UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
{X} ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 2001
or
{ } TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from _____ to _____
Commission file number 0-3134
A. Full title of the plan and the address of the plan, if
different from that of the issuer named below:
INDIVIDUAL ACCOUNT RETIREMENT PLAN OF PARK-OHIO
INDUSTRIES, INC. AND ITS SUBSIDIARIES
B. Name of issuer of the securities held pursuant to the plan
and the address of its principal executive office:
PARK-OHIO HOLDINGS CORP.
23000 EUCLID AVENUE
CLEVELAND, OHIO 44117
Page 1
INDEX
PAGE (S)
Report of Independent Auditors................................................................... F-1
FINANCIAL STATEMENTS
Statements of Net Assets Available for Benefits.................................................. F-2
Statement of Changes in Net Assets Available for Benefits........................................ F-3
Notes to Financial Statements.................................................................... F-4--F-9
SUPPLEMENTAL SCHEDULE
Schedule H, Line 4i--Schedule of Assets (Held at End of Year).................................... F-10
EXHIBITS
Exhibit
Number Description
--------------- -----------------------------------------------------------
23 Consent of Independent Auditors
* Other supplemental schedules required by Section 2520.103-10
of the Department of Labor Rules and Regulations for
Reporting and Disclosure under the Employee Retirement
Income Security Act of 1974 have been omitted because they
are not applicable
Page 2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Administrator of the Plan has duly caused this annual report to be signed on its
behalf by the undersigned hereunto duly authorized.
Individual Account
Retirement Plan of
Park-Ohio Industries, Inc.
and Its Subsidiaries
Date: June 28, 2002
By /s/ Richard P. Elliott
-------------------------
Richard P. Elliott
Vice President and Chief
Financial Officer
Page 3
Report of Independent Auditors
Plan Administrative Committee
Individual Account Retirement Plan of
Park-Ohio Industries, Inc. and
Its Subsidiaries
We have audited the accompanying statements of net assets available for benefits
of the Individual Account Retirement Plan of Park-Ohio Industries, Inc. and Its
Subsidiaries as of December 31, 2001 and 2000, and the related statement of
changes in net assets available for benefits for the year ended December 31,
2001. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits 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 benefits of the Plan at
December 31, 2001 and 2000, and the changes in its net assets available for
benefits for the year ended December 31, 2001, in conformity with accounting
principles generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule of assets
(held at end of year) as of December 31, 2001 is presented for purposes of
additional analysis and is not a required part of the 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. This supplemental schedule is the responsibility of the
Plan's management. The supplemental schedule has been subjected to the auditing
procedures applied in our audits of the financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/ Ernst & Young LLP
Cleveland, Ohio
June 14, 2002
F-1
Individual Account Retirement Plan of Park-Ohio
Industries, Inc. and Its Subsidiaries
Statements of Net Assets Available for Benefits
December 31
2001 2000
-------------------------------
ASSETS
Investments, at fair value $51,503,118 $56,120,570
Receivables:
Employer contribution 104,994 100,363
Employee contribution 268,114 284,236
Accrued income 17,370 18,758
Pending sales 158,154 15,442
-------------------------------
Total receivables 548,632 418,799
-------------------------------
Total assets 52,051,750 56,539,369
LIABILITIES
Accrued purchase of investments 195,657 151,518
-------------------------------
Net assets available for benefits $51,856,093 $56,387,851
===============================
See notes to financial statements.
F-2
Individual Account Retirement Plan of Park-Ohio
Industries, Inc. and Its Subsidiaries
Statement of Changes in Net Assets Available for Benefits
Year ended December 31, 2001
ADDITIONS
Investment income:
Dividend and interest income $ 2,312,764
Contributions:
Participants 3,745,365
Employer 1,391,534
Rollovers 76,939
------------
5,213,838
------------
Total additions 7,526,602
DEDUCTIONS
Distributions to participants 3,001,997
Trustee fees and expenses 31,718
------------
3,033,715
Net depreciation in fair value of investments 9,024,645
------------
Total deductions 12,058,360
------------
Net decrease (4,531,758)
Net assets available for benefits:
Beginning of year 56,387,851
------------
End of year $ 51,856,093
============
See notes to financial statements.
F-3
Individual Account Retirement Plan of Park-Ohio
Industries, Inc. and Its Subsidiaries
Notes to Financial Statements
December 31, 2001 and 2000 and
Year ended December 31, 2001
1. SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The accounting records of the Individual Account Retirement Plan of Park-Ohio
Industries, Inc. and Its Subsidiaries (the Plan) are maintained on the accrual
basis.
INVESTMENT VALUE AND INCOME RECOGNITION
Purchases of investments are recorded at cost and revalued to market value at
the close of each day by the Plan Trustee. All investments are under the control
and management of KeyBank National Association, the Trustee of the Plan.
Investment income and realized and unrealized gains and losses are reported as
net income derived from investment activities and are allocated among the
individual accounts in proportion to their respective balances immediately
preceding the valuation date.
Realized gains and losses are calculated based upon historical cost of
securities using the average cost method.
The investments in common stock are stated at fair value which equals the quoted
market price on the last business day of the plan year. The fair value of the
participation units held by the Plan in the mutual funds and common/collective
fixed income investments funds are based on quoted redemption values on the last
business day of the plan year. The participant loans are valued at their
outstanding balances, which approximate fair value. Purchases and sales of
securities are recorded on a trade-date basis. Interest income is recorded on
the accrual basis. Dividends are recorded on the ex-dividend date.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
that affect the amounts reported in the financial statements and accompanying
notes. Actual results could differ from those estimates.
F-4
Individual Account Retirement Plan of Park-Ohio
Industries, Inc. and Its Subsidiaries
Notes to Financial Statements (continued)
2. DESCRIPTION OF PLAN
The Plan, adopted by Park-Ohio Industries, Inc. (Company) effective January 1,
1985, is a defined contribution plan. The Plan generally provides that an
employee who is in service of a division or group to which the Company has
extended eligibility for membership in the Plan (other than a temporary employee
or employees covered by a collective bargaining agreement that does not specify
coverage under the Plan) will be eligible to participate after completion of the
probationary period which generally occurs after 30 days of continuous
employment. The Plan is subject to the provisions of the Employee Retirement
Income Security Act of 1974 (ERISA).
Individual accounts are maintained for all participants. All amounts are
credited or charged to an account in terms of full and fractional investment
units at the investment unit values determined as of the transaction date. Each
participant designates how his share of the contributions is to be allocated
among the investment funds of the Plan. The benefit to which a participant is
entitled is the benefit that can be provided from the participant's account.
The Plan provides for contributions to be made to the Plan pursuant to a
qualified cash or deferred arrangement under Section 401(k) of the Internal
Revenue Code. If a participant elects to have contributions made for him
pursuant to such an arrangement, his compensation is reduced by the amount of
such contributions elected and the employer makes Plan contributions equal to
the amount of the reduction.
The Company may terminate the Plan at any time by resolution of its Board of
Directors, subject to the provisions of ERISA. In the event of the termination
of the Plan, the beneficial interests of all participants under the Plan shall
become fully vested.
Information about the Plan is contained in the Plan document, which is available
from the Company's Plan Administrative Committee.
F-5
Individual Account Retirement Plan of Park-Ohio
Industries, Inc. and Its Subsidiaries
Notes to Financial Statements (continued)
3. CONTRIBUTIONS
Contributions by employees to the Plan are made via payroll deductions.
Employees may contribute up to 16% of their compensation on a pre-tax basis, not
to exceed $10,500, the IRS maximum contribution for 2001. Employee contributions
are fully vested and non-forfeitable at all times.
The Plan provides for uniform rates of employer contributions for eligible
employees, which generally include non-bargaining unit employees of the Company,
so that each participant is entitled to basic contributions equal to two percent
of credited compensation paid by the employer. The basic contribution is
allocated among the investment options based on individual participant's
investment allocation designation.
Contributions refundable to participants represent current year contributions
and earnings on such deposits that must be returned to employees to ensure Plan
compliance with additional limitations in the Internal Revenue Code on
contributions by highly compensated individuals.
Participants of the Plan can make changes to their account via the telephone or
internet access through the KeyInvest System of Key Trust Company. The current
provision of the system permits a participant to change investment allocation
percentages daily and change payroll deferral percentages on the first day of
every month.
4. PARTICIPANT LOANS
A participant may borrow from employee 401(k) contributions and earnings a
minimum of $1,000 and a maximum of the lesser of 50% of the participant's
eligible account or $50,000. Loan repayments are made via payroll deductions on
after-tax dollars, which commence thirty to sixty days after receipt and
acceptance of the loan check. Terms of the participant loan are five years for a
personal loan and 15 years for a mortgage loan, with interest payable at prime
plus one percent.
F-6
Individual Account Retirement Plan of Park-Ohio
Industries, Inc. and Its Subsidiaries
Notes to Financial Statements (continued)
5. INVESTMENTS
Investments that represent 5% or more of fair value of the Plan's net assets are
as follows:
DECEMBER 31
2001 2000
----------------------------
KeyCorp Victory Value Fund $16,727,343 $19,432,724
KeyCorp Prism Money Market Fund -- 9,238,974
KeyCorp Victory DCS Money Market Fund 10,088,477 --
Putnam New Opportunities Fund 6,916,517 9,678,245
Janus Balanced Fund 4,920,991 4,792,252
Pimco Total Return Fund 4,585,134 3,316,365
During 2001, the Plan's investments (including investment purchased, sold as
well as held during the year) depreciated in fair value as follows:
NET
APPRECIATION
(DEPRECIATION)
IN FAIR VALUE
OF INVESTMENT
-------------
Common stock $ (783,729)
Mutual funds (8,614,444)
Common/collective trust fund 373,528
-----------
Total $(9,024,645)
===========
F-7
Individual Account Retirement Plan of Park-Ohio
Industries, Inc. and Its Subsidiaries
Notes to Financial Statements (continued)
6. BENEFITS
A participant is entitled to receive the full value of his account upon (1)
normal retirement at age 65; (2) attainment of at least age 55 and 10 years of
service; (3) death, or total and permanent disability as determined by the Plan
Administrator upon the basis of competent medical opinion, or (4) termination of
employment after seven years of credited service. Such benefits may be paid in a
lump sum cash payment or through the purchase of a single premium annuity
contract.
In the event of termination of employment, a participant has a vested right in
his share of the Company's contributions determined as follows:
VESTED
CREDITED VESTING SERVICE PERCENTAGE
--------------------------------------------------------------------------------
Less than 3 years 0%
At least 3 years but less than 4 years 20%
At least 4 years but less than 5 years 40%
At least 5 years but less than 6 years 60%
At least 6 years but less than 7 years 80%
7 years or more 100%
The portion of the Company's contributions that are not vested in such
terminated participants will generally be forfeited and may be used to reduce
the Company's future contributions to the Plan. The total of forfeited
contributions by participants was $100,858 and contributions required by the
employer were reduced by $100,631 in 2001. The balance of forfeited amounts
available to the Company to reduce future contributions was $27,607 and $27,380
at December 31, 2001 and 2000, respectively.
A participant may withdraw in cash a portion of his contributions subject to
certain limitations and restrictions. The hardship withdrawal may be used to
purchase a principal residence, avoid foreclosure on a mortgage, or pay bona
fide medical or education expenditures.
F-8
Individual Account Retirement Plan of Park-Ohio
Industries, Inc. and Its Subsidiaries
Notes to Financial Statements (continued)
7. RELATED PARTY TRANSACTIONS
Certain Plan investments are shares of mutual funds managed by KeyBank National
Association, the Trustee of the Plan. Therefore, these transactions qualify as
party-in-interest. Fees paid by the Plan for the investment management services
amounted to $31,718 for the year ended December 31, 2001.
At December 31, 2001 and 2000, the Plan held 588,145 and 444,357 shares of
Park-Ohio Holdings Corporation common stock with a fair value of $1,870,301 and
$2,166,240, respectively.
8. INCOME TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
dated May 30, 1996, stating that the Plan is qualified under Section 401(a) of
the Internal Revenue Code (the Code), and, therefore, the related trust is
exempt from taxation. Once qualified, the Plan is required to operate in
conformity with the Code to maintain its qualification. The Plan Administrator
believes the Plan is being operated in compliance with the applicable
requirements of the Code and, therefore, believes that the Plan is qualified and
the related trust is tax exempt.
F-9
Individual Account Retirement Plan of Park-Ohio
Industries, Inc. and Its Subsidiaries
EIN: 34-6520107 Plan Number: 011
Schedule H, Line 4(i)--Schedule of Assets
(Held at End of Year)
December 31, 2001
IDENTITY OF ISSUE, BORROWER, CURRENT
LESSOR OR SIMILAR PARTY DESCRIPTION OF INVESTMENT VALUE
----------------------------------------------------------------------------------------------
COMMON STOCK
Park Ohio Holdings Corp.(*) 588,145 shares of common stock $ 1,870,301
MUTUAL FUNDS
KeyBank National Association Victory Value Fund; 1,333,918 shares 16,727,343
Victory Stock Index Fund; 44,864 shares 763,143
Victory DCS Money Market Fund;
728,926 units 10,088,477
EB Money Market Fund; 25,669
units 25,669
Putnam Investments New Opportunities Fund; 168,778 shares 6,916,517
OTC Emerging Growth Fund;
69,979 shares 524,840
PIMCO Funds Total Return Fund; 438,349 shares 4,585,134
INVESCO Funds Dynamics Fund; 51,132 shares 814,531
Janus Funds Worldwide Fund; 42,732 shares 1,873,357
Twenty Fund; 24,616 shares 946,742
Overseas Fund; 25,138 shares 510,308
Balanced Fund; 250,687 shares 4,920,991
OTHER
Participant loans Interest rates ranging from
5.75% to 10.50% 935,765
---------------
$ 51,503,118
===============
(*) Indicates party-in-interest to the Plan.
F-10