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Form
11-K
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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6-14
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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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15-16
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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
2007
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December
31
2006
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Participant
directed Investments, at fair value
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$ | 253,518 | $ | 185,938 | ||||
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Contributions
receivable:
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Employer’s
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2,185 | 2,148 | ||||||
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Participants’
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283 | 179 | ||||||
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Total
contribution receivables
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2,468 | 2,327 | ||||||
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Dividends
receivable
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348 | 304 | ||||||
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Net
assets available for benefits
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$ | 256,334 | $ | 188,569 | ||||
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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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$ | 49,709 | ||
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Dividends
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9,624 | |||
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Interest
– money market fund
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821 | |||
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Interest
- participant loans
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305 | |||
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Total
investment income
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60,459 | |||
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Contributions:
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Employer’s
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6,124 | |||
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Participants’
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11,294 | |||
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Total
contributions
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17,418 | |||
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Net
transfers in from Harsco Corporation Savings Plan due to employee
classification change (See Note 1)
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10,132 | |||
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Conversion
Credit (Loans transferred through 2007 Company
acquisition)
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99 | |||
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Total
additions
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88,108 | |||
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Deductions:
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Withdrawals
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20,343 | |||
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Net
increase in net assets available for benefits
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67,765 | |||
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Net
assets available for benefits:
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December
31, 2006
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188,569 | |||
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December
31, 2007
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$ | 256,334 | ||
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1.
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General Description of
Plan:
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General
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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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All
U.S. salaried non-union employees (including officers), with the exception
of 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. 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 in from Harsco
Corporation Savings Plan 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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1.
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General Description of
Plan: (continued)
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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 100% of the
first 3% of such participant's compensation designated as Matched Pre-Tax
Contributions and/or Matched After-Tax Contributions, and 50% of the sum
of the next 2% of each eligible Participant’s Matched Pre-Tax
Contributions and/or Matched After-Tax contributions for the
period. These contributions are referred to as "Company
Matching Contributions".
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As
of December 31 of each plan year, the employer may make a Company
discretionary contribution to the Plan in an amount determined by the
Company’s board of directors. Employer discretionary
contributions are allocated to the accounts of eligible participants in
the proportion that each eligible participant’s compensation bears to the
aggregate compensation of all eligible participants who are entitled to an
allocation of the Company discretionary contribution for that Plan
year.
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Vesting
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Administration
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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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(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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1.
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General Description of
Plan: (continued)
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(4)
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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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(5)
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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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(6)
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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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(7)
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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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(8)
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Neuberger
Berman Genesis Trust Fund – a fund consisting mainly of common stock of
small capitalization companies that offer potential for capital
growth.
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(9)
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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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(10)
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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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(11)
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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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(12)
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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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(13)
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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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1.
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General Description of
Plan: (continued)
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(14)
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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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(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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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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Payment of
Benefits:
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Benefit
payments to participants are recorded when
paid.
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2.
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Summary of Significant
Accounting Policies:
(continued)
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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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Income
Recognition:
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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
2007
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December
31
2006
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Harsco
Corporation Common Stock Fund
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$ | 114,266 | $ | 69,192 | ||||
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Vanguard
Institutional Index Fund
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17,256 | 16,309 | ||||||
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Putnam
Money Market Fund
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23,832 | 13,676 | ||||||
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American
Funds EuroPacific Growth Fund
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14,450 | 11,196 | ||||||
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Dodge
& Cox Stock Fund
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13,657 | 10,252 | ||||||
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Neuberger
Berman Genesis Trust Fund
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10,436 | 9,436 | ||||||
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Other
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59,621 | 55,877 | ||||||
| $ | 253,518 | $ | 185,938 | |||||
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(in
thousands)
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Common
stock
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$ | 45,074 | ||
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Mutual
funds
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4,635 | |||
| $ | 49,709 |
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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 permit participation by certain groups of
hourly employees, 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
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5.
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Plan Amendments:
(continued)
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procedures
must be included in the Plan document, and to grant authority 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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January
1, 2007, the Plan was amended to change the vesting of Company
discretionary contributions. For years ending prior to January
1, 2007, vesting of Company discretionary contributions continues to be
after five years of credited service. For years ending after
January 1, 2007, a participant’s Company discretionary contributions will
vest upon three years of credited
service.
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August
1, 2007, the Plan was amended to provide that an employee’s service with
Zeta Tech (a Company acquisition during 2007) be counted for purposes of
determining his vesting service under the
Plan.
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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 19, 2005 that
the Plan 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). 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
$5,970,522, 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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$ | 114,266 | ||||
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*
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Participant
Loans (1)
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3,566 | |||||
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Mutual
Funds:
Vanguard
Institutional Index Fund
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17,256 | ||||||
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*
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Putnam
Money Market
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23,832 | |||||
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*
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Putnam
New Opportunities Fund
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6,393 | |||||
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American
Europacific Growth Fund
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14,450 | ||||||
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Neuberger
Berman Genesis Trust Fund
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10,436 | ||||||
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*
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Putnam
Income Fund
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2,262 | |||||
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PIMCO
Total Return Fund
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6,049 | ||||||
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Dodge
& Cox Stock Fund
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13,657 | ||||||
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Morgan
Stanley Institutional Fund, Inc. U.S. Real
Estate Fund
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3,739 | ||||||
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CRM
Mid Cap Value Fund
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2,583 | ||||||
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Core
Growth Fund
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557 | ||||||
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Growth
Fund of America
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13,416 | ||||||
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*
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Putnam
Bond Index Fund
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784 | |||||
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T
Rowe Price Retirement Income
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1,415 | ||||||
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T
Rowe Price Retirement 2005
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639 | ||||||
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T
Rowe Price Retirement 2010
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2,775 | ||||||
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T
Rowe Price Retirement 2015
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4,941 | ||||||
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T
Rowe Price Retirement 2020
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3,939 | ||||||
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T
Rowe Price Retirement 2025
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2,309 | ||||||
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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 2030
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1,771 | ||||||
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T
Rowe Price Retirement 2035
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1,196 | ||||||
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T
Rowe Price Retirement 2040
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836 | ||||||
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T
Rowe Price Retirement 2045
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344 | ||||||
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T
Rowe Price Retirement 2050
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53 | ||||||
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T
Rowe Price Retirement 2055
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40 | ||||||
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Total
Mutual Funds
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135,672 | ||||||
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Cash
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14 | ||||||
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Total
Assets Held for Investment Purposes
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$ | 253,518 |
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*
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Represents
party in interest
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(1)
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Participant
Loans range up to 15 years to maturity and interest rates on these loans
ranged from 4.75% to 10.5%.
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HARSCO RETIREMENT SAVINGS AND INVESTMENT
PLAN
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BY
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/s/ Mark E. Kimmel | |
| Mark E. Kimmel | |||
| General Counsel & Corporate Secretary | |||