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<SEC-DOCUMENT>0001157523-03-003263.txt : 20030724
<SEC-HEADER>0001157523-03-003263.hdr.sgml : 20030724
<ACCEPTANCE-DATETIME>20030724090205
ACCESSION NUMBER:		0001157523-03-003263
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20030724
ITEM INFORMATION:		Financial statements and exhibits
ITEM INFORMATION:		Regulation FD Disclosure
FILED AS OF DATE:		20030724

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CARPENTER TECHNOLOGY CORP
		CENTRAL INDEX KEY:			0000017843
		STANDARD INDUSTRIAL CLASSIFICATION:	STEEL WORKS, BLAST FURNACES  ROLLING MILLS (COKE OVENS) [3312]
		IRS NUMBER:				230458500
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			0630

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-05828
		FILM NUMBER:		03799498

	BUSINESS ADDRESS:	
		STREET 1:		1047 N PARK ROAD
		CITY:			WYOMISSING
		STATE:			PA
		ZIP:			19610-1339
		BUSINESS PHONE:		6102082000

	MAIL ADDRESS:	
		STREET 1:		1047 N PARK ROAD
		CITY:			WYOMISSING
		STATE:			PA
		ZIP:			19610
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>a4440691.txt
<DESCRIPTION>CARPENTER TECHNOLOGY 8-K
<TEXT>


              SECURITIES AND EXCHANGE COMMISSION
                   WASHINGTON, D.C.  20549

                          FORM 8-K

                       CURRENT REPORT




            Pursuant to Section 13 or 15(d) of the
               Securities Exchange Act of 1934


             Date of Report  - July 24, 2003
             ------------------------------------
               (Date of Earliest Event Reported)



               Carpenter Technology Corporation
               --------------------------------
     (Exact Name of Registrant as specified in its charter)



       Delaware                     1-5828                 23-0458500
     -------------                ----------               ----------
(State of Incorporation)     (Commission File No.)   (IRS Employer I.D. No.)



           1047 North Park Road, Wyomissing, Pennsylvania, 19610-1339
           ----------------------------------------------------------
                    (Address of principal executive offices)


       Registrant's telephone number, including area code: (610) 208-2000




<PAGE>


Item 7.  Financial Statements and Exhibits.


     (a) and (b) None.

     (c) Exhibit:

     Exhibit 99. Press Release dated July 23, 2003

Item 9. Regulation FD Disclosure

On July 24, 2003, Carpenter Technology Corporation issued a press release
discussing fourth quarter and fiscal 2003 year end results. The press release,
attached as Exhibit 99.1 hereto and incorporated herein by reference, is being
furnished pursuant to Item 12.




<PAGE>




                                   SIGNATURES
                                   ----------

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned hereunto duly authorized.



Date:  July 24, 2003           CARPENTER TECHNOLOGY CORPORATION
                                        (Registrant)




                                By:/s/ David A. Christiansen
                                   --------------------------------
                                   David A. Christiansen
                                   Vice President, General
                                   Counsel and Secretary



<PAGE>




                       EXHIBIT INDEX

Exhibit             Description

   99.              Press release dated July 24, 2003



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>3
<FILENAME>a4440691_ex991.txt
<DESCRIPTION>CARPENTER TECHNOLOGY   EXHIBIT 99.1
<TEXT>

                                                                 Exhibit 99.1

  Carpenter Technology Reports Fourth Quarter and Year-End Results


    WYOMISSING, Pa.--(BUSINESS WIRE)--xx--Carpenter Technology
Corporation (NYSE:CRS) today reported fourth quarter results, which
showed continued improvement in its operating performance and free
cash flow generation.
    Net sales for the fourth fiscal quarter ended June 30, 2003 were
$212.4 million, compared with $227.6 million for the same period a
year ago.
    Net income in the fourth quarter was $5.5 million or $.23 per
diluted share. In the quarter, Carpenter incurred a pre-tax charge of
$3.6 million related primarily to the early redemption of debt. In the
fourth quarter a year ago, Carpenter had a net loss of $4.9 million or
$.24 per diluted share.
    Free cash flow, defined as net cash provided before financing
activities but after dividends, was $32.8 million in the fourth
quarter versus $31.6 million in the same quarter a year ago.
    At the end of the fourth quarter, total debt, net of cash and
including amounts outstanding under the company's receivables purchase
facility, was reduced to $356.3 million. Carpenter's net debt amount
was $23.1 million lower than at the end of the previous quarter and
$77.8 million lower than a year ago.

    Year-to-Date Results

    Net sales for fiscal 2003 were $871.1 million, compared with
$977.1 million in the previous year. The net loss for fiscal 2003,
including special charges, was $10.9 million or $.56 per diluted share
compared to a net loss of $118.3 million or $5.41 per diluted share a
year ago.
    In the recently completed fiscal year, Carpenter incurred pre-tax
special charges of $30.6 million related primarily to severance costs
and early retirement incentives associated with its cost reduction
efforts and the early redemption of debt. Approximately $24 million of
the special charge was non-cash.
    The loss in fiscal 2002 included a $112.3 million charge, or $5.06
per diluted share, related to the adoption of Statement of Financial
Accounting Standards No. 142, "Goodwill and Other Intangible Assets."
    During fiscal 2003, the company generated $80.2 million of free
cash flow in addition to the $79.6 million during fiscal 2002, after
adjusting for the effects of the receivables purchase facility.

    Operating Summary

    "Although economic conditions were challenging throughout fiscal
2003 in many of the markets that we serve, including two of our key
markets - aerospace and power generation, we improved profitability
while continuing to generate significant free cash flow," said Robert
J. Torcolini, chairman, president and chief executive officer. "We
will further accelerate our efforts to reduce costs and continue to
implement lean practices and process variation reduction methods. Our
goal is to achieve profitability through all phases of an economic
cycle."
    Carpenter's fourth quarter operating income before other income
and expense (net sales less cost of sales and selling and
administrative expenses) improved to $19.8 million from $1.4 million a
year ago. Adjusted for the pension credit and special charge,
quarterly operating income was at its highest level since June 2001.
The improvement primarily reflected the benefit of the company's cost
reduction efforts, productivity and manufacturing improvements and a
reduced impact from inventory reduction initiatives, which negatively
affected last year's operating income.
    The improvement in operating income during the quarter was
achieved despite a seven percent decline in sales from a year ago. The
decrease was due to an 11% decline in stainless steel sales due
primarily to reduced demand from the consumer and industrial markets.
In addition, sales remained under pressure due to an intense pricing
environment caused primarily by the availability of low priced
imported stainless bar, rod and wire.
    High temperature alloy sales decreased six percent in the quarter
from a year ago due to lower sales to the industrial gas turbine
market and, to a lesser extent, the commercial aerospace market.
    Titanium alloy sales, which increased 11% from the same quarter a
year ago, benefited from increased sales to the medical market and
diversification into high performance motor sports, which offset
decreased sales to the aerospace market.

    Outlook

    "Although economic conditions may remain challenging in fiscal
2004, we expect that our cost reduction and manufacturing improvement
initiatives will continue to benefit our operating performance,"
Torcolini concluded.
    Based on current market conditions and excluding the non-cash
pension expense, Carpenter expects that its operating performance will
continue to show improved year-over-year comparisons for its current
fiscal year ending June 30, 2004.
    The operating improvement will be driven primarily by the cost
reduction initiatives, as sales growth is expected to be modest due to
the depressed aerospace and power generation markets.
    Additionally, the company anticipates that free cash flow for
fiscal 2004 will be in excess of $50 million. The projected free cash
flow is after estimated capital expenditures of $20 - $30 million.

    Segment Results - Fourth Quarter

    Specialty Metals

    Net sales for the quarter ended June 30, 2003 for the Specialty
Metals segment, which includes the Specialty Alloys Operations (SAO),
Dynamet, and Carpenter Powder Products (CPP) business units, were
$191.0 million or $9.0 million lower than in the same quarter a year
ago.
    SAO sales decreased six percent from a year ago primarily as a
result of a 16% decline in volume and sustained pricing pressure
caused by the availability of low priced imports. Lower valued
stainless wire and rod volume, which experienced a strong increase in
the fourth quarter a year ago, decreased as many customers rebalanced
inventories. Shipments of higher value special alloys declined due to
weak demand from the power generation and aerospace markets. SAO
continued to experience increased demand for its electronic strip
products.
    Dynamet's sales improved 14 percent in the fourth quarter versus a
year ago, due primarily to increased sales to the medical market and
diversification into new markets such as high performance motor
sports. CPP's sales were seven percent lower than a year ago.
    Operating income for the Specialty Metals segment was $23.0
million, which compared to $0.9 million a year ago. The improvement
reflects the benefit of cost reduction initiatives and the reduced
impact of inventory reduction efforts, which negatively impacted last
year's operating income.

    Engineered Products Segment

    Net sales for this segment, which includes sales of fabricated
metal and ceramic components, were $22.1 million compared to $28.2
million a year ago. Last year's fourth quarter included $5.3 million
of sales from companies that were subsequently divested.
    Operating income for the Engineered Products segment was $1.5
million in the fourth quarter versus $2.6 million a year ago. The
decrease in operating income primarily reflects an increase in
reserves for environmental liabilities at one of the Engineered
Products business units.

    Segment Results - Fiscal Year

    Specialty Metals

    Fiscal 2003 net sales for the Specialty Metals segment were $760.2
million or $90.6 million lower than a year ago.
    SAO sales decreased 10 percent from a year ago due to a weaker
sales mix and reduced selling prices. Decreased shipment levels of
higher value special alloys and sustained pricing pressures caused by
the availability of low priced stainless steel products adversely
impacted sales. Volume was marginally higher than last year due mainly
to increased sales of lower value stainless wire and rod products.
    Dynamet's sales decreased 22 percent in fiscal 2003 versus a year
ago. The decline in sales was due primarily to lower volumes sold to
the aerospace market. CPP's sales were eight percent higher than a
year ago due primarily to new customer sales and increased sales in
Europe.
    Operating income for the Specialty Metals segment was $38.8
million for fiscal 2003, which was $25.9 million higher than a year
ago. The increase reflected improved operating efficiencies, lower
costs and the effects on operating income of a more modest level of
inventory reduction versus a year ago.

    Engineered Products Segment

    Net sales for this segment for fiscal 2003 were $113.3 million as
compared to $128.5 million for the same period a year ago. This group
of companies was largely affected by the slowdown in the aerospace and
power generation markets. Approximately $10 million of the decline in
sales was due to the divestiture of certain businesses.
    Operating income for the Engineered Products segment for fiscal
2003 was $10.9 million versus $10.5 million a year ago. The increase
in operating income, despite the lower sales volume and increased
reserves, primarily reflects the benefit of cost savings initiatives.

    Net Pension Credit / Expense

    The net pension credit represents income relating to Carpenter's
well funded defined benefit pension plan, less expenses for other
post-retirement benefit plans.
    In the fourth quarter of fiscal 2003, the net pension credit added
income of $0.8 million, which compares to $4.3 million a year ago. For
fiscal 2003, the net pension credit added income of $3.4 million
versus $17.1 million for the prior fiscal year.
    In fiscal 2004, Carpenter's net pension credit will change to an
expense. The net pension expense, which was actuarially determined on
June 30, will be $18 million or $.48 per diluted share. This will be a
non-cash item, as the company is not required to make a cash
contribution to its defined benefit pension plan.
    The fiscal 2004 net pension expense primarily results from the
accumulated effect of investment losses from more than two years of
declining stock market returns. The stock market performance coupled
with the low interest rate environment resulted in a change of
actuarial assumptions. The changes included a reduction in the
expected rate of return to 8.5% from 10.0% and a lowering of the
discount rate to 6.0% from 7.25%, both of which had the effect of
increasing the company's net pension expense.

    Special Charges

    The first and second quarter of fiscal 2003 included pre-tax
charges totaling $27.0 million ($16.2 million after-tax or $.73 per
diluted share). The charges were primarily related to severance
payments associated with the elimination of certain salaried and
production and maintenance positions, enhanced pension benefits
associated with the early retirement of certain production and
maintenance employees, and pension related costs due to the
retirements and position eliminations in fiscal 2003.
    The charges were predominantly non-cash and did not materially
affect Carpenter's operating cash flow.
    In the fourth quarter of fiscal 2003, Carpenter incurred a pre-tax
charge of $3.6 million ($2.2 million after-tax or $.09 per diluted
share). The charge was comprised of a $4.5 million expense associated
with the early redemption of its 9% unsecured debentures, partially
offset by an adjustment to the first quarter special charge.

    Other Operating Comments

    In the fourth quarter of fiscal 2003, selling and administrative
expenses of $28.5 million were lower than last year by $5.6 million or
16 percent. For fiscal 2003, selling and administrative expenses of
$118.8 million were $23.3 million or 16 percent lower than the same
period a year ago.
    The favorable impacts of lower salary and benefits, professional
fees and outside services, and depreciation and amortization were
partially offset by the reduced net pension credit.
    For the most recent fourth quarter, interest expense of $7.5
million was $0.8 million lower than last year due to reduced debt
levels and lower interest rates.
    For fiscal 2003, interest expense was $31.0 million or $3.6
million lower than a year ago.
    Other expense of $0.6 million in the recent fourth quarter
compared with other expense of $3.7 million in the same quarter a year
ago. The current quarter included adjustments to reserves related to
former Talley Industries subsidiaries. Last year included a write-down
and loss on the sale of certain assets.
    For fiscal 2003, other income of $3.8 million compared with other
income of $0.5 million for the prior year. Income received from U.S.
Customs under the "Continued Dumping and Subsidy Offset Act of 2000"
and interest income were the primary contributors to other income in
both years.
    Income before taxes of $8.1 million in the recent fourth quarter
compared with a loss before taxes of $10.6 million for the same
quarter a year ago.
    For fiscal 2003, Carpenter had a pre-tax loss of $22.9 million,
which compared to a pre-tax loss of $13.3 million for the previous
fiscal year.
    Net income was $5.5 million or $.23 per diluted share for the
three months ended June 30, 2003. In the comparable period a year ago,
Carpenter had a net loss of $4.9 million or $.24 per diluted share.
    For fiscal 2003, Carpenter had a net loss of $10.9 million or $.56
per diluted share, which compared to a net loss of $118.3 million or
$5.41 per diluted share a year ago. The loss in the previous fiscal
year included a $112.3 million change in accounting charge, or $5.06
per diluted share, related to the adoption of Statement of Financial
Accounting Standards No. 142, "Goodwill and Other Intangible Assets."

    Cash Flow and Liquidity

    Carpenter has maintained the ability to provide cash to meet its
needs through cash flow from operations, including management of
working capital and the flexibility to use outside sources of
financing to supplement internally generated funds.
    Free cash flow for the fourth quarter was $32.8 million versus
$31.6 million a year ago. For fiscal 2003, free cash flow was $80.2
million versus $79.6 million a year ago, after adjusting for the
effects of the receivables purchase facility.
    Carpenter believes that its current financial resources, both from
internal and external sources, will be more than adequate to meet its
foreseeable needs. At fiscal year end, Carpenter had approximately
$175 million available under its credit facilities.

    Selected Financial Measures

    Additional details regarding operating income before other income
and expenses, free cash flow, net debt, special charge and net pension
credit can be found in the attached financial schedules.

    Conference Call

    Carpenter will host a conference call and webcast on Thursday,
July 24, at 10 a.m., Eastern Time, to discuss the results of
operations for the fourth quarter. The conference call will be
available by webcast at www.vcall.com.
    A replay of the conference call will be available at www.vcall.com
or by calling 888-266-2081. The passcode for the replay is 203042.
    Carpenter produces and distributes specialty materials and various
engineered products. Information about Carpenter can be found on the
Internet at www.cartech.com, with selected products sold online at
www.carpenterdirect.com.

    Except for historical information, all other information in this
news release consists of forward-looking statements within the meaning
of the Private Securities Litigation Act of 1995. These
forward-looking statements are subject to risks and uncertainties that
could cause actual results to differ from those projected, anticipated
or implied. The most significant of these uncertainties are described
in Carpenter's filings with the Securities and Exchange Commission
including its report on Form 10-K for the year ended June 30, 2002,
its Form 10-Q for the third quarter and its most recent registration
statement on Form S-4, filed on October 12, 2001, as amended on
November 29, 2001. They include but are not limited to: 1) the
cyclical nature of the specialty materials business and certain
end-use markets, including aerospace, power generation, automotive,
industrial and consumer durables, all of which are subject to changes
in general economic and financial market conditions; 2) the ability of
Carpenter to ensure adequate supplies of raw materials and to recoup
increased costs of electricity, natural gas, and raw materials, such
as nickel, through increased prices and surcharges; 3) domestic and
foreign excess manufacturing capacity for certain metals that
Carpenter produces; 4) fluctuations in currency exchange rates,
resulting in increased competition and downward pricing pressure on
certain Carpenter products; 5) the degree of success of government
trade actions; 6) fluctuations in stock markets which could impact the
valuation of the assets in Carpenter's pension trusts and the
accounting for pension assets; 7) the potential cost advantages that
new competitors or competitors who have reorganized through bankruptcy
may have; 8) the transfer of manufacturing capacity from the United
States to foreign countries; and 9) the consolidation of customers and
suppliers. Any of these factors could have an adverse and/or
fluctuating effect on Carpenter's results of operations. The
forward-looking statements in this document are intended to be subject
to the safe harbor protection provided by Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. Carpenter undertakes no obligation
to update or revise any forward-looking statements.



                   CONSOLIDATED STATEMENT OF INCOME
                 (in Millions, Except per Share Data)

                                  Three Months Ended    Year Ended
                                        June 30           June 30
                                   ----------------- -----------------
                                     2003     2002     2003     2002
                                   -------- -------- -------- --------

NET SALES                           $212.4   $227.6   $871.1   $977.1
                                   -------- -------- -------- --------
COSTS AND EXPENSES:
   Cost of sales                     164.1    192.1    717.4    814.2
   Selling and administrative
    expenses                          28.5     34.1    118.8    142.1
   Special charge                      3.6       --     30.6       --
   Interest expense                    7.5      8.3     31.0     34.6
   Other expense (income), net         0.6      3.7     (3.8)    (0.5)
                                   -------- -------- -------- --------
                                     204.3    238.2    894.0    990.4
                                   -------- -------- -------- --------
Income (loss) before income taxes
 and cumulative effect of
 accounting change                     8.1    (10.6)   (22.9)   (13.3)
Income tax expense (benefit)           2.6     (5.7)   (12.0)    (7.3)
                                   -------- -------- -------- --------
Net income (loss) before cumulative
 effect of accounting change           5.5     (4.9)   (10.9)    (6.0)
Cumulative effect of accounting
 change                                 --       --       --   (112.3)
                                   -------- -------- -------- --------
NET INCOME (LOSS)                     $5.5    ($4.9)  ($10.9) ($118.3)
                                   ======== ======== ======== ========

EARNINGS (LOSS) PER COMMON SHARE:
 Basic:
   Earnings (loss) before
    cumulative effect of accounting
    change                           $0.23   ($0.24)  ($0.56)  ($0.35)
   Cumulative effect of accounting
    change                              --       --       --    (5.06)
                                   -------- -------- -------- --------
   Net earnings (loss)               $0.23   ($0.24)  ($0.56)  ($5.41)
                                   ======== ======== ======== ========

 Diluted:
   Earnings (loss) before
    cumulative effect of accounting
    change                           $0.23   ($0.24)  ($0.56)  ($0.35)
   Cumulative effect of accounting
    change                              --       --       --    (5.06)
                                   -------- -------- -------- --------
   Net earnings (loss)               $0.23   ($0.24)  ($0.56)  ($5.41)
                                   ======== ======== ======== ========

WEIGHTED AVERAGE COMMON
  SHARES OUTSTANDING
   Basic                              22.4     22.3     22.3     22.2
                                   ======== ======== ======== ========
   Diluted                            23.1     22.3     22.3     22.2
                                   ======== ======== ======== ========
Cash dividends per common share    $0.0825    $0.33  $0.5775    $1.32
                                   ======== ======== ======== ========

Certain reclassifications of prior year's amounts have been made to
conform with current year's presentation.


                             PRELIMINARY
                 CONSOLIDATED STATEMENT OF CASH FLOWS
                            (in Millions)

                                                       Year Ended
                                                         June 30
                                                    ------------------
                                                      2003      2002
                                                    --------  --------

OPERATIONS:
  Net loss                                           ($10.9)  ($118.3)
  Adjustments to reconcile net loss to
   net cash provided from operations:
    Depreciation                                       53.3      56.5
    Amortization                                       10.7      11.2
    Goodwill impairment charge                           --     112.3
    Deferred income taxes                             (14.7)      9.2
    Net pension credit                                 (3.4)    (17.1)
    Net loss on asset disposals                         0.2       4.4
    Special charge                                     24.0        --
  Changes in working capital and other, net of
   divestitures:
    Receivables                                        18.7      50.5
    Net change in accounts receivable purchase
     facility                                            --      10.0
    Inventories                                         8.2      51.2
    Accounts payable                                  (11.7)     (5.5)
    Accrued current liabilities                        (2.2)     (3.1)
    Income tax refund                                  18.3       9.0
    Other, net                                          1.7     (26.6)
                                                    --------  --------
Net cash provided from operations                      92.2     143.7
                                                    --------  --------

INVESTING ACTIVITIES:
  Purchases of plant, equipment and software           (8.5)    (26.7)
  Proceeds from sale of businesses                      8.5       3.0
  Proceeds from disposals of plant and equipment        2.5       0.6
                                                    --------  --------
Net cash provided from (used for) investing
 activities                                             2.5     (23.1)
                                                    --------  --------

FINANCING ACTIVITIES:
  Net change in short-term debt                        (1.7)   (154.4)
  Proceeds from issuance of long-term debt             98.0      98.3
  Payments on long-term debt                         (145.8)    (25.6)
  Checks not cleared                                    3.7        --
  Dividends paid                                      (14.5)    (31.0)
  Proceeds from issuance of common stock                 --       3.0
                                                    --------  --------
Net cash used for financing activities                (60.3)   (109.7)
                                                    --------  --------

Effect of exchange rate changes on cash and cash
 equivalents                                            0.4        --
                                                    --------  --------

INCREASE IN CASH AND CASH EQUIVALENTS                  34.8      10.9
Cash and cash equivalents at beginning of period       18.7       7.8
                                                    --------  --------
Cash and cash equivalents at end of period            $53.5     $18.7
                                                    ========  ========

Certain reclassifications of prior year's amounts have been made to
conform with current year's presentation.


                             PRELIMINARY
                      CONSOLIDATED BALANCE SHEET
                            (in Millions)

                                                   June 30    June 30
                                                    2003       2002
                                                  ---------  ---------

ASSETS
Current Assets:
  Cash and cash equivalents                          $53.5      $18.7
  Accounts receivable, net                           113.8      133.7
  Inventories                                        180.9      190.0
  Other current assets                                21.1       33.5
                                                  ---------  ---------
     Total current assets                            369.3      375.9

Property, plant and equipment, net                   651.7      713.1
Prepaid pension cost                                 253.7      255.9
Goodwill                                              46.3       46.3
Trademarks and trade names, net                       25.4       26.4
Other assets                                          53.5       61.9
                                                  ---------  ---------
Total assets                                      $1,399.9   $1,479.5
                                                  =========  =========

LIABILITIES
Current liabilities:
  Short-term debt                                    $17.1      $16.8
  Accounts payable                                    68.2       76.8
  Accrued income taxes                                 6.1         --
  Accrued liabilities                                 54.1       61.1
  Deferred income taxes                                4.3        5.9
  Current portion of long-term debt                    0.1       50.2
                                                  ---------  ---------
     Total current liabilities                       149.9      210.8

Long-term debt, net of current portion               378.9      375.8
Accrued postretirement benefits                      182.4      167.8
Deferred income taxes                                166.7      182.3
Other liabilities                                     47.4       34.5
                                                  ---------  ---------
Total liabilities                                    925.3      971.2
                                                  ---------  ---------


STOCKHOLDERS' EQUITY
  Convertible preferred stock                         10.2       24.4
  Common stock                                       117.3      117.3
  Capital in excess of par value - common stock      199.8      200.1
  Reinvested earnings                                203.7      229.0
  Common stock in treasury, at cost                  (38.3)     (38.3)
  Deferred compensation                               (3.8)     (11.7)
  Accumulated other comprehensive income (loss)      (14.3)     (12.5)
                                                  ---------  ---------
     Total stockholders' equity                      474.6      508.3
                                                  ---------  ---------

Total liabilities and stockholders' equity        $1,399.9   $1,479.5
                                                  =========  =========


                             PRELIMINARY
                        SEGMENT FINANCIAL DATA
                            (in Millions)

                                        Three Months
                                            Ended        Year Ended
                                           June 30         June 30
                                       --------------- ---------------

                                         2003    2002    2003    2002
                                       ------- ------- ------- -------

Net sales:
  Specialty Metals                     $191.0  $200.0  $760.2  $850.8
  Engineered Products                    22.1    28.2   113.3   128.5
  Intersegment                           (0.7)   (0.6)   (2.4)   (2.2)
                                       ------- ------- ------- -------
  Consolidated net sales               $212.4  $227.6  $871.1  $977.1
                                       ======= ======= ======= =======

Operating results:
  Specialty Metals                      $23.0    $0.9   $38.8   $12.9
  Engineered Products                     1.5     2.6    10.9    10.5
  Net pension credit                      0.8     4.3     3.4    17.1
  Corporate costs                        (5.5)   (6.4)  (18.2)  (19.7)
  Special charge                         (3.6)     --   (30.6)     --
  Interest expense                       (7.5)   (8.3)  (31.0)  (34.6)
  Other (expense) income, net            (0.6)   (3.7)    3.8     0.5
                                       ------- ------- ------- -------

   Consolidated income (loss) before
    income taxes and cumulative effect
    of accounting change                 $8.1  ($10.6) ($22.9) ($13.3)
                                       ======= ======= ======= =======

Carpenter is organized on a product basis: Specialty Alloys
Operations, Dynamet, Carpenter Powder Products and Engineered Products
Group. For segment reporting purposes, Specialty Alloys Operations,
Dynamet and Carpenter Powder Products are aggregated into one
reportable segment called Specialty Metals because of the similarities
in products, processes, customers and distribution methods.

Certain reclassifications of prior year's amounts have been made to
conform with current year's presentation.


                             PRELIMINARY
                     SELECTED FINANCIAL MEASURES
                            (in Millions)

                                        Three Months
                                            Ended        Year Ended
                                           June 30         June 30
                                       --------------- ---------------
OPERATING INCOME BEFORE OTHER            2003    2002    2003    2002
                                       ------- ------- ------- -------
INCOME AND EXPENSE

Net sales                              $212.4  $227.6  $871.1  $977.1
Cost of sales                          (164.1) (192.1) (717.4) (814.2)
Selling and administrative expenses     (28.5)  (34.1) (118.8) (142.1)
                                       ------- ------- ------- -------
Operating income before other income
 and expense                            $19.8    $1.4   $34.9   $20.8
                                       ======= ======= ======= =======


                                        Three Months
                                            Ended        Year Ended
                                           June 30         June 30
                                       --------------- ---------------
FREE CASH FLOW                           2003    2002    2003    2002
                                       ------- ------- ------- -------

Net cash provided from operations       $36.6   $29.9   $92.2  $143.7
Net cash (used for) provided from
 investing activities                    (1.5)   (2.6)    2.5   (23.1)
Net change in accounts receivable
   purchase facility                       --    12.0      --   (10.0)
Dividends paid                           (2.3)   (7.7)  (14.5)  (31.0)
                                       ------- ------- ------- -------
Free cash flow                          $32.8   $31.6   $80.2   $79.6
                                       ======= ======= ======= =======

Carpenter uses free cash flow as a measure of cash generated which is
available for debt repayment.


                                      June 30 March 31 June 30
NET DEBT                                 2003    2003    2002
                                       ------- ------- -------

Accounts receivable purchase facility   $10.0   $10.0   $10.0
Short-term debt                          17.1    16.2    16.8
Current portion of long-term debt         0.1    50.1    50.2
Long-term debt, net of current portion  378.9   357.5   375.8
                                       ------- ------- -------
Total Debt                              406.1   433.8   452.8
Cash                                    (53.5)  (54.4)  (18.7)
Checks not cleared                        3.7      --      --
                                       ------- ------- -------
Net Debt                               $356.3  $379.4  $434.1
                                       ======= ======= =======

Cash is subtracted from total debt because cash is expected to be used
for debt repayments.


                             PRELIMINARY
                     SELECTED FINANCIAL MEASURES
                            (in Millions)

                                           Three Months   Year Ended
                                               Ended
                                              June 30       June 30
                                           ------------- -------------
SPECIAL CHARGE                              2003   2002   2003   2002
                                           ------ ------ ------ ------

Reductions in workforce                       --     --  $17.4     --
Pension plan curtailment loss                 --     --    6.7     --
Premium on early retirement of debt          4.5     --    4.5     --
Writedown of certain assets                 (0.9)    --    2.0     --
                                           ------ ------ ------ ------
Special charge                               3.6     --   30.6     --
Income tax benefit                          (1.4)    --  (12.2)    --
                                           ------ ------ ------ ------
Special charge, net of income taxes         $2.2     --  $18.4     --
                                           ====== ====== ====== ======

Special charge per share                   $0.09     --  $0.82     --
                                           ====== ====== ====== ======

Weighted average diluted common shares      23.1   22.3   22.3   22.2
                                           ====== ====== ====== ======


                                           Three Months
                                               Ended      Year Ended
                                              June 30       June 30
                                           ------------- -------------
NET PENSION CREDIT                          2003   2002   2003   2002
                                           ------ ------ ------ ------

Pension plan credit                         $4.1   $6.8  $16.4  $27.2
Other postretirement benefit expense        (3.3)  (2.5) (13.0) (10.1)
                                           ------ ------ ------ ------
Net pension credit                          $0.8   $4.3   $3.4  $17.1
                                           ====== ====== ====== ======




    CONTACT: Carpenter Technology Corporation
             Investors:
             Jaime Vasquez, 610-208-2165
             jvasquez@cartech.com
              or
             Media:
             Katharine B. Marshall, 610-208-3034
             kmarshall@cartech.com


</TEXT>
</DOCUMENT>
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