Additionally, Putnam New Opportunity Fund balances
were transferred from Class A shares to Class Y shares to take advantage of
lower management fees associated with the Class Y shares. These transfers did
not change the value of the participant accounts.
ELIGIBILITY - The Plan covers all non-union and certain unionized 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 wages, which include base salary, overtime, shift differential pay
and incentive compensation. Participants may elect to contribute to the Plan
from 1% to 15% of their wages through payroll
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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.
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 and are secured by the
balance in the participant's account. Principal and interest are paid ratably
through payroll deductions. At December 31, 2000, interest rates on participant
loans ranged from 6% to 10.5%, with maturity dates ranging from January 2001 to
August 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. Effective October 1, 2000, participants may
direct contributions to any of the following investment options:
PRIMCO Stable Value Fund - Investments of this fixed income fund consist of
traditional investment contracts issued by insurance companies, banks and other
financial institutions (or corporations), asset-backed investment contracts,
synthetic investment contracts and short-term investments.
Putnam Voyager Fund - This fund seeks aggressive capital appreciation by
investing in a combination of stocks of small companies expected to grow over
time as well as in stocks of larger, more established corporations.
Putnam Asset Allocation: Balanced Portfolio - For investors who want an
investment with moderate risk and the potential for moderate growth, this fund
seeks a balance between the relative stability of bonds and the fluctuation of
stocks, in efforts to reduce overall risk.
The Putnam Fund for Growth & Income - This fund seeks growth and income by
investing in attractively priced stocks of companies that offer long-term growth
potential while also providing income.
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Putnam New Opportunities Fund - This fund seeks 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.
Putnam Asset Allocation: Growth Portfolio - For more aggressive investors who
will accept more risk in exchange for a higher growth potential, this fund seeks
diversification among different types of stocks, with some investments in bonds
and money market funds.
Putnam Asset Allocation: Conservative Portfolio - For investors who are willing
to assume a reduced potential for growth in exchange for less risk, this fund
seeks to reduce overall risk through substantial investments in investment-grade
bonds, with some investments in stocks to help stay ahead of inflation.
Putnam International Growth Fund - This fund seeks capital appreciation by
investing in a diversified portfolio of companies located outside the United
States.
Kennametal Inc. Common Stock Fund - 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.
MAS Small Cap Value Fund - This fund seeks above average total return over a
three- to five-year period by investing primarily in common stocks and other
equity securities similar to companies included in the Russell 2000 Index. The
fund focuses on stocks that are undervalued based on the advisor's own measures
of value.
Vanguard 500 Index Fund - This fund seeks to provide long-term growth of capital
and income from dividends by holding all the 500 stocks that make up the
Standard & Poor's 500 Composite Stock Price Index in proportion to their
weightings in the index.
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.
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. Effective
October 1, 2000, this investment fund is closed to new participants.
Prior to October 1, 2000, participants were able to direct contributions to the
Putnam New Opportunities Fund, The Key Trust EB MaGIC Fund, Kennametal Inc.
common stock and TRW Inc. common stock, as well as any of the following
investment options:
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.
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Fidelity Advisor Growth Fund - This fund seeks to provide capital growth by
investing primarily in common stocks and securities convertible into common
stocks.
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.
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. Benefit-responsive investment contracts are valued at contract value.
According to the provisions of AICPA Statement of Position (SOP) 94-4,
"Reporting of Investment Contracts Held by Health and Welfare Benefit Plans and
Defined-Contribution Pension Plans," guaranteed investment contracts of defined
contribution plans are considered to be fully benefit-responsive. As a result,
these contracts are accounted for at contract value in the accompanying
financial statements. PRIMCO Capital Management, Inc. certified that all the
investment contracts held in this fixed income fund are fully
benefit-responsive. The difference between the contract value and the fair value
of all investment contracts was $205,109 at December 31, 2000. The crediting
interest rates on the contracts ranged from 4.85% to 7.47% at December 31, 2000.
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, 2000 and 1999, 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 accounting principles generally accepted
in the United States 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, 2000 and 1999 were as
follows:
2000 1999
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Putnam New Opportunities Fund $21,283,675 $26,732,781
The Key Trust EB MaGIC Fund 16,586,341 21,748,100
The Putnam Fund for Growth & Income 14,410,492 --
Vanguard 500 Index Fund 12,071,968 --
Putnam Asset Allocation: Balanced Fund 11,640,117 --
PRIMCO Stable Value Fund 8,755,695 --
Kennametal Inc. common stock 6,430,517 --
Loans to Participants 5,852,865 --
Fidelity Advisor Growth Opportunity Fund -- 17,624,302
Victory Stock Index Fund -- 14,489,861
American Balanced Fund -- 13,153,572
4. TAX STATUS
The Internal Revenue Service has determined and informed the Plan sponsor by a
letter dated January 30, 1995, that the Plan and related trust are designed in
accordance with applicable sections of the Code. 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 Code.
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, 2000
Identity
of Issue Description of Investment Current Value
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Mutual Funds
*Putnam Putnam New Opportunities Fund $21,283,675
*Putnam The Putnam Fund for Growth & Income 14,410,492
*Putnam Vanguard 500 Index Fund 12,071,968
*Putnam Putnam Asset Allocation: Balanced Fund 11,640,117
*Putnam Putnam International Growth Fund 1,410,940
*Putnam Putnam Voyager Fund 252,198
*Putnam MAS Small CAP Value 72,706
*Putnam Putnam Asset Allocation: Growth Fund 43,132
*Putnam Putnam Asset Allocation: Conservative Fund 14,320
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Total Mutual Funds 61,199,548
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Collective/Common Trusts
*Putnam PRIMCO Stable Value Fund 8,960,804
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Common Stock
*Putnam Kennametal Inc. Common Stock (a) 6,430,517
*Putnam TRW Inc. Common Stock 88,234
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Total Common Stock 6,518,751
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Fixed Income Funds
*Key Trust The Key Trust EB MaGIC Fund 16,586,341
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Loans to Participants
*Participants Loans to Participants, Maturities: from January 2001 to
August 2029, Interest rates 6% to 10.5% 5,852,865
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Total Investments $99,118,309
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* Party-in-interest.
(a) The cost of this investment is $5,774,941 at December 31, 2000.
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GREENFIELD INDUSTRIES, INC. RETIREMENT INCOME SAVINGS PLAN
PLAN NUMBER: 001
GREENFIELD INDUSTRIES, INC.
EIN: 04-2917072
SCHEDULE OF REPORTABLE TRANSACTIONS (a)
SCHEDULE H, LINE 4j
YEAR ENDED DECEMBER 31, 2000
Identity of Current Value
Party Purchase Selling Cost of Asset on Net
Involved Description of Investment Price Price of Asset Transaction Date Gain/(Loss)
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*Key Trust Putnam New Opportunities Fund $ -- $28,337,448 $19,781,462 $19,781,462 $8,555,986
*Putnam Putnam New Opportunities Fund 27,306,616 -- 27,306,616 27,306,616 --
*Key Trust American Balanced Fund -- 12,351,710 12,454,708 12,454,708 (102,998)
*Putnam Putnam Asset Allocation: Balanced Fund 11,965,905 -- 11,965,905 11,965,905 --
*Key Trust Fidelity Growth Opportunities Fund -- 14,135,020 13,053,754 13,053,754 1,081,266
*Putnam Putnam Fund for Growth & Income 13,834,159 -- 13,834,159 13,834,159 --
*Key Trust Victory Stock Index Fund -- 13,333,037 11,546,669 11,546,669 1,786,368
*Putnam Vanguard 500 Index Fund 12,994,025 -- 12,994,025 12,994,025 --
*Key Trust Key Trust EB MaGIC Fund -- 6,284,297 5,808,166 5,808,166 476,131
*Putnam PRIMCO Stable Value Fund 9,619,448 -- 9,619,448 9,619,448 --
* Party-in-interest.
(a) Represent non-participant transactions or a series of non-participant
transactions in excess of 5% of the fair value of the Plan assets at the
beginning of the year.
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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 29, 2001 By: /s/ SUZETTE PLETCHER
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Suzette Pletcher
Plan Administrator
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