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Form
11-K
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Pages
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Report
of Independent Registered Public Accounting Firm
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3
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Financial
Statements:
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Statements
of Net Assets Available for Benefits -
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December
31, 2007 and December 31, 2006
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4
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Statement
of Changes in Net Assets Available for Benefits -
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For
the Year Ended December 31, 2007
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5
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Notes
to Financial Statements
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6-13
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Supplemental
Schedule:
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Schedule
of Assets (Held at End of Year) - Schedule H, Line 4(i)*
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14-15
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Exhibits:
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Exhibit
23 – Consent of Independent Registered Public Accounting
Firm
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*
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Refers
to item number in Form 5500 (Annual Return/Report of Employee Benefit
Plan) for the plan year ended December 31,
2007.
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Assets
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December
31
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December
31
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2007
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2006
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Participant
directed investments, at fair value
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$ | 157,310 | $ | 135,961 | ||||
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Contributions
Receivable:
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Employer’s
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202 | 26 | ||||||
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Participants’
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138 | 102 | ||||||
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Total
contribution receivables
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340 | 128 | ||||||
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Dividends
Receivable
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280 | 323 | ||||||
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Net
assets available for benefits
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$ | 157,930 | $ | 136,412 | ||||
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Additions:
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Investment
income:
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Net
appreciation in the fair value of investments
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$ | 40,292 | ||
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Dividends
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4,083 | |||
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Interest
– money market fund
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454 | |||
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Interest
- participant loans
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374 | |||
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Total
investment income
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45,203 | |||
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Contributions:
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Employer’s
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1,652 | |||
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Participants’
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4,521 | |||
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Total
contributions
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6,173 | |||
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Total
additions
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51,376 | |||
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Deductions:
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Withdrawals
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19,726 | |||
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Net
transfers out to HRSIP due to employee classification change (See Note
1)
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10,132 | |||
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Net
increase in net assets available for benefits
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21,518 | |||
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Net
assets available for benefits:
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December
31, 2006
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136,412 | |||
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December
31, 2007
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$ | 157,930 | ||
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1.
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General Description of
Plan:
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General
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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.
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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”).
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As
of January 1, 2005, all U.S. hourly and Air-X-Changers salaried employees
who 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. Prior to January 1, 2005, in addition to hourly
employees, eligible employees also included all U.S. employees (including
officers) who received a stated weekly, monthly, or annual rate of
compensation. 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.
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Throughout
the year, employees are transferred to various positions within the
Company, which may result in a transfer between various retirement
plans. This is shown as “Net transfers out to HRSIP due to
employee classification change,” on the Statement of Changes in Net Assets
Available for Benefits.
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Contributions
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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 75%
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 69% of his or her compensation as an Unmatched
Pre-Tax Contribution and from 1% to 16% of his or her compensation as an
Unmatched After-Tax Contribution, subject to Internal Revenue Service
(“IRS”) and Plan limitations. 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 69% of compensation or (c) Pre-Tax Contributions exceed the amount
specified by the IRS code which was $15,500 and $15,000 for the years
ended December 31, 2007 and 2006, respectively, for participants under 50
years of age. For participants
who
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1.
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General Description of
Plan: (continued)
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Vesting
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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
three years of credited service.
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Administration
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The
Company pays administrative fees related to maintaining the Plan as a
whole. Fees for investment management, which include
recordkeeper fees, are subtracted from fund performance reported by each
fund. Loan setup fees, quarterly loan fees and withdrawal fees
are paid by the participant. Transfers in and out of the Harsco
Corporation Common Stock Fund are assessed a $0.03 commission per share
transferred.
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Participant
Loans
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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 4.25% to 10.5% at December 31, 2007. Principal and
interest is paid ratably through payroll
deductions.
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1.
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General Description of
Plan: (continued)
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Payment of
Benefits
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The
Plan, comprised of participant directed contributions, contains the
following investment options:
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(1)
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Harsco
Corporation Common Stock Fund – 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.
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(2)
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American
Funds EuroPacific Growth Fund – a long-term growth oriented fund
consisting primarily of stocks of issuers located in Europe and the
Pacific Basin.
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(3)
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American
Funds Growth Fund of America – a long-term growth oriented fund consisting
primarily of stocks that American Funds management believes offer superior
opportunities for growth of
capital.
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(4)
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Dodge
& Cox Stock Fund – a fund consisting principally of common stock with
a primary objective of long-term growth and income. The fund’s secondary
objective is to achieve a reasonable current
income.
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(5)
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Morgan
Stanley Institutional Fund, Inc. U.S. Real Estate Fund – a fund consisting
primarily of equity securities of companies in the U.S. real estate
industry, including real estate investment trusts. The fund
seeks to provide above average current income and long-term capital
appreciation.
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(6)
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Neuberger
Berman Genesis Fund – a fund consisting mainly of common stock of small
capitalization companies that offer potential for capital
growth.
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(7)
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PIMCO
Total Return Fund – 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.
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1.
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General Description of
Plan: (continued)
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(8)
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Putnam
Bond Index Fund – a fund consisting of a sample of securities included in
the Lehman Brothers Aggregate Bond Index. The fund’s goal is to
achieve a return, before the assessment of any fees that closely
approximates the index.
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(9)
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Putnam
Income Fund – a fund seeking high current income consistent with what
Putnam management believes to be prudent risk. The fund
includes principally investments in bonds and other debt
securities. Bonds include both corporate and government
bonds.
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(10)
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Putnam
Money Market Fund – a fund seeking as high a rate of current income as
Putnam’s management believes is consistent with preservation of capital
and maintenance of liquidity. The fund consists of short-term
high-quality money market securities. Investments in this fund
are neither insured nor guaranteed by the U.S.
government.
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(11)
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Putnam
New Opportunities Fund – a fund consisting primarily of investments in
common stock of U.S. companies within certain industry groups that Putnam
management believes have high growth
potential.
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(12)
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Vanguard
Institutional Index Fund – a fund consisting of investments in the same
stocks and in substantially the same percentages as the S&P 500
Index.
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(13)
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CRM
Mid Cap Value Fund – a fund seeking long-term capital
appreciation. The fund normally invests at least 80% of its
total assets in a diversified portfolio of equity or equity-related
securities including common and preferred stocks of companies that have a
market capitalization equal to those of companies in the Russell Midcap
Value Index and those publicly traded on a U.S. securities
market.
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(14)
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Thornburg
Core Growth Fund – a fund consisting primarily of investments in domestic
equity securities selected for their growth potential. However,
the fund may own a variety of securities including foreign equity
securities and debt securities.
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(15)
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T.
Rowe Price Retirement Funds (2005-2055) – a series of funds employing an
asset allocation strategy based on investors’ projected retirement
year. The fund invests in a combination of T. Rowe Price mutual
funds representing different types of stocks and
bonds.
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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 statements of net assets available for plan benefits and the
statement of changes in net assets available for plan
benefits.
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1.
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General Description of
Plan: (continued)
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2.
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Summary of Significant
Accounting Policies:
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Basis of
Accounting:
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The
financial statements of the Plan are prepared under the accrual basis of
accounting.
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Investment
Valuation:
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The Harsco Corporation Common
Stock Fund 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 mutual
funds are valued at net asset value, which represents fair
value. Putnam Bond Index Fund is a collective trust which is
stated at unit value. Cash, which represents funds held until
purchases of common stock are completed, is stated at fair
value. Participant loans are valued at their outstanding
balance which approximates fair
value.
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Benefit
payments to participants are recorded when
paid.
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Use of
Estimates:
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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.
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2.
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Summary of Significant
Accounting Policies:
(continued)
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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.
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3.
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Investments:
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(in
thousands)
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December
31
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December
31
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2007
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2006
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Harsco
Corporation Common Stock Fund
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$ | 91,959 | $ | 65,239 | ||||
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Vanguard
Institutional Index Fund
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11,159 | 13,048 | ||||||
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Putnam
Money Market Fund
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10,385 | 10,594 | ||||||
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Other
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43,807 | 47,080 | ||||||
| $ | 157,310 | $ | 135,961 | |||||
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3.
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Investments:
(continued)
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Common
stock
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$ | 26,719 | ||
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Mutual
funds
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13,573 | |||
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$ | 40,292 |
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4.
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Related-Party
Transactions:
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5.
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Plan
Amendments:
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January
1, 2006, the Plan was amended to allow for profit sharing contributions to
groups of employees as either required under collective bargaining
agreements or as determined by the Board, to permit profit sharing
contributions to be available for loans as required under collective
bargaining agreements, to permit expanded safe harbor hardship withdrawals
for funeral and casualty expenses and expedited hardship withdrawals for
certain participants impacted by the effects of Hurricane Katrina, to
suspend contributions for six months following hardship withdrawals, to
comply with the requirement that Non-Discrimination Testing procedures
must be included in the Plan document, and to grant to the
Benefits Committee to adopt Plan amendments which are needed due to
regulatory changes and which have no substantial adverse financial impact
upon the Employer of the
Plan.
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Effective
April 1, 2007, the Plan was amended to include Patterson-Kelley
hourly-paid union clerical employees in the plan provided that the
employee meets the Plan’s other eligibility requirements. Each
Plan year the Company will make a Company profit sharing contribution
equal to 2% of the Compensation paid to the Patterson-Kelley hourly-paid
union clerical employee for the previous calendar year. For
purposes of determining the amount for the Plan year ended December 31,
2007, the contribution will be based on the compensation paid to the
employee for the period beginning April 1, 2007 and ending December 31,
2007. This contribution will be made provided that the
Patterson-Kelley Company earns at least $1.00 of profit for the 2007
calendar year.
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6.
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Tax
Status:
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The
Company received a determination letter from the IRS on May 15, 2003, that
the Plan, as amended March 28, 2003, 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 determination letter renewed the IRS’s previous
favorable determination made on December 26, 2000. During
January 2007, the Plan and all amendments to date were submitted to the
IRS for a new determination letter. At the time of this report,
the new determination letter has not been received, 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 Code.
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7.
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Risks and
Uncertainties:
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The
plan invests in various investment securities. Investment
securities are exposed to various risks such as interest, market and
credit risks. Due to the level of risk associated with certain
investment securities, it is at least reasonably possible that changes in
the values of investment securities will occur in the near term and that
such changes, could materially affect the amounts reported in the
statements of net assets available for
benefits.
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8.
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Accounting
Pronouncements:
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In
September 2006, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standard No. 157 “Fair Value
Measurements” (SFAS 157). The standard defines fair value,
outlines a framework for measuring fair value and details the required
disclosures about fair value measurements. The standard is
effective for fiscal years beginning after November 15,
2007. The Company is currently in the process of evaluating the
adoption of SFAS 157 and does not believe there will be a material impact
on the financial statements of the
Plan.
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9.
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Subsequent
Events:
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Plan
assets at December 31, 2007, included the assets of Plan participants
which were employees of a divested operating segment of the
Company. The operating segment was divested in December
2007. In January 2008, the fair value of these assets of
$11,573,643, were transferred out of the Plan to a qualified trust of the
acquiring company.
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(a)
Party
In
Interest
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(b)
& (c)
Identity
of Issue and Description of Investment
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(d)
Current
Value
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*
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Common
Stock:
Harsco
Corp. Common Stock, par value $
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$ | 91,959 | ||||
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*
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Participant
Loans (1)
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4,269 | |||||
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Mutual
Funds:
Vanguard
Institutional Index Fund
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11,159 | ||||||
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*
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Putnam
Money Market
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10,385 | |||||
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*
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Putnam
New Opportunities Fund
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4,783 | |||||
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American
Europacific Growth Fund
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5,504 | ||||||
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Neuberger
Berman Genesis Trust Fund
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3,154 | ||||||
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*
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Putnam
Income Fund
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1,360 | |||||
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PIMCO
Total Return Fund
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1,509 | ||||||
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Dodge
& Cox Stock Fund
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4,086 | ||||||
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Morgan
Stanley Institutional Fund, Inc. U.S.
Real
Estate Fund
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1,023 | ||||||
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Growth
Fund of America
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6,980 | ||||||
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CRM
Mid Cap Value Fund
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445 | ||||||
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Thornburg
Core Growth Fund
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129 | ||||||
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*
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Putnam
Bond Index Fund
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182 | |||||
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T
Rowe Price Retirement Income
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1,338 | ||||||
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T
Rowe Price Retirement 2005
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3 | ||||||
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T
Rowe Price Retirement 2010
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1,356 | ||||||
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T
Rowe Price Retirement 2015
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2,071 | ||||||
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T
Rowe Price Retirement 2020
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2,112 | ||||||
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T
Rowe Price Retirement 2025
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1,564 | ||||||
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T
Rowe Price Retirement 2030
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800 | ||||||
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T
Rowe Price Retirement 2035
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487 |
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(a)
Party
In
Interest
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(b)
& (c)
Identity
of Issue and Description of Investment
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(d)
Current
Value
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T
Rowe Price Retirement 2040
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427 | ||||||
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T
Rowe Price Retirement 2045
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195 | ||||||
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T
Rowe Price Retirement 2050
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21 | ||||||
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T
Rowe Price Retirement 2055
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9 | ||||||
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Total
Mutual Funds
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61,082 | ||||||
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Total
Assets Held for Investment Purposes
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$ | 157,310 |
| HARSCO CORPORATION SAVINGS PLAN | |||
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By:
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/S/ Mark E. Kimmel | |
| Mark E. Kimmel | |||
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General
Counsel & Corporate Secretary
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