EX-99.1 3 j0226001exv99w1.txt EX-99.1 EXHIBIT 99.1 NEWS RELEASE Contact: Dan L. Greenfield 412-394-3004 ALLEGHENY TECHNOLOGIES ANNOUNCES SECOND QUARTER RESULTS Pittsburgh, PA - July 23, 2003 - Allegheny Technologies Incorporated (NYSE: ATI) reported a net loss of $26.0 million, or $0.32 per share, on sales of $489.9 million for the second quarter ended June 30, 2003. During the same period in 2002, the Company reported a net loss of $7.5 million, or $0.09 per share, on sales of $491.2 million.
THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30 JUNE 30 IN MILLIONS IN MILLIONS ------------------------------- --------------------------------- 2003 2002 2003 2002 -------------- -------------- --------------- ------------- Sales $ 489.9 $ 491.2 $ 970.4 $ 984.3 Net loss before the cumulative effect of change in accounting principle (26.0) (7.5) (51.8) (18.6) Cumulative effect of change in accounting principle - - (1.3) - -------------- -------------- --------------- ------------- Net loss $ (26.0) $ (7.5) $ (53.1) $ (18.6)
PER DILUTED SHARE PER DILUTED SHARE ------------------------------- --------------------------------- Net loss before the cumulative effect of change in accounting principle $ (0.32) $ (0.09) $ (0.64) $ (0.23) Cumulative effect of change in accounting principle - - (0.02) - -------------- -------------- --------------- ------------- Net loss $ (0.32) $ (0.09) $ (0.66) $ (0.23)
Pre-tax retirement benefit expense was $33.4 million in the second quarter of 2003, compared to $5.5 million in the comparable year ago period. Essentially all of this increase is non-cash. On a per share basis, retirement benefit expense represented $0.26 per share of the $0.32 per share second quarter net loss. Results for the six months ended June 30, 2003, were a net loss of $53.1 million, or $0.66 per share, on sales of $970.4 million compared to a net loss of $18.6 million, or $0.23 per share, on sales of $984.3 million for the comparable 2002 period. The six months results for 2003 include a $1.3 million, or $0.02 per share, charge for the cumulative effect of change in accounting principle. Pre-tax retirement benefit expense for the six months ended June 30, 2003, was $68.2 million, compared to $11.2 million in the same 2002 period. Essentially all of this increase is non-cash. On a per share basis, retirement benefit expense represented $0.54 per share of the $0.66 per share net loss for the six months ended June 30, 2003. COMMENTS "Business conditions in most of our end-markets remain challenging," said Jim Murdy, Allegheny Technologies' president and chief executive officer. "Although primarily non-cash, retirement benefit expense was again the biggest negative to earnings in the quarter. Continuing weak demand for most of our specialty materials combined with higher raw material, energy, and insurance costs also negatively impacted ATI results in the second quarter. "Company-wide cost reductions, before the effects of inflation, in the second quarter of 2003 totaled $28 million, bringing cost reductions to $56 million for the six months. Our 2003 cost reduction goal is $115 million. Managed working capital increased by $32 million in the second quarter primarily due to higher costs of nickel and scrap in our inventories, and higher accounts receivable. However, managed working capital as a percent of annualized sales improved to 32% compared to 34% at the end of 2002. "During the second quarter, we decided to arrange a $325 million four-year senior secured revolving credit facility to provide ATI with an added measure of prudent financial liquidity. There are no borrowings outstanding under the new facility, although a portion of its capacity is being utilized for letters of credit. Cash remained at a healthy level with $66 million on hand at the end of the second quarter, which is $7 million more than at the end of 2002. "Demand and pricing remained weak in our Flat-Rolled Products segment. Domestic consumption of stainless steel sheet and strip fell another 5% through the first five months of the year based on the latest data available. Demand from most capital goods markets remained at low levels. Productivity improvement and cost reduction initiatives continued at an accelerated pace with cost reductions year-to-date of $29 million in this segment. During the second quarter, we essentially completed the consolidation of our Precision Rolled Strip(R) service centers, which is aimed at improving value-added customer service and reducing costs. "In our High Performance Metals segment, demand for our nickel-based and premium titanium alloys from the commercial aerospace market continued to be weak. However, strong demand for these alloys from government defense and biomedical markets continued in the second quarter of 2003. Our exotic alloys business had another strong quarter and continued to benefit from sustained high demand from government defense and high-energy physics markets. "Profitability at all three of our Industrial Products segment companies improved during the first half of 2003. These companies have done an excellent job reducing costs and managing for cash in a difficult environment. Our tungsten specialty materials business has significantly improved its cost structure and is focusing on key niche markets where we have competitive advantages. "Even in these tough economic times, we continue to see profitable growth opportunities. For example, Uniti LLC, our joint venture with Russia-based VSMPO-AVISMA, began taking orders in early June. Interest from customers in North America, Asia and Europe has been strong. In addition, STAL, our Precision Rolled Strip products joint venture in China, continued to grow and prosper to meet the needs of customers in the rapidly expanding markets in Asia. Despite the SARS impact on Asian economies during the first half of 2003, STAL's shipments grew by 26% in the first six months of 2003 compared to the same period last year. We're convinced China continues to offer profitable growth opportunities for ATI's specialty materials. "At this time we see few signs of a recovery in most of our end markets, although the summer months are normally slow. With or without a recovery, we are aggressively focused on continuing to improve productivity, accelerate cost reductions, reduce managed working capital and conserve financial liquidity." SEGMENT RESULTS Comparative data by business segments for the second quarter ended June 30, 2003, is contained in the accompanying statements. FLAT-ROLLED PRODUCTS SECOND QUARTER OF 2003 COMPARED TO SECOND QUARTER OF 2002 Sales declined 6% to $260.2 million primarily due to continued weakness in capital goods markets. Reduced demand, lower prices, and higher energy and raw material costs more than offset lower depreciation expense resulting in an operating loss of $6.1 million for the quarter, compared to an operating profit of $0.7 million in the comparable 2002 period. As a result of higher natural gas and electricity prices, energy costs increased by $4.6 million compared to 2002, net of approximately $1.5 million in gains from natural gas derivatives. Results for the second quarter of 2003 benefited from $13.7 million in cost reductions, before the effects of inflation and higher energy costs. Total tons shipped decreased 6%. Average transaction prices to customers were basically flat due to higher raw materials surcharges; however, average base selling prices realized by ATI declined by approximately 5%. HIGH PERFORMANCE METALS SECOND QUARTER OF 2003 COMPARED TO SECOND QUARTER 2002 Sales increased 8% to $166.8 million due to strong demand for premium exotic alloys from government defense and high energy physics markets, partially offset by reduced demand from commercial aerospace and power generation markets. Operating profit improved to $11.6 million compared to $8.6 million in the year-ago period. Results for the second quarter of 2003 benefited from $11.2 million of cost reductions, before the effects of inflation. Pounds shipped of nickel-based and specialty steel products increased 12%, while pounds shipped of titanium-based products decreased 12%. Average revenue per pound of nickel-based and specialty steel products increased 2%, while average revenue per pound of titanium-based products increased 4%, both due primarily to product mix. Pounds shipped of exotic alloys increased 14% and average revenue per pound was 17% higher. INDUSTRIAL PRODUCTS SECOND QUARTER OF 2003 COMPARED TO SECOND QUARTER OF 2002 Sales improved 6% to $62.9 million resulting in an operating profit of $3.1 million for the second quarter of 2003 compared to an operating profit of $2.2 million for the same period of 2002. The improvement in operating results benefited from continuing cost reductions, which totaled $2.2 million, before the effects of inflation, and higher sales across all operating companies in the segment. RETIREMENT BENEFITS - PENSION, MEDICAL AND LIFE INSURANCE The severe decline in the equity markets over the past three years, combined with lower expected returns on benefit plan investments and a lower discount rate assumption for determining liabilities, resulted in a pre-tax retirement benefit expense of $33.4 million in the second quarter of 2003 compared to $5.5 million in the second quarter of 2002. This increase in retirement benefits expense resulted in a $27.9 million pre-tax, or $0.21 per share after-tax, reduction in second quarter of 2003 earnings compared to the same period of 2002. The increase in retirement benefit expense in 2003 negatively affected both cost of sales and selling and administrative expenses in the second quarter of 2003 compared to the same period last year. For the three months ended June 30, 2003, retirement benefit expense impacted cost of sales by $23.5 million and selling and administrative expenses by $9.9 million. For the three months ended June 30, 2002, retirement benefit expense impacted cost of sales by $1.0 million and selling and administrative expenses by $4.5 million. The majority of these retirement benefit expenses relate to our Allegheny Ludlum operation. Approximately $24.9 million of the second quarter 2003 retirement benefit expense is non-cash. Based upon the final actuarial study for 2003, retirement benefit costs for the 2003 full year are expected to be $134 million compared to $21 million for 2002. The Company is not required to make cash contributions to the defined benefit pension plan for 2003 and, based upon current actuarial studies, does not expect to be required to make cash contributions to the defined benefit pension plan for the next several years. OTHER COMMENTS Corporate expenses for the second quarter of 2003 increased to $5.3 million compared to $4.5 million in the year-ago period primarily due to higher insurance costs in 2003. These cost increases offset savings realized at the corporate office associated with reductions in staffing and related costs. In June 2003, we entered into a new $325 million four-year senior secured revolving credit facility. The new facility, which replaced a $250 million unsecured facility, is secured by Company domestic accounts receivable and inventory and includes capacity for up to $150 million of letters of credit. There are no borrowings currently outstanding under the new facility, although a portion of the letters of credit capacity is being utilized. Second quarter of 2003 interest expense, net of interest income, increased to $8.4 million from $7.9 million in the year-ago period due to a pretax charge of $1.2 million to write off the unamortized fees associated with the former unsecured credit facility. FINANCIAL HIGHLIGHTS At June 30, 2003, cash on hand was $66.2 million, an increase of $6.8 million from 2002 year-end. Cash flow from operating activities for the first half of 2003 was $17.1 million. This total included the receipt of our 2002 federal income tax refund of $48.5 million, which was largely offset by a $45.0 million increase in managed working capital compared to December 31, 2002. The increase in managed working capital was due to a $40 million increase in accounts receivable resulting primarily from a higher level of sales in the second quarter of 2003 compared to the fourth quarter of 2002, and a $24 million increase in inventory mostly as a result of higher raw material costs. The increase in raw material costs should largely be recovered through surcharges. These increases were partially offset by $19 million in higher accounts payable. In the first half of 2002, cash flow from operations was $170.9 million, including the receipt of a federal income tax refund of $45.6 million and a reduction in managed working capital of $111.7 million. Cash used in investing activities, primarily capital expenditures, was $22.1 million in the first half of 2003 compared to $23.4 million in the first half of 2002. Cash provided by financing activities totaled $11.8 million in the first half of 2003 and included proceeds of $15.3 million on the termination of certain interest rate swap arrangements, primarily in the first quarter of 2003, proceeds from capital project financing of $9.2 million less net debt repayments of $3.0 million, and $9.7 million of dividend payments. Cash used in financing activities in the comparable 2002 period was $111.0 million and included $78.8 million in debt reduction and $32.2 million of dividend payments. Cash on hand declined $45.2 million in the second quarter of 2003 compared to the first quarter of 2003. This decrease in cash resulted primarily from an increase in managed working capital of $32 million mainly due to higher inventories as a result of higher raw material costs and higher accounts receivable as a result of an increase in sales. Other cash items included semi-annual interest payments of approximately $16 million, up-front costs of approximately $4 million associated with the new secured credit facility, and a one-time payment of $5 million concluding the profit sharing dispute for prior years with the United Steelworkers of America, which we announced in January 2003. In building the liquidity of the Company, we focus on controlling managed working capital, which we define as accounts receivable and inventories less accounts payable. We exclude the effects of the LIFO inventory and other valuation reserves. At June 30, 2003, managed working capital was 32% of annualized sales compared to 34% of annualized sales at 2002 year-end. NEW ACCOUNTING PRONOUNCEMENT On January 1, 2003, we adopted Statement of Financial Accounting Standards No. 143, "Accounting for Asset Retirement Obligations" ("SFAS 143"). Under SFAS 143, obligations associated with the retirement of tangible long-lived assets are capitalized and amortized to expense over an asset's useful life. The adoption of SFAS 143 resulted in an after-tax charge of $1.3 million, or $0.02 per share in the 2003 first quarter. This charge is reported as a cumulative effect of change in accounting principle. * * * Allegheny Technologies will conduct a conference call with investors and analysts on July 23 2003, at 1 p.m. ET to discuss the earnings results. The conference call will be broadcast live on www.alleghenytechnologies.com. To access the broadcast, click on "Second Quarter Conference Call". In addition, the conference call will be available through the CCBN website, located at www.ccbn.com. This news release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Certain statements in this news release relate to future events and expectations and, as such, constitute forward-looking statements. Forward-looking statements include those containing such words as "anticipates," "believes," "estimates," "expects," "would," "should," "will," "will likely result," "forecast," "outlook," "projects," and similar expressions. Such forward-looking statements are based on management's current expectations and include known and unknown risks, uncertainties and other factors, many of which we are unable to predict or control, that may cause our actual results or performance to materially differ from any future results or performance expressed or implied by such statements. Various of these factors are described from time to time in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2002, and our Quarterly Reports on Form 10-Q. We assume no duty to update our forward-looking statements. Allegheny Technologies Incorporated (NYSE: ATI) is one of the largest and most diversified specialty materials producers in the world, with revenues of approximately $1.9 billion in 2002. The Company has approximately 9,650 employees world-wide and its talented people use innovative technologies to offer growing global markets a wide range of specialty materials. High-value products include nickel-based and cobalt-based alloys and superalloys, titanium and titanium alloys, specialty steels, super stainless steel, exotic alloys, which include zirconium, hafnium and niobium, tungsten materials, and highly engineered strip and Precision Rolled Strip(R) products. In addition, we produce commodity specialty materials such as stainless steel sheet and plate, silicon and tool steels, and forgings and castings. The Allegheny Technologies website can be found at www.alleghenytechnologies.com. ALLEGHENY TECHNOLOGIES INCORPORATED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited - Dollars in millions, except per share amounts)
THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30 JUNE 30 ------------------------------- -------------------------------- 2003 2002 2003 2002 --------------- -------------- -------------- --------------- SALES $ 489.9 $ 491.2 $ 970.4 $ 984.3 Costs and expenses: Cost of sales 469.1 444.1 935.0 896.8 Selling and administrative expenses 53.4 49.3 101.1 99.8 --------------- -------------- -------------- --------------- Loss before interest, other income (expense) and income taxes (32.6) (2.2) (65.7) (12.3) Interest expense, net 8.4 7.9 15.8 17.8 Other income (expense), net 0.2 (0.4) 0.7 1.6 --------------- -------------- -------------- --------------- Loss before income tax benefit and cumulative effect of a change in accounting principle (40.8) (10.5) (80.8) (28.5) Income tax benefit (14.8) (3.0) (29.0) (9.9) --------------- -------------- -------------- --------------- Net loss before cumulative effect of change in accounting principle (26.0) (7.5) (51.8) (18.6) Cumulative effect of change in accounting principle - - (1.3) - --------------- -------------- -------------- --------------- NET LOSS $ (26.0) $ (7.5) $ (53.1) $ (18.6) =============== ============== ============== =============== Basic and diluted net loss per common share before cumulative effect of change in accounting principle $ (0.32) $ (0.09) $ (0.64) $ (0.23) Cumulative effect of change in accounting principle - - (0.02) - --------------- -------------- -------------- --------------- BASIC AND DILUTED NET LOSS PER COMMON SHARE $ (0.32) $ (0.09) $ (0.66) $ (0.23) =============== ============== ============== =============== Weighted average common shares outstanding -- basic and diluted (millions) 81.0 80.6 80.8 80.5 Actual common shares outstanding-- end of period (millions) 81.0 80.6 81.0 80.6
ALLEGHENY TECHNOLOGIES INCORPORATED AND SUBSIDIARIES SALES AND OPERATING PROFIT (LOSS) BY BUSINESS SEGMENT (Unaudited - Dollars in millions)
YTD 2003 YTD 2002 Q2 2003 Q1 2003 Q4 2002 Q3 2002 Q2 2002 --------------- ------------- ----------- ----------- ----------- ----------- ----------- Sales: $ 519.0 $ 538.8 Flat-Rolled Products $ 260.2 $ 258.8 $ 243.0 $ 266.4 $ 276.7 327.8 327.8 High Performance Metals 166.8 161.0 156.1 146.1 154.9 123.6 117.7 Industrial Products 62.9 60.7 55.1 56.8 59.6 --------------- ------------- ----------- ----------- ----------- ----------- ----------- $ 970.4 $ 984.3 TOTAL EXTERNAL SALES $ 489.9 $ 480.5 $ 454.2 $ 469.3 $ 491.2 =============== ============= =========== =========== =========== =========== =========== Operating Profit (Loss): $ (7.1) $ 0.3 Flat-Rolled Products $ (6.1) $ (1.0) $ (12.1) $ 3.9 $ 0.7 (1.4%) 0.1% % of Sales (2.3%) (0.4%) (5.0%) 1.5% 0.3% 19.9 12.9 High Performance Metals 11.6 8.3 9.0 9.3 8.6 6.1% 3.9% % of Sales 7.0% 5.2% 5.8% 6.4% 5.6% 4.6 1.5 Industrial Products 3.1 1.5 0.9 1.6 2.2 3.7% 1.3% % of Sales 4.9% 2.5% 1.6% 2.8% 3.7% --------------- ------------- ----------- ----------- ----------- ----------- ----------- 17.4 14.7 OPERATING PROFIT (LOSS) 8.6 8.8 (2.2) 14.8 11.5 1.8% 1.5% % of Sales 1.8% 1.8% (0.5%) 3.2% 2.3% (10.1) (10.2) Corporate expenses (5.3) (4.8) (4.8) (5.6) (4.5) (15.8) (17.8) Interest expense, net (8.4) (7.4) (8.2) (8.3) (7.9) --------------- ------------- ----------- ----------- ----------- ----------- ----------- (8.5) (13.3) Subtotal (5.1) (3.4) (15.2) 0.9 (0.9) Restructuring costs and other (4.1) (4.0) costs, net of gains on asset sales (2.3) (1.8) (41.3) (9.1) (4.1) (68.2) (11.2) Retirement benefit expense (a) (33.4) (a) (34.8) (5.2) (5.4) (5.5) --------------- ------------- ----------- ----------- ----------- ----------- ----------- $ (80.8) $ (28.5) LOSS BEFORE INCOME TAX BENEFIT $ (40.8) $ (40.0) $ (61.7) $ (13.6) $ (10.5) =============== ============= =========== =========== =========== =========== ===========
(a) Includes non-cash expenses of $24.9 million and $28.2 million for the 2003 second quarter and 2003 first quarter, respectively. ALLEGHENY TECHNOLOGIES INCORPORATED AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Current period unaudited--Dollars in millions)
JUNE 30, 2003 DECEMBER 31, 2002 -------------------- ------------------------ ASSETS CURRENT ASSETS: Cash and cash equivalents $ 66.2 $ 59.4 Accounts receivable, net of allowances for doubtful accounts of $9.3 and $10.1 at June 30, 2003, and December 31, 2002, respectively 274.8 239.3 Inventories, net 416.6 409.0 Deferred income taxes 22.6 20.8 Income tax refunds receivable 3.4 51.9 Prepaid expenses and other current assets 27.7 32.0 -------------------- ------------------------ TOTAL CURRENT ASSETS 811.3 812.4 Property, plant and equipment, net 748.6 757.6 Cost in excess of net assets acquired 196.0 194.4 Deferred pension asset 165.1 165.1 Deferred income taxes 110.2 85.4 Other assets 71.9 78.3 -------------------- ------------------------ TOTAL ASSETS $ 2,103.1 $ 2,093.2 ==================== ======================== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 175.1 $ 171.3 Accrued liabilities 160.4 161.0 Short term debt and current portion of long-term debt 7.1 9.7 -------------------- ------------------------ TOTAL CURRENT LIABILITIES 342.6 342.0 Long-term debt 523.6 509.4 Accrued postretirement benefits 502.9 496.4 Pension liabilities 259.8 216.0 Other long-term liabilities 82.0 80.6 -------------------- ------------------------ TOTAL LIABILITIES 1,710.9 1,644.4 -------------------- ------------------------ TOTAL STOCKHOLDERS' EQUITY 392.2 448.8 -------------------- ------------------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,103.1 $ 2,093.2 ==================== ========================
ALLEGHENY TECHNOLOGIES INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited--Dollars in millions) SIX MONTHS ENDED JUNE 30 ------------------------------- 2003 2002 -------------- -------------- OPERATING ACTIVITIES: Net loss $ (53.1) $ (18.6) Cumulative effect of change in accounting principle 1.3 -- Depreciation and amortization 37.1 45.4 Change in managed working capital (45.0) 111.7 Income tax refunds receivable 48.5 45.6 Change in pension assets/liabilities 43.9 (5.2) Other (15.6) (8.0) -------------- -------------- CASH PROVIDED BY OPERATING ACTIVITIES 17.1 170.9 -------------- -------------- INVESTING ACTIVITIES: Purchases of property, plant and equipment (28.8) (25.5) Asset disposals and other 6.7 2.1 -------------- -------------- CASH USED IN INVESTING ACTIVITIES (22.1) (23.4) -------------- -------------- FINANCING ACTIVITIES: Net increase (decrease) in debt 6.2 (78.8) Interest rate swap termination 15.3 -- Dividends paid (9.7) (32.2) -------------- -------------- CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 11.8 (111.0) -------------- -------------- INCREASE IN CASH AND CASH EQUIVALENTS 6.8 36.5 Cash and cash equivalents at beginning of period 59.4 33.7 -------------- -------------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 66.2 $ 70.2 ============== ==============
ALLEGHENY TECHNOLOGIES INCORPORATED AND SUBSIDIARIES SELECTED FINANCIAL DATA (Unaudited)
YTD 2003 YTD 2002 Q2 2003 Q1 2003 Q4 2002 Q3 2002 Q2 2002 -------------- ------------- ----------- ----------- ----------- ----------- ----------- VOLUME: 239,518 250,283 Flat-Rolled Products (finished tons) 120,554 118,964 114,803 122,249 128,490 -------------- ------------- ----------- ----------- ----------- ----------- ----------- 170,829 179,914 Commodity 87,337 83,492 82,503 87,884 92,483 68,689 70,369 High value 33,217 35,472 32,300 34,365 36,007 High Performance Metals - nickel- based and specialty steel 18,149 19,212 alloys (000's lbs.) 9,457 8,692 8,719 7,901 8,447 High Performance Metals - titanium mill 9,232 10,225 products (000's lbs.) 4,617 4,615 4,633 4,186 5,276 High Performance Metals - exotic 2,092 1,884 alloys (000's lbs.) 1,160 932 861 967 1,015 AVERAGE PRICES: $ 2,151 $ 2,135 Flat-Rolled Products (per finished $ 2,144 $ 2,159 $ 2,102 $ 2,163 $ 2,141 ton) $ 1,557 $ 1,515 Commodity $ 1,550 $ 1,564 $ 1,490 $ 1,594 $ 1,541 $ 3,630 $ 3,713 High value $ 3,708 $ 3,557 $ 3,663 $ 3,617 $ 3,668 High Performance Metals - nickel- based and specialty steel $ 6.59 $ 6.40 alloys (per lb.) $ 6.47 $ 6.73 $ 6.09 $ 6.72 $ 6.32 High Performance Metals - titanium $ 12.00 $ 11.41 mill products (per lb.) $ 11.16 $ 12.85 $ 12.36 $ 12.25 $ 10.76 High Performance Metals - exotic $ 37.94 $ 33.64 alloys (per lb.) $ 38.10 $ 37.75 $ 43.33 $ 35.16 $ 32.45
ALLEGHENY TECHNOLOGIES INCORPORATED AND SUBSIDIARIES OTHER FINANCIAL INFORMATION MANAGED WORKING CAPITAL (Unaudited - Dollars in Millions)
CHANGE IN MANAGED JUNE 30, 2003 DECEMBER 31, 2002 (a) WORKING CAPITAL ----------------- --------------------- ----------------- Accounts receivable $ 274.8 $ 239.3 Inventory 416.6 409.0 Accounts payable (175.1) (171.3) ----------------- --------------------- Subtotal 516.3 477.0 Allowance for doubtful 9.3 10.1 accounts LIFO reserve 87.0 74.7 Corporate and other 20.4 26.2 ----------------- --------------------- ------ Managed working capital $ 633.0 $ 588.0 $ 45.0 ================= ====================== ====== Annualized prior 2 months sales $ 1,953.0 $ 1,741.0 ================= ===================== Managed working capital as a % of annualized sales 32% 34%
(a) Certain amounts from 2002 have been reclassified to conform with the 2003 presentation. # # #