-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CpjCdXrWyxcT+XKgbsiXH/rngSdVZyMlah8lNcy/GPnY+LgbItH8m2mMZTIiGEm7 8Lw8zoQaEeEvNr5go/LZrg== 0000950128-02-000493.txt : 20020701 0000950128-02-000493.hdr.sgml : 20020701 20020701164714 ACCESSION NUMBER: 0000950128-02-000493 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20011231 FILED AS OF DATE: 20020701 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALLEGHENY TECHNOLOGIES INC CENTRAL INDEX KEY: 0001018963 STANDARD INDUSTRIAL CLASSIFICATION: STEEL PIPE & TUBES [3317] IRS NUMBER: 251792394 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-12001 FILM NUMBER: 02693970 BUSINESS ADDRESS: STREET 1: 1000 SIX PPG PLACE CITY: PITTSBURGH STATE: PA ZIP: 15222 BUSINESS PHONE: 4123942800 MAIL ADDRESS: STREET 1: 100 SIX PPG PLACE CITY: PITTSBURGH STATE: PA ZIP: 15222 FORMER COMPANY: FORMER CONFORMED NAME: ALLEGHENY TELEDYNE INC DATE OF NAME CHANGE: 19960716 10-K/A 1 j9499101e10vkza.txt FORM 10-K/A AMENDMENT NO. 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K/A (AMENDMENT NO. 1) (Mark One) [X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended December 31, 2001 or [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from ________ to _________ Commission file number: 1-12001 ALLEGHENY TECHNOLOGIES INCORPORATED ----------------------------------- (Exact name of Registrant as specified in its charter) Delaware 25-1792394 -------------------------------------------- ------------- (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 1000 Six PPG Place, Pittsburgh, Pennsylvania 15222-5479 -------------------------------------------- ------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (412) 394-2800 Securities registered pursuant to Section 12(b) of the Act: Title of Each Class: Name of Each Exchange On Which Registered: ------------------------------ ------------------------------------------ Common Stock, $0.10 par value New York Stock Exchange Preferred Stock Purchase Rights New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None. Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate by check mark if disclosure of delinquent files pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. X At May 31, 2002, the Registrant had outstanding 80,576,717 shares of its Common Stock. The aggregate market value of the Registrant's voting stock held by non-affiliates at this date was approximately $1.3 billion, based on the closing price per share of Common Stock on this date of $17.56 as reported on the New York Stock Exchange. Shares of Common Stock known by the Registrant to be owned beneficially by directors of the Registrant and officers of the Registrant subject to the reporting requirements of Section 16 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), are not included in the computation. The Registrant, however, has made no determination that such persons are "affiliates" within the meaning of Rule 12b-2 under the Exchange Act. Documents Incorporated By Reference Selected portions of the 2001 Annual Report to Stockholders ("2001 Annual Report") - Part I, Part II and Part IV of this Report. Selected portions of the Proxy Statement for the 2002 Annual Meeting of Stockholders - Part III of this Report. The information included in the Proxy Statement as required by paragraphs (k) and (l) of Item 402 of Regulation S-K is not incorporated by reference in this Form 10-K/A (Amendment No. 1). -2- EXPLANATORY NOTE: Pursuant to this Form 10-K/A (Amendment No. 1) ("Amendment No. 1"), Allegheny Technologies Incorporated (the "Registrant" or the "Company") amends and restates in its entirety "Item 8. Financial Statements and Supplementary Data" of Part II and "Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K" of Part IV of its Annual Report on Form 10-K for the year ended December 31, 2001 ("2001 Form 10-K"), in order to file in accordance with Rule 15d-21 under the Exchange Act, financial statements required by Form 11-K for the following plans: (1) Allegheny Technologies Retirement Savings Plan; (2) 401(k) Savings Account Plan for Employees of the Washington Plate Plant; (3) Savings and Security Plan of the Lockport and Waterbury Facilities of Allegheny Ludlum Corporation; (4) Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan; and (5) The 401(k) Plan. "Item 8. Financial Statements and Supplementary Data" of Part II of the 2001 Form 10-K is hereby amended and restated in its entirety to read as follows: ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The Consolidated Financial Statements and Notes to Consolidated Financial Statements listed in Item 14(a)(1) are incorporated by reference from pages 25 to 52 of the 2001 Annual Report. The following financial statements are filed by the Company with respect to the following plans in accordance with Rule 15d-21 under the Exchange Act:
PLAN PAGE NO. --------------------------------------------------------------- --------- Allegheny Technologies Retirement Savings Plan 4 401(k) Savings Account Plan for Employees of the Washington Plate Plant................................................ 22 Savings and Security Plan of the Lockport and Waterbury Facilities of Allegheny Ludlum Corporation................. 37 Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan................................ 52 The 401(k) Plan............................................ 67 TDY Industries, Inc. Profit Sharing Plan for Certain Employees of Metalworking Products......................... 82 Allegheny Rodney (ALstrip) Profit Sharing Plan............. 95
-3- AUDITED FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE Allegheny Technologies Retirement Savings Plan Years ended December 31, 2001 and 2000 with Report of Independent Auditors -4- Allegheny Technologies Retirement Savings Plan Audited Financial Statements and Supplemental Schedule Years ended December 31, 2001 and 2000 CONTENTS Report of Independent Auditors .............................................6 Audited Financial Statements Statements of Net Assets Available for Benefits.............................7 Statements of Changes in Net Assets Available for Benefits..................8 Notes to Financial Statements ..............................................9 Supplemental Schedule Schedule H, Line 4(i)--Schedule of Assets (Held at End of Year).............18 -5- Report of Independent Auditors Allegheny Technologies Incorporated We have audited the accompanying statements of net assets available for benefits of the Allegheny Technologies Retirement Savings Plan as of December 31, 2001 and 2000, and the related statements of changes in net assets available for benefits for the years then ended. 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 years then ended, 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 complying with the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974, and is not a required part of the financial statements. 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 Pittsburgh, Pennsylvania May 24, 2002 -6- Allegheny Technologies Retirement Savings Plan Statements of Net Assets Available for Benefits
DECEMBER 31 2001 2000 ----------------------------------- ASSETS Investments: Interest-bearing cash $ -- $ 33,984 Interest in Allegheny Ludlum Corporation Master Trusts 152,644,352 155,224,928 Interest in registered investment companies 35,107,084 34,281,115 Interest in common collective trusts 27,709,529 30,817,957 Corporate common stocks 12,847,133 13,871,318 Participant loans 3,942,809 3,876,612 ----------------------------------- Total investments 232,250,907 238,105,914 Contributions receivable -- 29,474 Other receivables 221,582 597,365 Other payables (72,161) (692,659) Cash overdraft (151,796) (79,119) ----------------------------------- Net assets available for benefits $ 232,248,532 $ 237,960,975 ===================================
See accompanying notes. -7- Allegheny Technologies Retirement Savings Plan Statements of Changes in Net Assets Available for Benefits
YEAR ENDED DECEMBER 31 2001 2000 ----------------------------------- Additions: Contributions: Employer $ 9,492,507 $ 8,817,420 Employee 6,989,652 6,606,246 Investment income: Net loss from interest in Allegheny Ludlum Corporation Master Trusts (6,112,130) (4,157,630) Net loss from interest in registered investment companies (5,099,993) (1,068,800) Net loss from interest in common collective trusts (2,145,405) (77,949) Interest income 357,733 348,601 Dividend income 504,859 123,114 Net realized/unrealized loss on corporate common stocks (57,789) (2,128,403) Other 36 2,396 Transfers into Plan 6,356,533 -- ----------------------------------- Total additions 10,286,003 8,464,995 Deductions: Distributions to participants 15,986,006 19,602,033 Administrative expenses 12,440 3,536 ----------------------------------- Total deductions 15,998,446 19,605,569 ----------------------------------- Net deductions (5,712,443) (11,140,574) Net assets available for benefits at beginning of year 237,960,975 249,101,549 ----------------------------------- Net assets available for benefits at end of year $ 232,248,532 $ 237,960,975 ===================================
See accompanying notes. -8- Allegheny Technologies Retirement Savings Plan Notes to Financial Statements December 31, 2001 1. SIGNIFICANT ACCOUNTING POLICIES Investments are valued as follows: Bank and insurance contracts with varying contract rates and maturity dates are stated at contract value. Although it is management's intention to hold the investment contracts in the Fixed Income Fund until maturity, certain investment contracts provide for adjustments to contract value for withdrawals made prior to maturity. All other funds are stated at their net asset value, based on the quoted market prices of the securities held in such funds on applicable exchanges. 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. 2. DESCRIPTION OF THE PLAN The Allegheny Technologies Retirement Savings Plan (the Plan) is a defined contribution plan and is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). The purpose of the Plan is to provide retirement benefits to eligible employees through company contributions and to encourage employee thrift by permitting eligible employees to defer a part of their compensation and contribute such deferral to the Plan. Participants can defer between 1% and 14%, subject to Internal Revenue Code limitations, of their eligible wages, including profit sharing awards, and contribute them to the Plan. Depending on participants' years of service, qualifying employee contributions are matched by the Plan Sponsor up to 4% of participants' salary. In addition, Plan Sponsor contributes 6.5% of participants' monthly pensionable earnings, as described in the Plan, and in addition contributes $43.34 per month per participant. Separate accounts are maintained by the Plan Sponsor for each participating employee. Trustee fees and asset management fees charged by the Plan's trustee, Dreyfus Retirement Services, for the administration of all funds are charged against net assets available for benefits of the respective fund. Certain other expenses of administering the Plan are paid by the Plan Sponsor. -9- Allegheny Technologies Retirement Savings Plan Notes to Financial Statements (continued) 2. DESCRIPTION OF THE PLAN (CONTINUED) Participants may make "in-service" and hardship withdrawals as outlined in the plan document. Active employees can borrow up to 50% of their vested account balances minus any outstanding loans. The loan amounts are further limited to a minimum of $1,000 and a maximum of $50,000, and an employee can obtain no more than three loans at one time. Interest rates are determined based on commercially accepted criteria, and payment schedules vary based on the type of the loan. General purpose loans are repaid over 6 to 60 months, and primary residence loans are repaid over periods up to 180 months. Payments are made by payroll deductions. Effective November 29, 1999, Allegheny Teledyne Incorporated's (the Plan Sponsor) name was changed to Allegheny Technologies Incorporated. Also, the Aerospace and Electronics and Consumer segments of Allegheny Teledyne were spun off into two new freestanding public companies--Teledyne Technologies Incorporated and Water Pik Technologies, Inc. Stockholders of Allegheny Teledyne became stockholders of Teledyne Technologies Incorporated and Water Pik Technologies, Inc., thus creating two new master trusts. Participants may continue to hold interest in the two new companies until December 31, 2002, at which time these two holdings will be terminated and the assets will be transferred to one of the other plan investment options. Effective October 1, 2000, the Allegheny Technologies Incorporated (ATI) Common Stock Master Trust, Teledyne Technologies Incorporated Common Stock Master Trust, and Water Pik Technologies, Inc. Common Stock Master Trust were deunitized, enabling each participating plan to hold actual shares of the common stocks versus holding each stock in separate master trusts. Effective April 1, 2001, the salaried employees who were participants in the Alstrip profit sharing plan and the salaried employees at the Plan Sponsor's Rodney Metals plant became eligible to participate in the Plan. Accordingly, plan investments related to these participants were transferred into the Plan. Further information about the Plan, including eligibility, vesting, contributions, and withdrawals, is contained in the Plan documents and related contracts. These documents are available from the Allegheny Technologies Personnel and Compensation Committee. -10- Allegheny Technologies Retirement Savings Plan Notes to Financial Statements (continued) 3. INVESTMENTS The following presents investments that represent 5% or more of the Plan's net assets:
DECEMBER 31 2001 2000 -------------------------------------------- Allegheny Technologies Disciplined Stock Fund $26,513,154 $30,710,160 Alliance Equity Fund 30,328,009 39,467,959 Dreyfus Emerging Leaders Fund 18,372,326 19,855,407 Dreyfus Lifestyle Growth and Income Fund 17,328,573 18,814,507 Fixed Income Fund 95,803,188 85,046,809
Certain of the Plan's investments are in the Allegheny Technologies Disciplined Stock Fund Master Trust, the Alliance Equity Master Trust and the Fixed Income Master Trust, which was established for the investment of assets of the Plan, and several other ATI sponsored retirement plans. Each participating retirement plan has an undivided interest in the Master Trust. At December 31, 2001 and 2000, the Plan's interest in the net assets of the Allegheny Technologies Disciplined Stock Fund Master Trust, the Alliance Equity Master Trust and the Fixed Income Master Trust were as follows:
2001 2000 ----------------------------------------- Allegheny Technologies Disciplined Stock Fund Master Trust 34.20% 33.66% Alliance Equity Master Trust 75.90 77.14 Fixed Income Master Trust 57.84 58.87
Investment income and expenses are allocated to the Plan based upon its pro rata share in the net assets of the Master Trust. -11- Allegheny Technologies Retirement Savings Plan Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) The composition of the net assets of the Fixed Income Master Trust at December 31, 2001 and 2000 was as follows:
2001 2000 ----------------------------------- Registered investment companies: Merrill Lynch Income Accumulation Fund $ -- $ 6,258,870 ----------------------------------- -- 6,258,870 Guaranteed investment contracts: Business Mens Assurance Company of America 1,246,890 2,498,807 Canada Life 2,743,536 4,136,118 Combined Life Insurance Company 3,097,946 4,668,459 GE Life and Annuity 11,812,375 5,163,549 Hartford Life Insurance Company 10,025,160 5,641,680 John Hancock Life Insurance Company 14,218,029 11,001,797 Monumental Life Insurance Company 3,331,280 1,867,053 New York Life Insurance Company 7,729,985 3,136,760 Ohio National Life 7,936,620 4,576,017 Pacific Mutual Life Insurance Company 6,036,924 6,200,078 Principal Life 3,000,000 -- Protective Life Insurance Company 1,002,333 2,012,650 Pruco Pace Credit Enhanced 9,950,359 7,691,842 Safeco Life Insurance 3,000,505 2,998,449 Security Life of Denver 6,181,488 5,131,606 Sun America, Inc. 2,992,868 2,998,064 United of Omaha 7,188,790 5,137,380 ----------------------------------- 101,495,088 74,860,309 Synthetic guaranteed investment contracts: Caisse des Depots et Consignations 7,800,826 8,950,177 CIT Equipment 992,755 -- Common Wealth Edison 1,976,061 -- Conn RRB Spec Trust 2,987,164 -- Detroit Edison 2,018,460 -- FHLMC 2,466,660 -- Illinois Power Sp. Trust 1,957,161 -- MBNA Master CC Trust 1,983,492 -- Peco Energy Company 1,982,788 -- Peoples Security Life Insurance Company 6,602,162 9,137,201 Public Service 1,998,629 -- Transamerica Occidental 9,559,425 14,066,106 Union Bank of Switzerland 2,737,675 5,967,640 Westdeutsche Landesbank Girozentrale 9,387,186 15,715,408 ----------------------------------- 54,450,444 53,836,532 Interest in common trusts 7,680,629 8,087,097 Receivables 381,024 1,191,139 Other 1,635,070 231,457 ----------------------------------- Total net assets $ 165,642,255 $ 144,465,404 ===================================
-12- Allegheny Technologies Retirement Savings Plan Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) The Fixed Income Fund (the Fund) invests in guaranteed investment contracts (GICs) and actively managed structured or synthetic investment contracts (SICs). The GICs are promises by a bank or insurance company to repay principal plus a fixed rate of return through contract maturity. SICs differ from GICs in that there are specific assets supporting the SICs, and these assets are owned by the Master Trust. The bank or insurance company issues a wrapper contract that allows participant-directed transactions to be made at contract value. The assets supporting the SICs are comprised of government agency bonds, corporate bonds, asset-backed securities (ABOs) and collateralized mortgage obligations (CMOs) with fair values of $55,854,607 and $53,822,660 at December 31, 2001 and 2000, respectively. The contract value minus the market value of the wrapper contracts at December 31, 2001 and 2000 is ($1,397,030) and $396,172, respectively. Interest crediting rates on the GICs in the Fund are determined at the time of purchase. Interest crediting rates on the SICs are either: (1) set at the time of purchase for a fixed term and crediting rate; (2) set at the time of purchase for a fixed term and variable crediting rate or (3) set at the time of purchase and reset monthly within a "constant duration." A constant duration contract may specify a duration of 2.5 years and the crediting rate is adjusted monthly based upon quarterly rebalancing of eligible 2.5 year duration investment instruments at the time of each resetting; in effect the contract never matures. At December 31, 2001 and 2000, the interest crediting rates for GICs and Fixed Maturity SICs ranged from 3.49% to 8.05% and 5.53% to 8.05%, respectively. For the years ended December 31, 2001 and 2000, the average annual yield for the investment contracts in the Fund was 6.25% and 6.39%, respectively. Fair value of the GICs was estimated by discounting the weighted average of the Fund's cash flows at the then-current interest crediting rate for a comparable maturity investment contract. Fair value for the SICs was estimated based on the fair value of each contract's supporting assets at December 31, 2001 and 2000. -13- Allegheny Technologies Retirement Savings Plan Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) The composition of net assets of the Alliance Equity Master Trust at December 31, 2001 and 2000 was as follows:
2001 2000 --------------------------------------- Investment in registered investment companies: Alliance Equity Fund S.A. #4 $ 40,024,274 $ 51,215,520 Cash overdraft -- (19,387) Operating payables (64,365) (31,413) ----------------------------------- Total net assets $ 39,959,909 $ 51,164,720 ===================================
The composition of net assets of the Allegheny Technologies Disciplined Stock Fund Master Trust at December 31, 2001 and 2000 was as follows:
2001 2000 --------------------------------------- Corporate common stocks $ 76,016,770 $ 89,911,418 Investment in common collective trusts 1,410,015 1,415,662 Receivables 103,913 62,651 Operating payables -- (147,875) ----------------------------------- Total net assets $ 77,530,698 $ 91,241,856 ===================================
-14- Allegheny Technologies Retirement Savings Plan Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) The composition of the changes in net assets of the various master trusts is as follows:
ALLEGHENY TECHNOLOGIES FIXED INCOME ALLIANCE EQUITY MASTER DISCIPLINED STOCK FUND MASTER MASTER TRUST TRUST TRUST --------------------------------- ---------------------------- ----------------------------------- YEAR ENDED DECEMBER 31 -------------------------------------------------------------------------------------------------- 2001 2000 2001 2000 2001 2000 ------------- ------------- ------------- ------------- ------------- ------------- Investment income (loss): Interest income (loss) $ 9,147,492 $ 7,954,724 $ -- $ -- $ (639) $ -- Net realized/unrealized loss on corporate common stocks -- -- -- -- (12,375,289) (8,472,618) Dividends -- -- -- -- 941,613 525,391 Net gain (loss), registered invest- ment companies 32,606 108,612 (9,248,179) (9,783,261) -- -- Net gain, common collective trusts 401,062 404,170 -- -- 53,202 138,084 Other income -- 468 -- -- -- -- Administrative expenses (208,589) (185,368) (170,195) (218,831) (519,489) (414,238) Transfers 11,804,280 1,647,278 (1,786,437) 2,172,578 (1,810,556) 54,049,508 ------------- ------------- ------------- ------------- ------------- ------------- Net increase (decrease) 21,176,851 9,929,884 (11,204,811) (7,829,514) (13,711,158) 45,826,127 Total net assets at beginning of year 144,465,404 134,535,520 51,164,720 58,994,234 91,241,856 45,415,729 ------------- ------------- ------------- ------------- ------------- ------------- Total net assets at end of year $ 165,642,255 $ 144,465,404 $ 39,959,909 $ 51,164,720 $ 77,530,698 $ 91,241,856 ============= ============= ============= ============= ============= =============
-15- Allegheny Technologies Retirement Savings Plan Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED)
TELEDYNE TECHNOLOGIES WATER PIK TECHNOLOGIES, ATI COMMON STOCK INCORPORATED COMMON STOCK INC. COMMON STOCK MASTER MASTER TRUST MASTER TRUST TRUST ------------------------------------------------------------------------------------------ YEAR ENDED DECEMBER 31 ------------------------------------------------------------------------------------------ 2001 2000 2001 2000 2001 2000 -------------- --------------- -------------- -------------- -------------- -------------- Investment income (loss): Net realized/unrealized gain (loss) on corporate common stocks $- $ (3,205,592) $- $ 3,930,711 $- $ (33,206) Dividends - 525,069 - -- - -- Net gain, common collective trusts - 17,831 - 2,171 - 409 Other loss - (708) - (1,379) - (233) Administrative expenses - (8,451) - 133 - 41 Transfers - (17,568,539) - (6,320,601) - (815,045) --------------------------------------------------------------------------------------------- Net decrease - (20,240,390) - (2,388,965) - (848,034) Total net assets at beginning of year - 20,240,390 - 2,388,965 - 848,034 --------------------------------------------------------------------------------------------- Total net assets at end of year $- $ -- $- $ -- $- $ -- =============================================================================================
Interest, realized and unrealized gains and losses, and management fees from the master trusts are included in the net (loss)/gain from interest in Allegheny Ludlum Corporation Master Trusts on the statement of changes in net assets available for benefits. 4. INCOME TAX STATUS The Plan has received a determination letter from the Internal Revenue Service dated July 23, 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. Subsequent to this issuance of the determination letter, the Plan was amended. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The plan administrator believes that 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. 5. TRANSACTIONS WITH PARTIES-IN-INTEREST Certain plan investments are shares of mutual funds managed by Dreyfus Retirement Services. Dreyfus Retirement Services is the trustee as defined by the Plan and, therefore, these transactions qualify as party-in-interest. Trustee and investment fees paid during 2001 and 2000 were based upon customary and reasonable rates for such services. -16- Allegheny Technologies Retirement Savings Plan Notes to Financial Statements (continued) 6. PLAN TERMINATION Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. 7. RECLASSIFICATIONS Certain reclassifications have been made to the 2000 financial statements to conform to the current year financial statement presentation. -17-
Allegheny Technologies Retirement Savings Plan EIN 25-1792394 Plan 004 Schedule H, Line 4(i)--Schedule of Assets (Held at End of Year) December 31, 2001 CURRENT DESCRIPTION UNITS/SHARES VALUE - ---------------------------------------------------------------------------------------------------------------------- REGISTERED INVESTMENT COMPANIES Dreyfus Emerging Leaders Fund* 528,395.929 $18,372,326 Prudential Jennison Growth Fund 77,891.635 1,138,776 Dreyfus International Value Fund* 262,414.386 3,608,198 Mas Midcap Growth Fund 159,406.852 2,781,650 Dreyfus Premier Nextech Fd* 13,000.225 63,311 MFS Mid-Cap Growth A 1,761.821 19,310 Pioneer Fd Class A SHS 327.813 12,755 Selected American SHS Inc. 297.298 9,213 Self-Directed Fund: AIM Equity Funds Inc Weingarten Fund Class A Shares 1,272.607 17,167 AIM Equity Funds Inc Blue Chip Fund Class A Shares 2,999.672 36,446 AIM Funds Group Value Fund Class A Shares 2,100.313 22,830 Alliance Growth & Income Fund Class A 5,102.135 18,317 Alliance Premier Growth Fund Class A 1,126.185 22,884 Alliance Technology Fund Inc Class B 158.294 9,876 American Balanced Fund 200.000 3,170 American Century Quantitative Equity Funds Eq Growth Fund Inc 1,526.752 29,375 American Century Mut Fds Ultra Twentieth Century Ultra Fund Inv 543.576 15,024 American High Income Mun. Bd Fund 201.348 3,030 American Mutual Fund 206.917 4,976 Ariel Growth Fund Calvert Ariel Appreciation Fund 158.447 5,866 Berger Growth and Income Fund 1,631.699 23,725 Berger Omni Invt Fund Tr Small Cap Value Fund Inc 1,250.685 35,107 Blair William Mut Fds Inc Intl Growth 401.230 6,211 Buffalo Small Cap Fund 3,383.871 67,542 Capital Income Bldr Fund Sh Ben Int 100.000 4,359 Capital World Growth & Income Fd Inc 200.030 4,901 Citizens Fds Emerging Growth Fd 240.376 3,281 Credit Suisse Warburg Pincus Global Telecom Fund 402.057 12,098 Delaware Group Trend Fd Inc Trend Fc Cl A 544.668 9,657 Delaware Pooled Trust Real Estate Investment Trust Portfolio 264.375 3,844 Delaware Technology & Innovation Fd Cl A 303.115 685 Dreyfus 100% U.S. Treasury MM Fd 505,170.950 505,171 Dreyfus Short Term Inc Fd Inc 870.209 10,355 Dreyfus Inv Grade Bd Fds Inter Term Fd 803.544 10,189 Dreyfus/Laurel Fds Inc S&P 500 Stock Index Fd Tr Shs 6,755.398 161,454 Dreyfus/Laurel Disc Stk Fd R 219.815 7,027
-18-
Schedule H, Line 4(i)--Schedule of Assets (Held at End of Year) (continued) CURRENT DESCRIPTION UNITS/SHARES VALUE - ---------------------------------------------------------------------------------------------------------------------- Dreyfus Bond Market Index Cl R 335,941.028 3,376,207 Dreyfus Growth & Value Fds Inc Premier Techn Growth Fd Cl R 682.494 17,233 Dreyfus Mid Cap Value Fund 3,568.018 93,803 Dreyfus Technology Growth Fund 9,646.772 241,748 Dreyfus Inc Fds High Ylds Secs Fd 856.257 4,941 Eaton Vance Growth Tr Worldwide Health Sciences Fd Cl A 1,401.090 14,473 Euro Pac Growth Fd Sh Ben Int 100.237 2,693 Federated Equity Kaufmann Fund 28,283.987 124,167 Federated Eqty Fds Comm Tech Fd Cl A 1,402.279 7,670 Fidelity Invt Tr Diversified Intl Fd 231.147 4,410 Fidelity Low Priced Stock Fund 515.647 14,139 Fidelity Mt Vernon Str Tr Growth Co Fd 754.351 40,147 Fidelity Mt Vernon Str Tr Growth Co Fd 405.155 7,706 Fidelity Puritan Tr Puritan Fd 1,501.303 26,528 Fidelity Secs Fd Growth & Income Portfolio 382.772 14,308 Fidelity Secs Fd Blue Chip Growth Fd 62.132 2,668 Fidelity Secs Fd Dividend Growth Fd 1,688.088 47,824 Fidelity Select Portfolios Technology Portfolio 1,063.553 64,451 Fidelity Select Portfolios Health Care Portfolio 83.568 10,635 Fidelity Select Portfolios Development Commnts Portfolio 682.742 12,904 Fidelity Select Portfolios Reg Bks Portfolio 495.350 16,451 Fidelity Select Portfolios Biotechnology Portfolio 1,348.942 87,843 Fidelity Select Portfolios Software & Computer Svcs Portfolio 1,131.400 53,843 Fidelity Select Portfolios Telecommunications Portfolio 521.346 18,883 Fidelity Select Portfolios Brokerage * Invt Mgmt. Portfolio 739.163 32,834 Fidelity Select Portfolios Ele Portfolio 4,511.411 222,277 Fidelity Select Portfolios Computers Portfolio 3,746.339 142,473 Firsthand Fds Technology Value Fd 235.923 9,732 Firsthand Fds Technology Leaders Fund 161.067 3,038 Franklin Value Invest-Balanced Investment Fund Class A 173.600 6,947 Franklin Value Invest-Micro Cap Value Fund 201.369 4,970 Gabelli Asset Fund-Sh Ben Int 146.488 4,830 Gabelli Equity Ser Fds-Small Cap Growth Fund 389.313 7,479 Gabelli Global Growth Fund AAA 504.376 7,793 Gabelli Growth Fd Sh Ben Int 1,476.704 42,352 Gabelli Intl Growth Fund 1,707.713 23,464 Growth Fd Amer Inc Com 758.214 17,977 Harris Assoc. Invt Trust-Oakmark Balanced Fd 669.113 12,466 Harris Assoc. Invt Trust-Oakmark Select Fund 781.558 21,290 Heritage Ser Tr Growth Equity Fd Cl A 177.589 5,333 Income Fund Amer Inc 200.000 3,164 Invesco Sector Fds Inc Health Sciences Fund 1,713.797 86,787 Invesco Sector Fds Inc Technology Fd Cl II 945.407 30,792 Invesco Sector Fds Inc Telecommunications Fd Inv 2,170.119 36,067 Investment Co America Com 616.378 17,585 Janus Invt Fd Sh Ben Int 4,528.995 111,413 Janus Invt Fd Growth & Income Fd 8,883.229 266,230 Janus Invt Fd Worldwide Fd 4,812.384 210,975 Janus Invt Fd Twenty Fd 4,170.554 160,400 Janus Invt Fd Flexible Income Fd 5,173.161 47,697 Janus Invt Fd Orion Fd 10,067.829 60,206 Janus Invt Fd Strategic Value Fund 9,883.418 91,520 Janus Invt Fd Global Tech Fd 12,391.523 150,433 Janus Invt Fd Global Life Sciences Fund 4,362.129 76,643 Janus Invt Fd Olympus Fd 9,551.636 266,013 Janus Invt Fd High Yield Fd 947.315 8,876 Janus Invt Fd Enterprise Fd 2,990.298 95,690
-19-
Schedule H, Line 4(i)--Schedule of Assets (Held at End of Year) (continued) CURRENT DESCRIPTION UNITS/SHARES VALUE - ---------------------------------------------------------------------------------------------------------------------- Janus Invt Fd Overseas Fd 2,878.667 58,437 Janus Invt Fd Mercury Fd 10,879.828 226,192 Janus Invt Fd Balanced Fund 156.34 3,069 MFS Ser Tr Strategic Growth Fd Cl A 495.903 9,903 Munder Gramlington Fds Tr Healthcare Fd Cl A 220.769 5,093 Munder Fds Inc Netnet Fd Cl A 96.285 1,731 New Perspective Fd Inc Com 459.559 9,968 New World Fd Inc New Com 240.038 4,940 PBHG Fds Inc Select Equity Fd 135.692 3,310 PBHG Fds Inc New Oppty Fd 1.613 46 PBHG Fds Inc Technology & Communications Fd 935.158 15,327 Park Ave Portfolio Guardian Invt Quality Bd Fd 473.424 4,668 Park Ave Portfolio Guardian Pk Ave Fd 4,698.310 150,346 Phoenix Strategic Equity Ser Fd Theme Fd Cl A 187.869 1,894 PIMCO Fds Pac Invt Mgmt Ser Total Return 963.795 10,081 PIMCO Fds Pac Invt Mgmt Ser Short Term Fd Cl A 996.688 9,997 T. Rowe Price Health Science Fd Inc Com 499.735 10,035 Putnam Fds Tr Intl Growth & Income Fd Cl A 481.015 4,137 Putnam High Yield Tr II Cl A 724.520 4,021 Putnam Income Fund Class A 1,733.198 11,248 Putnam Invt Fds Classic Equity Fd Cl A 1,882.355 22,607 Putnam Invt Fds Global Growth & Inc Fd 503.177 5,963 Putnam U.S. Govt Income Tr Cl A 1,048.608 13,527 Putnam Voyager Fd Inc Cl A 772.165 13,358 RCM Equity Funds Inc Dresdnar RCM Biotechnology Fd 93.228 2,554 RS Invt Tr Emerging Growth Fd 2,400.565 76,842 RS Invt Tr Internet Age Fd 845.547 4,870 Reserve Private Eq Ser Small Cap Growth Fc Cl R 124.916 4,529 T. Rowe Price MidCap Growth Fd Inc Com 340.541 13,417 T. Rowe Price Intl Fds Inc Japan Fd 388.035 2,348 T. Rowe Price Science & Tech Fd Inc Cap Stk 3,883.236 81,237 Royce Fd Opportunity Fd 730.858 6,585 Rydex Ser Tr OTC Fd 1,883.371 20,811 Scudder Intl Fd Inc Greater Europe Growth Fd 102.095 2,348 Scudder Secs Tr Technology Fd 4,564.405 71,981 SIT Mut Fds Inc Small Cap Growth Fd 337.580 8,510 State Street Resh Portfolios Inc Intl Equity Fd Cl A 529.676 5,339 Strong Equity Fds Inc Growth 20 Fd 687.666 10,136 Strong Conservative Equity Fds Inc Amer Utils Fd 6,360.851 96,621 Strong Opportunity Fd Inc 468.811 18,420 Templeton Fds Inc World Fd Cl A 673.854 10,013 Tweedy Browne Fd Inc Global Value Fd 625.852 11,597 Tweedy Browne Fd Inc American Value Fd 297.877 6,976 Van Kampen Amer Cap Emerging Growth Fd Cl A 74.996 3,174 Van Wagoner Fds Inc Post Venture Fd 515.761 5,178 Van Wagoner Fds Tech Fd 277.771 4,428 Vanguard Index Tr 500 Portfolio 1,128.745 119,523 Vanguard Index Tr Growth Portfolio 221.618 5,853 Vanguard/Wellington Fd 4,467.130 121,774 Vanguard Bd Index Fd 7,912.957 80,237 Vanguard/Windsor Fd Inc II Portfolio 798.568 20,435 Vanguard Fixed Income Secs Fd Inter Term U.S. Treas Portfolio 955.021 10,534 Warburg Pincus Gbl Post Venture Cap Fd Com 335.468 5,918
-20- Schedule H, Line 4(i)--Schedule of Assets (Held at End of Year) (continued)
CURRENT DESCRIPTION UNITS/SHARES VALUE - ---------------------------------------------------------------------------------------------------------------------- Wasatch Advisors Fds-Growth Fund 35.802 1,240 Wasatch Ultra Growth Fund 382.226 9,250 Washington Mut Invs Fd Inc Com 347.464 9,816 Wilshire Target Fds Inc Large Growth Portfolio Inv Cl 104.766 3,165 ------------------- Total self-directed fund 9,101,545 ------------------- Total registered investment companies $35,107,084 =================== COMMON COLLECTIVE TRUSTS Dreyfus Lifestyle Growth and Income Fund* 1,064,478.101 $17,328,573 Dreyfus Lifestyle Growth Fund* 483,568.978 8,405,115 Dreyfus Lifestyle Income Fund* 132,327.219 1,973,600 Dreyfus Short Term Investment Fund* 2,240.650 2,241 ------------------- Total common collective trusts $27,709,529 =================== CORPORATE COMMON STOCKS Allegheny Technologies Incorporated* 648,275.813 $10,858,620 Teledyne Technologies Incorporated 103,479.952 1,685,688 Water Pik Technologies, Inc. 33,766.2770 293,429 Ericsson LM Tel Co Adr CL B Sek 10 1,800.000 9,396 ------------------- Total corporate common stocks $12,847,133 =================== Participant loans* (6% to 10.5%) $ 3,942,809 ===================
*Party-in-interest -21- AUDITED FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE 401(k) Savings Account Plan for Employees of the Washington Plate Plant Years ended December 31, 2001 and 2000 with Report of Independent Auditors -22- 401(k) Savings Account Plan for Employees of the Washington Plate Plant Audited Financial Statements and Supplemental Schedule Years ended December 31, 2001 and 2000 CONTENTS Report of Independent Auditors ..........................................24 Audited Financial Statements Statements of Net Assets Available for Benefits..........................25 Statements of Changes in Net Assets Available for Benefits...............26 Notes to Financial Statements ...........................................27 Supplemental Schedule Schedule H, Line 4(i)--Schedule of Assets (Held at End of Year)..........36 -23- Report of Independent Auditors Allegheny Technologies Incorporated We have audited the accompanying statements of net assets available for benefits of the 401(k) Savings Account Plan for Employees of the Washington Plate Plant as of December 31, 2001 and 2000, and the related statements of changes in net assets available for benefits for the years then ended. 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 years then ended, 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 at end of year as of December 31, 2001 is presented for purposes of complying with the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974, and is not a required part of the financial statements. 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 Pittsburgh, Pennsylvania May 24, 2002 -24- 401(k) Savings Account Plan for Employees of the Washington Plate Plant Statements of Net Assets Available for Benefits
DECEMBER 31 2001 2000 --------------------------------- ASSETS Investments: Interest in Allegheny Ludlum Corporation Master Trusts $1,360,089 $1,306,977 Interest in registered investment companies 487,164 359,377 Interest in common collective trusts 462,073 420,569 Corporate common stocks 98,723 64,166 Participant loans 27,110 7,982 -------------------------------- Net assets available for benefits $2,435,159 $2,159,071 ================================
See accompanying notes. -25- 401(k) Savings Account Plan for Employees of the Washington Plate Plant Statements of Changes in Net Assets Available for Benefits
YEAR ENDED DECEMBER 31 2001 2000 -------------------------- Additions: Contributions: Employer $ 174,189 $ -- Employee 367,312 455,077 Investment income: Net loss from interest in Allegheny Ludlum Corporation Master Trusts (142,973) (107,330) Net (loss)/gain from interest in registered investment companies (42,462) 13,118 Net loss from interest in common collective trusts (29,623) (868) Interest income 1,268 609 Dividend income 2,997 587 Net realized/unrealized gain (loss) on corporate common stocks 9,090 (10,867) -------------------------- Total additions 339,798 350,326 Deductions: Distributions to participants 63,710 47,969 -------------------------- Total deductions 63,710 47,969 -------------------------- Net additions 276,088 302,357 Net assets available for benefits at beginning of year 2,159,071 1,856,714 -------------------------- Net assets available for benefits at end of year $ 2,435,159 $ 2,159,071 ==========================
See accompanying notes. -26- 401(k) Savings Account Plan for Employees of the Washington Plate Plant Notes to Financial Statements December 31, 2001 1. SIGNIFICANT ACCOUNTING POLICIES Investments are valued as follows: Bank and insurance contracts with varying contract rates and maturity dates are stated at contract value. Although it is management's intention to hold the investment contracts in the Fixed Income Fund until maturity, certain investment contracts provide for adjustments to contract value for withdrawals made prior to maturity. All other funds are stated at their net asset value, based on the quoted market prices of the securities held in such funds on applicable exchanges. 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. 2. DESCRIPTION OF THE PLAN The 401(k) Savings Account Plan for Employees of the Washington Plate Plant (the Plan) is a defined contribution plan and is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). The purpose of the Plan is to encourage thrift and to assist union employees of the Allegheny Ludlum Corporation (the Company) of the Washington Plate facility in accumulating a fund to supplement retirement income by allowing eligible employees to make tax-deferred contributions to the Plan. Allegheny Ludlum Corporation is a wholly-owned subsidiary of Allegheny Technologies Incorporated. Employee contributions to the Plan can range between 1% and 18% of eligible wages subject to Internal Revenue Code limitations. In addition, the employee's annual pretax profit sharing award and pretax Longevity Incentive Payment Plan award may be contributed at the employee's discretion. Beginning May 1, 2001, the Company began contributing $.50 for each hour worked per eligible union employee. Unless otherwise specified by the participant, all contributions are made to the Fixed Income Fund. Such contributions are made only from current income or accumulated earnings of the Plan Sponsor. -27- 401(k) Savings Account Plan for Employees of the Washington Plate Plant Notes to Financial Statements (continued) 2. DESCRIPTION OF THE PLAN (CONTINUED) Separate accounts are maintained by the Plan Sponsor for each participating employee. Trustee fees and asset management fees charged by the Plan's trustee, Dreyfus Retirement Services, for the administration of all funds are charged against net assets available for benefits of the respective fund. Certain other expenses of administering the Plan are paid by the Plan Sponsor. Participants may make "in-service" and hardship withdrawals as outlined in the plan document. Active employees can borrow up to 50% of their vested account balances minus any outstanding loans. The loan amounts are further limited to a minimum of $500 and a maximum of $50,000, and an employee can obtain no more than three loans at one time. Interest rates are determined based on commercially accepted criteria, and payment schedules vary based on the type of the loan. General purpose loans are repaid over 6 to 60 months, and primary residence loans are repaid over periods up to 180 months. Payments are made by payroll deductions. Effective November 29, 1999, Allegheny Teledyne Incorporated's (the Plan Sponsor) name was changed to Allegheny Technologies Incorporated. Also, the Aerospace and Electronics and Consumer segments of Allegheny Teledyne were spun off into two new freestanding public companies--Teledyne Technologies Incorporated and Water Pik Technologies, Inc. Stockholders of Allegheny Teledyne became stockholders of Teledyne Technologies Incorporated and Water Pik Technologies, Inc., thus creating two new master trusts. Participants may continue to hold interest in the two new companies until December 31, 2002, at which time these two holdings will be terminated and the assets will be transferred to one of the other plan investment options. Effective October 1, 2000, the Allegheny Technologies Incorporated (ATI) Common Stock Master Trust, Teledyne Technologies Incorporated Common Stock Master Trust, and Water Pik Technologies, Inc. Common Stock Master Trust were deunitized, enabling each participating plan to hold actual shares of the common stocks versus holding each stock in separate master trusts. Further information about the Plan, including eligibility, vesting, contributions, and withdrawals, is contained in the plan documents and related contracts. These documents are available from the Allegheny Technologies Personnel and Compensation Committee. -28- 401(k) Savings Account Plan for Employees of the Washington Plate Plant Notes to Financial Statements (continued) 3. INVESTMENTS The following presents investments that represent 5% or more of the Plan's net assets:
DECEMBER 31 2001 2000 -------------------------------------------- Allegheny Technologies Disciplined Stock Fund $516,281 $549,829 Alliance Equity Fund 418,404 473,294 Dreyfus Emerging Leaders Fund 377,069 298,029 Dreyfus Lifestyle Growth Fund 125,988 131,854 Dreyfus Lifestyle Growth and Income Fund 303,884 265,849 Fixed Income Fund 425,404 283,854
Certain of the Plan's investments are in the Allegheny Technologies Disciplined Stock Fund Master Trust, the Alliance Equity Master Trust and the Fixed Income Master Trust, which was established for the investment of assets of the Plan, and several other ATI sponsored retirement plans. Each participating retirement plan has an undivided interest in the Master Trust. At December 31, 2001 and 2000, the Plan's interest in the net assets of the Allegheny Technologies Disciplined Stock Fund Master Trust, the Alliance Equity Master Trust and the Fixed Income Master Trust were as follows:
2001 2000 -------------------------------------------- Allegheny Technologies Disciplined Stock Fund Master Trust 0.67% 0.60% Alliance Equity Master Trust 1.05 0.93 Fixed Income Master Trust 0.26 0.20
Investment income and expenses are allocated to the Plan based upon its pro rata share in the net assets of the Master Trust. -29- 401(k) Savings Account Plan for Employees of the Washington Plate Plant Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) The composition of the net assets of the Fixed Income Master Trust at December 31, 2001 and 2000 was as follows:
2001 2000 -------------------------------------------- Registered investment companies: Merrill Lynch Income Accumulation Fund $ - $ 6,258,870 -------------------------------------------- - 6,258,870 Guaranteed investment contracts: Business Mens Assurance Company of America 1,246,890 2,498,807 Canada Life 2,743,536 4,136,118 Combined Life Insurance Company 3,097,946 4,668,459 GE Life and Annuity 11,812,375 5,163,549 Hartford Life Insurance Company 10,025,160 5,641,680 John Hancock Life Insurance Company 14,218,029 11,001,797 Monumental Life Insurance Company 3,331,280 1,867,053 New York Life Insurance Company 7,729,985 3,136,760 Ohio National Life 7,936,620 4,576,017 Pacific Mutual Life Insurance Company 6,036,924 6,200,078 Principal Life 3,000,000 - Protective Life Insurance Company 1,002,333 2,012,650 Pruco Pace Credit Enhanced 9,950,359 7,691,842 Safeco Life Insurance 3,000,505 2,998,449 Security Life of Denver 6,181,488 5,131,606 Sun America, Inc. 2,992,868 2,998,064 United of Omaha 7,188,790 5,137,380 -------------------------------------------- 101,495,088 74,860,309 Synthetic guaranteed investment contracts: Caisse des Depots et Consignations 7,800,826 8,950,177 CIT Equipment 992,755 - Common Wealth Edison 1,976,061 - Conn RRB Spec Trust 2,987,164 - Detroit Edison 2,018,460 - FHLMC 2,466,660 - Illinois Power Sp. Trust 1,957,161 - MBNA Master CC Trust 1,983,492 - Peco Energy Company 1,982,788 - Peoples Security Life Insurance Company 6,602,162 9,137,201 Public Service 1,998,629 - Transamerica Occidental 9,559,425 14,066,106 Union Bank of Switzerland 2,737,675 5,967,640 Westdeutsche Landesbank Girozentrale 9,387,186 15,715,408 -------------------------------------------- 54,450,444 53,836,532 Interest in common collective trusts 7,680,629 8,087,097 Receivables 381,024 1,191,139 Other 1,635,070 231,457 -------------------------------------------- Total net assets $165,642,255 $144,465,404 ============================================
-30- 401(k) Savings Account Plan for Employees of the Washington Plate Plant Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) The Fixed Income Fund (the Fund) invests in guaranteed investment contracts (GICs) and actively managed structured or synthetic investment contracts (SICs). The GICs are promises by a bank or insurance company to repay principal plus a fixed rate of return through contract maturity. SICs differ from GICs in that there are specific assets supporting the SICs, and these assets are owned by the Master Trust. The bank or insurance company issues a wrapper contract that allows participant-directed transactions to be made at contract value. The assets supporting the SICs are comprised of government agency bonds, corporate bonds, asset-backed securities (ABOs) and collateralized mortgage obligations (CMOs) with fair values of $55,854,607 and $53,822,660 at December 31, 2001 and 2000, respectively. The contract value minus the market value of the wrapper contracts at December 31, 2001 and 2000 is ($1,397,030) and $396,172, respectively. Interest crediting rates on the GICs in the Fund are determined at the time of purchase. Interest crediting rates on the SICs are either: (1) set at the time of purchase for a fixed term and crediting rate; (2) set at the time of purchase for a fixed term and variable crediting rate or (3) set at the time of purchase and reset monthly within a "constant duration." A constant duration contract may specify a duration of 2.5 years and the crediting rate is adjusted monthly based upon quarterly rebalancing of eligible 2.5 year duration investment instruments at the time of each resetting; in effect the contract never matures. At December 31, 2001 and 2000, the interest crediting rates for GICs and Fixed Maturity SICs ranged from 3.49% to 8.05% and 5.53% to 8.05%, respectively. For the years ended December 31, 2001 and 2000, the average annual yield for the investment contracts in the Fund was 6.25% and 6.39%, respectively. Fair value of the GICs was estimated by discounting the weighted average of the Fund's cash flows at the then-current interest crediting rate for a comparable maturity investment contract. Fair value for the SICs was estimated based on the fair value of each contract's supporting assets at December 31, 2001 and 2000. -31- 401(k) Savings Account Plan for Employees of the Washington Plate Plant Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) The composition of net assets of the Alliance Equity Master Trust at December 31, 2001 and 2000 was as follows:
2001 2000 --------------------------------- Investment in registered investment companies: Alliance Equity Fund S.A. #4 $40,024,274 $51,215,520 Cash overdraft - (19,387) Operating payables (64,365) (31,413) --------------------------------- Total net assets $39,959,909 $51,164,720 =================================
The composition of net assets of the Allegheny Technologies Disciplined Stock Fund Master Trust at December 31, 2001 and 2000 was as follows:
2001 2000 --------------------------------- Corporate common stocks $76,016,770 $89,911,418 Interest in common collective trusts 1,410,015 1,415,662 Receivables 103,913 62,651 Operating payables - (147,875) --------------------------------- Total net assets $77,530,698 $91,241,856 =================================
-32- 401(k) Savings Account Plan for Employees of the Washington Plate Plant Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) The composition of the changes in net assets of the various master trusts is as follows:
ALLEGHENY TECHNOLOGIES DISCIPLINED STOCK FUND MASTER FIXED INCOME MASTER TRUST ALLIANCE EQUITY MASTER TRUST TRUST --------------------------------- ---------------------------- ------------------------------- YEAR ENDED DECEMBER 31 ---------------------------------------------------------------------------------------------- 2001 2000 2001 2000 2001 2000 -------------------------------------------------------------------------------------------------- Investment income (loss): Interest income (loss) $ 9,147,492 $ 7,954,724 $ -- $ -- $ (639) $ -- Net realized/unrealized loss on corporate common stocks -- -- -- -- (12,375,289) (8,472,618) Dividends -- -- -- -- 941,613 525,391 Net gain (loss), registered invest- ment companies 32,606 108,612 (9,248,179) (9,783,261) -- -- Net gain, common collective trusts 401,062 404,170 -- -- 53,202 138,084 Other income -- 468 -- -- -- -- Administrative expenses (208,589) (185,368) (170,195) (218,831) (519,489) (414,238) Transfers 11,804,280 1,647,278 (1,786,437) 2,172,578 (1,810,556) 54,049,508 -------------------------------------------------------------------------------------------------- Net increase (decrease) 21,176,851 9,929,884 (11,204,811) (7,829,514) (13,711,158) 45,826,127 Total net assets at beginning of year 144,465,404 134,535,520 51,164,720 58,994,234 91,241,856 45,415,729 -------------------------------------------------------------------------------------------------- Total net assets at end of year $ 165,642,255 $ 144,465,404 $ 39,959,909 $ 51,164,720 $ 77,530,698 $ 91,241,856 ==================================================================================================
-33- 401(k) Savings Account Plan for Employees of the Washington Plate Plant Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED)
TELEDYNE TECHNOLOGIES WATER PIK TECHNOLOGIES, ATI COMMON STOCK MASTER TRUST INCORPORATED COMMON STOCK INC. COMMON STOCK MASTER MASTER TRUST TRUST --------------------------------------------------------------------------------------- YEAR ENDED DECEMBER 31 ------------------------------------------------------------------------------------------ 2001 2000 2001 2000 2001 2000 --------------------------------------------------------------------------------------- Investment income (loss): Net realized/unrealized gain (loss) on corporate common stocks $ -- $ (3,205,592) $ -- $ 3,930,711 $ -- $ (33,206) Dividends -- 525,069 -- -- -- -- Net gain, common collective trusts -- 17,831 -- 2,171 -- 409 Other loss -- (708) -- (1,379) -- (233) Administrative expenses -- (8,451) -- 133 -- 41 Transfers -- (17,568,539) -- (6,320,601) -- (815,045) --------------------------------------------------------------------------------------- Net decrease -- (20,240,390) -- (2,388,965) -- (848,034) Total net assets at beginning of year -- 20,240,390 -- 2,388,965 -- 848,034 --------------------------------------------------------------------------------------- Total net assets at end of year $ -- $ -- $ -- $ -- $ -- $ -- =======================================================================================
Interest, realized and unrealized gains and losses, and management fees from the master trusts are included in the net (loss)/gain from interest in Allegheny Ludlum Corporation Master Trusts on the statements of changes in net assets available for benefits. 4. INCOME TAX STATUS The Plan has received a determination letter from the Internal Revenue Service dated March 3, 1998, 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. Subsequent to this issuance of the determination letter, the Plan was amended. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The plan sponsor has indicated that it will take the necessary steps, if any, to maintain the Plan's qualified status. -34- 401(k) Savings Account Plan for Employees of the Washington Plate Plant Notes to Financial Statements (continued) 5. TRANSACTIONS WITH PARTIES-IN-INTEREST Certain plan investments are shares of mutual funds managed by Dreyfus Retirement Services. Dreyfus Retirement Services is the trustee as defined by the Plan and, therefore, these transactions qualify as party-in-interest. Trustee and investment fees paid during 2001 and 2000 were based upon customary and reasonable rates for such services. 6. PLAN TERMINATION Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. 7. RECLASSIFICATIONS Certain reclassifications have been made to the 2000 financial statements to conform to the current year financial statement presentation. -35- 401(k) Savings Account Plan for Employees of the Washington Plate Plant EIN 25-1792394 Plan 020 Schedule H, Line 4(i)--Schedule of Assets (Held at End of Year) December 31, 2001
DESCRIPTION UNITS/SHARES CURRENT VALUE - ---------------------------------------------------------------------------------------------------------------------- REGISTERED INVESTMENT COMPANIES Interest in Dreyfus Emerging Leaders Fund* 10,844.658 $377,069 Dreyfus International Value Fund* 3,559.537 48,944 Dreyfus Bond Market Index Fund* 3,723.569 37,422 MAS Mid Cap Growth Fund 421.462 7,354 Jennison Growth Fund 1,120.055 16,375 ------------------- Total registered investment companies $487,164 =================== COMMON COLLECTIVE TRUSTS Dreyfus Lifestyle Growth and Income Fund* 18,667.310 $303,884 Dreyfus Lifestyle Growth Fund* 7,248.418 125,988 Short-Term Investment Fund 33.750 34 Dreyfus Lifestyle Income Fund* 2,156.779 32,167 ------------------- Total common collective trusts $462,073 =================== CORPORATE COMMON STOCKS Allegheny Technologies Incorporated* 5,194.000 $ 87,000 Teledyne Technologies Incorporated 605.000 9,855 Water Pik Technologies, Inc. 215.000 1,868 ------------------- Total corporate common stocks $ 98,723 =================== Participant loans* (6% to 10.5%) $ 27,110 ===================
*Party-in-interest -36- Audited Financial Statements and Supplemental Schedule Savings and Security Plan of the Lockport and Waterbury Facilities Years ended December 31, 2001 and 2000 with Report of Independent Auditors -37- Savings and Security Plan of the Lockport and Waterbury Facilities Audited Financial Statements and Supplemental Schedule Years ended December 31, 2001 and 2000 CONTENTS Report of Independent Auditors ..........................................39 Audited Financial Statements Statements of Net Assets Available for Benefits..........................40 Statements of Changes in Net Assets Available for Benefits...............41 Notes to Financial Statements ...........................................42 Supplemental Schedule Schedule H, Line 4(i)--Schedule of Assets (Held at End of Year)..........51 -38- Report of Independent Auditors Allegheny Technologies Incorporated We have audited the accompanying statements of net assets available for benefits of the Savings and Security Plan of the Lockport and Waterbury Facilities as of December 31, 2001 and 2000, and the related statements of changes in net assets available for benefits for the years then ended. 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 years then ended, 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 complying with the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974, and is not a required part of the financial statements. 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 Pittsburgh, Pennsylvania May 24, 2002 -39- Savings and Security Plan of the Lockport and Waterbury Facilities Statements of Net Assets Available for Benefits
DECEMBER 31 2001 2000 -------------------------- ASSETS Investments: Interest in Allegheny Ludlum Corporation Master Trusts $ 4,676,529 $ 4,668,897 Interest in registered investment companies 961,957 998,576 Interest in common collective trusts 363,959 456,870 Corporate common stocks 221,166 222,199 Participant loans 314,699 171,832 -------------------------- Total investments 6,538,310 6,518,374 Cash -- 9,892 Other receivables -- 24,388 Other payables (248) (34,429) -------------------------- Net assets available for benefits $ 6,538,062 $ 6,518,225 ==========================
See accompanying notes. -40- Savings and Security Plan of the Lockport and Waterbury Facilities Statements of Changes in Net Assets Available for Benefits
YEAR ENDED DECEMBER 31 2001 2000 ---------------------------- Additions: Contributions: Employer $ 234,332 $ 400,701 Employee 242,146 254,827 Investment income: Net gain from interest in Allegheny Ludlum Corporation Master Trusts 105,188 126,342 Net (loss)/gain from interest in registered investment companies (153,603) 62,064 Net loss from interest in common collective trusts (23,017) (1,641) Interest income 18,668 10,382 Dividend income 8,379 4,435 Net realized/unrealized loss on corporate common stocks (7,558) (99,694) -------------------------- Total additions 424,535 757,416 Deductions: Distributions to participants 404,698 651,687 -------------------------- Total deductions 404,698 651,687 -------------------------- Net additions 19,837 105,729 Net assets available for benefits at beginning of year 6,518,225 6,412,496 -------------------------- Net assets available for benefits at end of year $ 6,538,062 $ 6,518,225 ==========================
See accompanying notes. -41- Savings and Security Plan of the Lockport and Waterbury Facilities Notes to Financial Statements December 31, 2001 1. SIGNIFICANT ACCOUNTING POLICIES Investments are valued as follows: Bank and insurance contracts with varying contract rates and maturity dates are stated at contract value. Although it is management's intention to hold the investment contracts in the Fixed Income Fund until maturity, certain investment contracts provide for adjustments to contract value for withdrawals made prior to maturity. All other funds are stated at their net asset value, based on the quoted market prices of the securities held in such funds on applicable exchanges. 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. 2. DESCRIPTION OF THE PLAN The Savings and Security Plan of the Lockport and Waterbury Facilities of Allegheny Ludlum Corporation (the Plan) is a defined contribution plan and is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). The purpose of the Plan is to provide a savings and retirement plan to eligible employees of the Lockport and Waterbury Facilities of Allegheny Ludlum Corporation (ALC) by allowing a portion of their salary to be set aside each month through payroll deductions. ALC is a wholly owned subsidiary of Allegheny Technologies Incorporated (ATI), the Plan Sponsor. Effective July 1, 2001, participants can defer between 1% and 18% of their eligible wages, subject to Internal Revenue Code limitations. The Company's contribution effective July 1, 2001 consists solely of $.50 for each hour worked by the participant (fixed dollar retirement). Prior to July 1, 2001, participants could defer up to 8% of their eligible wages to the Plan based on years of service (basic savings deferral). In addition, participants could defer additional amounts such that when combined with the basic savings deferral, the total deferral did not exceed 16% of eligible wages or Internal Revenue Code limitations. The Company, prior to July 1, 2001, contributed 6.5% of the participant's eligible wages plus a fixed dollar percentage as defined in the Plan regardless of whether the participant made any basic savings deferrals. The Company also contributed a matching contribution equal to 50% of the participant's basic savings deferral. -42- Savings and Security Plan of the Lockport and Waterbury Facilities Notes to Financial Statements (continued) 2. DESCRIPTION OF THE PLAN (CONTINUED) Separate accounts are maintained by the Plan Sponsor for each participating employee. Trustee fees and asset management fees charged by the Plan's trustee, Dreyfus Retirement Services, for the administration of all funds are charged against net assets available for benefits of the respective fund. Certain other expenses of administering the Plan are paid by the Plan Sponsor. Participants may make "in-service" and hardship withdrawals as outlined in the plan document. Prior to July 1, 2001, under certain provisions of the Plan, contributions by the Plan Sponsor, which have been allocated to the accounts of the participants, were subject to forfeiture upon participant's termination of employment with less than five years of service. Such forfeitures will be used to reduce future contributions by the employer. Prior to July 1, 2001, employer matching contributions allocated to a participant's account became fully vested after a participant completed five years of service. Employee contributions and the fixed dollar retirement contributions are fully vested at all times. Effective July 1, 2001, participants are fully vested in their entire participant account balance. Active employees can borrow up to 50% of their vested account balances. The loan amounts are further limited to a minimum of $500 and a maximum of $50,000, and an employee can obtain no more than three loans at one time. Interest rates are determined based on commercially accepted criteria, and payment schedules vary based on the type of the loan. General purpose loans are repaid over 6 to 60 months, and primary residence loans are repaid over periods up to 180 months. Payments are made by payroll deductions. Effective November 29, 1999, Allegheny Teledyne Incorporated's (the Plan Sponsor) name was changed to Allegheny Technologies Incorporated. Also, the Aerospace and Electronics and Consumer segments of Allegheny Teledyne were spun off into two new freestanding public companies--Teledyne Technologies Incorporated and Water Pik Technologies, Inc. Stockholders of Allegheny Teledyne became stockholders of Teledyne Technologies Incorporated and Water Pik Technologies, Inc., thus creating two new master trusts. Participants may continue to hold interest in the two new companies until December 31, 2002, at which time these two holdings will be terminated and the assets will be transferred to one of the other plan investment options. Effective October 1, 2000, the Allegheny Technologies Incorporated (ATI) Common Stock Master Trust, Teledyne Technologies Incorporated Common Stock Master Trust, and Water Pik Technologies, Inc. Common Stock Master Trust were deunitized, enabling each participating plan to hold actual shares of the common stocks versus holding each stock in separate master trusts. -43- Savings and Security Plan of the Lockport and Waterbury Facilities Notes to Financial Statements (continued) 2. DESCRIPTION OF THE PLAN (CONTINUED) Further information about the Plan, including eligibility, vesting, contributions, and withdrawals, is contained in the plan documents and related contracts. These documents are available from the Allegheny Technologies Personnel and Compensation Committee. 3. INVESTMENTS The following presents investments that represent 5% or more of the Plan's net assets:
DECEMBER 31 2001 2000 -------------------------------- Fixed Income Fund $3,954,889 $3,853,103 Dreyfus Emerging Leaders Fund 800,041 921,082 Allegheny Technologies Disciplined Stock Fund 533,936 545,492
Certain of the Plan's investments are in the Allegheny Technologies Disciplined Stock Fund Master Trust, the Alliance Equity Master Trust and the Fixed Income Master Trust, which was established for the investment of assets of the Plan, and several other ATI sponsored retirement plans. Each participating retirement plan has an undivided interest in the Master Trust. At December 31, 2001 and 2000, the Plan's interest in the net assets of the Allegheny Technologies Disciplined Stock Fund Master Trust, the Alliance Equity Master Trust and the Fixed Income Master Trust were as follows:
2001 2000 -------------------------------- Allegheny Technologies Disciplined Stock Fund Master Trust 0.69% 0.60% Alliance Equity Master Trust 0.47 0.53 Fixed Income Master Trust 2.39 2.67
Investment income and expenses are allocated to the Plan based upon its pro rata share in the net assets of the Master Trust. -44- Savings and Security Plan of the Lockport and Waterbury Facilities Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) The composition of the net assets of the Fixed Income Master Trust at December 31, 2001 and 2000 was as follows:
2001 2000 --------------------------- Registered investment companies: Merrill Lynch Income Accumulation Fund $ -- $ 6,258,870 --------------------------- -- 6,258,870 Guaranteed investment contracts: Business Mens Assurance Company of America 1,246,890 2,498,807 Canada Life 2,743,536 4,136,118 Combined Life Insurance Company 3,097,946 4,668,459 GE Life and Annuity 11,812,375 5,163,549 Hartford Life Insurance Company 10,025,160 5,641,680 John Hancock Life Insurance Company 14,218,029 11,001,797 Monumental Life Insurance Company 3,331,280 1,867,053 New York Life Insurance Company 7,729,985 3,136,760 Ohio National Life 7,936,620 4,576,017 Pacific Mutual Life Insurance Company 6,036,924 6,200,078 Principal Life 3,000,000 -- Protective Life Insurance Company 1,002,333 2,012,650 Pruco Pace Credit Enhanced 9,950,359 7,691,842 Safeco Life Insurance 3,000,505 2,998,449 Security Life of Denver 6,181,488 5,131,606 Sun America, Inc. 2,992,868 2,998,064 United of Omaha 7,188,790 5,137,380 --------------------------- 101,495,088 74,860,309 Synthetic guaranteed investment contracts: Caisse des Depots et Consignations 7,800,826 8,950,177 CIT Equipment 992,755 -- Common Wealth Edison 1,976,061 -- Conn RRB Spec Trust 2,987,164 -- Detroit Edison 2,018,460 -- FHLMC 2,466,660 -- Illinois Power Sp. Trust 1,957,161 -- MBNA Master CC Trust 1,983,492 -- Peco Energy Company 1,982,788 -- Peoples Security Life Insurance Company 6,602,162 9,137,201 Public Service 1,998,629 -- Transamerica Occidental 9,559,425 14,066,106 Union Bank of Switzerland 2,737,675 5,967,640 Westdeutsche Landesbank Girozentrale 9,387,186 15,715,408 --------------------------- 54,450,444 53,836,532 Interest in common collective trust 7,680,629 8,087,097 Receivables 381,024 1,191,139 Other 1,635,070 231,457 --------------------------- Total net assets $165,642,255 $144,465,404 ===========================
-45- Savings and Security Plan of the Lockport and Waterbury Facilities Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) The Fixed Income Fund (the Fund) invests in guaranteed investment contracts (GICs) and actively managed structured or synthetic investment contracts (SICs). The GICs are promises by a bank or insurance company to repay principal plus a fixed rate of return through contract maturity. SICs differ from GICs in that there are specific assets supporting the SICs, and these assets are owned by the Master Trust. The bank or insurance company issues a wrapper contract that allows participant-directed transactions to be made at contract value. The assets supporting the SICs are comprised of government agency bonds, corporate bonds, asset-backed securities (ABOs) and collateralized mortgage obligations (CMOs) with fair values of $55,854,607 and $53,822,660 at December 31, 2001 and 2000, respectively. The contract value minus the market value of the wrapper contracts at December 31, 2001 and 2000 is ($1,397,030) and $396,172, respectively. Interest crediting rates on the GICs in the Fund are determined at the time of purchase. Interest crediting rates on the SICs are either: (1) set at the time of purchase for a fixed term and crediting rate; (2) set at the time of purchase for a fixed term and variable crediting rate or (3) set at the time of purchase and reset monthly within a "constant duration." A constant duration contract may specify a duration of 2.5 years and the crediting rate is adjusted monthly based upon quarterly rebalancing of eligible 2.5 year duration investment instruments at the time of each resetting; in effect the contract never matures. At December 31, 2001 and 2000, the interest crediting rates for GICs and Fixed Maturity SICs ranged from 3.49% to 8.05% and 5.53% to 8.05%, respectively. For the years ended December 31, 2001 and 2000, the average annual yield for the investment contracts in the Fund was 6.25% and 6.39%, respectively. Fair value of the GICs was estimated by discounting the weighted average of the Fund's cash flows at the then-current interest crediting rate for a comparable maturity investment contract. Fair value for the SICs was estimated based on the fair value of each contract's supporting assets at December 31, 2001 and 2000. -46- Savings and Security Plan of the Lockport and Waterbury Facilities Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) The composition of net assets of the Alliance Equity Master Trust at December 31, 2001 and 2000 was as follows:
2001 2000 ---------------------------- Investment in registered investment companies: Alliance Equity Fund S.A. #4 $ 40,024,274 $ 51,215,520 Cash overdraft -- (19,387) Operating payables (64,365) (31,413) ---------------------------- Total net assets $ 39,959,909 $ 51,164,720 =============================
The composition of net assets of the Allegheny Technologies Disciplined Stock Fund Master Trust at December 31, 2001 and 2000 was as follows:
2001 2000 ------------------------------ Corporate common stocks $ 76,016,770 $ 89,911,418 Interest in common collective trusts 1,410,015 1,415,662 Receivables 103,913 62,651 Operating payables -- (147,875) ----------------------------- Total net assets $ 77,530,698 $ 91,241,856 =============================
-47- Savings and Security Plan of the Lockport and Waterbury Facilities Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) The composition of the changes in net assets of the various master trusts is as follows:
ALLEGHENY TECHNOLOGIES DISCIPLINED STOCK FUND MASTER FIXED INCOME MASTER TRUST ALLIANCE EQUITY MASTER TRUST TRUST --------------------------------- ---------------------------- ------------------------------- YEAR ENDED DECEMBER 31 ---------------------------------------------------------------------------------------------- 2001 2000 2001 2000 2001 2000 ---------------------------------------------------------------------------------------------- Investment income (loss): Interest income (loss) $ 9,147,492 $ 7,954,724 $ - $ - $ (639) $ - Net realized/unrealized loss on corporate common stocks - - - - (12,375,289) (8,472,618) Dividends - - - - 941,613 525,391 Net gain (loss), registered invest- ment companies 32,606 108,612 (9,248,179) (9,783,261) - - Net gain, common collective trusts 401,062 404,170 - - 53,202 138,084 Other income - 468 - - - - Administrative expenses (208,589) (185,368) (170,195) (218,831) (519,489) (414,238) Transfers 11,804,280 1,647,278 (1,786,437) 2,172,578 (1,810,556) 54,049,508 ---------------------------------------------------------------------------------------------- Net increase (decrease) 21,176,851 9,929,884 (11,204,811) (7,829,514) (13,711,158) 45,826,127 Total net assets at beginning of year 144,465,404 134,535,520 51,164,720 58,994,234 91,241,856 45,415,729 ---------------------------------------------------------------------------------------------- Total net assets at end of year $165,642,255 $144,465,404 $39,959,909 $51,164,720 $77,530,698 $91,241,856 ==============================================================================================
-48- Savings and Security Plan of the Lockport and Waterbury Facilities Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED)
TELEDYNE TECHNOLOGIES WATER PIK TECHNOLOGIES, ATI COMMON STOCK MASTER TRUST INCORPORATED COMMON STOCK INC. COMMON STOCK MASTER MASTER TRUST TRUST ------------------------------ ----------------------------- ----------------------------- YEAR ENDED DECEMBER 31 ------------------------------------------------------------------------------------------ 2001 2000 2001 2000 2001 2000 ------------------------------------------------------------------------------------------ Investment income (loss): Net realized/unrealized gain (loss) on corporate common stocks $ -- $ (3,205,592) $ -- $ 3,930,711 $ -- $ (33,206) Dividends -- 525,069 -- -- -- -- Net gain, common collective trusts -- 17,831 -- 2,171 -- 409 Other loss -- (708) -- (1,379) -- (233) Administrative expenses -- (8,451) -- 133 -- 41 Transfers -- (17,568,539) -- (6,320,601) -- (815,045) ------------------------------------------------------------------------------------------ Net decrease -- (20,240,390) -- (2,388,965) -- (848,034) Total net assets at beginning of year -- 20,240,390 -- 2,388,965 -- 848,034 ------------------------------------------------------------------------------------------ Total net assets at end of year $ -- $ -- $ -- $ -- $ -- $ -- ==========================================================================================
Interest, realized and unrealized gains and losses, and management fees from the master trusts are included in the net (loss)/gain from interest in Allegheny Ludlum Corporation Master Trusts on the statements of changes in net assets available for benefits. 4. INCOME TAX STATUS The Plan has received a determination letter from the Internal Revenue Service dated February 1, 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. Subsequent to this issuance of the determination letter, the Plan was amended. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The plan administrator believes that 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. -49- Savings and Security Plan of the Lockport and Waterbury Facilities Notes to Financial Statements (continued) 5. TRANSACTIONS WITH PARTIES-IN-INTEREST Certain plan investments are shares of mutual funds managed by Dreyfus Retirement Services. Dreyfus Retirement Services is the trustee as defined by the Plan and, therefore, these transactions qualify as party-in-interest. Trustee and investment fees paid during 2001 and 2000 were based upon customary and reasonable rates for such services. 6. PLAN TERMINATION Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. 7. RECLASSIFICATIONS Certain reclassifications have been made to the 2000 financial statements to conform to the current year financial statement presentation. -50- Savings and Security Plan of the Lockport and Waterbury Facilities EIN 25-1792394 Plan 007 Schedule H, Line 4(i)--Schedule of Assets (Held at End of Year) December 31, 2001
DESCRIPTION UNITS/SHARES CURRENT VALUE - --------------------------------------------------------------------------------------------- REGISTERED INVESTMENT COMPANIES Dreyfus Bond Market Index* 5033.318 $ 50,585 Dreyfus Emerging Leaders Fund* 23,009.507 800,041 Dreyfus International Value Fund* 2,605.846 35,830 MAS Midcap Growth Fund 2,295.470 40,056 Jennison Growth Fund 2,424.439 35,445 --------------------- Total registered investment companies $961,957 ===================== COMMON COLLECTIVE TRUSTS Dreyfus Lifestyle Growth and Income Fund* 13,845.001 $225,382 Short Term Investment Fund 360.400 361 Dreyfus Lifestyle Growth Fund* 5,711.035 99,266 Dreyfus Lifestyle Income Fund* 2,611.5670 38,950 --------------------- Total common collective trusts $363,959 ===================== CORPORATE COMMON STOCKS Allegheny Technologies Incorporated* 10,802.000 $180,934 Teledyne Technologies Incorporated 2,131.000 34,714 Water Pik Technologies, Inc. 635.000 5,518 --------------------- Total corporate common stocks $221,166 ===================== Participant loans* (6% to 10.5%) $314,699 ======================
*Party-in-interest -51- AUDITED FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan Years ended December 31, 2001 and 2000 with Report of Independent Auditors -52- Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan Audited Financial Statements and Supplemental Schedule Years ended December 31, 2001 and 2000 CONTENTS Report of Independent Auditors ..............................................54 Audited Financial Statements Statements of Net Assets Available for Benefits..............................55 Statements of Changes in Net Assets Available for Benefits...................56 Notes to Financial Statements ...............................................57 Supplemental Schedule Schedule H, Line 4(i)--Schedule of Assets (Held at End of Year)..............66 -53- Report of Independent Auditors Allegheny Technologies Incorporated We have audited the accompanying statements of net assets available for benefits of the Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan as of December 31, 2001 and 2000, and the related statements of changes in net assets available for benefits for the years then ended. 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 years then ended, 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 complying with the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974, and is not a required part of the financial statements. 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 Pittsburgh, Pennsylvania May 24, 2002 -54- Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan Statements of Net Assets Available for Benefits
DECEMBER 31 2001 2000 --------------------------- ASSETS Investments: Interest-bearing cash $ 351 $ -- Interest in Allegheny Ludlum Corporation Master Trusts 67,085,891 62,127,823 Interest in registered investment companies 12,684,948 8,095,070 Interest in common collective trusts 9,801,563 8,822,190 Corporate common stocks 9,862,875 5,450,485 Participant loans 6,219,132 3,592,858 --------------------------- Total investments 105,654,760 88,088,426 Cash overdraft -- (45,691) Other receivables (payables) 88 (27,430) --------------------------- Net assets available for benefits $105,654,848 $ 88,015,305 ===========================
See accompanying notes. -55- Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan Statements of Changes in Net Assets Available for Benefits
YEAR ENDED DECEMBER 31 2001 2000 ------------------------------ Additions: Contributions: Employer $ 2,377,780 $ 2,648,506 Employee 5,046,862 5,482,813 Investment income: Net (loss)/gain from interest in Allegheny Ludlum Corporation Master Trusts (26,871) 146,094 Net (loss)/gain from interest in registered investment companies (723,000) 335,404 Net loss from interest in common collective trusts (569,870) (41,496) Interest income 341,696 305,116 Dividend income 260,396 47,706 Net realized/unrealized loss on corporate common stocks (1,835,120) (800,720) Transfers into Plan 17,023,296 -- ------------------------------ Total additions 21,895,169 8,123,423 Deductions: Distributions to participants 4,080,646 4,262,984 Transfers out of Plan 174,980 -- ------------------------------ Total deductions 4,255,626 4,262,984 ------------------------------ Net additions 17,639,543 3,860,439 Net assets available for benefits at beginning of year 88,015,305 84,154,866 ------------------------------ Net assets available for benefits at end of year $ 105,654,848 $ 88,015,305 ==============================
See accompanying notes. -56- Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan Notes to Financial Statements December 31, 2001 1. SIGNIFICANT ACCOUNTING POLICIES Investments are valued as follows: Bank and insurance contracts with varying contract rates and maturity dates are stated at contract value. Although it is management's intention to hold the investment contracts in the Fixed Income Fund until maturity, certain investment contracts provide for adjustments to contract value for withdrawals made prior to maturity. All other funds are stated at their net asset value, based on the quoted market prices of the securities held in such funds on applicable exchanges. 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. 2. DESCRIPTION OF THE PLAN The Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan (the Plan) is a defined contribution plan and subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). The purpose of the Plan is to provide retirement benefits to eligible employees of Allegheny Ludlum Corporation (ALC) through company contributions and to encourage employee thrift by permitting eligible employees to defer a part of their compensation and contribute such deferral to the Plan. ALC is a wholly owned subsidiary of Allegheny Technologies Incorporated. ALC contributes to the Plan fifty cents per hour worked per eligible union employee. Unless otherwise specified by the participant, all contributions are made to the Fixed Income Fund. Such contributions are made only from current income or accumulated earnings of the Plan Sponsor. The Plan allows participants to direct contributions made on their behalf to any of the investment alternatives. The Plan allows employees to set aside up to 18% of eligible wages each pay period through payroll deductions subject to Internal Revenue Code limitations. In addition, the employees' annual pretax profit sharing award and pretax Longevity Incentive Payment Plan award may be contributed at the employees' discretion as their deferral. -57- Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan Notes to Financial Statements (continued) 2. DESCRIPTION OF THE PLAN (CONTINUED) Separate accounts are maintained by the plan sponsor for each participating employee. Trustee fees and asset management fees charged by the Plan's trustee, Dreyfus Retirement Services, for the administration of all funds are charged against net assets available for benefits of the respective fund. Certain other expenses of administering the Plan are paid by the plan sponsor. Participants may make "in-service" and hardship withdrawals as outlined in the plan document. Active employees can borrow up to 50% of their vested account balances minus any outstanding loans. The loan amounts are further limited to a minimum of $500 and a maximum of $50,000, and an employee can obtain no more than three loans at one time. Interest rates are determined based on commercially accepted criteria, and payment schedules vary based on the type of the loan. General purpose loans are repaid over 6 to 60 months, and primary residence loans are repaid over periods up to 180 months. Payments are made by payroll deductions. Effective November 29, 1999, Allegheny Teledyne Incorporated's (the Plan Sponsor) name was changed to Allegheny Technologies Incorporated. Also, the Aerospace and Electronics and Consumer segments of Allegheny Teledyne were spun off into two new freestanding public companies--Teledyne Technologies Incorporated and Water Pik Technologies, Inc. Stockholders of Allegheny Teledyne became stockholders of Teledyne Technologies Incorporated and Water Pik Technologies, Inc., thus creating two new master trusts. Participants may continue to hold interest in the two new companies until December 31, 2002, at which time these two holdings will be terminated and the assets will be transferred to one of the other plan investment options. Effective October 1, 2000, the Allegheny Technologies Incorporated (ATI) Common Stock Master Trust, Teledyne Technologies Incorporated Common Stock Master Trust, and Water Pik Technologies, Inc. Common Stock Master Trust were deunitized, enabling each participating plan to hold actual shares of the common stocks versus holding each stock in separate master trusts. Effective November 1, 2001, Oremet employees belonging to the bargaining unit Local 7150 became eligible to participant in the Plan. Accordingly, plan investments related to these participants were transferred into the Plan. Further information about the Plan, including eligibility, vesting, contributions and withdrawals, is contained in the Plan Document and related contracts. Copies of these documents are available from the Allegheny Technologies Personnel and Compensation Committee. -58- Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan Notes to Financial Statements (continued) 3. INVESTMENTS The following presents investments that represent 5% or more of the Plan's net assets:
DECEMBER 31 2001 2000 ---------------------------------- Allegheny Technologies Disciplined Stock Fund $ 8,447,657 $ 7,874,739 Alliance Equity Fund 8,435,007 10,581,519 Allegheny Technologies Incorporated common stocks 8,450,736 - Dreyfus Emerging Leaders 6,113,187 6,398,297 Dreyfus Lifestyle Growth and Income Fund 6,547,450 4,991,187 Fixed Income Fund 50,203,227 43,671,565
Certain of the Plan's investments are in the Allegheny Technologies Disciplined Stock Fund Master Trust, the Alliance Equity Master Trust and the Fixed Income Master Trust, which was established for the investment of assets of the Plan, and several other ATI sponsored retirement plans. Each participating retirement plan has an undivided interest in the Master Trust. At December 31, 2001 and 2000, the Plan's interest in the net assets of the Allegheny Technologies Disciplined Stock Fund Master Trust, the Alliance Equity Master Trust and the Fixed Income Master Trust were as follows:
2001 2000 -------------------- ------------------ Allegheny Technologies Disciplined Stock Fund Master Trust 10.90% 8.63% Alliance Equity Master Trust 21.11 20.68 Fixed Income Master Trust 30.31 30.23
Investment income and expenses are allocated to the Plan based upon its pro rata share in the net assets of the Master Trust. -59- Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) The composition of the net assets of the Fixed Income Master Trust at December 31, 2001 and 2000 was as follows:
2001 2000 --------------------------- Registered investment companies: Merrill Lynch Income Accumulation Fund $ -- $ 6,258,870 --------------------------- -- 6,258,870 Guaranteed investment contracts: Business Mens Assurance Company of America 1,246,890 2,498,807 Canada Life 2,743,536 4,136,118 Combined Life Insurance Company 3,097,946 4,668,459 GE Life and Annuity 11,812,375 5,163,549 Hartford Life Insurance Company 10,025,160 5,641,680 John Hancock Life Insurance Company 14,218,029 11,001,797 Monumental Life Insurance Company 3,331,280 1,867,053 New York Life Insurance Company 7,729,985 3,136,760 Ohio National Life 7,936,620 4,576,017 Pacific Mutual Life Insurance Company 6,036,924 6,200,078 Principal Life 3,000,000 -- Protective Life Insurance Company 1,002,333 2,012,650 Pruco Pace Credit Enhanced 9,950,359 7,691,842 Safeco Life Insurance 3,000,505 2,998,449 Security Life of Denver 6,181,488 5,131,606 Sun America, Inc. 2,992,868 2,998,064 United of Omaha 7,188,790 5,137,380 --------------------------- 101,495,088 74,860,309 Synthetic guaranteed investment contracts: Caisse des Depots et Consignations 7,800,826 8,950,177 CIT Equipment 992,755 -- Common Wealth Edison 1,976,061 -- Conn RRB Spec Trust 2,987,164 -- Detroit Edison 2,018,460 -- FHLMC 2,466,660 -- Illinois Power Sp. Trust 1,957,161 -- MBNA Master CC Trust 1,983,492 -- Peco Energy Company 1,982,788 -- Peoples Security Life Insurance Company 6,602,162 9,137,201 Public Service 1,998,629 -- Transamerica Occidental 9,559,425 14,066,106 Union Bank of Switzerland 2,737,675 5,967,640 Westdeutsche Landesbank Girozentrale 9,387,186 15,715,408 --------------------------- 54,450,444 53,836,532 Interest in common collective trust 7,680,629 8,087,097 Receivables 381,024 1,191,139 Other 1,635,070 231,457 --------------------------- Total net assets $165,642,255 $144,465,404 ===========================
-60- Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) The Fixed Income Fund (the Fund) invests in guaranteed investment contracts (GICs) and actively managed structured or synthetic investment contracts (SICs). The GICs are promises by a bank or insurance company to repay principal plus a fixed rate of return through contract maturity. SICs differ from GICs in that there are specific assets supporting the SICs, and these assets are owned by the Master Trust. The bank or insurance company issues a wrapper contract that allows participant-directed transactions to be made at contract value. The assets supporting the SICs are comprised of government agency bonds, corporate bonds, asset-backed securities (ABOs) and collateralized mortgage obligations (CMOs) with fair values of $55,854,607 and $53,822,660 at December 31, 2001 and 2000, respectively. The contract value minus the market value of the wrapper contracts at December 31, 2001 and 2000 is ($1,397,030) and $396,172, respectively. Interest crediting rates on the GICs in the Fund are determined at the time of purchase. Interest crediting rates on the SICs are either: (1) set at the time of purchase for a fixed term and crediting rate; (2) set at the time of purchase for a fixed term and variable crediting rate or (3) set at the time of purchase and reset monthly within a "constant duration." A constant duration contract may specify a duration of 2.5 years and the crediting rate is adjusted monthly based upon quarterly rebalancing of eligible 2.5 year duration investment instruments at the time of each resetting; in effect the contract never matures. At December 31, 2001 and 2000, the interest crediting rates for GICs and Fixed Maturity SICs ranged from 3.49% to 8.05% and 5.53% to 8.05%, respectively. For the years ended December 31, 2001 and 2000, the average annual yield for the investment contracts in the Fund was 6.25% and 6.39%, respectively. Fair value of the GICs was estimated by discounting the weighted average of the Fund's cash flows at the then-current interest crediting rate for a comparable maturity investment contract. Fair value for the SICs was estimated based on the fair value of each contract's supporting assets at December 31, 2001 and 2000. -61- Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) The composition of net assets of the Alliance Equity Master Trust at December 31, 2001 and 2000 was as follows:
2001 2000 --------------------------------- Investment in registered investment companies: Alliance Equity Fund S.A. #4 $40,024,274 $51,215,520 Cash overdraft - (19,387) Operating payables (64,365) (31,413) --------------------------------- Total net assets $39,959,909 $51,164,720 =================================
The composition of net assets of the Allegheny Technologies Disciplined Stock Fund Master Trust at December 31, 2001 and 2000 was as follows:
2001 2000 ---------------------------------- Corporate common stocks $76,016,770 $89,911,418 Interest in common collective trusts 1,410,015 1,415,662 Receivables 103,913 62,651 Operating payables - (147,875) ---------------------------------- Total net assets $77,530,698 $91,241,856 ==================================
-62- Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) The composition of the changes in net assets of the various master trusts is as follows:
ALLEGHENY TECHNOLOGIES DISCIPLINED STOCK FUND MASTER FIXED INCOME MASTER TRUST ALLIANCE EQUITY MASTER TRUST TRUST -------------------------------------------------------------------------------------------------- YEAR ENDED DECEMBER 31 ---------------------------------------------------------------------------------------------- 2001 2000 2001 2000 2001 2000 -------------------------------------------------------------------------------------------------- Investment income (loss): Interest income (loss) $ 9,147,492 $ 7,954,724 $ -- $ -- $ (639) $ -- Net realized/unrealized loss on corporate common stocks -- -- -- -- (12,375,289) (8,472,618) Dividends -- -- -- -- 941,613 525,391 Net gain (loss), registered invest- ment companies 32,606 108,612 (9,248,179) (9,783,261) -- -- Net gain, common collective trusts 401,062 404,170 -- -- 53,202 138,084 Other income -- 468 -- -- -- -- Administrative expenses (208,589) (185,368) (170,195) (218,831) (519,489) (414,238) Transfers 11,804,280 1,647,278 (1,786,437) 2,172,578 (1,810,556) 54,049,508 -------------------------------------------------------------------------------------------------- Net increase (decrease) 21,176,851 9,929,884 (11,204,811) (7,829,514) (13,711,158) 45,826,127 Total net assets at beginning of year 144,465,404 134,535,520 51,164,720 58,994,234 91,241,856 45,415,729 -------------------------------------------------------------------------------------------------- Total net assets at end of year $ 165,642,255 $ 144,465,404 $ 39,959,909 $ 51,164,720 $ 77,530,698 $ 91,241,856 ==================================================================================================
-63- Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED)
TELEDYNE TECHNOLOGIES WATER PIK TECHNOLOGIES, ATI COMMON STOCK MASTER TRUST INCORPORATED COMMON STOCK INC. COMMON STOCK MASTER MASTER TRUST TRUST --------------------------------------------------------------------------------------- YEAR ENDED DECEMBER 31 ------------------------------------------------------------------------------------------ 2001 2000 2001 2000 2001 2000 --------------------------------------------------------------------------------------- Investment income (loss): Net realized/ (unrealized) gain (loss) on corporate common stocks $ -- $ (3,205,592) $ -- $ 3,930,711 $ -- $ (33,206) Dividends -- 525,069 -- -- -- -- Net gain, common collective trusts -- 17,831 -- 2,171 -- 409 Other loss -- (708) -- (1,379) -- (233) Administrative expenses -- (8,451) -- 133 -- 41 Transfers -- (17,568,539) -- (6,320,601) -- (815,045) --------------------------------------------------------------------------------------- Net decrease -- (20,240,390) -- (2,388,965) -- (848,034) Total net assets at beginning of year -- 20,240,390 -- 2,388,965 -- 848,034 --------------------------------------------------------------------------------------- Total net assets at end of year $ -- $ -- $ -- $ -- $ -- $ -- =======================================================================================
Interest, realized and unrealized gains and losses, and management fees from the master trusts are included in the net (loss)/gain from interest in Allegheny Ludlum Corporation Master Trusts on the statements of changes in net assets available for benefits. -64- Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan Notes to Financial Statements (continued) 4. INCOME TAX STATUS The Plan has received a determination letter from the Internal Revenue Service dated November 30, 1995, 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. Subsequent to this issuance of the determination letter, the Plan was amended. 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, as amended, is qualified and the related trust is tax-exempt. 5. TRANSACTIONS WITH PARTIES-IN-INTEREST Certain plan investments are shares of mutual funds managed by Dreyfus Retirement Services. Dreyfus Retirement Services is the trustee as defined by the Plan and, therefore, these transactions qualify as party-in-interest. Trustee and investment fees paid during 2001 and 2000 were based upon customary and reasonable rates for such services. 6. PLAN TERMINATION Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. 7. RECLASSIFICATIONS Certain reclassifications have been made to the 2000 financial statements to conform with the current year financial statement presentation. -65- Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan EIN 25-1792394 Plan 005 Schedule H, Line 4(i)--Schedule of Assets (Held at End of Year) December 31, 2001
DESCRIPTION UNITS/SHARES CURRENT VALUE - ------------------------------------------------------------------------------- Interest-Bearing Cash 350.95 $ 351 =========== REGISTERED INVESTMENT COMPANIES Dreyfus Emerging Leaders Fund* 175,817.861 $ 6,113,187 Dreyfus 100% US Treasury MM Fund* 61,479.130 61,479 Dreyfus International Value Fund* 138,279.771 1,901,347 Dreyfus Bond Market Index* 104,469.057 1,049,914 MAS Midcap Growth Fund 151,527.199 2,644,150 Jennison Growth Fund 65,576.699 914,871 ----------- Total registered investment companies $12,684,948 =========== COMMON COLLECTIVE TRUSTS Dreyfus Lifestyle Growth and Income Fund* 402,203.752 $ 6,547,450 Short-Term Investment Fund 1,926.250 1,926 Dreyfus Lifestyle Growth Fund* 144,703.953 2,515,160 Dreyfus Lifestyle Income Fund* 49,416.685 737,027 ----------- Total common collective trusts $ 9,801,563 =========== CORPORATE COMMON STOCKS Allegheny Technologies Incorporated* 504,521.544 $ 8,450,736 Teledyne Technologies Incorporated 72,920.424 1,187,874 Water Pik Technologies, Inc. 25,807.246 224,265 ----------- Total corporate common stocks $ 9,862,875 =========== Participant loans (6% to 10.5%)* $ 6,219,132 ===========
*Party-in-interest -66- AUDITED FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE The 401(k) Plan Year ended December 31, 2001 with Report of Independent Auditors -67- The 401(k) Plan Audited Financial Statements and Supplemental Schedule Year ended December 31, 2001 CONTENTS Report of Independent Auditors ..............................................69 Audited Financial Statements Statements of Net Assets Available for Benefits .............................70 Statement of Changes in Net Assets Available for Benefits....................71 Notes to Financial Statements ...............................................72 Supplemental Schedule Schedule H, Line 4(i)--Schedule of Assets (Held at End of Year)..............80 -68- Report of Independent Auditors Allegheny Technologies Incorporated We have audited the accompanying statements of net assets available for benefits of The 401(k) Plan 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 complying with Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974 and is not a required part of the financial statements. 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 basic financial statements taken as a whole. /s/ Ernst & Young LLP Pittsburgh, Pennsylvania May 24, 2002 -69- The 401(k) Plan Statements of Net Assets Available for Benefits
DECEMBER 31 2001 2000 --------------------------------- Investments: Interest-bearing cash $ 1,727 $ -- Interest in Allegheny Ludlum Corporation Master Trusts 55,592,584 62,961,444 Interest in registered investment companies 25,134,460 25,289,559 Interest in common collective trusts 27,632,762 31,017,292 Corporate common stocks 7,077,011 7,011,641 Participant loans 5,131,050 4,437,039 --------------------------------- Total investments 120,569,594 130,716,975 Cash overdraft (133,688) (33,318) Other receivables 160,169 33,448 Other payables (92,603) (41,074) --------------------------------- Net assets available for benefits $ 120,503,472 $ 130,676,031 =================================
See accompanying notes. -70- The 401(k) Plan Statement of Changes in Net Assets Available for Benefits Year ended December 31, 2001 Additions: Contributions: Employer $ 2,627,766 Employee 10,059,044 Investment income: Net loss from interest in Allegheny Ludlum Corporation Master Trusts (5,638,275) Net loss from interest in registered investment companies (3,635,411) Net loss from interest in common collective trusts (2,037,595) Interest income 412,527 Dividend income 277,110 Net unrealized/realized loss on corporate common stocks (110,129) ------------- Total additions 1,955,037 Deductions: Distributions to participants 9,593,209 Transfers out of Plan 2,524,562 Other, net 9,825 ------------- Total deductions 12,127,596 ------------- Net deductions (10,172,559) Net assets available for benefits at beginning of year 130,676,031 ------------- Net assets available for benefits at end of year $ 120,503,472 =============
See accompanying notes. -71- The 401(k) Plan Notes to Financial Statements December 31, 2001 1. SIGNIFICANT ACCOUNTING POLICIES Investments are valued as follows: Bank and insurance contracts with varying contract rates and maturity dates are stated at contract value. Although it is management's intention to hold the investment contracts in the Fixed Income Fund until maturity, certain investment contracts provide for adjustments to contract value for withdrawals made prior to maturity. All other funds are stated at their net asset value, based on the quoted market prices of the securities held in such funds on applicable exchanges. 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. 2. DESCRIPTION OF THE PLAN The 401(k) Plan (the Plan) is a defined contribution plan and is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). The purpose of the Plan is to provide retirement benefits to eligible employees through company contributions and to encourage employee thrift by permitting eligible employees to defer a part of their compensation and contribute such deferral to the Plan. Participants can defer between 1% and 15%, subject to Internal Revenue Code limitations, of their eligible wages and contribute them to the Plan. Qualifying employee contributions are partially matched by Allegheny Technologies up to the lesser of a maximum of $1,000 annually for each participant, or 50% of participants' deferrals. Separate accounts are maintained by the Plan Sponsor for each participating employee. Trustee fees and asset management fees charged by the Plan's trustee, Dreyfus Retirement Services, for the administration of all funds are charged against net assets available for benefits of the respective fund. Certain other expenses of administering the Plan are paid by the Plan Sponsor. -72- The 401(k) Plan Notes to Financial Statements (continued) 2. DESCRIPTION OF THE PLAN (CONTINUED) Participants may make "in-service" and hardship withdrawals as outlined in the plan document. Active employees can borrow up to 50% of their vested account balances minus any outstanding loans. The loan amounts are further limited to a minimum of $1,000 and a maximum of $50,000, and an employee can obtain no more than three loans at one time. Interest rates are determined based on commercially accepted criteria, and payment schedules vary based on the type of the loan. General-purpose loans are repaid over 6 to 60 months, and primary residence loans are repaid over periods up to 180 months. Payments are made by payroll deductions. Effective November 29, 1999, Allegheny Teledyne Incorporated's (the Plan Sponsor) name was changed to Allegheny Technologies Incorporated. Also, the Aerospace and Electronics and Consumer segments of Allegheny Teledyne were spun off into two new freestanding public companies--Teledyne Technologies Incorporated and Water Pik Technologies, Inc. As a result of this spin-off, changes were made to the Allegheny Teledyne Incorporated Stock Fund within The 401(k) Plan. The name of the stock fund was changed from the Allegheny Teledyne Incorporated Stock Fund to the Allegheny Technologies Incorporated Stock Fund. In addition, stockholders of the Allegheny Technologies Incorporated Stock Fund became stockholders of Teledyne Technologies and Water Pik Technologies. The Plan includes two new common stock funds--the Teledyne Technologies Incorporated Stock Fund and the Water Pik Technologies, Inc. Stock Fund. Participants in The 401(k) Plan may continue to hold interests in the Teledyne Technologies and Water Pik Technologies stock funds until December 31, 2002, at which time these two stock funds will be terminated and the assets transferred to one of the other plan investment options. Additionally, no new purchases of Teledyne Technologies and Water Pik Technologies stocks were permitted as of April 1, 2001. Further information about the Plan, including eligibility, vesting, contributions, and withdrawals, is contained in the plan documents. Copies of these documents are available from the Allegheny Technologies Personnel and Compensation Committee. -73- The 401(k) Plan Notes to Financial Statements (continued) 3. INVESTMENTS The following presents investments that represent 5% or more of the Plan's net assets as of December 31, 2001 and 2000.
DECEMBER 31 2001 2000 ------------------------------------- Dreyfus LifeStyle Growth & Income Fund $18,643,505 $20,858,277 Dreyfus LifeStyle Growth Fund 7,379,558 8,458,087 Allegheny Technologies Disciplined Stock Fund 40,956,787 51,301,400 Fixed Income Master Trust 14,304,314 11,498,158 Prudential Jennison Growth Fund, Class A Shares 9,844,233 11,428,707 Dreyfus Bond Market Index 7,181,316 -
Certain of the Plan's investments are in the Allegheny Technologies Disciplined Stock Fund Master Trust, the Alliance Equity Master Trust and the Fixed Income Master Trust, which was established for the investment of assets of the Plan, and several other ATI sponsored retirement plans. Each participating retirement plan has an undivided interest in the Master Trust. At December 31, 2001 and 2000, the Plan's interest in the net assets of the Allegheny Technologies Disciplined Stock Fund Master Trust, the Alliance Equity Master Trust and the Fixed Income Master Trust were as follows:
2001 2000 ---------------------------- Allegheny Technologies Disciplined Stock Fund Master Trust 52.83% 56.23% Fixed Income Master Trust 8.64 7.96 Alliance Equity Master Trust 0.83 0.32
Investment income and expenses are allocated to the Plan based upon its pro rata share in the net assets of the Master Trust. -74- The 401(k) Plan Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) The composition of the net assets of the Fixed Income Master Trust at December 31, 2001 and 2000 was as follows:
2001 2000 ------------------------------ Registered investment companies: Merrill Lynch Income Accumulation Fund $ -- $ 6,258,870 ------------------------------ -- 6,258,870 Guaranteed investment contracts: Business Mens Assurance Company of America 1,246,890 2,498,807 Canada Life 2,743,536 4,136,118 Combined Life Insurance Company 3,097,946 4,668,459 GE Life and Annuity 11,812,375 5,163,549 Hartford Life Insurance Company 10,025,160 5,641,680 John Hancock Life Insurance Company 14,218,029 11,001,797 Monumental Life Insurance Company 3,331,280 1,867,053 New York Life Insurance Company 7,729,985 3,136,760 Ohio National Life 7,936,620 4,576,017 Pacific Mutual Life Insurance Company 6,036,924 6,200,078 Principal Life 3,000,000 -- Protective Life Insurance Company 1,002,333 2,012,650 Pruco Pace Credit Enhanced 9,950,359 7,691,842 Safeco Life Insurance 3,000,505 2,998,449 Security Life of Denver 6,181,488 5,131,606 Sun America, Inc. 2,992,868 2,998,064 United of Omaha 7,188,790 5,137,380 ------------------------------ 101,495,088 74,860,309 Synthetic guaranteed investment contracts: Caisse des Depots et Consignations 7,800,826 8,950,177 CIT Equipment 992,755 -- Common Wealth Edison 1,976,061 -- Conn RRB Spec Trust 2,987,164 -- Detroit Edison 2,018,460 -- FHLMC 2,466,660 -- Illinois Power Sp. Trust 1,957,161 -- MBNA Master CC Trust 1,983,492 -- Peco Energy Company 1,982,788 -- Peoples Security Life Insurance Company 6,602,162 9,137,201 Public Service 1,998,629 -- Transamerica Occidental 9,559,425 14,066,106 Union Bank of Switzerland 2,737,675 5,967,640 Westdeutsche Landesbank Girozentrale 9,387,186 15,715,408 ------------------------------ 54,450,444 53,836,532 Interest in common collective trusts 7,680,629 8,087,097 Receivables 381,024 1,191,139 Other 1,635,070 231,457 ------------------------------ Total net assets $165,642,255 $144,465,404 ==============================
-75- The 401(k) Plan Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) The Fixed Income Fund (the Fund) invests in guaranteed investment contracts (GICs) and actively managed structured or synthetic investment contracts (SICs). The GICs are promises by a bank or insurance company to repay principal plus a fixed rate of return through contract maturity. SICs differ from GICs in that there are specific assets supporting the SICs, and these assets are owned by the Master Trust. The bank or insurance company issues a wrapper contract that allows participant-directed transactions to be made at contract value. The assets supporting the SICs are comprised of government agency bonds, corporate bonds, asset-backed securities (ABOs) and collateralized mortgage obligations (CMOs) with fair values of $55,854,607 and $53,822,660 at December 31, 2001 and 2000, respectively. The contract value minus the market value of the wrapper contracts at December 31, 2001 and 2000 is ($1,397,030) and $396,172, respectively. Interest crediting rates on the GICs in the Fund are determined at the time of purchase. Interest crediting rates on the SICs are either: (1) set at the time of purchase for a fixed term and crediting rate; (2) set at the time of purchase for a fixed term and variable crediting rate or (3) set at the time of purchase and reset monthly within a "constant duration." A constant duration contract may specify a duration of 2.5 years and the crediting rate is adjusted monthly based upon quarterly rebalancing of eligible 2.5 year duration investment instruments at the time of each resetting; in effect the contract never matures. At December 31, 2001 and 2000, the interest crediting rates for GICs and Fixed Maturity SICs ranged from 3.49% to 8.05% and 5.53% to 8.05%, respectively. For the year ended December 31, 2001, the average annual yield for the investment contracts in the Fund was 6.25%. Fair value of the GICs was estimated by discounting the weighted average of the Fund's cash flows at the then-current interest crediting rate for a comparable maturity investment contract. Fair value for the SICs was estimated based on the fair value of each contract's supporting assets at December 31, 2001 and 2000. -76- The 401(k) Plan Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) The composition of net assets of the Alliance Equity Master Trust at December 31, 2001 and 2000 was as follows:
2001 2000 --------------------------------- Investment in registered investment companies: Alliance Equity Fund S.A. #4 $40,024,274 $51,215,520 Cash overdraft - (19,387) Operating payables (64,365) (31,413) --------------------------------- Total net assets $39,959,909 $51,164,720 =================================
The composition of net assets of the Allegheny Technologies Disciplined Stock Fund Master Trust at December 31, 2001 and 2000 was as follows:
2001 2000 --------------------------------- Corporate common stocks $76,016,770 $89,911,418 Investment in common collective trusts 1,410,015 1,415,662 Receivables 103,913 62,651 Operating payables - (147,875) --------------------------------- Total net assets $77,530,698 $91,241,856 =================================
-77- The 401(k) Plan Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) The composition of the changes in net assets of the various master trusts is as follows:
ALLEGHENY ALLIANCE TECHNOLOGIES EQUITY DISCIPLINED FIXED INCOME MASTER STOCK FUND MASTER TRUST TRUST MASTER TRUST ----------------------------------------------------- YEAR ENDED DECEMBER 31 ----------------------------------------------------- 2001 2001 2001 ----------------------------------------------------- Investment income (loss): Interest income (loss) $ 9,147,492 $ -- $ (639) Net realized/unrealized loss on corporate common stocks -- -- (12,375,289) Dividends -- -- 941,613 Net gain (loss), registered investment companies 32,606 (9,248,179) -- Net gain, common collective trusts 401,062 -- 53,202 Administrative expenses (208,589) (170,195) (519,489) Transfers 11,804,280 (1,786,437) (1,810,556) ----------------------------------------------------- Net increase (decrease) 21,176,851 (11,204,811) (13,711,158) Total net assets at beginning of year 144,465,404 51,164,720 91,241,856 ----------------------------------------------------- Total net assets at end of year $ 165,642,255 $ 39,959,909 $ 77,530,698 =====================================================
-78- The 401(k) Plan Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) Interest, realized and unrealized gains and losses, and management fees from the master trusts are included in the net (loss)/gain from interest in Allegheny Ludlum Corporation Master Trusts on the statement of changes in net assets available for benefits. 4. INCOME TAX STATUS The Plan has received a determination letter from the Internal Revenue Service dated December 2, 1997, 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. Subsequent to this issuance of the determination letter, the Plan was amended. 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, as amended, is qualified and the related trust is tax-exempt. 5. PARTIES-IN-INTEREST Certain plan investments are shares of mutual funds managed by Dreyfus Retirement Services. Dreyfus Retirement Services is the trustee as defined by the Plan and, therefore, these transactions qualify as party-in-interest. Trustee and investment fees paid during 2001 and 2000 were based upon customary and reasonable rates for such services. 6. PLAN TERMINATION Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. 7. RECLASSIFICATIONS Certain reclassifications have been made to the 2000 financial statements to conform to the current year financial statement presentation. -79- The 401(k) Plan EIN 25-1792394 Plan 098 Schedule H, Line 4(i)--Schedule of Assets (Held at End of Year) December 31, 2001
INVESTMENT DESCRIPTION UNITS/SHARES CURRENT VALUE - ---------------------------------------------------------------------------------------------- Interest-bearing cash 1,727.010 $ 1,727 =============== Interest in registered investment companies: Dreyfus Bond Market Index Fund* 714,558.851 $ 7,181,316 Dreyfus Emerging Leaders Fund* 31,044.751 1,079,426 Dreyfus Premier Nextech Fund* 175.644 855 Dreyfus Growth & Value International Fund* 232,408.645 3,195,619 MAS Mid Cap Growth Fund, Institutional Shares 218,128.318 3,806,339 Dreyfus 100% U.S. Treasury Money Market Fund* 7,804.300 7,804 Prudential Jennison Growth Fund, Class A Shares 673,340.129 9,844,233 Self-directed account: Dreyfus Midcap Value Fund* 42.997 1,130 Dreyfus Technology Growth Fund* 79.737 1,998 Harris Assoc. Invt Tr. Oakmark Intl Fd 65.178 945 Ryder Ser Tr Dynamic Velocity 100 Fd 7.977 271 Strong Equity Fds - Technology 100 Fd 115.155 554 Van Wagoner Fds - Inc Post Venture Fd 835.434 8,388 Vanguard/Windsor Fd II Portfolio 218.130 5,582 --------------- $ 25,134,460 ===============
-80- Schedule H, Line 4(i)--Schedule of Assets (Held at End of Year) (continued)
INVESTMENT DESCRIPTION UNITS/SHARES CURRENT VALUE - ---------------------------------------------------------------------------------------------- Interest in common collective investment funds: Dreyfus LifeStyle Growth & Income Fund* 1,145,253.146 $ 18,643,505 Dreyfus LifeStyle Growth Fund* 424,565.917 7,379,558 Dreyfus LifeStyle Income Fund* 103,629.848 1,545,592 Dreyfus Short Term Investment Fund 64,107.570 64,107 --------------- $ 27,632,762 =============== Interest in corporate common stocks: Allegheny Technologies Incorporated common stock* 356,790.643 $ 5,976,243 Teledyne Technologies Incorporated common stock 56,820.624 925,608 Water Pik Technologies, Inc. common stock 20,156.477 175,160 --------------- $ 7,077,011 =============== Participant loans (6% to 10.5%)* $ 5,131,050 ===============
* Party-in-interest -81- FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE TDY Industries, Inc. Profit Sharing Plan for Certain Employees of Metalworking Products Year ended December 31, 2001 -82- TDY Industries, Inc. Profit Sharing Plan for Certain Employees of Metalworking Products Financial Statements and Supplemental Schedule Year ended December 31, 2001 (Unaudited) CONTENTS Financial Statements (Unaudited) Statements of Net Assets Available for Benefits .............................84 Statement of Changes in Net Assets Available for Benefits....................85 Notes to Financial Statements ...............................................86 Supplemental Schedule Schedule H, Line 4(i)--Schedule of Assets (Held at End of Year)..............94 -83- TDY Industries, Inc. Profit Sharing Plan for Certain Employees of Metalworking Products Statements of Net Assets Available for Benefits (Unaudited)
DECEMBER 31 2001 2000 --------------------------------------- Investments: Interest in Allegheny Ludlum Corporation Master Trusts $ 869,222 $ 513,437 Interest in registered investment companies 753,101 405,525 Interest in common collective trusts 299,772 199,040 Corporate common stocks 3,534 1,429 Participant loans 212,324 129,235 --------------------------------------- Net assets available for benefits $2,137,953 $1,248,666 =======================================
See accompanying notes. -84- TDY Industries, Inc. Profit Sharing Plan for Certain Employees of Metalworking Products Statement of Changes in Net Assets Available for Benefits (Unaudited) Year ended December 31, 2001 Additions: Contributions: Employer $ 379,693 Employee 715,418 Investment income: Net loss from interest in Allegheny Ludlum Corporation Master Trusts (24,579) Net loss from interest in registered investment companies (118,863) Net loss from interest in common collective trusts (16,543) Interest income 11,712 Dividend income 127 Net unrealized/realized loss on corporate common stocks 98 ---------------- Total additions 947,063 Deductions: Distributions to participants 57,776 ---------------- Net deductions 889,287 Net assets available for benefits at beginning of year 1,248,666 ---------------- Net assets available for benefits at end of year $2,137,953 ================
See accompanying notes. -85- TDY Industries, Inc. Profit Sharing Plan for Certain Employees of Metalworking Products Notes to Financial Statements December 31, 2001 1. SIGNIFICANT ACCOUNTING POLICIES Investments are valued as follows: Bank and insurance contracts with varying contract rates and maturity dates are stated at contract value. Although it is management's intention to hold the investment contracts in the Fixed Income Fund until maturity, certain investment contracts provide for adjustments to contract value for withdrawals made prior to maturity. All other funds are stated at their net asset value, based on the quoted market prices of the securities held in such funds on applicable exchanges. 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. 2. DESCRIPTION OF THE PLAN The TDY Industries, Inc. Profit Sharing Plan for Certain Employees of Metalworking Products (the Plan) is a defined contribution plan and is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). The purpose of the Plan is to provide retirement benefits to eligible employees through company contributions and to encourage employee thrift by permitting eligible employees to defer a part of their compensation and contribute such deferral to the Plan. Participants can defer between 1% and 15%, subject to Internal Revenue Code limitations, of their eligible wages and contribute them to the Plan. Qualifying employee contributions are matched by Allegheny Technologies as follows: (1) Such contributions that are not greater than 3% of their eligible wages are matched at 100% (2) Such contributions that are greater than 3% but are not greater than 5% of their eligible wages are matched at 50%. In addition, an employee profit-sharing contribution is matched on the basis of the eligible employees as follows: Employer Contribution Age as a Percentage of Pay --- ---------------------- Under 35 2.0% 35 - 39 2.5% 40 - 44 3.0% 45 - 49 3.5% 50 - 54 4.0% 55 - 59 4.5% 60 and Older 5.0% Separate accounts are maintained by the Plan Sponsor for each participating employee. Trustee fees and asset management fees charged by the Plan's trustee, Dreyfus Retirement Services, for the administration of all funds are charged against net assets available for benefits of the respective fund. Certain other expenses of administering the Plan are paid by the Plan Sponsor. -86- TDY Industries, Inc. Profit Sharing Plan for Certain Employees of Metalworking Products Notes to Financial Statements (continued) 2. DESCRIPTION OF THE PLAN (CONTINUED) Participants may make "in-service" and hardship withdrawals as outlined in the plan document. Active employees can borrow up to 50% of their vested account balances minus any outstanding loans. The loan amounts are further limited to a minimum of $1,000 and a maximum of $50,000, and an employee can obtain no more than three loans at one time. Interest rates are determined based on commercially accepted criteria, and payment schedules vary based on the type of the loan. General-purpose loans are repaid over 6 to 60 months, and primary residence loans are repaid over periods up to 180 months. Payments are made by payroll deductions. Further information about the Plan, including eligibility, vesting, contributions, and withdrawals, is contained in the plan documents. Copies of these documents are available from the Allegheny Technologies Personnel and Compensation Committee. -87- TDY Industries, Inc. Profit Sharing Plan for Certain Employees of Metalworking Products Notes to Financial Statements (continued) 3. INVESTMENTS The following presents investments that represent 5% or more of the Plan's net assets as of December 31, 2001 and 2000.
DECEMBER 31 2001 2000 -------------------------------- (Unaudited) Dreyfus LifeStyle Growth & Income Fund $ 93,458 $ -- Dreyfus LifeStyle Growth Fund 144,500 101,981 Fixed Income Master Trust 548,276 275,818 Alliance Capital Fund 259,327 190,138 Dreyfus Emerging Leaders Fund 460,011 314,896 Dreyfus Growth & Value International Fund 81,523 -- Morgan Stanley Institutional Fund - Mid Cap Growth Portfolio 178,536 --
Certain of the Plan's investments are in the Allegheny Technologies Disciplined Stock Fund Master Trust, the Alliance Equity Master Trust and the Fixed Income Master Trust, which was established for the investment of assets of the Plan, and several other ATI sponsored retirement plans. Each participating retirement plan has an undivided interest in the Master Trust. At December 31, 2001 and 2000, the Plan's interest in the net assets of the Allegheny Technologies Disciplined Stock Fund Master Trust, the Alliance Equity Master Trust and the Fixed Income Master Trust were as follows:
2001 2000 ----------------------- (Unaudited) Allegheny Technologies Disciplined Stock Fund Master Trust 0.08% 0.05% Fixed Income Master Trust 0.33 0.19 Alliance Equity Master Trust 0.65 0.37
Investment income and expenses are allocated to the Plan based upon its pro rata share in the net assets of the Master Trust. -88- TDY Industries, Inc. Profit Sharing Plan for Certain Employees of Metalworking Products Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) The composition of the net assets of the Fixed Income Master Trust at December 31, 2001 and 2000 was as follows:
2001 2000 -------------------------------------------- (Unaudited) Registered investment companies: Merrill Lynch Income Accumulation Fund $ - $ 6,258,870 -------------------------------------------- - 6,258,870 Guaranteed investment contracts: Business Mens Assurance Company of America 1,246,890 2,498,807 Canada Life 2,743,536 4,136,118 Combined Life Insurance Company 3,097,946 4,668,459 GE Life and Annuity 11,812,375 5,163,549 Hartford Life Insurance Company 10,025,160 5,641,680 John Hancock Life Insurance Company 14,218,029 11,001,797 Monumental Life Insurance Company 3,331,280 1,867,053 New York Life Insurance Company 7,729,985 3,136,760 Ohio National Life 7,936,620 4,576,017 Pacific Mutual Life Insurance Company 6,036,924 6,200,078 Principal Life 3,000,000 - Protective Life Insurance Company 1,002,333 2,012,650 Pruco Pace Credit Enhanced 9,950,359 7,691,842 Safeco Life Insurance 3,000,505 2,998,449 Security Life of Denver 6,181,488 5,131,606 Sun America, Inc. 2,992,868 2,998,064 United of Omaha 7,188,790 5,137,380 -------------------------------------------- 101,495,088 74,860,309 Synthetic guaranteed investment contracts: Caisse des Depots et Consignations 7,800,826 8,950,177 CIT Equipment 992,755 - Common Wealth Edison 1,976,061 - Conn RRB Spec Trust 2,987,164 - Detroit Edison 2,018,460 - FHLMC 2,466,660 - Illinois Power Sp. Trust 1,957,161 - MBNA Master CC Trust 1,983,492 - Peco Energy Company 1,982,788 - Peoples Security Life Insurance Company 6,602,162 9,137,201 Public Service 1,998,629 - Transamerica Occidental 9,559,425 14,066,106 Union Bank of Switzerland 2,737,675 5,967,640 Westdeutsche Landesbank Girozentrale 9,387,186 15,715,408 -------------------------------------------- 54,450,444 53,836,532 Interest in common collective trusts 7,680,629 8,087,097 Receivables 381,024 1,191,139 Other 1,635,070 231,457 -------------------------------------------- Total net assets $165,642,255 $144,465,404 ============================================
-89- TDY Industries, Inc. Profit Sharing Plan for Certain Employees of Metalworking Products Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) The Fixed Income Fund (the Fund) invests in guaranteed investment contracts (GICs) and actively managed structured or synthetic investment contracts (SICs). The GICs are promises by a bank or insurance company to repay principal plus a fixed rate of return through contract maturity. SICs differ from GICs in that there are specific assets supporting the SICs, and these assets are owned by the Master Trust. The bank or insurance company issues a wrapper contract that allows participant-directed transactions to be made at contract value. The assets supporting the SICs are comprised of government agency bonds, corporate bonds, asset-backed securities (ABOs) and collateralized mortgage obligations (CMOs) with fair values of $55,854,607 and $53,822,660 at December 31, 2001 and 2000, respectively. The contract value minus the market value of the wrapper contracts at December 31, 2001 and 2000 is ($1,397,030) and $396,172, respectively. Interest crediting rates on the GICs in the Fund are determined at the time of purchase. Interest crediting rates on the SICs are either: (1) set at the time of purchase for a fixed term and crediting rate; (2) set at the time of purchase for a fixed term and variable crediting rate or (3) set at the time of purchase and reset monthly within a "constant duration." A constant duration contract may specify a duration of 2.5 years and the crediting rate is adjusted monthly based upon quarterly rebalancing of eligible 2.5 year duration investment instruments at the time of each resetting; in effect the contract never matures. At December 31, 2001 and 2000, the interest crediting rates for GICs and Fixed Maturity SICs ranged from 3.49% to 8.05% and 5.53% to 8.05%, respectively. For the year ended December 31, 2001, the average annual yield for the investment contracts in the Fund was 6.25%. Fair value of the GICs was estimated by discounting the weighted average of the Fund's cash flows at the then-current interest crediting rate for a comparable maturity investment contract. Fair value for the SICs was estimated based on the fair value of each contract's supporting assets at December 31, 2001 and 2000. -90- TDY Industries, Inc. Profit Sharing Plan for Certain Employees of Metalworking Products Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) The composition of net assets of the Alliance Equity Master Trust at December 31, 2001 and 2000 was as follows:
2001 2000 -------------------------------------------- (Unaudited) Investment in registered investment companies: Alliance Equity Fund S.A. #4 $40,024,274 $51,215,520 Cash overdraft - (19,387) Operating payables (64,365) (31,413) -------------------------------------------- Total net assets $39,959,909 $51,164,720 ============================================
The composition of net assets of the Allegheny Technologies Disciplined Stock Fund Master Trust at December 31, 2001 and 2000 was as follows:
2001 2000 ---------------------- -------------------- (Unaudited) Corporate common stocks $76,016,770 $89,911,418 Investment in common collective trusts 1,410,015 1,415,662 Receivables 103,913 62,651 Operating payables - (147,875) ---------------------- -------------------- Total net assets $77,530,698 $91,241,856 ====================== ====================
-91- TDY Industries, Inc. Profit Sharing Plan for Certain Employees of Metalworking Products Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) The composition of the changes in net assets of the various master trusts is as follows:
ALLEGHENY ALLIANCE TECHNOLOGIES EQUITY DISCIPLINED FIXED INCOME MASTER STOCK FUND MASTER TRUST TRUST MASTER TRUST ------------------------------------------------------------ YEAR ENDED DECEMBER 31 ------------------------------------------------------------ 2001 2001 2001 ------------------------------------------------------------ (Unaudited) Investment income (loss): Interest income (loss) $ 9,147,492 $ - $ (639) Net realized/unrealized loss on corporate common stocks - - (12,375,289) Dividends - - 941,613 Net gain (loss), registered investment companies 32,606 (9,248,179) - Net gain, common collective trusts 401,062 - 53,202 Administrative expenses (208,589) (170,195) (519,489) Transfers 11,804,280 (1,786,437) (1,810,556) ------------------- ------------------ --------------------- Net increase (decrease) 21,176,851 (11,204,811) (13,711,158) Total net assets at beginning of year 144,465,404 51,164,720 91,241,856 ------------------- ------------------ --------------------- Total net assets at end of year $165,642,255 $39,959,909 $77,530,698 =================== ================== =====================
-92- TDY Industries, Inc. Profit Sharing Plan for Certain Employees of Metalworking Products Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) Interest, realized and unrealized gains and losses, and management fees from the master trusts are included in the net (loss)/gain from interest in Allegheny Ludlum Corporation Master Trusts on the statement of changes in net assets available for benefits. 4. INCOME TAX STATUS The Plan has applied for an initial determination letter from the Internal Revenue Service affirming 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 will be 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 believes that the Plan is qualified and the related trust is tax-exempt. 5. PARTIES-IN-INTEREST Certain plan investments are shares of mutual funds managed by Dreyfus Retirement Services. Dreyfus Retirement Services is the trustee as defined by the Plan and, therefore, these transactions qualify as party-in-interest. Trustee and investment fees paid during 2001 and 2000 were based upon customary and reasonable rates for such services. 6. PLAN TERMINATION Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. -93- TDY Industries, Inc. Profit Sharing Plan for Certain Employees of Metalworking Products EIN 25-1792394 Plan 040 Schedule H, Line 4(i)--Schedule of Assets (Held at End of Year) December 31, 2001
INVESTMENT DESCRIPTION UNITS/SHARES CURRENT VALUE - --------------------------------------------------------------------------------------------------- Interest in registered investment companies: Dreyfus Bond Market Index Fund* 3,246.616 $ 32,628 Dreyfus Emerging Leaders Fund* 13,230.105 460,011 Dreyfus Growth & Value International Fund* 5,928.962 81,523 MAS Mid Cap Growth Fund, Institutional Shares 10,231.292 178,536 Prudential Jennison Growth Fund, Class A Shares 27.515 403 ------------------- $753,101 =================== Interest in common collective investment funds: Dreyfus LifeStyle Growth & Income Fund* 5,741.034 $ 93,458 Dreyfus LifeStyle Growth Fund* 8,313.487 144,500 Dreyfus LifeStyle Income Fund* 4,142.116 61,778 Dreyfus Short Term Investment Fund 35.820 36 ------------------- $299,772 =================== Interest in corporate common stocks: Allegheny Technologies Incorporated common stock* 211.000 $ 3,534 =================== Participant loans (6% to 10.5%)* $212,324 ===================
* Party-in-interest -94- FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE Allegheny Rodney (ALstrip) Profit Sharing Plan Year ended December 31, 2001 (Unaudited) -95- Allegheny Rodney (ALstrip) Profit Sharing Plan Financial Statements and Supplemental Schedule Year ended December 31, 2001 (Unaudited) CONTENTS Financial Statements (Unaudited) Statements of Net Assets Available for Benefits ........................97 Statement of Changes in Net Assets Available for Benefits...............98 Notes to Financial Statements ..........................................99 Supplemental Schedule Schedule H, Line 4(i)--Schedule of Assets (Held at End of Year).........107 -96- Allegheny Rodney (ALstrip) Profit Sharing Plan Statements of Net Assets Available for Benefits (Unaudited)
DECEMBER 31 2001 2000 ---------------------------------- Investments: Interest-bearing cash $ - $5,200,716 Interest in Allegheny Ludlum Corporation Master Trusts 727,715 - Interest in registered investment companies 137,209 - Interest in common collective trusts 57,378 198,379 Participant loans 54,058 129,272 ---------------------------------- Total investments 976,360 5,528,367 Other receivables - 235,839 Other payables - (40,985) ---------------------------------- Net assets available for benefits $ 976,360 $5,723,221 ==================================
See accompanying notes. -97- Allegheny Rodney (ALstrip) Profit Sharing Plan Statement of Changes in Net Assets Available for Benefits (Unaudited) Year ended December 31, 2001 Additions: Contributions: Employee 7,060 Investment income: Net loss from interest in Allegheny Ludlum Corporation Master Trusts (81,318) Net loss from interest in registered investment companies (8,102) Net loss from interest in common collective trusts (12,034) Interest income 3,395 Dividend income 50 Net unrealized/realized loss on corporate common stocks 34 ----------- Total additions (90,915) Deductions: Distributions to participants 960,053 Transfers out of Plan 3,695,893 ----------- Total deductions 4,655,946 ----------- Net deductions (4,746,861) Net assets available for benefits at beginning of year 5,723,221 ----------- Net assets available for benefits at end of year $ 976,360 ===========
See accompanying notes. -98- Allegheny Rodney (ALstrip) Profit Sharing Plan Notes to Financial Statements December 31, 2001 1. SIGNIFICANT ACCOUNTING POLICIES Investments are valued as follows: Bank and insurance contracts with varying contract rates and maturity dates are stated at contract value. Although it is management's intention to hold the investment contracts in the Fixed Income Fund until maturity, certain investment contracts provide for adjustments to contract value for withdrawals made prior to maturity. All other funds are stated at their net asset value, based on the quoted market prices of the securities held in such funds on applicable exchanges. 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. 2. DESCRIPTION OF THE PLAN The Allegheny Rodney (ALstrip) Profit Sharing Plan (the Plan) is a defined contribution plan and is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). The purpose of the Plan is to provide retirement benefits to eligible employees through company contributions and to encourage employee thrift by permitting eligible employees to defer a part of their compensation and contribute such deferral to the Plan. Participants can defer between 1% and 10%, subject to Internal Revenue Code limitations, of their eligible wages and contribute them to the Plan. An employer profit-sharing contribution is made each year as determined by the Board of Directors in their sole discretion. Separate accounts are maintained by the Plan Sponsor for each participating employee. Trustee fees and asset management fees charged by the Plan's trustee, Dreyfus Retirement Services, for the administration of all funds are charged against net assets available for benefits of the respective fund. Certain other expenses of administering the Plan are paid by the Plan Sponsor. -99- Allegheny Rodney (ALstrip) Profit Sharing Plan Notes to Financial Statements (continued) 2. DESCRIPTION OF THE PLAN (CONTINUED) Participants may make "in-service" and hardship withdrawals as outlined in the plan document. Active employees can borrow up to 50% of their vested account balances minus any outstanding loans. The loan amounts are further limited to a minimum of $500 and a maximum of $50,000, and an employee can obtain no more than three loans at one time. Interest rates are determined based on commercially accepted criteria, and payment schedules vary based on the type of the loan. General-purpose loans are repaid over 6 to 60 months, and primary residence loans are repaid over periods up to 180 months. Payments are made by payroll deductions. Further information about the Plan, including eligibility, vesting, contributions, and withdrawals, is contained in the plan documents. Copies of these documents are available from the Allegheny Technologies Personnel and Compensation Committee. -100- Allegheny Rodney (ALstrip) Profit Sharing Plan Notes to Financial Statements (continued) 3. INVESTMENTS The following presents investments that represent 5% or more of the Plan's net assets as of December 31, 2001.
DECEMBER 31 2001 2000 ------------------------------- (Unaudited) Allegheny Technologies Disciplined Stock Fund $ 359,484 $ - Fixed Income Master Trust 359,336 - Dreyfus Bond Market Index 127,325 - ANB Multiple Short-Term Investment Fund - 5,200,716
The majority of assets held at December 31, 2000 were in interest-bearing cash pending the January 1, 2001 transfer of assets to a new trustee. Certain of the Plan's investments are in the Allegheny Technologies Disciplined Stock Fund Master Trust, the Alliance Equity Master Trust and the Fixed Income Master Trust, which was established for the investment of assets of the Plan, and several other ATI sponsored retirement plans. Each participating retirement plan has an undivided interest in the Master Trust. At December 31, 2001, the Plan's interest in the net assets of the Allegheny Technologies Disciplined Stock Fund Master Trust, the Alliance Equity Master Trust and the Fixed Income Master Trust were as follows: 2001 ------------- (Unaudited) Allegheny Technologies Disciplined Stock Fund Master Trust 0.46% Fixed Income Master Trust 0.22 Alliance Equity Master Trust 0.02 Investment income and expenses are allocated to the Plan based upon its pro rata share in the net assets of the Master Trust. -101- Allegheny Rodney (ALstrip) Profit Sharing Plan Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) The composition of the net assets of the Fixed Income Master Trust at December 31, 2001 was as follows:
2001 ------------ (Unaudited) Guaranteed investment contracts: Business Mens Assurance Company of America $ 1,246,890 Canada Life 2,743,536 Combined Life Insurance Company 3,097,946 GE Life and Annuity 11,812,375 Hartford Life Insurance Company 10,025,160 John Hancock Life Insurance Company 14,218,029 Monumental Life Insurance Company 3,331,280 New York Life Insurance Company 7,729,985 Ohio National Life 7,936,620 Pacific Mutual Life Insurance Company 6,036,924 Principal Life 3,000,000 Protective Life Insurance Company 1,002,333 Pruco Pace Credit Enhanced 9,950,359 Safeco Life Insurance 3,000,505 Security Life of Denver 6,181,488 Sun America, Inc. 2,992,868 United of Omaha 7,188,790 ------------ 101,495,088 Synthetic guaranteed investment contracts: Caisse des Depots et Consignations 7,800,826 CIT Equipment 992,755 Common Wealth Edison 1,976,061 Conn RRB Spec Trust 2,987,164 Detroit Edison 2,018,460 FHLMC 2,466,660 Illinois Power Sp. Trust 1,957,161 MBNA Master CC Trust 1,983,492 Peco Energy Company 1,982,788 Peoples Security Life Insurance Company 6,602,162 Public Service 1,998,629 Transamerica Occidental 9,559,425 Union Bank of Switzerland 2,737,675 Westdeutsche Landesbank Girozentrale 9,387,186 ------------ 54,450,444 Interest in common collective trusts 7,680,629 Receivables 381,024 Other 1,635,070 ------------ Total net assets $165,642,255 ============
-102- Allegheny Rodney (ALstrip) Profit Sharing Plan Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) The Fixed Income Fund (the Fund) invests in guaranteed investment contracts (GICs) and actively managed structured or synthetic investment contracts (SICs). The GICs are promises by a bank or insurance company to repay principal plus a fixed rate of return through contract maturity. SICs differ from GICs in that there are specific assets supporting the SICs, and these assets are owned by the Master Trust. The bank or insurance company issues a wrapper contract that allows participant-directed transactions to be made at contract value. The assets supporting the SICs are comprised of government agency bonds, corporate bonds, asset-backed securities (ABOs) and collateralized mortgage obligations (CMOs) with fair values of $55,854, at December 31, 2001. The contract value minus the market value of the wrapper contracts at December 31, 2001 is ($1,397,030). Interest crediting rates on the GICs in the Fund are determined at the time of purchase. Interest crediting rates on the SICs are either: (1) set at the time of purchase for a fixed term and crediting rate; (2) set at the time of purchase for a fixed term and variable crediting rate or (3) set at the time of purchase and reset monthly within a "constant duration." A constant duration contract may specify a duration of 2.5 years and the crediting rate is adjusted monthly based upon quarterly rebalancing of eligible 2.5 year duration investment instruments at the time of each resetting; in effect the contract never matures. At December 31, 2001, the interest crediting rates for GICs and Fixed Maturity SICs ranged from 3.49% to 8.05%. For the year ended December 31, 2001, the average annual yield for the investment contracts in the Fund was 6.25%. Fair value of the GICs was estimated by discounting the weighted average of the Fund's cash flows at the then-current interest crediting rate for a comparable maturity investment contract. Fair value for the SICs was estimated based on the fair value of each contract's supporting assets at December 31, 2001. -103- Allegheny Rodney (ALstrip) Profit Sharing Plan Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) The composition of net assets of the Alliance Equity Master Trust at December 31, 2001 was as follows: 2001 ----------- (Unaudited) Investment in registered investment companies: Alliance Equity Fund S.A. #4 $40,024,274 Operating payables (64,365) ----------- Total net assets $39,959,909 =========== The composition of net assets of the Allegheny Technologies Disciplined Stock Fund Master Trust at December 31, 2001 was as follows: 2001 ----------- (Unaudited) Corporate common stocks $76,016,770 Investment in common collective trusts 1,410,015 Receivables 103,913 ----------- Total net assets $77,530,698 =========== -104- Allegheny Rodney (ALstrip) Profit Sharing Plan Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) The composition of the changes in net assets of the various master trusts is as follows:
ALLEGHENY TECHNOLOGIES ALLIANCE DISCIPLINED FIXED INCOME EQUITY STOCK FUND MASTER TRUST MASTER TRUST MASTER TRUST ------------- ------------- ------------- YEAR ENDED DECEMBER 31 --------------------------------------------------------- 2001 2001 2001 ------------- ------------- ------------- (Unaudited) Investment income (loss): Interest income (loss) $ 9,147,492 $ -- $ (639) Net realized/unrealized loss on corporate common stocks -- -- (12,375,289) Dividends -- -- 941,613 Net gain (loss), registered investment companies 32,606 (9,248,179) -- Net gain, common collective trusts 401,062 -- 53,202 Administrative expenses (208,589) (170,195) (519,489) Transfers 11,804,280 (1,786,437) (1,810,556) ------------- ------------- ------------- Net increase (decrease) 21,176,851 (11,204,811) (13,711,158) Total net assets at beginning of year 144,465,404 51,164,720 91,241,856 ------------- ------------- ------------- Total net assets at end of year $ 165,642,255 $ 39,959,909 $ 77,530,698 ============= ============= =============
-105- Allegheny Rodney (ALstrip) Profit Sharing Plan Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) Interest, realized and unrealized gains and losses, and management fees from the master trusts are included in the net (loss)/gain from interest in Allegheny Ludlum Corporation Master Trusts on the statement of changes in net assets available for benefits. 4. INCOME TAX STATUS The Plan has received a determination letter from the Internal Revenue Service dated August 16, 1993, 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. Subsequent to this issuance of the determination letter, the Plan was amended. 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, as amended, is qualified and the related trust is tax-exempt. 5. PARTIES-IN-INTEREST Certain plan investments are shares of mutual funds managed by Dreyfus Retirement Services. Dreyfus Retirement Services is the trustee as defined by the Plan and, therefore, these transactions qualify as party-in-interest. Trustee and investment fees paid during 2001 were based upon customary and reasonable rates for such services. 6. PLAN TERMINATION Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. -106- Allegheny Rodney (ALstrip) Profit Sharing Plan EIN 25-1792394 Plan 002 Schedule H, Line 4(i)--Schedule of Assets (Held at End of Year) December 31, 2001
INVESTMENT DESCRIPTION UNITS/SHARES CURRENT VALUE - ---------------------------------------------------------------------------------------------------- Interest in registered investment companies: Dreyfus Bond Market Index Fund* 12,669.175 $127,325 Dreyfus Emerging Leaders Fund* 112.264 3,903 Dreyfus Growth & Value International Fund* 103.991 1,430 MAS Mid Cap Growth Fund, Institutional Shares 96.078 1,677 Prudential Jennison Growth Fund, Class A Shares 196.599 2,874 -------- $137,209 ======== Interest in common collective investment funds: Dreyfus LifeStyle Growth & Income Fund* 2,384.560 $ 38,818 Dreyfus LifeStyle Growth Fund* 960.489 16,695 Dreyfus LifeStyle Income Fund* 125.073 1,865 -------- $ 57,378 ======== Participant loans (6% to 10.5%)* $ 54,058 ========
* Party-in-interest -107- "Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K" of Part IV of the 2001 Form 10-K is hereby amended and restated in its entirety to read as follows: ITEM 14. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES: (A) EXHIBITS AND FINANCIAL STATEMENT SCHEDULES: (1) FINANCIAL STATEMENTS (A) The following consolidated financial statements included on pages 25 to 52 of the 2001 Annual Report are incorporated herein by reference: Consolidated Statements of Operations - Years Ended December 31, 2001, 2000 and 1999 Consolidated Balance Sheets at December 31, 2001 and 2000 Consolidated Statements of Cash Flows - Years Ended December 31, 2001, 2000 and 1999 Consolidated Statements of Stockholders' Equity - Years Ended December 31, 2001, 2000 and 1999 Report of Ernst & Young LLP, Independent Auditors Notes to Consolidated Financial Statements (B) The following financial statements for the plans listed below are filed with this Amendment No. 1 under Item 8 of Part II: (i) Allegheny Technologies Retirement Savings Plan Report of Independent Auditors Statements of Net Assets Available for Benefits at December 31, 2001 and December 31, 2000 Statements of Changes in Net Assets Available for Benefits, Years Ended December 31, 2001 and December 31, 2000 Notes to Financial Statements (ii) 401(k) Savings Account Plan for Employees of the Washington Plate Plant Report of Independent Auditors Statements of Net Assets Available for Benefits at December 31, 2001 and December 31, 2000 Statements of Changes in Net Assets Available for Benefits, Years Ended December 31, 2001 and December 31, 2000 Notes to Financial Statements -108- (iii) Savings and Security Plan of the Lockport and Waterbury Facilities of Allegheny Ludlum Corporation Report of Independent Auditors Statements of Net Assets Available for Benefits at December 31, 2001 and December 31, 2000 Statements of Changes in Net Assets Available for Benefits, Years Ended December 31, 2001 and December 31, 2000 Notes to Financial Statements (iv) Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan Report of Independent Auditors Statements of Net Assets Available for Benefits at December 31, 2001 and December 31, 2000 Statements of Changes in Net Assets Available for Benefits, Years Ended December 31, 2001 and December 31, 2000 Notes to Financial Statements (v) The 401(k) Plan Report of Independent Auditors Statements of Net Assets Available for Benefits at December 31, 2001 and December 31, 2000 Statement of Changes in Net Assets Available for Benefits, Year Ended December 31, 2001 Notes to Financial Statements (vi) TDY Industries, Inc. Profit Sharing Plan for Certain Employees of Metalworking Products Statements of Net Assets Available for Benefits at December 31, 2001 and December 31, 2000 Statement of Changes in Net Assets Available for Benefits, Year Ended December 31, 2001 Notes to Financial Statements (vii) Allegheny Rodney (ALstrip) Profit Sharing Plan Statements of Net Assets Available for Benefits at December 31, 2001 and December 31, 2000 Statement of Changes in Net Assets Available for Benefits, Year Ended December 31, 2001 Notes to Financial Statements -109- (2) FINANCIAL STATEMENT SCHEDULES The following financial statement schedules with respect to the plans listed below are filed with this Amendment No. 1 under Item 8 of Part II: (i) Allegheny Technologies Retirement Savings Plan Schedule H, Line 4(i) - Schedule of Assets (Held at end of year) - December 31, 2001 (ii) 401(k) Savings Account Plan for Employees of the Washington Plate Plant Schedule H, Line 4(i) - Schedule of Assets (Held at end of year) - December 31, 2001 (iii) Savings and Security Plan of the Lockport and Waterbury Facilities of Allegheny Ludlum Corporation Schedule H, Line 4(i) - Schedule of Assets (Held at end of year) - December 31, 2001 (iv) Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan Schedule H, Line 4(i) - Schedule of Assets (Held at end of year) - December 31, 2001 (v) The 401(k) Plan Schedule H, Line 4(i) - Schedule of Assets (Held at end of year) - December 31, 2001 (vi) TDY Industries, Inc. Profit Sharing Plan for Certain Employees of Metalworking Products Schedule H, Line 4(i) - Schedule of Assets (Held at end of year) - December 31, 2001 (vii) Allegheny Rodney (ALstrip) Profit Sharing Plan Schedule H, Line 4(i) - Schedule of Assets (Held at end of year) - December 31, 2001 (3) EXHIBITS A list of exhibits included in the 2001 Form 10-K or incorporated by reference is found in the Exhibit Index beginning on page 20 of the 2001 Form 10-K and incorporated herein by reference. In addition, by virtue of Amendment No. 1, the following exhibit is added to such Exhibit Index, as Exhibit 23.2, and filed with Amendment No. 1: EXHIBIT NO. DESCRIPTION ----------- ----------------------------- 23.2 Consent of Ernst & Young LLP (B) REPORTS ON FORM 8-K The Company filed a current report on Form 8-K on May 3, 2002 disclosing certain supplemental financial information for the Company's Flat-Rolled Products segment. The Company filed a current report on Form 8-K on April 17, 2002 disclosing a press release with respect to its first quarter 2002 earnings. -110- SIGNATURE Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Form 10-K/A (Amendment No. 1) to be signed on its behalf by the undersigned duly authorized. Allegheny Technologies Incorporated Date: July 1, 2002 By: /s/ Richard J. Harshman ------------------------------------------ Richard J. Harshman, Senior Vice President, Finance and Chief Financial Officer -111- EXHIBIT INDEX EXHIBIT NO. DESCRIPTION METHOD OF FILING ----------- ----------- ---------------- 23.2 Consent of Ernst & Young Filed herewith LLP -112- EX-23.2 3 j9499101exv23w2.txt CONSENT OF INDEPENDENT AUDITORS Exhibit 23.2 Consent of Independent Auditors We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 333-10225) pertaining to the Savings and Security Plan of the Lockport and Waterbury Facilities of Allegheny Ludlum Corporation, Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan, 401(k) Savings Account Plan for Employees of the Washington Plant and Allegheny Technologies Retirement Savings Plan of our report dated May 24, 2002 with respect to the financial statements and supplemental schedules of the Savings and Security Plan of the Lockport and Waterbury Facilities of Allegheny Ludlum Corporation, Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan, 401(k) Savings Account Plan for Employees of the Washington Plant and Allegheny Technologies Retirement Savings Plan and in the Registration Statement (Form S-8 No. 333-10227) pertaining to The 401(k) Plan of our report dated May 24, 2002 with respect to the financial statements and supplemental schedule of The 401(k) Plan, all of which are included in the Annual Report on Form 10K/A (Amendment No. 1) for the year ended December 31, 2001. /s/ Ernst & Young LLP Pittsburgh, Pennsylvania June 28, 2002 -----END PRIVACY-ENHANCED MESSAGE-----