-----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, JFCChT+Iz2sG9K1pzKbxvH4vLQkbxVtVuhVIadghEHn68V6DeFLCJqwaYQ1KuwIv X9xfUshbitXapTC3ohlZQA== 0000950128-99-000840.txt : 19990701 0000950128-99-000840.hdr.sgml : 19990701 ACCESSION NUMBER: 0000950128-99-000840 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990630 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALLEGHENY TELEDYNE INC CENTRAL INDEX KEY: 0001018963 STANDARD INDUSTRIAL CLASSIFICATION: SEMICONDUCTORS & RELATED DEVICES [3674] IRS NUMBER: 251792394 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: SEC FILE NUMBER: 001-12001 FILM NUMBER: 99655965 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 10-K/A 1 ALLEGHENY TELEDYNE INCORPORATED - 401(K) PLANS 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, 1998 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 TELEDYNE 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) 394-8400 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 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 March 15, 1999, the Registrant had outstanding 193,696,608 shares of its Common Stock. The aggregate market value of the Registrant's voting stock held by non-affiliates at this date was approximately $3.4 billion, based on the closing price per share of Common Stock on this date of $20.00 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. 2 Documents Incorporated By Reference Selected portions of the 1998 Annual Report to Stockholders ("1998 Annual Report") - Part I, Part II and Part IV of this Report. Selected portions of the Proxy Statement for the 1999 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 3 EXPLANATORY NOTE: Pursuant to this Form 10-K/A (Amendment No. 1) ("Amendment No. 1"), Allegheny Teledyne 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, 1998 ("1998 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 Ludlum Retirement Savings Plan; (2) 401(k) Savings Account Plan for Employees of the Washington 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; (5) Teledyne 401(k) Plan; and (6) Oregon Metallurgical Corporation Savings Plan. "Item 8. Financial Statements and Supplementary Data" of Part II of the 1998 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 30 to 51 of the 1998 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 Ludlum Retirement Savings Plan............................... 4 401(k) Savings Account Plan for Employees of the Washington Plant...................................... 23 Savings and Security Plan of the Lockport and Waterbury Facilities of Allegheny Ludlum Corporation........................................ 40 Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan............................. 60 Teledyne 401(k) Plan................................................... 78 Oregon Metallurgical Corporation Savings Plan.......................... 92 3 4 Audited Financial Statements Allegheny Ludlum Retirement Savings Plan Years ended December 31, 1998 and 1997 with Report of Independent Auditors 4 5 Allegheny Ludlum Retirement Savings Plan Audited Financial Statements Years ended December 31, 1998 and 1997 CONTENTS Report of Independent Auditors .............................................6 Audited Financial Statements Statement of Net Assets Available for Benefits, with Fund Information as of December 31, 1998 .................................................7 Statement of Net Assets Available for Benefits, with Fund Information as of December 31, 1997 .................................................8 Statement of Changes in Net Assets Available for Benefits, with Fund Information, Year ended December 31, 1998................................9 Statement of Changes in Net Assets Available for Benefits, with Fund Information, Year ended December 31, 1997...............................10 Notes to Financial Statements .............................................11 Supplemental Schedules Line 27a--Schedule of Assets Held for Investment Purposes .................20 Line 27d--Schedule of Reportable Transactions..............................22 5 6 Report of Independent Auditors Personnel and Compensation Committee Allegheny Ludlum Corporation We have audited the accompanying statements of net assets available for benefits of the Allegheny Ludlum Retirement Savings Plan as of December 31, 1998 and 1997, 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 generally accepted auditing standards. 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 Allegheny Ludlum Retirement Savings Plan at December 31, 1998 and 1997, and the changes in its net assets available for benefits for the years then ended, in conformity with generally accepted accounting principles. Our audits were made for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedules of assets held for investment purposes as of December 31, 1998, and reportable transactions for the year then ended, are 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 are not a required part of the financial statements. The Fund Information in the statements of net assets available for benefits and the statements of changes in net assets available for benefits is presented for purposes of additional analysis rather than to present the net assets available for benefits and changes in net assets available for benefits of each fund. The supplemental schedules and Fund Information have been subjected to the auditing procedures applied in our audit of the financial statements and, in our opinion, are fairly stated in all material respects in relation to the financial statements taken as a whole. /s/ Ernst & Young LLP Pittsburgh, Pennsylvania June 11, 1999 6 7 Allegheny Ludlum Retirement Savings Plan Statement of Net Assets Available for Benefits, with Fund Information December 31, 1998
DREYFUS DREYFUS DREYFUS LIFESTYLE LIFESTYLE LIFESTYLE ALLIANCE FIXED GROWTH AND GROWTH INCOME EQUITY INCOME INCOME FUND FUND FUND FUND FUND ---------------------------------------------------------------------------------------------- ASSETS Investments: Interest in Allegheny Ludlum Corporation Master Trusts $ -- $ -- $ -- $ 38,128,531 $ 87,165,844 Interest in registered investment company -- -- -- -- -- Interest in common collective trusts 20,612,832 7,043,546 2,265,859 -- -- Participant notes receivable -- -- -- -- -- Other -- -- -- -- -- Other (payables) receivables (95,293) 38,623 (34,511) (415,472) (104,171) ---------------------------------------------------------------------------------------------- Net assets available for benefits $ 20,517,539 $ 7,082,169 $ 2,231,348 $ 37,713,059 $ 87,061,673 ==============================================================================================
DREYFUS ALLEGHENY SMALL DREYFUS TELEDYNE COMPANY INTERNATIONAL COMPANY SELF- DISCIPLINED VALUE VALUE STOCK DIRECTED STOCK FUND FUND FUND FUND FUND -------------------------------------------------------------------------------------------- ASSETS Investments: Interest in Allegheny Ludlum Corporation Master Trusts $ 35,230,900 $ -- $ -- $ 22,853,067 $ -- Interest in registered investment company -- 10,425,125 3,097,947 -- 1,237,357 Interest in common collective trusts -- -- -- -- -- Participant notes receivable -- -- -- -- -- Other -- -- -- -- 29,124 Other (payables) receivables (84,271) 104,499 46,454 (28,619) -- -------------------------------------------------------------------------------------------- Net assets available for benefits $ 35,146,629 $ 10,529,624 $ 3,144,401 $ 22,824,448 $ 1,266,481 ============================================================================================
PARTICIPANT LOANS TOTAL -------------------------------- ASSETS Investments: Interest in Allegheny Ludlum Corporation Master Trusts $ -- $ 183,378,342 Interest in registered investment company -- 14,760,429 Interest in common collective trusts -- 29,922,237 Participant notes receivable 3,749,111 3,749,111 Other -- 29,124 Other (payables) receivables 5,673 (567,088) -------------------------------- Net assets available for benefits $ 3,754,784 $ 231,272,155 ================================
See accompanying notes. 7 8 Allegheny Ludlum Retirement Savings Plan Statement of Net Assets Available for Benefits, with Fund Information December 31, 1997
DREYFUS DREYFUS DREYFUS LIFESTYLE LIFESTYLE LIFESTYLE ALLIANCE FIXED GROWTH AND GROWTH INCOME EQUITY INCOME INCOME FUND FUND FUND FUND FUND ---------------------------------------------------------------------------------------------- ASSETS Investments: Interest in Allegheny Ludlum Corporation Master Trusts $ 18,995,349 $ 4,156,514 $ 1,492,055 $ 49,094,068 $ 99,746,033 Interest in registered investment company -- -- -- -- -- Participant notes receivable -- -- -- -- -- Other -- -- -- -- -- ---------------------------------------------------------------------------------------------- Net assets available for benefits $ 18,995,349 $ 4,156,514 $ 1,492,055 $ 49,094,068 $ 99,746,033 ==============================================================================================
DREYFUS SMALL DREYFUS DREYFUS COMPANY INTERNATIONAL COMPANY SELF- DISCIPLINED VALUE VALUE STOCK DIRECTED STOCK FUND FUND FUND FUND FUND ------------------------------------------------------------------------------------------- ASSETS Investments: Interest in Allegheny Ludlum Corporation Master Trusts $ -- $ -- $ -- $ 27,656,220 $ -- Interest in registered investment company 27,858,603 15,446,354 2,964,614 -- 340,241 Participant notes receivable -- -- -- -- -- Other -- -- -- -- (30,000) ------------------------------------------------------------------------------------------- Net assets available for benefits $ 27,858,603 $ 15,446,354 $ 2,964,614 $ 27,656,220 $ 310,241 ===========================================================================================
PARTICIPANT LOANS TOTAL -------------------------------- ASSETS Investments: Interest in Allegheny Ludlum Corporation Master Trusts $ -- $ 201,140,239 Interest in registered investment company -- 46,609,812 Participant notes receivable 4,367,721 4,367,721 Other -- (30,000) -------------------------------- Net assets available for benefits $ 4,367,721 $ 252,087,772 ================================
See accompanying notes. 8 9 Allegheny Ludlum Retirement Savings Plan Statement of Changes in Net Assets Available for Benefits, with Fund Information Year ended December 31, 1998
DREYFUS DREYFUS DREYFUS LIFESTYLE LIFESTYLE LIFESTYLE ALLIANCE FIXED GROWTH AND GROWTH INCOME EQUITY INCOME INCOME FUND FUND FUND FUND FUND ---------------------------------------------------------------------------------------------- Additions: Contributions: Employer $ 753,484 $ 363,687 $ 102,129 $ 1,897,236 $ 3,311,379 Employee 618,058 333,937 88,607 1,458,599 2,197,227 Investment income: Net gain (loss) from interest in Allegheny Ludlum Corporation Master Trusts 1,375,578 441,132 101,399 (1,744,436) 6,577,957 Net gain (loss) from interest in registered investment companies -- -- -- -- -- Net gain from common interest in collective trusts 2,167,257 726,497 157,406 -- -- Interest income -- -- -- -- -- Other income (loss) 3,643 955 (247) (763) 3,285 Transfers in from outside of Plan 312,833 204,551 -- 176,557 206,138 Interfund transfers (253,340) 1,454,628 1,080,791 (7,866,805) 6,926,458 ---------------------------------------------------------------------------------------------- Total additions 4,977,513 3,525,387 1,530,085 (6,079,612) 19,222,444 Deductions: Distributions to participants 3,455,323 599,728 790,784 5,301,355 31,906,541 Administrative expenses -- 4 8 42 263 ---------------------------------------------------------------------------------------------- Total deductions 3,455,323 599,732 790,792 5,301,397 31,906,804 ---------------------------------------------------------------------------------------------- Net additions (deductions) 1,522,190 2,925,655 739,293 (11,381,009) (12,684,360) Net assets available for benefits at beginning of year 18,995,349 4,156,514 1,492,055 49,094,068 99,746,033 ---------------------------------------------------------------------------------------------- Net assets available for benefits at end of year $ 20,517,539 $ 7,082,169 $ 2,231,348 $ 37,713,059 $ 87,061,673 ==============================================================================================
DREYFUS ALLEGHENY SMALL DREYFUS TELEDYNE COMPANY INTERNATIONAL COMPANY SELF- DISCIPLINED VALUE VALUE STOCK DIRECTED STOCK FUND FUND FUND FUND FUND ---------------------------------------------------------------------------------------------- Additions: Contributions: Employer $ 1,417,870 $ 735,018 $ 202,162 $ 430,142 $ -- Employee 1,166,369 597,598 155,845 376,066 -- Investment income: Net gain (loss) from interest in Allegheny Ludlum Corporation Master Trusts 3,662,203 -- -- (3,941,336) -- Net gain (loss) from interest in registered investment companies 3,180,359 (1,003,817) 269,959 -- 142,045 Net gain from common interest in collective trusts -- -- -- -- -- Interest income -- -- -- -- -- Other income (loss) (17,366) (2,921) (254) 2,496 -- Transfers in from outside of Plan 983,304 -- 99,438 185,261 -- Interfund transfers 1,511,346 (3,750,226) 21,801 663,451 814,195 ---------------------------------------------------------------------------------------------- Total additions 11,904,085 (3,424,348) 748,951 (2,283,920) 956,240 Deductions: Distributions to participants 4,615,901 1,492,315 569,164 2,547,844 -- Administrative expenses 158 67 -- 8 -- ---------------------------------------------------------------------------------------------- Total deductions 4,616,059 1,492,382 569,164 2,547,852 -- ---------------------------------------------------------------------------------------------- Net additions (deductions) 7,288,026 (4,916,730) 179,787 (4,831,772) 956,240 Net assets available for benefits at beginning of year 27,858,603 15,446,354 2,964,614 27,656,220 310,241 ---------------------------------------------------------------------------------------------- Net assets available for benefits at end of year $ 35,146,629 $ 10,529,624 $ 3,144,401 $ 22,824,448 $ 1,266,481 ==============================================================================================
PARTICIPANT LOANS TOTAL --------------------------------- Additions: Contributions: Employer $ -- $ 9,213,107 Employee -- 6,992,306 Investment income: Net gain (loss) from interest in Allegheny Ludlum Corporation Master Trusts -- 6,472,497 Net gain (loss) from interest in registered investment companies -- 2,588,546 Net gain from common interest in collective trusts -- 3,051,160 Interest income 377,538 377,538 Other income (loss) -- (11,172) Transfers in from outside of Plan 40,632 2,208,714 Interfund transfers (602,299) -- --------------------------------- Total additions (184,129) 30,892,696 Deductions: Distributions to participants 428,808 51,707,763 Administrative expenses -- 550 --------------------------------- Total deductions 428,808 51,708,313 --------------------------------- Net additions (deductions) (612,937) (20,815,617) Net assets available for benefits at beginning of year 4,367,721 252,087,772 --------------------------------- Net assets available for benefits at end of year $ 3,754,784 $ 231,272,155 =================================
See accompanying notes. 9 10 Allegheny Ludlum Retirement Savings Plan Statement of Changes in Net Assets Available for Benefits, with Fund Information Year ended December 31, 1997
DREYFUS DREYFUS DREYFUS LIFESTYLE LIFESTYLE LIFESTYLE ALLIANCE FIXED GROWTH AND GROWTH INCOME EQUITY INCOME INCOME FUND FUND FUND FUND FUND ---------------------------------------------------------------------------------------------- Additions: Contributions: Employer $ 702,727 $ 249,631 $ 62,837 $ 2,004,482 $ 3,677,232 Employee 565,903 183,655 47,169 1,510,645 2,153,794 Investment income: Net gain from interest in Allegheny Ludlum Corporation Master Trusts 3,216,461 728,854 122,079 11,149,275 6,587,944 Net gain from interest in registered investment companies -- -- -- -- -- Interest income -- -- -- -- 1,396 Interfund transfers 243,216 1,525,897 907,445 (7,998,026) (7,564,050) ---------------------------------------------------------------------------------------------- Total additions 4,728,307 2,688,037 1,139,530 6,666,376 4,856,316 Deductions: Distributions to participants 612,897 143,344 86,663 2,111,534 9,234,509 Administrative expenses -- -- -- -- -- ---------------------------------------------------------------------------------------------- Total deductions 612,897 143,344 86,663 2,111,534 9,234,509 ---------------------------------------------------------------------------------------------- Net additions (deductions) 4,115,410 2,544,693 1,052,867 4,554,842 (4,378,193) Net assets available for benefits at beginning of year 14,879,939 1,611,821 439,188 44,539,226 104,124,226 ---------------------------------------------------------------------------------------------- Net assets available for benefits at end of year $ 18,995,349 $ 4,156,514 $ 1,492,055 $ 49,094,068 $ 99,746,033 ==============================================================================================
DREYFUS SMALL DREYFUS DREYFUS COMPANY INTERNATIONAL COMPANY SELF- DISCIPLINED VALUE VALUE STOCK DIRECTED STOCK FUND FUND FUND FUND FUND ---------------------------------------------------------------------------------------------- Additions: Contributions: Employer $ 1,145,475 $ 625,035 $ 160,574 $ 398,923 $ -- Employee 964,562 566,507 134,766 311,109 -- Investment income: Net gain from interest in Allegheny Ludlum Corporation Master Trusts -- -- -- 3,977,292 -- Net gain from interest in registered investment companies 5,946,391 2,345,108 89,494 -- 28,693 Interest income -- -- -- -- -- Interfund transfers 6,009,014 8,238,142 1,802,110 (3,514,614) 281,730 ---------------------------------------------------------------------------------------------- Total additions 14,065,442 11,774,792 2,186,944 1,172,710 310,423 Deductions: Distributions to participants 601,963 224,750 19,788 1,333,961 -- Administrative expenses -- -- -- -- 182 ---------------------------------------------------------------------------------------------- Total deductions 601,963 224,750 19,788 1,333,961 182 ---------------------------------------------------------------------------------------------- Net additions (deductions) 13,463,479 11,550,042 2,167,156 (161,251) 310,241 Net assets available for benefits at beginning of year 14,395,124 3,896,312 797,458 27,817,471 -- ---------------------------------------------------------------------------------------------- Net assets available for benefits at end of year $ 27,858,603 $ 15,446,354 $ 2,964,614 $ 27,656,220 $ 310,241 ==============================================================================================
PARTICIPANT LOANS TOTAL --------------------------------- Additions: Contributions: Employer $ -- $ 9,026,916 Employee -- 6,438,110 Investment income: Net gain from interest in Allegheny Ludlum Corporation Master Trusts -- 25,781,905 Net gain from interest in registered investment companies -- 8,409,686 Interest income 377,707 379,103 Interfund transfers 69,136 -- --------------------------------- Total additions 446,843 50,035,720 Deductions: Distributions to participants -- 14,369,409 Administrative expenses -- 182 --------------------------------- Total deductions -- 14,369,591 --------------------------------- Net additions (deductions) 446,843 35,666,129 Net assets available for benefits at beginning of year 3,920,878 216,421,643 --------------------------------- Net assets available for benefits at end of year $ 4,367,721 $ 252,087,772 =================================
See accompanying notes. 10 11 Allegheny Ludlum Retirement Savings Plan Notes to Financial Statements December 31, 1998 1. SIGNIFICANT ACCOUNTING POLICIES Investments are stated at fair value determined as follows: The Company Stock Fund consists of investments in Allegheny Teledyne Incorporated (Allegheny Teledyne) common stock and is stated at the quoted market price as listed on the New York Stock Exchange. The Fixed Income Fund is stated at cost plus net earnings, which approximates market value and is provided by the Plan's trustee. 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 generally accepted accounting principles requires management to make estimates and assumptions 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 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. Allegheny Ludlum Corporation (ALC) is a wholly owned subsidiary of Allegheny Teledyne. Depending on participants' years of service, participants can defer between 1% and 14%, subject to Internal Revenue Service limitations, of their eligible wages, including profit sharing awards, and contribute them to the Plan. ALC contributes 6.5% of participants' monthly pensionable earnings, as described in the Plan, and in addition contributes $43.34 per month per participant. The investment options provided by the Plan are as follows: Dreyfus Lifestyle Growth and Income Fund--invests in equity and fixed income securities and may invest up to 15% of its assets in international securities. Dreyfus Lifestyle Growth Fund--invests in equity and fixed income securities and may invest up to 25% of its assets in international securities. 11 12 Allegheny Ludlum Retirement Savings Plan Notes to Financial Statements (continued) 2. DESCRIPTION OF THE PLAN (CONTINUED) Dreyfus Lifestyle Income Fund--consists of common stock, fixed income securities and short-term money market instruments. Alliance Equity Fund--consists of common stock. Fixed Income Fund--consists of amounts invested in insurance companies or other financial institutions under an agreement with repayment in full, plus interest at a fixed rate. Allegheny Teledyne Disciplined Stock Fund--invests in equity securities and may invest up to 20% of its assets in high quality money market accounts. Effective November 1, 1998, the Dreyfus Disciplined Stock Fund changed from a mutual fund to a separate account structure, and will be known as the Allegheny Teledyne Disciplined Stock Fund. Investment objective and strategy remain the same. Dreyfus Small Company Value Fund--invests primarily in small company equities, and to a limited degree, in bonds and money market instruments. Dreyfus International Value Fund--consists of equity securities of foreign company equities, and to a limited degree, in bonds and money market instruments. Company Stock Fund--consists of Allegheny Teledyne common stock. Effective April 1, 1997, participants can elect to participate in the self-directed account if they have at least a $10,000 balance in the Plan. The minimum initial investment amount in the self-directed fund, which is comprised of various mutual funds, is $5,000. Separate accounts are maintained by the Plan Sponsor for each participating employee. Trustee fees and asset management fees charged 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. Under certain provisions of the Plan, contributions by the Plan Sponsor, which have been allocated to the accounts of the participants, may be subject to forfeiture upon participants' termination of employment. Such forfeitures will be used to reduce future contributions by the employer. Employer contributions allocated to a participant's account become fully vested after a participant completes five full years of service. Employee contributions and the fixed dollar retirement contributions are fully vested at all times. 12 13 Allegheny Ludlum Retirement Savings Plan Notes to Financial Statements (continued) 2. DESCRIPTION OF THE PLAN (CONTINUED) 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 12 to 60 months, and primary residence loans are repaid over periods up to 180 months. Payments are made by payroll deductions. In the event that the Plan is partially or completely terminated, or the Plan Sponsor permanently discontinues making contributions, all amounts credited to the accounts of the affected participants become fully vested and nonforfeitable. Further information about the Plan, including eligibility, vesting, contributions, and withdrawals, is contained in the Summary Plan Description and related contracts. Copies of this Summary Plan Description are available from the Allegheny Teledyne Personnel and Compensation Committee. 3. INVESTMENTS As of December 31, 1998, the Plan is a participant in the ALC Fixed Income Master Trust, the ALC Alliance Equity Master Trust, the ALC ATI Common Stock Master Trust, and the ALC Dreyfus Disciplined Stock Fund Master Trust. During 1998, the Dreyfus Lifestyle Growth and Income Fund, the Dreyfus Lifestyle Growth Fund, and the Dreyfus Lifestyle Income Fund were reclassified as common collective trusts from master trusts while the Allegheny Teledyne Disciplined Stock Fund was reclassified to a master trust from the Dreyfus Disciplined Stock Fund, a registered investment company. The Plan's participating interests in these master trusts as of December 31, 1998 and 1997 were as follows:
1998 1997 -------------------------------------------- ALC Fixed Income Master Trust 68.81% 73.72% ALC Alliance Equity Master Trust 80.47% 81.57% ALC ATI Common Stock Master Trust 70.95% 77.65% ALC Lifestyle Growth Fund Master Trust --% 81.23% ALC Lifestyle Income Fund Master Trust --% 81.72% ALC Lifestyle Growth and Income Fund Master Trust --% 83.53% Allegheny Teledyne Disciplined Stock Fund Master Trust 81.55% --%
13 14 Allegheny Ludlum Retirement Savings Plan Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) The composition of the net assets of the ALC Fixed Income Master Trust at December 31, 1998 and 1997 was as follows:
1998 1997 ------------------------------------- Guaranteed investment contracts: Confederation Life Insurance Company $ 2,575 $ 29,118 Continental Assurance Company -- 6,718,924 John Hancock Life Insurance Company 5,100,000 2,600,000 Life Insurance Company of Virginia -- 8,725,219 New York Life Insurance Company 13,258,607 15,169,828 Pacific Mutual Life Insurance Company 6,167,430 5,793,190 Peoples Security Life Insurance Company 10,367,671 11,038,629 Prudential Insurance Company -- 6,144,220 Southland Life Insurance Company 10,752,479 16,288,645 Transamerica Occidental 11,296,810 10,936,663 Sun America, Inc. 3,000,000 -- Business Mens Assurance Company of America 2,505,536 -- Protective Life Insurance Company 3,002,482 -- Safeco Life Insurance 3,000,000 -- ------------------------------------- 68,453,590 83,444,436 Synthetic contracts: Caisse des Depots et Consignations 12,865,126 3,879,321 Peoples Security Life Insurance Company 2,968,196 2,948,698 Transamerica Occidental 13,859,523 13,865,850 Union Bank of Switzerland 5,935,391 5,937,712 Westdeutsche Landesbank Girozentrale 16,952,480 13,727,581 ------------------------------------- 52,580,716 40,359,162 Temporary short-term investments 4,248,515 10,765,309 Accrued interest receivable 1,443,795 733,753 Other payables (88,501) (6,169) ------------------------------------- Total net assets $ 126,638,115 $ 135,296,491 =====================================
In May 1997, the ALC Fixed Income Master Trust received approximately $4,500,000 related to the Confederation Life Insurance Company Guaranteed Investment Contract in accordance with the liquidation plan. Management is unable to determine additional amounts, if any, that will be received by the ALC Fixed Income Master Trust. 14 15 Allegheny Ludlum Retirement Savings Plan Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) The composition of net assets of the ALC Alliance Equity Master Trust at December 31, 1998 and 1997 was as follows:
1998 1997 ---------------------------------- Investment in registered investment companies: Alliance Equity Fund S.A. #4 (6,966.434 and 865.194 shares, respectively) $ 47,408,255 $ 60,199,619 Cash 117 90 Operating payables (26,007) (10,341) ---------------------------------- Total net assets $ 47,382,365 $ 60,189,368 ==================================
The composition of net assets of the ALC ATI Common Stock Master Trust at December 31, 1998 and 1997 was as follows:
1998 1997 ---------------------------------- Allegheny Teledyne Incorporated common stock (1,544,975 and 1,347,732 shares, respectively) $ 31,575,427 $ 34,872,566 Receivables 196,291 4,527 Short-Term Investment Fund 450,324 738,595 Operating payables (10,492) (822) ---------------------------------- Total net assets $ 32,211,550 $ 35,614,866 ==================================
The composition of assets of the ALC Lifestyle Growth Fund Master Trust at December 31, 1998 and 1997 was as follows:
1998 1997 ---------------------------------- Dreyfus Lifestyle Growth Fund $ -- $ 5,117,053 Operating payables -- (5) ---------------------------------- $ -- $ 5,117,048 ==================================
The composition of assets of the ALC Lifestyle Income Fund Master Trust at December 31, 1998 and 1997 was as follows:
1998 1997 ---------------------------------- Dreyfus Lifestyle Income Fund $ -- $ 1,825,632 Operating payables -- (2) ---------------------------------- $ -- $ 1,825,630 ==================================
15 16 Allegheny Ludlum Retirement Savings Plan Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) The composition of assets of the ALC Lifestyle Growth and Income Fund Master Trust at December 31, 1998 and 1997 was as follows:
1998 1997 ---------------------------------- Dreyfus Lifestyle Growth and Income Fund $ -- $ 22,740,752 Receivables -- 56 ---------------------------------- $ -- $ 22,740,808 ==================================
The composition of net assets of the Allegheny Teledyne Disciplined Stock Fund Master Trust at December 31, 1998 and 1997 was as follows:
1998 1997 ---------------------------------- Corporate common stock $ 41,699,413 $ -- Noninterest-bearing cash (5,217) -- Receivables 58,761 -- Short-Term Investment Fund 1,499,311 -- Operating payables (51,809) -- ---------------------------------- Total net assets $ 43,200,459 $ -- ==================================
16 17 Allegheny Ludlum 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:
ALC FIXED INCOME MASTER ALC ALLIANCE EQUITY MASTER ALC ATI COMMON STOCK MASTER TRUST TRUST TRUST --------------------------------------------------------------------------------------------- YEAR ENDED DECEMBER 31 --------------------------------------------------------------------------------------------- 1998 1997 1998 1997 1998 1997 --------------------------------------------------------------------------------------------- Investment income (loss): Interest income (loss) $ 8,359,937 $ 8,694,877 $ -- $ -- $ (113) $ (1,554) Realized (loss) gain on sale of -- -- -- -- (620,712) 1,835,342 investments Unrealized (depreciation) appreciation in fair value of investments -- -- -- -- (5,308,345) 2,318,151 Dividends -- -- -- -- 934,022 837,662 Net (loss) gain, registered investment companies -- -- (2,106,215) 13,819,313 -- -- Net gain, common collective trusts 408,717 468,281 -- -- 41,352 73,411 Other income 1,147 1,343 -- -- -- -- Administrative expenses (191,163) (189,938) (237,876) (211,873) (24,196) (27,286) Transfers (17,237,014) (15,337,329) (10,462,912) (6,981,034) 1,574,676 (4,894,605) --------------------------------------------------------------------------------------------- Net increase (decrease) (8,658,376) (6,362,766) (12,807,003) 6,626,406 (3,403,316) 141,121 Total net assets at beginning of year 135,296,491 141,659,257 60,189,368 53,562,962 35,614,866 35,473,745 --------------------------------------------------------------------------------------------- Total net assets at end of year $126,638,115 $135,296,491 $47,382,365 $60,189,368 $32,211,550 $35,614,866 =============================================================================================
17 18 Allegheny Ludlum Retirement Savings Plan Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED)
ALC LIFESTYLE GROWTH ALC LIFESTYLE INCOME ALC LIFESTYLE GROWTH AND FUND MASTER TRUST FUND MASTER TRUST INCOME FUND MASTER TRUST ---------------------------------------------------------------------------------------- YEAR ENDED DECEMBER 31 ---------------------------------------------------------------------------------------- 1998* 1997 1998* 1997 1998* 1997 ---------------------------------------------------------------------------------------- Investment income (loss): Interest income (loss) $ -- $ -- $ -- $ 105 $ -- $ 1 Realized gain on sale of investments -- -- -- -- -- -- Unrealized appreciation in fair value of investments -- -- -- -- -- -- Dividends -- -- -- -- -- -- Net gain, common collective trusts 514,556 882,650 109,828 152,034 1,558,031 3,853,009 Other loss (14) -- -- -- (10) -- Administrative expenses (94) (116) (34) (38) (229) -- Transfers (5,631,496) 2,285,394 (1,935,424) 1,083,338 (24,298,600) 838,793 ---------------------------------------------------------------------------------------- Net increase (decrease) (5,117,048) 3,167,928 (1,825,630) 1,235,439 (22,740,808) 4,691,803 Total net assets at beginning of year 5,117,048 1,949,120 1,825,630 590,191 22,740,808 18,049,005 ---------------------------------------------------------------------------------------- Total net assets at end of year $ -- $ 5,117,048 $ -- $ 1,825,630 $ -- $ 22,740,808 ========================================================================================
ALLEGHENY TELEDYNE DISCIPLINED STOCK FUND MASTER TRUST ------------------------ YEAR ENDED DECEMBER 31 ------------------------ 1998 1997 ------------------------ Investment income (loss): Interest income (loss) $ (925) $ -- Realized gain on sale of investments 107,964 -- Unrealized appreciation in fair value of investments 4,322,009 -- Dividends 87,868 -- Net gain, common collective trusts 26,165 -- Other loss -- -- Administrative expenses (51,809) -- Transfers 38,709,187 -- ------------------------ Net increase (decrease) 43,200,459 -- Total net assets at beginning of year -- -- ------------------------ Total net assets at end of year $ 43,200,459 $ -- ========================
* Partial year only. Reclassified as common collective trusts. The average yield for 1998 and 1997 for the ALC Fixed Income Master Trust was 6.55% and 6.57%, respectively. Credited interest rates on the contracts ranged from 5.13% to 8.18% and 5.60% to 8.18% for 1998 and 1997, respectively, and are determined at contract inception. Interest, realized and unrealized gains and losses, and management fees from the master trusts are included in the net gain (loss) from interest in Allegheny Ludlum Corporation Master Trusts on the statement of changes in net assets available for benefits. 18 19 Allegheny Ludlum Retirement Savings Plan Notes to Financial Statements (continued) 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 of 1986 (the Code) and, therefore, the related trust is exempt from taxation. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The plan administrator believes 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 Investment fees paid during the year for services rendered were based on customary and reasonable rates for such services. 6. YEAR 2000 READINESS DISCLOSURE (UNAUDITED) The Plan Sponsor has determined that it will be necessary to take certain steps in order to ensure that the Plan's information systems are prepared to handle Year 2000 dates. The Plan Sponsor is taking a two-phase approach. The first phase addresses internal systems that must be modified or replaced to function properly. Internal resources are being utilized to upgrade or modify existing software applications, and test the software and equipment for the Year 2000 modifications. The Plan Sponsor believes that it has substantially completed this phase of the project. Costs associated with modifying software and equipment are not estimated to be significant and will be paid by the Plan Sponsor. For the second phase of the project, plan management established formal communications with its third party service providers to determine that they have developed plans to address their own Year 2000 problems as they relate to the Plan's operations. All third party service providers have indicated that they expect to be Year 2000 compliant by mid-1999. If modification of data processing systems of either the Plan, the Plan Sponsor, or its service providers are not completed timely, the Year 2000 problem could have a material impact on the operations of the Plan. Plan management has not developed a contingency plan because they are confident that all material systems will be Year 2000 ready. 7. SUBSEQUENT EVENT Effective July 1, 1999, the Plan will no longer offer the Dreyfus Small Company Value Fund as an investment option. The Dreyfus Emerging Leaders Fund will be offered to participants as a new investment option as of this date. 19 20 Allegheny Ludlum Retirement Savings Plan EIN 25-1364894 Plan 004 Line 27a--Schedule of Assets Held for Investment Purposes December 31, 1998
CURRENT DESCRIPTION UNITS/SHARES COST VALUE VALUE - ---------------------------------------------------------------------------------------------------------------------- Common Collective Trusts - ------------------------ Dreyfus Lifestyle Growth and Income Fund*: Interest in Dreyfus Lifestyle Growth and Income Fund 1,319,441.510 shares $18,553,762 $20,612,832 Dreyfus Lifestyle Growth Fund*: Interest in Dreyfus Lifestyle Growth Fund 396,724.803 shares 6,309,277 7,043,546 Dreyfus Lifestyle Income Fund*: Interest in Dreyfus Lifestyle Income Fund 171,183.496 shares 2,159,031 2,265,859 ------------------------------------- Total Common Collective Trusts 27,022,070 29,922,237 Registered Investment Companies - ------------------------------- Dreyfus Small Company Value Fund*: Interest in Dreyfus Small Company Value Fund 527,854.405 shares 10,119,212 10,425,125 Dreyfus International Value Fund*: Interest in Dreyfus International Value Fund 204,620.016 shares 3,109,456 3,097,947 Self-Directed Fund: American Century Quantitative Equity Growth Fund 1,380.485 shares 30,643 31,351 American Century 20th Century Ultra Fund 300.726 shares 10,854 10,047 Barron Asset Fund 834.709 shares 43,034 42,186 Berger Small Cap Value Fund 1,680.335 shares 31,474 32,464 Dreyfus 100% U.S. Treasury Money Market Fund* 162,294.820 shares 162,295 162,295 Dreyfus Appreciation Fund, Inc.* 663.109 shares 20,405 27,897 Dreyfus Technology Growth Fund* 3,005.487 shares 50,245 62,364 Fidelity Puritan Fund 1,218.333 shares 22,422 24,452 Fidelity Low Priced Stock Fund 508.686 shares 11,803 11,623 Fidelity Growth & Income Fund 318.998 shares 12,198 14,623 Fidelity Dividend Growth Fund 540.766 shares 12,221 15,536 Fidelity Select Financial Services Portfolio 96.358 shares 10,109 9,504 Fidelity Select Home Finance Portfolio 190.367 shares 10,035 8,239 Fidelity Select Biotechnology Portfolio 305.157 shares 10,035 12,136 Fidelity Select Brokerage and Investment Management 220.459 shares 10,035 8,481 Fidelity Select Electronics Portfolio 345.873 shares 11,853 16,104 Fidelity Select Computer Portfolio 207.383 shares 10,035 14,042 Gabelli Global Interactive Couch Potato Fund 126.291 shares 2,091 2,146 Gabelli Growth Fund 1,249.010 shares 41,182 44,215 Invesco Health Science Portfolio 42.852 shares 2,794 2,616 Janus Growth and Income Fund 1,500.554 shares 37,228 43,666 Janus Worldwide Fund 2,622.608 shares 100,606 124,207 Janus Twenty Fund 2,559.909 shares 111,708 136,443 Janus Special Situations Fund 607.227 shares 9,176 10,572 Janus Overseas Fund 3,034.335 shares 55,706 60,929 Janus Fund 1,193.072 shares 32,827 40,147 Guardian Park Ave Fund 937.402 shares 46,508 48,632 Phoenix Strategic Theme Fund Class A 121.569 shares 2,002 1,980 T. Rowe Price Equity Income Fund 407.642 shares 10,843 10,729
20 21 Line 27a--Schedule of Assets Held for Investment Purposes (continued)
CURRENT DESCRIPTION UNITS/SHARES COST VALUE VALUE - ---------------------------------------------------------------------------------------------------------------------- T. Rowe Price Mid-Cap Growth Fund 1,196.476 shares 37,562 40,776 T. Rowe Price Value Fund 1,813.642 shares 34,400 33,208 Safeco Growth Fund 390.930 shares 10,035 8,874 Strong American Utilities Fund 4,178.117 shares 63,829 70,234 Vanguard/Windsor II Portfolio 173.899 shares 5,559 5,191 Vanguard Index Trust 500 Portfolio 433.947 shares 43,000 49,448 ------------------------------------- Total Self-Directed Fund 1,116,752 1,237,357 ------------------------------------- Total Registered Investment Companies 14,345,420 14,760,429 Participant loans 8.75% to 9.50% -- 3,749,111 ------------------------------------- $41,367,490 $48,431,777 =====================================
*Party-in-interest 21 22 Allegheny Ludlum Retirement Savings Plan EIN 25-1364894 Plan 004 Line 27d--Schedule of Reportable Transactions Year ended December 31, 1998
CURRENT VALUE OF ASSETS ON PURCHASE SELLING COST OF TRANSACTION NET DESCRIPTION PRICE PRICE ASSET DATE GAIN - ------------------------------------------------------------------------------------------------------------------ Type (i) transactions: Dreyfus Disciplined Stock Fund $ -- $31,378,316 $27,898,261 $31,378,316 $ 3,480,055 Dreyfus Lifestyle Growth and Income Fund 20,277,990 -- 20,277,990 20,277,990 -- Type (iii) transactions: Dreyfus Disciplined Stock Fund 16,957,031 -- 16,957,031 16,957,031 -- Dreyfus Disciplined Stock Fund -- 47,960,058 42,709,908 47,960,058 5,250,150 Dreyfus Small Company Value Fund 5,971,806 -- 5,971,806 5,971,806 -- Dreyfus Small Company Value Fund -- 9,993,746 9,986,738 9,993,746 7,008 Dreyfus Lifestyle Growth and Income Fund 22,349,396 -- 22,349,396 22,349,396 -- Dreyfus Lifestyle Growth and Income Fund -- 3,903,821 3,795,634 3,903,821 108,187
There were no Type (ii) or (iv) transactions during the year ended December 31, 1998. 22 23 Audited Financial Statements 401(k) Savings Account Plan for Employees of the Washington Plant Years ended December 31, 1998 and 1997 with Report of Independent Auditors 23 24 401(k) Savings Account Plan for Employees of the Washington Plant Audited Financial Statements Years ended December 31, 1998 and 1997 CONTENTS Report of Independent Auditors ...........................................25 Audited Financial Statements Statement of Net Assets Available for Benefits, with Fund Information as of December 31, 1998 ...................................26 Statement of Net Assets Available for Benefits, with Fund Information as of December 31, 1997 ...................................27 Statement of Changes in Net Assets Available for Benefits, with Fund Information, Year ended December 31, 1998 .............................28 Statement of Changes in Net Assets Available for Benefits, with Fund Information, Year ended December 31, 1997 .............................29 Notes to Financial Statements ............................................30 Supplemental Schedules Line 27a--Schedule of Assets Held for Investment Purposes.................38 Line 27d--Schedule of Reportable Transactions.............................39 24 25 Report of Independent Auditors The Plan Administrator 401(k) Savings Account Plan for Employees of the Washington Plant We have audited the accompanying statements of net assets available for benefits of the 401(k) Savings Account Plan for Employees of the Washington Plant as of December 31, 1998 and 1997, 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 generally accepted auditing standards. 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 401(k) Savings Account Plan for Employees of the Washington Plant as of December 31, 1998 and 1997, and the changes in net assets available for benefits for the years then ended, in conformity with generally accepted accounting principles. Our audits were made for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedules of assets held for investment purposes as of December 31, 1998, and reportable transactions for the year then ended, are 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 are not a required part of the financial statements. The Fund Information in the statements of net assets available for benefits and the statements of changes in net assets available for benefits is presented for purposes of additional analysis rather than to present the net assets available for benefits and changes in net assets available for benefits of each fund. The supplemental schedules and Fund Information have been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, are fairly stated in all material respects in relation to the financial statements taken as a whole. /s/ Ernst & Young LLP Pittsburgh, Pennsylvania June 11, 1999 25 26 401(k) Savings Account Plan for Employees of the Washington Plant Statement of Net Assets Available for Benefits, with Fund Information December 31, 1998
DREYFUS DREYFUS DREYFUS LIFESTYLE LIFESTYLE LIFESTYLE ALLIANCE FIXED GROWTH AND GROWTH INCOME EQUITY INCOME INCOME FUND FUND FUND FUND FUND -------------------------------------------------------------------------- ASSETS Investments: Interest in Allegheny Ludlum Corporation Master Trusts $ -- $ -- $ -- $ 279,582 $ 143,364 Interest in registered investment companies -- -- -- -- -- Interest in common collective trusts 143,554 57,108 7,667 -- -- -------------------------------------------------------------------------- Net assets available for benefits $ 143,554 $ 57,108 $ 7,667 $ 279,582 $ 143,364 ==========================================================================
DREYFUS ALLEGHENY SMALL DREYFUS TELEDYNE COMPANY INTERNATIONAL COMPANY DISCIPLINED VALUE VALUE STOCK STOCK FUND FUND FUND FUND TOTAL ----------------------------------------------------------------------- ASSETS Investments: Interest in Allegheny Ludlum Corporation Master Trusts $ 403,630 $ -- $ -- $ 115,325 $ 941,901 Interest in registered investment companies -- 56,201 12,472 -- 68,673 Interest in common collective trusts -- -- -- -- 208,329 ---------------------------------------------------------------------- Net assets available for benefits $ 403,630 $ 56,201 $ 12,472 $ 115,325 $1,218,903 =====================================================================-
See accompanying notes. 26 27 401(k) Savings Account Plan for Employees of the Washington Plant Statement of Net Assets Available for Benefits, with Fund Information December 31, 1997
DREYFUS DREYFUS DREYFUS LIFESTYLE LIFESTYLE LIFESTYLE ALLIANCE FIXED GROWTH AND GROWTH INCOME EQUITY INCOME INCOME FUND FUND FUND FUND FUND ---------------------------------------------------------------------- ASSETS Investments: Interest in Allegheny Ludlum Corporation Master Trusts $ 98,019 $ 4,596 $ 157 $263,569 $ 67,853 Interest in registered investment companies -- -- -- -- -- ---------------------------------------------------------------------- Net assets available for benefits $ 98,019 $ 4,596 $ 157 $263,569 $ 67,853 ======================================================================
DREYFUS SMALL DREYFUS DREYFUS COMPANY INTERNATIONAL COMPANY DISCIPLINED VALUE VALUE STOCK STOCK FUND FUND FUND FUND TOTAL --------------------------------------------------------------------- ASSETS Investments: Interest in Allegheny Ludlum Corporation Master Trusts $ -- $ -- $ -- $ 35,008 $469,202 Interest in registered investment companies 223,415 49,231 9,328 -- 281,974 -------------------------------------------------------------------- Net assets available for benefits $223,415 $ 49,231 $ 9,328 $ 35,008 $751,176 ====================================================================
See accompanying notes. 27 28 401(k) Savings Account Plan for Employees of the Washington Plant Statement of Changes in Net Assets Available for Benefits, with Fund Information Year ended December 31, 1998
DREYFUS LIFESTYLE DREYFUS DREYFUS GROWTH LIFESTYLE LIFESTYLE ALLIANCE FIXED AND INCOME GROWTH INCOME EQUITY INCOME FUND FUND FUND FUND FUND -------------------------------------------------------------------------------- Additions: Employee contributions $ 42,302 $ 32,556 $ 6,467 $ 84,765 $ 39,230 Investment income (loss): Net gain from interest in common collective trusts 14,421 5,624 362 -- -- Net gain (loss) from interest in Allegheny Ludlum Corporation Master Trusts 5,945 850 61 (11,578) 7,192 Net gain (loss) from interest in registered investment companies -- -- -- -- -- Interfund transfers (17,133) 13,482 620 (57,174) 29,089 -------------------------------------------------------------------------------- Total additions 45,535 52,512 7,510 16,013 75,511 Deductions: Distributions to participants -- -- -- -- -- -------------------------------------------------------------------------------- Net additions 45,535 52,512 7,510 16,013 75,511 Net assets available for benefits at beginning of year 98,019 4,596 157 263,569 67,853 -------------------------------------------------------------------------------- Net assets available for benefits at end of year $ 143,554 $ 57,108 $ 7,667 $ 279,582 $ 143,364 ================================================================================
ALLEGHENY DREYFUS TELEDYNE SMALL DREYFUS DISCIPLINED COMPANY INTERNATIONAL COMPANY STOCK VALUE VALUE STOCK FUND FUND FUND FUND TOTAL ---------------------------------------------------------------------------------- Additions: Employee contributions $ 112,162 $ 41,426 $ 6,606 $ 20,658 $ 386,172 Investment income (loss): Net gain from interest in common collective trusts -- -- -- -- 20,407 Net gain (loss) from interest in Allegheny Ludlum Corporation Master Trusts 41,780 -- -- (116) 44,134 Net gain (loss) from interest in registered investment companies 22,373 (6,368) 1,009 -- 17,014 Interfund transfers 3,900 (28,088) (4,471) 59,775 -- --------------------------------------------------------------------------------- Total additions 180,215 6,970 3,144 80,317 467,727 Deductions: Distributions to participants -- -- -- -- -- --------------------------------------------------------------------------------- Net additions 180,215 6,970 3,144 80,317 467,727 Net assets available for benefits at beginning of year 223,415 49,231 9,328 35,008 751,176 --------------------------------------------------------------------------------- Net assets available for benefits at end of year $ 403,630 $ 56,201 $ 12,472 $ 115,325 $1,218,903 =================================================================================
See accompanying notes. 28 29 401(k) Savings Account Plan for Employees of the Washington Plant Statement of Changes in Net Assets Available for Benefits, with Fund Information Year ended December 31, 1997
DREYFUS LIFESTYLE DREYFUS DREYFUS GROWTH LIFESTYLE LIFESTYLE ALLIANCE FIXED AND INCOME GROWTH INCOME EQUITY INCOME FUND FUND FUND FUND FUND ---------------------------------------------------------------- Additions: Employee contributions $37,068 $3,085 $151 $108,583 $35,755 Investment income: Net gain from interest in Allegheny Ludlum Corporation Master Trusts 11,610 513 6 53,012 3,154 Net gain from interest in registered investment companies -- -- -- -- -- Interfund transfers 12,661 874 -- (31,297) 8,642 ---------------------------------------------------------------- Total additions 61,339 4,472 157 130,298 47,551 Deductions: Distributions to participants 66 3 -- 393 569 ---------------------------------------------------------------- Net additions 61,273 4,469 157 129,905 46,982 Net assets available for benefits at beginning of year 36,746 127 -- 133,664 20,871 ---------------------------------------------------------------- Net assets available for benefits at end of year $98,019 $4,596 $157 $263,569 $67,853 ================================================================
DREYFUS DREYFUS SMALL DREYFUS DISCIPLINED COMPANY INTERNATIONAL COMPANY STOCK VALUE VALUE STOCK FUND FUND FUND FUND TOTAL ------------------------------------------------------------------- Additions: Employee contributions $ 95,405 $43,193 $6,849 $15,781 $345,870 Investment income: Net gain from interest in Allegheny Ludlum Corporation Master Trusts -- -- -- 1,773 70,068 Net gain from interest in registered investment companies 40,440 4,084 209 -- 44,733 Interfund transfers 5,016 1,016 (614) 3,702 -- ------------------------------------------------------------------- Total additions 140,861 48,293 6,444 21,256 460,671 Deductions: Distributions to participants 627 -- 117 -- 1,775 ------------------------------------------------------------------- Net additions 140,234 48,293 6,327 21,256 458,896 Net assets available for benefits at beginning of year 83,181 938 3,001 13,752 292,280 ------------------------------------------------------------------- Net assets available for benefits at end of year $ 223,415 $49,231 $9,328 $35,008 $751,176 ===================================================================
See accompanying notes. 29 30 401(k) Savings Account Plan for Employees of the Washington Plant Notes to Financial Statements December 31, 1998 1. SIGNIFICANT ACCOUNTING POLICIES Investments are stated at fair value determined as follows: The Company Stock Fund consists of investments in Allegheny Teledyne Incorporated (Allegheny Teledyne) common stock and is stated at the quoted market price as listed on the New York Stock Exchange. The Fixed Income Fund is stated at cost plus net earnings, which approximates market value and is provided by the Plan's trustee. 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 generally accepted accounting principles requires management to make estimates and assumptions 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 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 in accumulating a fund to supplement retirement income by allowing eligible employees to make tax-deferred contributions to the Plan. Employee contributions to the Plan can range between 1% and 18% of eligible wages subject to Internal Revenue Service (IRS) 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. The Plan is comprised, solely, of employee contributions. 30 31 401(k) Savings Account Plan for Employees of the Washington Plant Notes to Financial Statements (continued) 2. DESCRIPTION OF THE PLAN (CONTINUED) The investment options provided by the Plan are as follows: Dreyfus Lifestyle Growth and Income Fund--invests in equity and fixed income securities and may invest up to 15% of its assets in international securities. Dreyfus Lifestyle Growth Fund--invests in equity and fixed income securities and may invest up to 25% of its assets in international securities. Dreyfus Lifestyle Income Fund--consists of common stock, fixed income securities and short-term money market instruments. Alliance Equity Fund--consists of common stock. Fixed Income Fund--consists of amounts invested in insurance companies or other financial institutions under an agreement with repayment in full, plus interest at a fixed rate. Allegheny Teledyne Disciplined Stock Fund--invests in equity securities and may invest up to 20% of its assets in high quality money market accounts. Effective November 1, 1998, the Dreyfus Disciplined Stock Fund changed from a mutual fund to a separate account structure, and will be known as the Allegheny Teledyne Disciplined Stock Fund. Investment objective and strategy remain the same. Dreyfus Small Company Value Fund--invests primarily in small domestic and foreign company equities, and to a limited degree, in bonds and money market instruments. Dreyfus International Value Fund--consists of equity securities of foreign company equities, and to a limited degree, in bonds and money market instruments. Company Stock Fund--consists of Allegheny Teledyne common stock. Separate accounts are maintained by the Plan Sponsor for each participating employee. Trustee fees and asset management fees charged 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. 31 32 401(k) Savings Account Plan for Employees of the Washington Plant Notes to Financial Statements (continued) 2. DESCRIPTION OF THE PLAN (CONTINUED) In the event that the Plan is partially or completely terminated, all amounts credited to the accounts of the affected participants become fully vested. Further information about the Plan, including eligibility, vesting, contributions, and withdrawals, is contained in the Summary Plan Description and related contracts. Copies of this Summary Plan Description are available from the Allegheny Teledyne Personnel and Compensation Committee. 3. INVESTMENTS As of December 31, 1998, the Plan is a participant in the ALC Fixed Income Master Trust, the ALC Alliance Equity Master Trust, the ALC ATI Common Stock Master Trust, and the ALC Dreyfus Disciplined Stock Fund Master Trust. During 1998, the Dreyfus Lifestyle Growth and Income Fund, the Dreyfus Lifestyle Growth Fund, and the Dreyfus Lifestyle Income Fund were reclassified as common collective trusts from master trusts, while the Allegheny Teledyne Disciplined Stock Fund was reclassified to a master trust from the Dreyfus Disciplined Stock Fund, a registered investment company. The Plan's participating interests in these master trusts as of December 31, 1998 and 1997 were as follows:
1998 1997 ------------------------------- ALC Fixed Income Master Trust 0.11% 0.05% ALC Alliance Equity Master Trust 0.59% 0.44% ALC ATI Common Stock Master Trust 0.36% 0.10% ALC Lifestyle Growth Fund Master Trust --% .09% ALC Lifestyle Income Fund Master Trust --% --% ALC Lifestyle Growth and Income Fund Master Trust --% 0.43% Allegheny Teledyne Disciplined Stock Fund Master Trust 0.93% --%
The composition of the net assets of the ALC Fixed Income Master Trust at December 31, 1998 and 1997 was as follows:
1998 1997 ---------------------------- Guaranteed investment contracts: Confederation Life Insurance Company $ 2,575 $ 29,118 Continental Assurance Company -- 6,718,924 John Hancock Life Insurance Company 5,100,000 2,600,000 Life Insurance Company of Virginia -- 8,725,219 New York Life Insurance Company 13,258,607 15,169,828 Pacific Mutual Life Insurance Company 6,167,430 5,793,190 Peoples Security Life Insurance Company 10,367,671 11,038,629 Prudential Insurance Company -- 6,144,220
32 33 401(k) Savings Account Plan for Employees of the Washington Plant Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED)
1998 1997 -------------------------------------- Southland Life Insurance Company 10,752,479 16,288,645 Transamerica Occidental 11,296,810 10,936,663 Sun America, Inc. 3,000,000 -- Business Mens Assurance Company of America 2,505,536 -- Protective Life Insurance Company 3,002,482 -- Safeco Life Insurance 3,000,000 -- -------------------------------------- 68,453,590 83,444,436 Synthetic contracts: Caisse des Depots et Consignations 12,865,126 3,879,321 Peoples Security Life Insurance Company 2,968,196 2,948,698 Transamerica Occidental 13,859,523 13,865,850 Union Bank of Switzerland 5,935,391 5,937,712 Westdeutsche Landesbank Girozentrale 16,952,480 13,727,581 -------------------------------------- 52,580,716 40,359,162 Temporary short-term investments 4,248,515 10,765,309 Accrued interest receivable 1,443,795 733,753 Other payables (88,501) (6,169) -------------------------------------- Total net assets $126,638,115 $135,296,491 ======================================
In May 1997, the ALC Fixed Income Master Trust received approximately $4,500,000 related to the Confederation Life Insurance Company Guaranteed Investment Contract in accordance with the liquidation plan. Management is unable to determine additional amounts, if any, that will be received by the ALC Fixed Income Master Trust. The composition of net assets of the ALC Alliance Equity Master Trust at December 31, 1998 and 1997 was as follows:
1998 1997 ------------------------------------ Investment in registered investment companies: Alliance Equity Fund S.A. #4 (6,966.434 and 865.194 shares, respectively) $47,408,255 $60,199,619 Cash 117 90 Operating payables (26,007) (10,341) ------------------------------------ Total net assets $47,382,365 $60,189,368 ====================================
33 34 401(k) Savings Account Plan for Employees of the Washington Plant Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) The composition of net assets of the ALC ATI Common Stock Master Trust at December 31, 1998 and 1997 was as follows:
1998 1997 ------------------------------------- Allegheny Teledyne Incorporated common stock (1,544,975 and 1,347,732 shares, respectively) $31,575,427 $34,872,566 Receivables 196,291 4,527 Short-Term Investment Fund 450,324 738,595 Operating payables (10,492) (822) ------------------------------------- Total net assets $32,211,550 $35,614,866 =====================================
The composition of assets of the ALC Lifestyle Growth Fund Master Trust at December 31, 1998 and 1997 was as follows:
1998 1997 ------------------ ------------------- Dreyfus Lifestyle Growth Fund $-- $5,117,053 Operating payables -- (5) ------------------ ------------------- $-- $5,117,048 ================== ===================
The composition of assets of the ALC Lifestyle Income Fund Master Trust at December 31, 1998 and 1997 was as follows:
1998 1997 ------------------ ------------------- Dreyfus Lifestyle Income Fund $-- $1,825,632 Operating payables -- (2) ------------------ ------------------- $-- $1,825,630 ================== ===================
The composition of assets of the ALC Lifestyle Growth and Income Fund Master Trust at December 31, 1998 and 1997 was as follows:
1998 1997 ------------------ ------------------- Dreyfus Lifestyle Growth and Income Fund $-- $22,740,752 Receivables -- 56 ------------------ ------------------- $-- $22,740,808 ================== ===================
34 35 401(k) Savings Account Plan for Employees of the Washington Plant Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) The composition of net assets of the Allegheny Teledyne Disciplined Stock Fund Master Trust at December 31, 1998 and 1997 was as follows:
1998 1997 ------------------ ------------------- Corporate common stock $41,699,413 $-- Noninterest-bearing cash (5,217) -- Receivables 58,761 -- Short-Term Investment Fund 1,499,311 -- Operating payables (51,809) -- ------------------ ------------------- Total net assets $43,200,459 $-- ================== ===================
The composition of the changes in net assets of the various master trusts is as follows:
ALC FIXED INCOME MASTER ALC ALLIANCE EQUITY MASTER ALC ATI COMMON STOCK MASTER TRUST TRUST TRUST ----------------------------------------------------------------------------------------------------- YEAR ENDED DECEMBER 31 ----------------------------------------------------------------------------------------------------- 1998 1997 1998 1997 1998 1997 ------------- ------------- ------------- ------------- ------------- ------------- Investment income (loss): Interest income (loss) $ 8,359,937 $ 8,694,877 $ -- $ -- $ (113) $ (1,554) Realized (loss) gain on sale of investments -- -- -- -- (620,712) 1,835,342 Unrealized (depreciation) appreciation in fair value of investments -- -- -- -- (5,308,345) 2,318,151 Dividends -- -- -- -- 934,022 837,662 Net (loss) gain, registered investment companies -- -- (2,106,215) 13,819,313 -- -- Net gain, common collective trusts 408,717 468,281 -- -- 41,352 73,411 Other income 1,147 1,343 -- -- -- -- Administrative expenses (191,163) (189,938) (237,876) (211,873) (24,196) (27,286) Transfers (17,237,014) (15,337,329) (10,462,912) (6,981,034) 1,574,676 (4,894,605) ------------- ------------- ------------- ------------- ------------- ------------- Net increase (decrease) (8,658,376) (6,362,766) (12,807,003) 6,626,406 (3,403,316) 141,121 Total net assets at beginning of year 135,296,491 141,659,257 60,189,368 53,562,962 35,614,866 35,473,745 ------------- ------------- ------------- ------------- ------------- ------------- Total net assets at end of year $ 126,638,115 $ 135,296,491 $ 47,382,365 $ 60,189,368 $ 32,211,550 $ 35,614,866 ============= ============= ============= ============= ============= =============
35 36 401(k) Savings Account Plan for Employees of the Washington Plant Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED)
ALLEGHENY TELEDYNE ALC LIFESTYLE GROWTH ALC LIFESTYLE INCOME ALC LIFESTYLE GROWTH AND DISCIPLINED STOCK FUND FUND MASTER TRUST FUND MASTER TRUST INCOME FUND MASTER TRUST MASTER TRUST ---------------------------------------------------------------------------------------------------- YEAR ENDED DECEMBER 31 ---------------------------------------------------------------------------------------------------- 1998* 1997 1998* 1997 1998* 1997 1998 1997 ----------- ---------- ----------- ----------- ------------ ----------- ----------- ------ Investment income: Interest income (loss) $ -- $ -- $ -- $ 105 $ -- $ 1 $ (925) $ -- Realized gain on sale of investments -- -- -- -- -- -- 107,964 -- Unrealized appreciation in fair value of investments -- -- -- -- -- -- 4,322,009 -- Dividends -- -- -- -- -- -- 87,868 -- Net gain, common collective trusts 514,556 882,650 109,828 152,034 1,558,031 3,853,009 26,165 -- Other loss (14) -- -- -- (10) -- -- -- Administrative expenses (94) (116) (34) (38) (229) -- (51,809) -- Transfers (5,631,496) 2,285,394 (1,935,424) 1,083,338 (24,298,600) 838,793 38,709,187 -- ----------- ---------- ----------- ----------- ------------ ----------- ----------- ---- Net increase (decrease) (5,117,048) 3,167,928 (1,825,630) 1,235,439 (22,740,808) 4,691,803 43,200,459 -- Total net assets at beginning of year 5,117,048 1,949,120 1,825,630 590,191 22,740,808 18,049,005 -- -- ----------- ---------- ----------- ----------- ------------ ----------- ----------- ---- Total net assets at end of year $ -- $5,117,048 $ -- $ 1,825,630 $ -- $22,740,808 $43,200,459 $ -- =========== ========== =========== =========== ============ =========== =========== ====
* Partial year only. Reclassified as common collective trusts. The average yield for 1998 and 1997 for the ALC Fixed Income Master Trust was 6.55% and 6.57%, respectively. Credited interest rates on the contracts ranged from 5.13% to 8.18% and 5.60% to 8.18% for 1998 and 1997, respectively, and are determined at contract inception. Interest, realized and unrealized gains and losses, and management fees from the master trusts are included in the net gain (loss) from interest in Allegheny Ludlum Corporation Master Trusts on the statement of changes in net assets available for benefits. 36 37 401(k) Savings Account Plan for Employees of the Washington Plant Notes to Financial Statements (continued) 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 of 1986 (the Code) and, therefore, the related trust is exempt from taxation. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The plan administrator believes 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 Investment fees paid during the period for services rendered were based on customary and reasonable rates for such services. 6. YEAR 2000 READINESS DISCLOSURE (UNAUDITED) The Plan Sponsor has determined that it will be necessary to take certain steps in order to ensure that the Plan's information systems are prepared to handle Year 2000 dates. The Plan Sponsor is taking a two-phase approach. The first phase addresses internal systems that must be modified or replaced to function properly. Internal resources are being utilized to upgrade or modify existing software applications, and test the software and equipment for the Year 2000 modifications. The Plan Sponsor believes that it has substantially completed this phase of the project. Costs associated with modifying software and equipment are not estimated to be significant and will be paid by the Plan Sponsor. For the second phase of the project, plan management established formal communications with its third party service providers to determine that they have developed plans to address their own Year 2000 problems as they relate to the Plan's operations. All third party service providers have indicated that they expect to be Year 2000 compliant by mid-1999. If modification of data processing systems of either the Plan, the Plan Sponsor, or its service providers are not completed timely, the Year 2000 problem could have a material impact on the operations of the Plan. Plan management has not developed a contingency plan because they are confident that all material systems will be Year 2000 ready. 7. SUBSEQUENT EVENT Effective July 1, 1999, the Plan will no longer offer the Dreyfus Small Company Value Fund as an investment option. The Dreyfus Emerging Leaders Fund will be offered to participants as a new investment option as of this date. 37 38 401(k) Savings Account Plan for Employees of the Washington Plant EIN 25-0575410 Plan 020 Line 27a--Schedule of Assets Held for Investment Purposes December 31, 1998
CURRENT DESCRIPTION UNITS/SHARES COST VALUE - ----------------------------------------------------------------------------------------------------- Common Collective Trusts - ------------------------ Dreyfus Lifestyle Growth and Income Fund* 9,188.988 shares 129,203 143,554 Dreyfus Lifestyle Growth Fund* 3,216.593 shares 51,364 57,108 Dreyfus Lifestyle Income Fund* 579.241 shares 7,277 7,667 ----------------------- Total Common Collective Trusts 187,844 208,329 Registered Investment Companies - ------------------------------- Dreyfus Small Company Value Fund*: Interest in Dreyfus Small Company Value Fund 2,845.644 shares $ 56,846 $ 56,201 Dreyfus International Value Fund*: Interest in Dreyfus International Value Fund 823.753 shares 12,485 12,472 ----------------------- Total Registered Investment Companies 69,331 68,673 ----------------------- $257,175 $277,002 =======================
*Party-in-interest 38 39 401(k) Savings Account Plan for Employees of the Washington Plant EIN 25-0575410 Plan 020 Line 27d--Schedule of Reportable Transactions Year ended December 31, 1998
CURRENT VALUE OF ASSETS ON NET PURCHASE SELLING COST OF TRANSACTION GAIN DESCRIPTION PRICE PRICE ASSET DATE (LOSS) - ------------------------------------------------------------------------------------------------------------------ Type (i) Transactions - --------------------- Dreyfus Disciplined Stock Fund $ -- $311,849 $283,329 $311,849 $28,520 Dreyfus Lifestyle Growth and Income Fund 113,074 -- 113,074 113,074 -- Type (iii) Transactions - ----------------------- Dreyfus Disciplined Stock Fund 223,069 -- 223,069 223,069 -- Dreyfus Disciplined Stock Fund -- 468,294 430,706 468,294 37,588 Dreyfus Small Company Value Fund 41,012 -- 41,012 41,012 -- Dreyfus Small Company Value Fund -- 27,628 30,840 27,628 (3,212) Dreyfus Lifestyle Growth and Income Fund 133,733 -- 133,733 133,733 -- Dreyfus Lifestyle Growth and Income Fund -- 4,600 4,530 4,600 70 Dreyfus Lifestyle Growth Fund 53,522 -- 53,522 53,522 -- Dreyfus Lifestyle Growth Fund -- 2,037 2,157 2,037 (120)
There were no Type (ii) or (iv) transactions during the year ended December 31, 1998. 39 40 Audited Financial Statements Savings and Security Plan of the Lockport and Waterbury Facilities of Allegheny Ludlum Corporation Years ended December 31, 1998 and 1997 with Report of Independent Auditors 40 41 Savings and Security Plan of the Lockport and Waterbury Facilities of Allegheny Ludlum Corporation Audited Financial Statements Years ended December 31, 1998 and 1997 CONTENTS Report of Independent Auditors .............................................42 Audited Financial Statements Statement of Net Assets Available for Benefits, with Fund Information as of December 31, 1998 .....................................43 Statement of Net Assets Available for Benefits, with Fund Information as of December 31, 1997 .....................................44 Statement of Changes in Net Assets Available for Benefits, with Fund Information, Year ended December 31, 1998 .....................45 Statement of Changes in Net Assets Available for Benefits, with Fund Information, Year ended December 31, 1997 .....................46 Notes to Financial Statements ..............................................47 Supplemental Schedules Line 27a--Schedule of Assets Held for Investment Purposes ..................58 Line 27d--Schedule of Reportable Transactions...............................59 41 42 Report of Independent Auditors Personnel and Compensation Committee Allegheny Ludlum Corporation We have audited the accompanying statements of net assets available for benefits of the Savings and Security Plan of the Lockport and Waterbury Facilities of Allegheny Ludlum Corporation as of December 31, 1998 and 1997, 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 generally accepted auditing standards. 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 Savings and Security Plan of the Lockport and Waterbury Facilities of Allegheny Ludlum Corporation at December 31, 1998 and 1997, and the changes in its net assets available for benefits for the years then ended, in conformity with generally accepted accounting principles. Our audits were made for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedules of assets held for investment purposes as of December 31, 1998, and reportable transactions for the year then ended are 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 are not a required part of the financial statements. The Fund Information in the statements of net assets available for benefits and the statements of changes in net assets available for benefits is presented for purposes of additional analysis rather than to present the net assets available for benefits and changes in net assets available for benefits of each fund. The supplemental schedules and Fund Information have been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, are fairly stated in all material respects in relation to the financial statements taken as a whole. /s/ Ernst & Young LLP Pittsburgh, Pennsylvania June 11, 1999 42 43 Savings and Security Plan of the Lockport and Waterbury Facilities of Allegheny Ludlum Corporation Statement of Net Assets Available for Benefits, with Fund Information December 31, 1998
DREYFUS LIFESTYLE GROWTH DREYFUS DREYFUS ALLEGHENY AND LIFESTYLE LIFESTYLE ALLIANCE FIXED TELEDYNE INCOME GROWTH INCOME EQUITY INCOME DISCIPLINED FUND FUND FUND FUND FUND STOCK FUND ---------------------------------------------------------------------------- ASSETS Investments: Interest in Allegheny Ludlum Corporation Master Trusts $ -- $ -- $ -- $283,093 $3,092,525 $721,478 Interest in registered investment companies -- -- -- -- -- -- Interest in common collective trusts 188,843 152,562 30,833 -- -- -- Participant notes receivable -- -- -- -- -- -- Contributions receivable 192 236 70 436 9,010 773 Other receivables -- 13 6 74 802 183 ---------------------------------------------------------------------------- Net assets available for benefits $189,035 $152,811 $30,909 $283,603 $3,102,337 $722,434 ============================================================================
DREYFUS SMALL DREYFUS COMPANY INTERNATIONAL COMPANY VALUE VALUE STOCK PARTICIPANT FUND FUND FUND LOANS TOTAL ------------------------------------------------------------------------- ASSETS Investments: Interest in Allegheny Ludlum Corporation Master Trusts $ -- $ -- $403,931 $ -- $4,501,027 Interest in registered investment companies 507,604 15,511 -- -- 523,115 Interest in common collective trusts -- -- -- -- 372,238 Participant notes receivable -- -- -- 128,691 128,691 Contributions receivable 446 66 344 -- 11,573 Other receivables 180 17 21 15 1,311 ------------------------------------------------------------------------- Net assets available for benefits $508,230 $15,594 $404,296 $128,706 $5,537,955 =========================================================================
See accompanying notes. 43 44 Savings and Security Plan of the Lockport and Waterbury Facilities of Allegheny Ludlum Corporation Statement of Net Assets Available for Benefits, with Fund Information December 31, 1997
DREYFUS LIFESTYLE GROWTH DREYFUS DREYFUS AND LIFESTYLE LIFESTYLE ALLIANCE FIXED DREYFUS INCOME GROWTH INCOME EQUITY INCOME DISCIPLINED FUND FUND FUND FUND FUND STOCK FUND ----------------------------------------------------------------------------- ASSETS Investments: Interest in Allegheny Ludlum Corporation Master Trusts $179,113 $42,269 $23,644 $241,674 $2,876,809 $ -- Interest in registered investment companies -- -- -- -- -- 548,495 Participant notes receivable -- -- -- -- -- -- ----------------------------------------------------------------------------- Net assets available for benefits $179,113 $42,269 $23,644 $241,674 $2,876,809 $548,495 =============================================================================
DREYFUS SMALL DREYFUS COMPANY INTERNATIONAL COMPANY VALUE VALUE STOCK PARTICIPANT FUND FUND FUND LOANS TOTAL -------------------------------------------------------------------------- ASSETS Investments: Interest in Allegheny Ludlum Corporation Master Trusts $ -- $ -- $511,952 $ -- $3,875,461 Interest in registered investment companies 612,903 17,654 -- -- 1,179,052 Participant notes receivable -- -- -- 152,629 152,629 -------------------------------------------------------------------------- Net assets available for benefits $612,903 $17,654 $511,952 $152,629 $5,207,142 ==========================================================================
See accompanying notes. 44 45 Savings and Security Plan of the Lockport and Waterbury Facilities of Allegheny Ludlum Corporation Statement of Changes in Net Assets Available for Benefits, with Fund Information Year ended December 31, 1998
DREYFUS LIFESTYLE ALLEGHENY GROWTH DREYFUS DREYFUS TELEDYNE AND LIFESTYLE LIFESTYLE ALLIANCE FIXED DISCIPLINED INCOME GROWTH INCOME EQUITY INCOME STOCK FUND FUND FUND FUND FUND FUND ------------------------------------------------------------------------------------- Additions Contributions: Employer $ 7,846 $ 5,964 $ 2,285 $ 15,234 $ 176,984 $ 19,644 Employee 6,130 5,092 1,597 12,929 148,226 17,512 Investment income (loss): Net gain (loss) from interest in Allegheny Ludlum Corporation Master Trusts 11,865 3,322 1,447 (9,993) 182,650 72,986 Net gain (loss) from interest in registered investment companies -- -- -- -- -- 75,615 Net gain from interest in common collective trusts 19,217 17,026 2,984 -- -- -- Interest income -- -- -- -- -- -- Other income -- -- -- 38 1 31 Interfund transfers (16,406) 81,710 (1,048) 51,634 (23,997) 6,840 ------------------------------------------------------------------------------------ Total additions 28,652 113,114 7,265 69,842 483,864 192,628 Deductions: Distributions to participants 18,730 2,572 -- 27,913 258,336 18,689 ------------------------------------------------------------------------------------ Net additions (deductions) 9,922 110,542 7,265 41,929 225,528 173,939 Net assets available for benefits at beginning of year 179,113 42,269 23,644 241,674 2,876,809 548,495 ------------------------------------------------------------------------------------ Net assets available for benefits at end of year $ 189,035 $152,811 $ 30,909 $ 283,603 $ 3,102,337 $722,434 ====================================================================================
DREYFUS SMALL DREYFUS COMPANY INTERNATIONAL COMPANY VALUE VALUE STOCK PARTICIPANT FUND FUND FUND LOANS TOTAL ----------------------------------------------------------------------- Additions Contributions: Employer $ 21,134 $ 1,294 $ 15,508 $ -- $ 265,893 Employee 17,691 873 10,222 -- 220,272 Investment income (loss): Net gain (loss) from interest in Allegheny Ludlum Corporation Master Trusts -- -- (106,228) -- 156,049 Net gain (loss) from interest in registered investment companies (24,486) 1,827 -- -- 52,956 Net gain from interest in common collective trusts -- -- -- -- 39,227 Interest income -- -- -- 12,981 12,981 Other income 24 -- -- 15 109 Interfund transfers (110,585) (3,657) 33,724 (18,215) -- ---------------------------------------------------------------------- Total additions (96,222) 337 (46,774) (5,219) 747,487 Deductions: Distributions to participants 8,451 2,397 60,882 18,704 416,674 ---------------------------------------------------------------------- Net additions (deductions) (104,673) (2,060) (107,656) (23,923) 330,813 Net assets available for benefits at beginning of year 612,903 17,654 511,952 152,629 5,207,142 ---------------------------------------------------------------------- Net assets available for benefits at end of year $ 508,230 $ 15,594 $ 404,296 $ 128,706 $5,537,955 ======================================================================
See accompanying notes. 45 46 Savings and Security Plan of the Lockport and Waterbury Facilities of Allegheny Ludlum Corporation Statement of Changes in Net Assets Available for Benefits, with Fund Information Year ended December 31, 1997
DREYFUS LIFESTYLE GROWTH DREYFUS DREYFUS DREYFUS AND LIFESTYLE LIFESTYLE ALLIANCE FIXED DISCIPLINED INCOME GROWTH INCOME EQUITY INCOME STOCK FUND FUND FUND FUND FUND FUND -------------------------------------------------------------------------------- Additions: Contributions: Employer $ 12,129 $ 3,640 $ 1,630 $ 16,223 $ 270,256 $ 19,079 Employee 10,826 2,555 1,582 14,258 145,270 17,420 Investment income: Net gain from interest in Allegheny Ludlum Corporation Master Trusts 36,335 10,847 1,453 80,992 180,421 -- Net gain from interest in registered investment companies -- -- -- -- -- 90,547 Interest income -- -- -- -- -- -- Interfund transfers (62,902) (2,136) 6,956 (183,386) (349,504) 272,994 -------------------------------------------------------------------------------- (3,612) 14,906 11,621 (71,913) 246,443 400,040 Deductions: Distributions to participants 1,750 3,417 -- 9,966 33,961 1,551 -------------------------------------------------------------------------------- Net additions (deductions) (5,362) 11,489 11,621 (81,879) 212,482 398,489 Net assets available for benefits at beginning of year 184,475 30,780 12,023 323,553 2,664,327 150,006 -------------------------------------------------------------------------------- Net assets available for benefits at end of year $179,113 $42,269 $23,644 $ 241,674 $2,876,809 $548,495 ================================================================================
DREYFUS SMALL DREYFUS COMPANY INTERNATIONAL COMPANY VALUE VALUE STOCK PARTICIPANT FUND FUND FUND LOANS TOTAL ------------------------------------------------------------------------ Additions: Contributions: Employer $ 13,963 $ 646 $ 15,303 $ -- $ 352,869 Employee 11,256 269 9,991 -- 213,427 Investment income: Net gain from interest in Allegheny Ludlum Corporation Master Trusts -- -- 88,729 -- 398,777 Net gain from interest in registered investment companies 64,370 264 -- -- 155,181 Interest income -- -- -- 12,137 12,137 Interfund transfers 504,045 (890) (208,532) 23,355 -- ------------------------------------------------------------------------ 593,634 289 (94,509) 35,492 1,132,391 Deductions: Distributions to participants 5,548 552 29,628 -- 86,373 ------------------------------------------------------------------------ Net additions (deductions) 588,086 (263) (124,137) 35,492 1,046,018 Net assets available for benefits at beginning of year 24,817 17,917 636,089 117,137 4,161,124 ------------------------------------------------------------------------ Net assets available for benefits at end of year $612,903 $17,654 $ 511,952 $152,629 $5,207,142 ========================================================================
See accompanying notes. 46 47 Savings and Security Plan of the Lockport and Waterbury Facilities of Allegheny Ludlum Corporation Notes to Financial Statements December 31, 1998 1. SIGNIFICANT ACCOUNTING POLICIES Investments are stated at fair value determined as follows: The Company Stock Fund consists of investments in Allegheny Teledyne Incorporated (Allegheny Teledyne) common stock and is stated at the quoted market price as listed on the New York Stock Exchange. The Fixed Income Fund is stated at cost plus net earnings, which approximates market value and is provided by the Plan's trustee. 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 generally accepted accounting principles requires management to make estimates and assumptions 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 purpose of the Savings and Security Plan of the Lockport and Waterbury Facilities of Allegheny Ludlum Corporation (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. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974. ALC is a wholly owned subsidiary of Allegheny Teledyne. Depending on participants' years of service, participants can defer between 1% and 16%, subject to Internal Revenue Service limitations, of their eligible wages and contribute them to the Plan. ALC will match 50% of participant deferrals up to 8% of each participant's deferral based on years of service as described in the Plan. Any contributions made by participants in excess of the eligible matched portion will not be matched by ALC. In addition, ALC will contribute 6.5% of monthly eligible wages regardless if participants elect to contribute to the savings portion of the Plan. ALC also contributes $.50 for each hour participants work. Effective July 1, 1998, ALC increased this contribution to $.59 for each hour participants work. 47 48 Savings and Security Plan of the Lockport and Waterbury Facilities of Allegheny Ludlum Corporation Notes to Financial Statements (continued) 2. DESCRIPTION OF THE PLAN (CONTINUED) The investment options provided by the Plan are as follows: Dreyfus Lifestyle Growth and Income Fund--invests in equity and fixed income securities and may invest up to 15% of its assets in international securities. Dreyfus Lifestyle Growth Fund--invests in equity and fixed income securities and may invest up to 25% of its assets in international securities. Dreyfus Lifestyle Income Fund--consists of common stock, fixed income securities and short-term money market instruments. Alliance Equity Fund--consists of common stock. Fixed Income Fund--consists of amounts invested in insurance companies or other financial institutions under an agreement with repayment in full, plus interest at a fixed rate. Allegheny Teledyne Disciplined Stock Fund--invests in equity securities and may invest up to 20% of its assets in high quality money market accounts. Effective November 1, 1998, the Dreyfus Disciplined Stock Fund changed from a mutual fund to a separate account structure, and will be known as the Allegheny Teledyne Disciplined Stock Fund. Investment objective and strategy remain the same. Dreyfus Small Company Value Fund--invests primarily in small company equities, and to a limited degree, in bonds and money market instruments. Dreyfus International Value Fund--consists of equity securities of foreign company equities, and to a limited degree, in bonds and money market instruments. Company Stock Fund--consists of Allegheny Teledyne common stock. 48 49 Savings and Security Plan of the Lockport and Waterbury Facilities of Allegheny Ludlum Corporation 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 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. 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. In the event that the Plan is partially or completely terminated, or the Plan Sponsor permanently discontinues making contributions, all amounts credited to the accounts of affected participants become fully vested and nonforfeitable. Further information about the Plan, including eligibility, vesting, contributions, and withdrawals, is contained in the Summary Plan Description and related contracts. Copies of this Summary Plan Description are available from the Allegheny Teledyne Personnel and Compensation Committee. 49 50 Savings and Security Plan of the Lockport and Waterbury Facilities of Allegheny Ludlum Corporation Notes to Financial Statements (continued) 3. INVESTMENTS As of December 31, 1998, the Plan is a participant in the ALC Fixed Income Master Trust, the ALC Alliance Equity Master Trust, the ALC ATI Common Stock Master Trust, and the ALC Dreyfus Disciplined Stock Fund Master Trust. During 1998, the Dreyfus Lifestyle Growth and Income Fund, the Dreyfus Lifestyle Growth Fund and the Dreyfus Lifestyle Income Fund were reclassified as common collective trusts from master trusts while the Allegheny Teledyne Disciplined Stock Fund was reclassified to a master trust from the Dreyfus Disciplined Stock Fund, a registered investment company. The Plan's participating interests in these master trusts as of December 31, 1998 and 1997 were as follows:
1998 1997 -------------------------------------------- ALC Fixed Income Master Trust 2.44% 2.13% ALC Alliance Equity Master Trust 0.60% .39% ALC ATI Common Stock Master Trust 1.25% 1.44% ALC Lifestyle Growth Fund Master Trust --% .83% ALC Lifestyle Income Fund Master Trust --% 1.31% ALC Lifestyle Growth and Income Fund Master Trust --% .79% Allegheny Teledyne Disciplined Stock Fund Master Trust 1.67% --%
The composition of the net assets of the ALC Fixed Income Master Trust at December 31, 1998 and 1997 was as follows:
1998 1997 -------------------------------------------- Guaranteed investment contracts: Confederation Life Insurance Company $ 2,575 $ 29,118 Continental Assurance Company -- 6,718,924 John Hancock Life Insurance Company 5,100,000 2,600,000 Life Insurance Company of Virginia -- 8,725,219 New York Life Insurance Company 13,258,607 15,169,828 Pacific Mutual Life Insurance Company 6,167,430 5,793,190 Peoples Security Life Insurance Company 10,367,671 11,038,629 Prudential Insurance Company -- 6,144,220 Southland Life Insurance Company 10,752,479 16,288,645 Transamerica Occidental 11,296,810 10,936,663 Sun America, Inc. 3,000,000 -- Business Mens Assurance Company of America 2,505,536 -- Protective Life Insurance Company 3,002,482 -- Safeco Life Insurance 3,000,000 -- -------------------------------------------- 68,453,590 83,444,436
50 51 Savings and Security Plan of the Lockport and Waterbury Facilities of Allegheny Ludlum Corporation Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED)
1998 1997 -------------------------------------------- Synthetic contracts: Caisse des Depots et Consignations 12,865,126 3,879,321 Peoples Security Life Insurance Company 2,968,196 2,948,698 Transamerica Occidental 13,859,523 13,865,850 Union Bank of Switzerland 5,935,391 5,937,712 Westdeutsche Landesbank Girozentrale 16,952,480 13,727,581 -------------------------------------------- 52,580,716 40,359,162 Temporary short-term investments 4,248,515 10,765,309 Accrued interest receivable 1,443,795 733,753 Other payables (88,501) (6,169) -------------------------------------------- Total net assets $126,638,115 $135,296,491 ============================================
In May 1997, the ALC Fixed Income Master Trust received approximately $4,500,000 related to the Confederation Life Insurance Company Guaranteed Investment Contract in accordance with the liquidation plan. Management is unable to determine additional amounts, if any, that will be received by the ALC Fixed Income Master Trust. The composition of net assets of the ALC Alliance Equity Master Trust at December 31, 1998 and 1997 was as follows:
1998 1997 -------------------------------------------- Investment in registered investment companies: Alliance Equity Fund S.A. #4 (6,966.434 and 865.194 shares, respectively) $47,408,255 $60,199,619 Cash 117 90 Operating payables (26,007) (10,341) -------------------------------------------- Total net assets $47,382,365 $60,189,368 ============================================
51 52 Savings and Security Plan of the Lockport and Waterbury Facilities of Allegheny Ludlum Corporation Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) The composition of net assets of the ALC ATI Common Stock Master Trust at December 31, 1998 and 1997 was as follows:
1998 1997 -------------------------------------------- Allegheny Teledyne Incorporated common stock (1,544,975 and 1,347,732 shares, respectively) $31,575,427 $34,872,566 Receivables 196,291 4,527 Short-Term Investment Fund 450,324 738,595 Operating payables (10,492) (822) -------------------------------------------- Total net assets $32,211,550 $35,614,866 ============================================
The composition of assets of the ALC Lifestyle Growth Fund Master Trust at December 31, 1998 and 1997 was as follows:
1998 1997 -------------------------------------------- Dreyfus Lifestyle Growth Fund $-- $5,117,053 Operating payables -- (5) -------------------------------------------- $-- $5,117,048 ============================================
The composition of assets of the ALC Lifestyle Income Fund Master Trust at December 31, 1998 and 1997 was as follows:
1998 1997 -------------------------------------------- Dreyfus Lifestyle Income Fund $-- $1,825,632 Operating payables -- (2) -------------------------------------------- $-- $1,825,630 ============================================
52 53 Savings and Security Plan of the Lockport and Waterbury Facilities of Allegheny Ludlum Corporation Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) The composition of assets of the ALC Lifestyle Growth and Income Fund Master Trust at December 31, 1998 and 1997 was as follows:
1998 1997 -------------------------------------------- Dreyfus Lifestyle Growth and Income Fund $-- $22,740,752 Receivables -- 56 -------------------------------------------- $-- $22,740,808 ============================================
The composition of net assets of the Allegheny Teledyne Disciplined Stock Fund Master Trust at December 31, 1998 and 1997 was as follows:
1998 1997 ---------------------- -------------------- Corporate common stock $41,699,413 $-- Noninterest-bearing cash (5,217) -- Receivables 58,761 -- Short-Term Investment Fund 1,499,311 -- Operating payables (51,809) -- ---------------------- -------------------- Total net assets $43,200,459 $-- ====================== ====================
53 54 Savings and Security Plan of the Lockport and Waterbury Facilities of Allegheny Ludlum Corporation Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) The composition of the changes in net assets of the various master trusts is as follows:
ALC FIXED INCOME MASTER ALC ALLIANCE EQUITY MASTER ALC ATI COMMON STOCK MASTER TRUST TRUST TRUST ----------------------------- ------------------------------- ------------------------------- YEAR ENDED DECEMBER 31 --------------------------------------------------------------------------------------------- 1998 1997 1998 1997 1998 1997 -------------- --------------- -------------- --------------- --------------- --------------- Investment income (loss): Interest income (loss) $ 8,359,937 $ 8,694,877 $ -- $ -- $ (113) $ (1,554) Realized (loss) gain on sale of investments -- -- -- -- (620,712) 1,835,342 Unrealized (depreciation) appreciation in fair value of investments -- -- -- -- (5,308,345) 2,318,151 Dividends -- -- -- -- 934,022 837,662 Net (loss) gain, registered investment companies -- -- (2,106,215) 13,819,313 -- -- Net gain, common collective trusts 408,717 468,281 -- -- 41,352 73,411 Other income 1,147 1,343 -- -- -- -- Administrative expenses (191,163) (189,938) (237,876) (211,873) (24,196) (27,286) Transfers (17,237,014) (15,337,329) (10,462,912) (6,981,034) 1,574,676 (4,894,605) -------------- --------------- -------------- --------------- --------------- --------------- Net increase (decrease) (8,658,376) (6,362,766) (12,807,003) 6,626,406 (3,403,316) 141,121 Total net assets at beginning of year 135,296,491 141,659,257 60,189,368 53,562,962 35,614,866 35,473,745 -------------- --------------- -------------- --------------- --------------- --------------- Total net assets at end of year $126,638,115 $135,296,491 $47,382,365 $60,189,368 $32,211,550 $35,614,866 ============== =============== ============== =============== =============== ===============
54 55 Savings and Security Plan of the Lockport and Waterbury Facilities of Allegheny Ludlum Corporation Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED)
ALC LIFESTYLE GROWTH ALC LIFESTYLE INCOME ALC LIFESTYLE GROWTH AND FUND MASTER TRUST FUND MASTER TRUST INCOME FUND MASTER TRUST ------------------------------------------------------------------------------------------------------ YEAR ENDED DECEMBER 31 ------------------------------------------------------------------------------------------------------ 1998* 1997 1998* 1997 1998* 1997 ------------------------------------------------------------------------------------------------------ Investment income (loss): Interest income (loss) $ -- $ -- $ -- $ 105 $ -- $ 1 Realized gain on sale of investments -- -- -- -- -- -- Unrealized appreciation in fair value of investments -- -- -- -- -- -- Dividends -- -- -- -- -- -- Net gain, common collective trusts 514,556 882,650 109,828 152,034 1,558,031 3,853,009 Other loss (14) -- -- -- (10) -- Administrative expenses (94) (116) (34) (38) (229) -- Transfers (5,631,496) 2,285,394 (1,935,424) 1,083,338 (24,298,600) 838,793 ------------ ------------ ------------ ------------ ------------ ------------ Net increase (decrease) (5,117,048) 3,167,928 (1,825,630) 1,235,439 (22,740,808) 4,691,803 Total net assets at beginning of year 5,117,048 1,949,120 1,825,630 590,191 22,740,808 18,049,005 ------------ ------------ ------------ ------------ ------------ ------------ Total net assets at end of year $ -- $ 5,117,048 $ -- $ 1,825,630 $ -- $ 22,740,808 ============ ============ ============ ============ ============ ============
ALLEGHENY TELEDYNE DISCIPLINED STOCK FUND MASTER TRUST ------------------------- YEAR ENDED DECEMBER 31 ------------------------- 1998 1997 ------------------------- Investment income (loss): Interest income (loss) $ (925) $ -- Realized gain on sale of investments 107,964 -- Unrealized appreciation in fair value of investments 4,322,009 -- Dividends 87,868 -- Net gain, common collective trusts 26,165 -- Other loss -- -- Administrative expenses (51,809) -- Transfers 38,709,187 -- ------------ ---- Net increase (decrease) 43,200,459 -- Total net assets at beginning of year -- -- ------------ ---- Total net assets at end of year $ 43,200,459 $ -- ============ ====
* Partial year only. Reclassified as common collective trusts. The average yield for 1998 and 1997 for the ALC Fixed Income Master Trust was 6.55% and 6.57%, respectively. Credited interest rates on the contracts ranged from 5.13% to 8.18% and 5.60% to 8.18% for 1998 and 1997, respectively, and are determined at contract inception. Interest, realized and unrealized gains and losses, and management fees from the master trusts are included in the net gain (loss) from interest in Allegheny Ludlum Corporation Master Trusts on the statement of changes in net assets available for benefits. 55 56 Savings and Security Plan of the Lockport and Waterbury Facilities of Allegheny Ludlum Corporation Notes to Financial Statements (continued) 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 of 1986 (the Code) and, therefore, the related trust is exempt from taxation. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The plan administrator believes 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 Investment fees paid during the year for services rendered were based on customary and reasonable rates for such services. 6. YEAR 2000 READINESS DISCLOSURE (UNAUDITED) The Plan Sponsor has determined that it will be necessary to take certain steps in order to ensure that the Plan's information systems are prepared to handle Year 2000 dates. The Plan Sponsor is taking a two-phase approach. The first phase addresses internal systems that must be modified or replaced to function properly. Internal resources are being utilized to upgrade or modify existing software applications, and test the software and equipment for the Year 2000 modifications. The Plan Sponsor believes that it has substantially completed this phase of the project. Costs associated with modifying software and equipment are not estimated to be significant and will be paid by the Plan Sponsor. For the second phase of the project, plan management established formal communications with its third party service providers to determine that they have developed plans to address their own Year 2000 problems as they relate to the Plan's operations. All third party service providers have indicated that they expect to be Year 2000 compliant by mid-1999. If modification of data processing systems of either the Plan, the Plan Sponsor, or its service providers are not completed timely, the Year 2000 problem could have a material impact on the operations of the Plan. Plan management has not developed a contingency plan because they are confident that all material systems will be Year 2000 ready. 56 57 Savings and Security Plan of the Lockport and Waterbury Facilities of Allegheny Ludlum Corporation Notes to Financial Statements (continued) 7. SUBSEQUENT EVENT Effective July 1, 1999, the Plan will no longer offer the Dreyfus Small Company Value Fund as an investment option. The Dreyfus Emerging Leaders Fund will be offered to participants as a new investment option as of this date. 57 58 Savings and Security Plan of the Lockport and Waterbury Facilities of Allegheny Ludlum Corporation EIN 25-1364874 Plan 007 Line 27a--Schedule of Assets Held for Investment Purposes December 31, 1998
DESCRIPTION UNITS/SHARES COST CURRENT VALUE - ---------------------------------------------------------------------------------------------------------------------- Common Collective Trusts Dreyfus Lifestyle Growth and Income Fund* 12,087.957 shares $169,644 $ 188,843 Dreyfus Lifestyle Growth Fund* 8,593.007 shares 135,527 152,562 Dreyfus Lifestyle Income Fund* 2,329.426 shares 29,010 30,833 -------------------------------------------- Total Common Collective Trusts 334,181 372,238 Registered Investment Companies Dreyfus Small Company Value Fund*: Interest in Dreyfus Small Company Value Fund 25,701.455 shares 507,561 507,604 Dreyfus International Value Fund*: Interest in Dreyfus International Value Fund 1,024.492 shares 15,688 15,511 -------------------------------------------- Total Registered Investment Companies 523,249 523,115 Participant loans 8.75% to 9.50% - 128,691 -------------------------------------------- $857,430 $1,024,044 ============================================
* Party-in-interest 58 59 Savings and Security Plan of the Lockport and Waterbury Facilities of Allegheny Ludlum Corporation EIN 25-1364894 Plan 007 Line 27d--Schedule of Reportable Transactions Year ended December 31, 1998
CURRENT VALUE OF ASSETS ON PURCHASE SELLING COST OF TRANSACTION NET DESCRIPTION PRICE PRICE ASSET DATE GAIN - ------------------------------------------------------------------------------------------------------------------------- Type (i) Transactions - --------------------- Dreyfus Disciplined Stock Fund $ -- $ 696,463 $ 680,132 $ 696,463 $ 16,331 Type (iii) Transactions - ----------------------- Dreyfus Disciplined Stock Fund 1,003,544 -- 1,003,544 1,003,544 -- Dreyfus Disciplined Stock Fund -- 1,626,969 1,567,313 1,626,969 59,656 Dreyfus Small Company Value Fund 382,092 -- 382,092 382,092 -- Dreyfus Small Company Value Fund -- 462,905 453,192 462,905 9,713 Dreyfus Lifestyle Income Fund 359,342 -- 359,342 359,342 -- Dreyfus Lifestyle Income Fund -- 331,493 330,332 331,493 1,161
There were no Type (ii) or (iv) transactions during the year ended December 31, 1998. 59 60 Audited Financial Statements Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan Years ended December 31, 1998 and 1997 with Report of Independent Auditors 60 61 Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan Audited Financial Statements Years ended December 31, 1998 and 1997 CONTENTS Report of Independent Auditors ...............................................62 Audited Financial Statements Statement of Net Assets Available for Benefits, with Fund Information as of December 31, 1998 ...................................................63 Statement of Net Assets Available for Benefits, with Fund Information as of December 31, 1997 ...................................................64 Statement of Changes in Net Assets Available for Benefits, with Fund Information, Year ended December 31, 1998 .................................65 Statement of Changes in Net Assets Available for Benefits, with Fund Information, Year ended December 31, 1997 .................................66 Notes to Financial Statements ................................................67 Supplemental Schedules Line 27a--Schedule of Assets Held for Investment Purposes.....................76 Line 27d--Schedule of Reportable Transactions.................................77 61 62 Report of Independent Auditors Personnel and Compensation Committee Allegheny Ludlum Corporation 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, 1998 and 1997, 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 generally accepted auditing standards. 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 Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan as of December 31, 1998 and 1997, and the changes in its net assets available for benefits for the years then ended, in conformity with generally accepted accounting principles. Our audits were made for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedules of assets held for investment purposes as of December 31, 1998, and reportable transactions for the year then ended, are 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 are not a required part of the financial statements. The Fund Information in the statements of net assets available for benefits and the statements of changes in net assets available for benefits is presented for purposes of additional analysis rather than to present the net assets available for benefits and changes in net assets available for benefits of each fund. The supplemental schedules and Fund Information have been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, are fairly stated in all material respects in relation to the financial statements taken as a whole. /s/ Ernst & Young LLP Pittsburgh, Pennsylvania June 11, 1999 62 63 Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan Statement of Net Assets Available for Benefits, with Fund Information December 31, 1998
DREYFUS DREYFUS DREYFUS ALLEGHENY LIFESTYLE LIFESTYLE LIFESTYLE ALLIANCE FIXED TELEDYNE GROWTH AND GROWTH INCOME EQUITY INCOME DISCIPLINED INCOME FUND FUND FUND FUND FUND STOCK FUND ------------------------------------------------------------------------------------------------------- ASSETS Investments: Interest in Allegheny Ludlum Corporation Master Trusts $ -- $ -- $ -- $ 8,691,158 $ 36,265,505 $ 6,844,452 Interest in registered investment companies -- -- -- -- -- -- Interest in common collective trusts 4,543,488 1,633,809 636,848 -- -- -- Participant notes receivable -- -- -- -- -- -- Contributions receivable 380 339 265 379 5,577 655 Other receivables (payables) 482 2,958 (5,753) (24,153) (22,957) (4,570) ------------------------------------------------------------------------------------------------------- Net assets available for benefits $ 4,544,350 $ 1,637,106 $ 631,360 $ 8,667,384 $ 36,248,125 $ 6,840,537 =======================================================================================================
DREYFUS SMALL DREYFUS COMPANY INTERNATIONAL COMPANY VALUE VALUE STOCK PARTICIPANT FUND FUND FUND LOANS TOTAL -------------------------------------------------------------------------------------- ASSETS Investments: Interest in Allegheny Ludlum Corporation Master Trusts $ -- $ -- $ 8,839,227 $ -- $ 60,640,342 Interest in registered investment companies 2,469,580 649,083 -- -- 3,118,663 Interest in common collective trusts -- -- -- -- 6,814,145 Participant notes receivable -- -- -- 2,933,000 2,933,000 Contributions receivable 442 91 1,202 -- 9,330 Other receivables (payables) (6,315) 4,741 (12,235) 1,631 (66,171) -------------------------------------------------------------------------------------- Net assets available for benefits $ 2,463,707 $ 653,915 $ 8,828,194 $ 2,934,631 $ 73,449,309 ======================================================================================
See accompanying notes. 63 64 Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan Statement of Net Assets Available for Benefits, with Fund Information December 31, 1997
DREYFUS DREYFUS DREYFUS LIFESTYLE LIFESTYLE LIFESTYLE ALLIANCE FIXED DREYFUS GROWTH AND GROWTH INCOME EQUITY INCOME DISCIPLINED INCOME FUND FUND FUND FUND FUND STOCK FUND -------------------------------------------------------------------------------------------------- ASSETS Investments: Interest in Allegheny Ludlum Corporation Master Trusts $ 3,395,294 $ 890,297 $ 299,973 $10,447,614 $32,302,520 $ -- Interest in registered investment companies -- -- -- -- -- 5,119,259 Participant notes receivable -- -- -- -- -- -- -------------------------------------------------------------------------------------------------- Net assets available for benefits $ 3,395,294 $ 890,297 $ 299,973 $10,447,614 $32,302,520 $ 5,119,259 ==================================================================================================
DREYFUS SMALL DREYFUS COMPANY INTERNATIONAL COMPANY VALUE VALUE STOCK PARTICIPANT FUND FUND FUND LOANS TOTAL ---------------------------------------------------------------------------- ASSETS Investments: Interest in Allegheny Ludlum Corporation Master Trusts $ -- $ -- $ 7,256,888 $ -- $54,592,586 Interest in registered investment companies 2,939,535 586,660 -- -- 8,645,454 Participant notes receivable -- -- -- 2,607,131 2,607,131 ---------------------------------------------------------------------------- Net assets available for benefits $ 2,939,535 $ 586,660 $ 7,256,888 $ 2,607,131 $65,845,171 =============================================================================
See accompanying notes. 64 65 Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan Statement of Changes in Net Assets Available for Benefits, with Fund Information Year ended December 31, 1998
DREYFUS ALLEGHENY LIFESTYLE DREYFUS DREYFUS TELEDYNE GROWTH LIFESTYLE LIFESTYLE ALLIANCE FIXED DISCIPLINED AND INCOME GROWTH INCOME EQUITY INCOME STOCK FUND FUND FUND FUND FUND FUND ----------------------------------------------------------------------------------------------------------- Additions: Contributions: Employer $ 79,040 $ 46,437 $ 12,287 $ 186,107 $ 1,748,743 $ 194,787 Employee 303,146 193,229 50,999 715,924 2,060,043 660,058 Investment income (loss): Net gain (loss) from interest in Allegheny Ludlum Corporation Master Trusts 237,100 92,517 16,687 (436,144) 2,131,558 714,305 Net gain (loss) from interest in registered investment companies -- -- -- -- -- 539,236 Net gain from interest in common collective trusts 447,790 165,195 29,974 -- -- -- Interest income -- -- -- -- -- -- Other income (loss) 2 12 (14) 2,068 (148) 2,014 Interfund transfers 224,638 286,786 233,801 (1,993,467) (50,215) (120,595) ----------------------------------------------------------------------------------------------------------- Total additions 1,291,716 784,176 343,734 (1,525,512) 5,889,981 1,989,805 Deductions: Distributions to participants 142,660 37,367 12,347 254,718 1,944,376 268,527 ----------------------------------------------------------------------------------------------------------- Net additions (deductions) 1,149,056 746,809 331,387 (1,780,230) 3,945,605 1,721,278 Net assets available for benefits at beginning of year 3,395,294 890,297 299,973 10,447,614 32,302,520 5,119,259 ----------------------------------------------------------------------------------------------------------- Net assets available for benefits at end of year $ 4,544,350 $ 1,637,106 $ 631,360 $ 8,667,384 $ 36,248,125 $ 6,840,537 ===========================================================================================================
DREYFUS SMALL DREYFUS COMPANY INTERNATIONAL COMPANY VALUE VALUE STOCK PARTICIPANT FUND FUND FUND LOANS TOTAL -------------------------------------------------------------------------------------- Additions: Contributions: Employer $ 108,429 $ 27,702 $ 192,191 $ -- $ 2,595,723 Employee 368,202 116,677 428,865 -- 4,897,143 Investment income (loss): Net gain (loss) from interest in Allegheny Ludlum Corporation Master Trusts -- -- (776,221) -- 1,979,802 Net gain (loss) from interest in registered investment companies (247,964) 61,006 -- -- 352,278 Net gain from interest in common collective trusts -- -- -- -- 642,959 Interest income -- -- -- 246,535 246,535 Other income (loss) 598 178 471 4 5,185 Interfund transfers (621,794) (126,367) 2,020,274 146,939 -- -------------------------------------------------------------------------------------- Total additions (392,529) 79,196 1,865,580 393,478 10,719,625 Deductions: Distributions to participants 83,299 11,941 294,274 65,978 3,115,487 -------------------------------------------------------------------------------------- Net additions (deductions) (475,828) 67,255 1,571,306 327,500 7,604,138 Net assets available for benefits at beginning of year 2,939,535 586,660 7,256,888 2,607,131 65,845,171 -------------------------------------------------------------------------------------- Net assets available for benefits at end of year $ 2,463,707 $ 653,915 $ 8,828,194 $ 2,934,631 $ 73,449,309 =======================================================================================
See accompanying notes. 65 66 Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan Statement of Changes in Net Assets Available for Benefits, with Fund Information Year ended December 31, 1997
DREYFUS LIFESTYLE DREYFUS DREYFUS DREYFUS GROWTH LIFESTYLE LIFESTYLE ALLIANCE FIXED DISCIPLINED AND INCOME GROWTH INCOME EQUITY INCOME STOCK FUND FUND FUND FUND FUND FUND ----------------------------------------------------------------------------------------------------------- Additions: Contributions: Employer $ 68,380 $ 28,734 $ 8,998 $ 201,521 $ 1,975,995 $ 152,920 Employee 241,851 114,142 37,916 751,807 2,098,166 509,756 Investment income: Net gain from interest in Allegheny Ludlum Corporation Master Trusts 570,237 134,743 25,255 2,223,395 2,075,054 -- Net gain from interest in registered investment companies -- -- -- -- -- 979,736 Interest income -- -- -- -- -- -- Interfund transfers (95,907) 362,740 119,771 (511,598) (3,241,130) 1,203,696 ----------------------------------------------------------------------------------------------------------- Total additions 784,561 640,359 191,940 2,665,125 2,908,085 2,846,108 Deductions: Distributions to participants 82,209 5,555 1,177 145,776 1,872,554 65,210 ----------------------------------------------------------------------------------------------------------- Net additions 702,352 634,804 190,763 2,519,349 1,035,531 2,780,898 Net assets available for benefits at beginning of year 2,692,942 255,493 109,210 7,928,265 31,266,989 2,338,361 ----------------------------------------------------------------------------------------------------------- Net assets available for benefits at end of year $ 3,395,294 $ 890,297 $ 299,973 $ 10,447,614 $ 32,302,520 $ 5,119,259 ===========================================================================================================
DREYFUS SMALL DREYFUS COMPANY INTERNATIONAL COMPANY VALUE VALUE STOCK PARTICIPANT FUND FUND FUND LOANS TOTAL ---------------------------------------------------------------------------------- Additions: Contributions: Employer $ 91,965 $ 27,724 $ 229,621 $ -- $ 2,785,858 Employee 316,135 110,902 503,062 -- 4,683,737 Investment income: Net gain from interest in Allegheny Ludlum Corporation Master Trusts -- -- 847,855 -- 5,876,539 Net gain from interest in registered investment companies 393,809 27,398 -- -- 1,400,943 Interest income -- -- -- 197,613 197,613 Interfund transfers 1,668,466 231,424 (182,497) 445,035 -- ---------------------------------------------------------------------------------- Total additions 2,470,375 397,448 1,398,041 642,648 14,944,690 Deductions: Distributions to participants 29,156 19,175 314,277 -- 2,535,089 ---------------------------------------------------------------------------------- Net additions 2,441,219 378,273 1,083,764 642,648 12,409,601 Net assets available for benefits at beginning of year 498,316 208,387 6,173,124 1,964,483 53,435,570 ---------------------------------------------------------------------------------- Net assets available for benefits at end of year $ 2,939,535 $ 586,660 $ 7,256,888 $ 2,607,131 $ 65,845,171 ==================================================================================
See accompanying notes. 66 67 Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan Notes to Financial Statements December 31, 1998 1. SIGNIFICANT ACCOUNTING POLICIES Investments are stated at fair value determined as follows: The Company Stock Fund consists of investments in Allegheny Teledyne Incorporated (Allegheny Teledyne) common stock and is stated at the quoted market price as listed on the New York Stock Exchange. The Fixed Income Fund is stated at cost plus net earnings, which approximates market value and is provided by the Plan's trustee. 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 generally accepted accounting principles requires management to make estimates and assumptions 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 purpose of the Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan (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. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974. ALC is a wholly owned subsidiary of Allegheny Teledyne. ALC, the Plan Sponsor, contributes to the Plan fifty cents per hour worked per eligible 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 Service (IRS) limitations. 67 68 Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan Notes to Financial Statements (continued) 2. DESCRIPTION OF THE PLAN (CONTINUED) The investment options provided by the Plan are as follows: Dreyfus Lifestyle Growth and Income Fund--invests in equity and fixed income securities and may invest up to 15% of its assets in international securities. Dreyfus Lifestyle Growth Fund--invests in equity and fixed income securities and may invest up to 25% of its assets in international securities. Dreyfus Lifestyle Income Fund--consists of common stock, fixed income securities and short-term money market instruments. Alliance Equity Fund--consists of common stock. Fixed Income Fund--consists of amounts invested in insurance companies or other financial institutions under an agreement with repayment in full, plus interest at a fixed rate. Allegheny Teledyne Disciplined Stock Fund--invests in equity securities and may invest up to 20% of its assets in high quality money market accounts. Effective November 1, 1998, the Dreyfus Disciplined Stock Fund changed from a mutual fund to a separate account structure, and will be known as the Allegheny Teledyne Disciplined Stock Fund. Investment objective and strategy remain the same. Dreyfus Small Company Value Fund--invests primarily in small company equities, and to a limited degree, in bonds and money market instruments. Dreyfus International Value Fund--consists of equity securities of foreign company equities, and to a limited degree, in bonds and money market instruments. Company Stock Fund--consists of Allegheny Teledyne common stock. Separate accounts are maintained by the Plan Sponsor for each participating employee. Trustee fees and asset management fees charged 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. A participant may make an "in-service" withdrawal of all or part of the value of his account attributable to employer contributions. Contributions made to an employee's 401(k) account may 68 69 Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan Notes to Financial Statements (continued) 2. DESCRIPTION OF THE PLAN (CONTINUED) be withdrawn at age 59-1/2, or in the event of financial hardship prior to age 59-1/2. Upon termination of employment or retirement, a participant is fully entitled to his account balance. In the event that the Plan is completely or partially terminated or ALC completely discontinues contributions, all amounts credited to the accounts of the affected participants shall immediately become fully vested and nonforfeitable. Further information about the Plan, including eligibility, vesting, contributions and withdrawals, is contained in the Summary Plan Description and related contracts. Copies of this Summary Plan Description are available from the Allegheny Teledyne Personnel and Compensation Committee. 3. INVESTMENTS As of December 31, 1998, the Plan is a participant in the ALC Fixed Income Master Trust, the ALC Alliance Equity Master Trust, the ALC ATI Common Stock Master Trust, and the ALC Dreyfus Disciplined Stock Fund Master Trust. During 1998, the Dreyfus Lifestyle Growth and Income Fund, the Dreyfus Lifestyle Growth Fund, and the Dreyfus Lifestyle Income Fund were reclassified as common collective trusts from master trusts, while the Allegheny Teledyne Disciplined Stock Fund was reclassified to a master trust from the Dreyfus Disciplined Stock Fund, a registered investment company. The Plan's participating interests in these master trusts as of December 31, 1998 and 1997 were as follows:
1998 1997 -------------------------------------------- ALC Fixed Income Master Trust 28.63% 23.88% ALC Alliance Equity Master Trust 18.34% 17.36% ALC ATI Common Stock Master Trust 27.44% 20.38% ALC Lifestyle Growth Fund Master Trust --% 17.40% ALC Lifestyle Income Fund Master Trust --% 16.43% ALC Lifestyle Growth and Income Fund Master Trust --% 14.93% Allegheny Teledyne Disciplined Stock Fund Master Trust 15.84% --%
69 70 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 ALC Fixed Income Master Trust at December 31, 1998 and 1997 was as follows:
1998 1997 ---------------------------------------- Guaranteed investment contracts: Confederation Life Insurance Company $ 2,575 $ 29,118 Continental Assurance Company -- 6,718,924 John Hancock Life Insurance Company 5,100,000 2,600,000 Life Insurance Company of Virginia -- 8,725,219 New York Life Insurance Company 13,258,607 15,169,828 Pacific Mutual Life Insurance Company 6,167,430 5,793,190 Peoples Security Life Insurance Company 10,367,671 11,038,629 Prudential Insurance Company -- 6,144,220 Southland Life Insurance Company 10,752,479 16,288,645 Transamerica Occidental 11,296,810 10,936,663 Sun America, Inc. 3,000,000 -- Business Mens Assurance Company of America 2,505,536 -- Protective Life Insurance Company 3,002,482 -- Safeco Life Insurance 3,000,000 -- ---------------------------------------- 68,453,590 83,444,436 Synthetic contracts: Caisse des Depots et Consignations 12,865,126 3,879,321 Peoples Security Life Insurance Company 2,968,196 2,948,698 Transamerica Occidental 13,859,523 13,865,850 Union Bank of Switzerland 5,935,391 5,937,712 Westdeutsche Landesbank Girozentrale 16,952,480 13,727,581 ---------------------------------------- 52,580,716 40,359,162 Temporary short-term investments 4,248,515 10,765,309 Accrued interest receivable 1,443,795 733,753 Other payables (88,501) (6,169) ---------------------------------------- Total net assets $ 126,638,115 $ 135,296,491 ========================================
70 71 Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) In May 1997, the ALC Fixed Income Master Trust received approximately $4,500,000 related to the Confederation Life Insurance Company Guaranteed Investment Contract in accordance with the liquidation plan. Management is unable to determine additional amounts, if any, that will be received by the ALC Fixed Income Master Trust. The composition of net assets of the ALC Alliance Equity Master Trust at December 31, 1998 and 1997 was as follows:
1998 1997 -------------------------------------------- Investment in registered investment companies: Alliance Equity Fund S.A. #4 (6,966.434 and 865.194 shares, respectively) $ 47,408,255 $ 60,199,619 Cash 117 90 Operating payables (26,007) (10,341) -------------------------------------------- Total net assets $ 47,382,365 $ 60,189,368 ============================================
The composition of net assets of the ALC ATI Common Stock Master Trust at December 31, 1998 and 1997 was as follows:
1998 1997 -------------------------------------------- Allegheny Teledyne Incorporated common stock (1,544,975 and 1,347,732 shares, respectively) $ 31,575,427 $ 34,872,566 Receivables 196,291 4,527 Short-Term Investment Fund 450,324 738,595 Operating payables (10,492) (822) -------------------------------------------- Total net assets $ 32,211,550 $ 35,614,866 ============================================
71 72 Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) The composition of assets of the ALC Lifestyle Growth Fund Master Trust at December 31, 1998 and 1997 was as follows:
1998 1997 -------------------------------------------- Dreyfus Lifestyle Growth Fund $ -- $ 5,117,053 Operating payables -- (5) -------------------------------------------- $ -- $ 5,117,048 ============================================
The composition of assets of the ALC Lifestyle Income Fund Master Trust at December 31, 1998 and 1997 was as follows:
1998 1997 -------------------------------------------- Dreyfus Lifestyle Income Fund $ -- $ 1,825,632 Operating payables -- (2) -------------------------------------------- $ -- $ 1,825,630 ============================================
The composition of assets of the ALC Lifestyle Growth and Income Fund Master Trust at December 31, 1998 and 1997 was as follows:
1998 1997 -------------------------------------------- Dreyfus Lifestyle Growth and Income Fund $ -- $22,740,752 Receivables -- 56 ============================================ $ -- $22,740,808 ============================================
The composition of net assets of the Allegheny Teledyne Disciplined Stock Fund Master Trust at December 31, 1998 and 1997 was as follows:
1998 1997 -------------------------------------------- Corporate common stock $41,699,413 $ -- Noninterest-bearing cash (5,217) -- Receivables 58,761 -- Short-Term Investment Fund 1,499,311 -- Operating payables (51,809) -- -------------------------------------------- Total net assets $43,200,459 $ -- ============================================
72 73 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:
ALC FIXED INCOME MASTER ALC ALLIANCE EQUITY MASTER ALC ATI COMMON STOCK MASTER TRUST TRUST TRUST ---------------------------------------------------------------------------------------------- YEAR ENDED DECEMBER 31 ---------------------------------------------------------------------------------------------- 1998 1997 1998 1997 1998 1997 ---------------------------------------------------------------------------------------------- Investment income (loss): Interest income (loss) $ 8,359,937 $ 8,694,877 $ -- $ -- $ (113) $ (1,554) Realized (loss) gain on sale of investments -- -- -- -- (620,712) 1,835,342 Unrealized (depreciation) appreciation in fair value of investments -- -- -- -- (5,308,345) 2,318,151 Dividends -- -- -- -- 934,022 837,662 Net (loss) gain, registered investment companies -- -- (2,106,215) 13,819,313 -- -- Net gain, common collective trusts 408,717 468,281 -- -- 41,352 73,411 Other income 1,147 1,343 -- -- -- -- Administrative expenses (191,163) (189,938) (237,876) (211,873) (24,196) (27,286) Transfers (17,237,014) (15,337,329) (10,462,912) (6,981,034) 1,574,676 (4,894,605) ---------------------------------------------------------------------------------------------- Net increase (decrease) (8,658,376) (6,362,766) (12,807,003) 6,626,406 (3,403,316) 141,121 Total net assets at beginning of year 135,296,491 141,659,257 60,189,368 53,562,962 35,614,866 35,473,745 ---------------------------------------------------------------------------------------------- Total net assets at end of year $126,638,115 $135,296,491 $47,382,365 $60,189,368 $32,211,550 $35,614,866 ==============================================================================================
73 74 Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED)
ALC LIFESTYLE GROWTH ALLEGHENY TELEDYNE ALC LIFESTYLE GROWTH ALC LIFESTYLE INCOME FUND AND INCOME FUND MASTER DISCIPLINED STOCK FUND MASTER TRUST MASTER TRUST TRUST FUND MASTER TRUST ------------------------------------------------------------------------------------------------------- YEAR ENDED DECEMBER 31 ------------------------------------------------------------------------------------------------------- 1998* 1997 1998* 1997 1998* 1997 1998 1997 ------------------------------------------------------------------------------------------------------- Investment income: Interest income (loss) $ -- $ -- $ -- $ 105 $ -- $ 1 $ (925) $ -- Realized gain on sale of investments -- -- -- -- -- -- 107,964 -- Unrealized appreciation in fair value of investments -- -- -- -- -- -- 4,322,009 -- Dividends -- -- -- -- -- -- 87,868 -- Net gain, common collective trusts 514,556 882,650 109,828 152,034 1,558,031 3,853,009 26,165 -- Other loss (14) -- -- -- (10) -- -- -- Administrative expenses (94) (116) (34) (38) (229) -- (51,809) -- Transfers (5,631,496) 2,285,394 (1,935,424) 1,083,338 (24,298,600) 838,793 38,709,187 -- ------------------------------------------------------------------------------------------------------- Net increase (decrease) (5,117,048) 3,167,928 (1,825,630) 1,235,439 (22,740,808) 4,691,803 43,200,459 -- Total net assets at beginning of year 5,117,048 1,949,120 1,825,630 590,191 22,740,808 18,049,005 -- -- ------------------------------------------------------------------------------------------------------- Total net assets at end of year $ -- $5,117,048 $ -- $1,825,630 $ -- $22,740,808 $43,200,459 $ -- =======================================================================================================
* Partial year only. Reclassed as common collective trusts. The average yield for 1998 and 1997 for the ALC Fixed Income Master Trust was 6.55% and 6.57%, respectively. Credited interest rates on the contracts ranged from 5.13% to 8.18% and 5.60% to 8.18% for 1998 and 1997, respectively, and are determined at contract inception. Interest, realized and unrealized gains and losses, and management fees from the master trusts are included in the net gain (loss) from interest in Allegheny Ludlum Corporation Master Trusts on the statement of changes in net assets available for benefits. 74 75 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 of 1986 (the Code) and, therefore, the related trust is exempt from taxation. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The plan administrator believes 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 Investment fees paid during the year for services rendered were based on customary and reasonable rates for such services. 6. YEAR 2000 READINESS DISCLOSURE (UNAUDITED) The Plan Sponsor has determined that it will be necessary to take certain steps in order to ensure that the Plan's information systems are prepared to handle Year 2000 dates. The Plan Sponsor is taking a two-phase approach. The first phase addresses internal systems that must be modified or replaced to function properly. Internal resources are being utilized to upgrade or modify existing software applications, and test the software and equipment for the Year 2000 modifications. The Plan Sponsor believes that it has substantially completed this phase of the project. Costs associated with modifying software and equipment are not estimated to be significant and will be paid by the Plan Sponsor. For the second phase of the project, plan management established formal communications with its third party service providers to determine that they have developed plans to address their own Year 2000 problems as they relate to the Plan's operations. All third party service providers have indicated that they expect to be Year 2000 compliant by mid-1999. If modification of data processing systems of either the Plan, the Plan Sponsor, or its service providers are not completed timely, the Year 2000 problem could have a material impact on the operations of the Plan. Plan management has not developed a contingency plan because they are confident that all material systems will be Year 2000 ready. 7. SUBSEQUENT EVENT Effective July 1, 1999, the Plan will no longer offer the Dreyfus Small Company Value Fund as an investment option. The Dreyfus Emerging Leaders Fund will be offered to participants as a new investment plan as of this date. 75 76 Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan EIN 25-1364894 Plan 005 Line 27a--Schedule of Assets Held for Investment Purposes December 31, 1998
DESCRIPTION UNITS/SHARES COST VALUE CURRENT VALUE - ---------------------------------------------------------------------------------------------------------------------- Common Collective Trusts - ------------------------ Dreyfus Lifestyle Growth and Income Fund* 290,831.764 shares $4,092,946 $ 4,543,488 Dreyfus Lifestyle Growth Fund* 92,023.631 shares 1,458,356 1,633,809 Dreyfus Lifestyle Income Fund* 48,113.299 shares 607,095 636,848 -------------------------------------------- Total Common Collective Trusts 6,158,397 6,814,145 Registered Investment Companies - ------------------------------- Dreyfus Small Company Value Fund*: Interest in Dreyfus Small Company Value Fund 125,042.004 shares 2,444,924 2,469,580 Dreyfus International Value Fund*: Interest in Dreyfus International Value Fund 42,872.062 shares 656,677 649,083 -------------------------------------------- Total Registered Investment Companies 3,101,601 3,118,663 Participant loans 8.75% to 9.50% -- 2,933,000 -------------------------------------------- $9,259,998 $12,865,808 ============================================
*Party-in-interest 76 77 Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan EIN 25-1364894 Plan 005 Line 27d--Schedule of Reportable Transactions Year ended December 31, 1998
CURRENT VALUE OF ASSETS ON NET PURCHASE SELLING COST OF TRANSACTION GAIN DESCRIPTION PRICE PRICE ASSET DATE (LOSS) - ----------------------------------------------------------------------------------------------------------------------- Type (i) Transactions - --------------------- Dreyfus Disciplined Stock Fund $ -- $5,863,898 $5,316,402 $5,863,898 $547,496 Dreyfus Lifestyle Growth and Income Fund 3,918,436 -- 3,918,436 3,918,436 -- Type (iii) Transactions - ----------------------- Dreyfus Disciplined Stock Fund 3,175,393 -- 3,175,393 3,175,393 -- Dreyfus Disciplined Stock Fund - 8,827,353 8,026,593 8,827,353 800,760 Dreyfus Lifestyle Growth and Income Fund 4,418,302 -- 4,418,302 4,418,302 -- Dreyfus Lifestyle Growth and Income Fund -- 322,604 325,355 322,604 (2,751)
There were no Type (ii) or (iv) transactions during the year ended December 31, 1998. 77 78 Audited Financial Statements Teledyne 401(k) Plan Years ended December 31, 1998 and 1997 with Report of Independent Auditors 78 79 Teledyne 401(k) Plan Audited Financial Statements Years ended December 31, 1998 and 1997 CONTENTS Report of Independent Auditors .......................................................80 Audited Financial Statements Statements of Net Assets Available for Benefits ......................................81 Statement of Changes in Net Assets Available for Benefits, with Fund Information, Year ended December 31, 1998 ......................................................82 Statement of Changes in Net Assets Available for Benefits, with Fund Information, Year ended December 31, 1997 ......................................................83 Notes to Financial Statements ........................................................84 Supplemental Schedules Line 27a--Schedule of Assets Held for Investment Purposes.............................90 Line 27d--Schedule of Reportable Transactions.........................................91
79 80 Report of Independent Auditors Personnel and Compensation Committee Allegheny Teledyne Incorporated We have audited the accompanying statements of net assets available for benefits of the Teledyne 401(k) Plan as of December 31, 1998 and 1997, 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 generally accepted auditing standards. 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, information regarding the Plan's net assets available for benefits at December 31, 1998 and 1997, and the changes therein for the years then ended, in conformity with generally accepted accounting principles. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of assets held for investment purposes as of December 31, 1998, and reportable transactions for the year then ended, are presented for the purpose of additional analysis and are not a required part of the basic financial statements but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The Fund Information in the statements of changes in net assets available for benefits is presented for purposes of additional analysis rather than to present the changes in net assets available for benefits of each fund. The supplemental schedules and Fund Information have been subjected to the auditing procedures applied in our audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ Ernst & Young LLP Pittsburgh, Pennsylvania June 11, 1999 80 81 Teledyne 401(k) Plan Statements of Net Assets Available for Benefits (000s Omitted)
DECEMBER 31 1998 1997 ------------------------ Investments at fair value: Interest in collective investment fund: Income Accumulation Fund $ 18,689 $ 14,695 Growth Stock Fund -- 21,453 ----------------------- Total interest in collective investment funds 18,689 36,148 Mutual funds: Pioneer Growth Fund 23,626 -- Teledyne custom funds: Teledyne Bond Index Fund 9,266 5,475 Teledyne Country Selector Fund 5,793 4,450 Allegheny Teledyne Stock Fund 15,936 18,329 Teledyne S&P 500 Stock Fund 109,171 78,949 Teledyne LifePath 2000 Fund 2,696 2,067 Teledyne LifePath 2010 Fund 7,845 5,904 Teledyne LifePath 2020 Fund 30,589 24,741 Teledyne LifePath 2030 Fund 7,120 4,967 Teledyne LifePath 2040 Fund 6,623 4,298 ----------------------- Total Teledyne custom funds 195,039 149,180 Loans receivable from participants 7,002 5,385 ----------------------- Net assets available for benefits $244,356 $190,713 =======================
See accompanying notes. 81 82 Teledyne 401(k) Plan Statement of Changes in Net Assets Available for Benefits, with Fund Information Year ended December 31, 1998 (000s Omitted)
TELEDYNE TELEDYNE TELEDYNE INCOME GROWTH PIONEER BOND COUNTRY ALLEGHENY S&P 500 TELEDYNE ACCUMULATION STOCK GROWTH INDEX SELECTOR TELEDYNE STOCK LIFEPATH FUND FUND FUND FUND FUND STOCK FUND FUND 2000 FUND --------- --------- --------- --------- --------- --------- --------- --------- Additions: Interest income $ 982 $ -- $ -- $ -- $ -- $ -- $ -- $ -- Net realized/ unrealized appreciation (depreciation) in fair value of investments -- 261 1,614 638 903 (3,340) 23,350 223 Contributions from participants 2,476 4,585 238 1,412 1,162 2,348 11,699 339 Contributions from employer 693 1,156 26 346 281 653 2,768 87 Rollover contributions 116 217 11 137 48 62 419 10 Other, net 255 (16) -- 12 (7) (6) (72) 4 Interfund transfers 2,205 (25,571) 21,798 1,851 (478) (736) (412) 257 --------- --------- --------- --------- --------- --------- --------- --------- Total additions 6,727 (19,368) 23,687 4,396 1,909 (1,019) 37,752 920 Deductions: Distributions to participants or their beneficiaries 2,562 1,906 61 556 464 1,171 6,506 286 Transfers of plan assets 171 179 -- 49 102 203 1,024 5 --------- --------- --------- --------- --------- --------- --------- --------- Total deductions 2,733 2,085 61 605 566 1,374 7,530 291 --------- --------- --------- --------- --------- --------- --------- --------- Net additions (deductions) 3,994 (21,453) 23,626 3,791 1,343 (2,393) 30,222 629 Net assets available for benefits at beginning of year 14,695 21,453 -- 5,475 4,450 18,329 78,949 2,067 --------- --------- --------- --------- --------- --------- --------- --------- Net assets available for benefits at end of year $ 18,689 $ -- $ 23,626 $ 9,266 $ 5,793 $ 15,936 $ 109,171 $ 2,696 ========= ========= ========= ========= ========= ========= ========= =========
TELEDYNE TELEDYNE TELEDYNE TELEDYNE LIFEPATH LIFEPATH LIFEPATH LIFEPATH LOAN SWEEP 2010 FUND 2020 FUND 2030 FUND 2040 FUND FUND ACCOUNT TOTAL --------- --------- --------- --------- --------- --------- --------- Additions: Interest income $ -- $ -- $ -- $ -- $ 549 $ -- $ 1,531 Net realized/ unrealized appreciation (depreciation) in fair value of investments 944 4,703 1,185 1,178 -- (13) 31,646 Contributions from participants 1,156 3,022 1,098 1,216 -- -- 30,751 Contributions from employer 267 771 283 308 -- -- 7,639 Rollover contributions 29 187 87 87 -- -- 1,410 Other, net 46 (27) (11) (4) -- (1) 173 Interfund transfers 27 (1,024) 155 87 1,816 25 -- --------- --------- --------- --------- --------- --------- --------- Total additions 2,469 7,632 2,797 2,872 2,365 11 73,150 Deductions: Distributions to participants or their beneficiaries 386 1,482 553 425 748 11 17,117 Transfers of plan assets 142 302 91 122 -- -- 2,390 --------- --------- --------- --------- --------- --------- --------- Total deductions 528 1,784 644 547 748 11 19,507 --------- --------- --------- --------- --------- --------- --------- Net additions (deductions) 1,941 5,848 2,153 2,325 1,617 -- 53,643 Net assets available for benefits at beginning of year 5,904 24,741 4,967 4,298 5,385 -- 190,713 --------- --------- --------- --------- --------- --------- --------- Net assets available for benefits at end of year $ 7,845 $ 30,589 $ 7,120 $ 6,623 $ 7,002 $ -- $ 244,356 ========= ========= ========= ========= ========= ========= =========
See accompanying notes. 82 83 Teledyne 401(k) Plan Statement of Changes in Net Assets Available for Benefits, with Fund Information Year ended December 31, 1997 (000s Omitted)
TELEDYNE TELEDYNE INCOME GROWTH BOND COUNTRY ALLEGHENY TELEDYNE TELEDYNE ACCUMULATION STOCK INDEX SELECTOR TELEDYNE S&P 500 LIFEPATH FUND FUND FUND FUND STOCK FUND STOCK FUND 2000 FUND -------- -------- -------- -------- -------- -------- -------- Additions: Interest income $ 830 $ -- $ -- $ -- $ -- $ -- $ -- Net realized/ unrealized appreciation (depreciation) in fair value of investments -- 813 451 (164) 2,069 18,507 177 Contributions from participants 2,408 5,409 1,268 1,391 2,434 10,475 387 Contributions from employer 346 555 147 144 280 1,050 41 Rollover contributions 495 417 117 84 130 713 5 Other, net 289 82 -- (2) 10 (5) (2) Interfund transfers 784 (3,027) (197) (738) 589 1,280 (48) -------- -------- -------- -------- -------- -------- -------- Total additions 5,152 4,249 1,786 715 5,512 32,020 560 Deductions: Distributions to participants or their beneficiaries 2,505 1,161 432 378 1,726 4,381 175 Transfers of plan assets 49 92 5 8 83 103 9 -------- -------- -------- -------- -------- -------- -------- Total deductions 2,554 1,253 437 386 1,809 4,484 184 -------- -------- -------- -------- -------- -------- -------- Net additions (deductions) 2,598 2,996 1,349 329 3,703 27,536 376 Net assets available for benefits at beginning of year 12,097 18,457 4,126 4,121 14,626 51,413 1,691 -------- -------- -------- -------- -------- -------- -------- Net assets available for benefits at end of year $ 14,695 $ 21,453 $ 5,475 $ 4,450 $ 18,329 $ 78,949 $ 2,067 ======== ======== ======== ======== ======== ======== ========
TELEDYNE TELEDYNE TELEDYNE TELEDYNE LIFEPATH LIFEPATH LIFEPATH LIFEPATH LOAN SWEEP 2010 FUND 2020 FUND 2030 FUND 2040 FUND FUND ACCOUNT TOTAL -------- -------- -------- -------- -------- -------- -------- Additions: Interest income $ -- $ -- $ -- $ -- $ 372 $ 1 $ 1,203 Net realized/ unrealized appreciation (depreciation) in fair value of investments 732 3,888 810 665 -- (10) 27,938 Contributions from participants 1,170 3,089 1,048 948 -- -- 30,027 Contributions from employer 113 343 120 111 -- -- 3,250 Rollover contributions 68 150 69 69 -- -- 2,317 Other, net (7) 50 (1) (1) -- (8) 405 Interfund transfers (75) (1,105) (10) 473 2,054 20 -- -------- -------- -------- -------- -------- -------- --------- Total additions 2,001 6,415 2,036 2,265 2,426 3 65,140 Deductions: Distributions to participants or their beneficiaries 320 1,563 256 158 524 3 13,582 Transfers of plan assets 5 80 -- -- -- -- 434 -------- -------- -------- -------- -------- -------- --------- Total deductions 325 1,643 256 158 524 3 14,016 -------- -------- -------- -------- -------- -------- --------- Net additions (deductions) 1,676 4,772 1,780 2,107 1,902 -- 51,124 Net assets available for benefits at beginning of year 4,228 19,969 3,187 2,191 3,483 -- 139,589 -------- -------- -------- -------- -------- -------- --------- Net assets available for benefits at end of year $ 5,904 $ 24,741 $ 4,967 $ 4,298 $ 5,385 $ -- $ 190,713 ======== ======== ======== ======== ======== ======== =========
See accompanying notes. 83 84 Teledyne 401(k) Plan Notes to Financial Statements December 31, 1998 1. SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION The accompanying financial statements of the Teledyne 401(k) Plan ("the Plan") have been prepared on an accrual basis. VALUATION OF INVESTMENTS The Teledyne custom funds are stated at their unit values established for each fund at each valuation date, which fluctuate with the value of the assets in the fund. Units of the Allegheny Teledyne Stock Fund are valued principally on the basis of the market value of the Allegheny Teledyne Incorporated ("Allegheny Teledyne") common stock in which it invests. Although the performance of the Allegheny Teledyne Stock Fund is based on the performance of the underlying stock, the value of a fund unit is different from the price of one share of the stock, which is stated at the quoted market price as listed on the New York Stock Exchange. All other funds of the Plan are stated at their net asset value, based on the quoted market prices of the securities held in such funds on applicable exchanges. ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions 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 Plan is a defined contribution plan available to employees of eligible Allegheny Teledyne Incorporated subsidiaries (primarily Teledyne Industries, Inc.) and divisions ("companies"). The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974. Participants can defer between 1% and 15%, subject to Internal Revenue Service limitations, of their eligible wages and contribute them to the Plan. Qualifying employee contributions are partially matched by Allegheny Teledyne up to a maximum of $1,000 annually for each participant. Prior to January 1, 1998, the maximum match was $300 annually per participant. 84 85 Teledyne 401(k) 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 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. 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 have no more than one loan outstanding at any given time. Interest rates are determined based on commercially accepted criteria, and payment schedules vary based on the type of the loan. Loans may be prepaid in full or in part at any time. The participant may choose the loan repayment period which should not exceed five years, except primary residence loans, which can be repaid over periods up to 180 months. Payments are generally made by payroll deductions. In the event that the Plan is partially or completely terminated, or the plan sponsor permanently discontinues making contributions, all amounts credited to the accounts of affected participants become fully vested and nonforfeitable. Further information about the Plan, including eligibility, vesting, contributions, and withdrawals, is contained in the Summary Plan Description. Copies of this Summary Plan Description are available from the Allegheny Teledyne Personnel and Compensation Committee. 3. INVESTMENTS Plan participants can invest their contributions in any or all of the eleven investment programs managed by the plan trustee listed below: Income Accumulation Fund: This collective investment fund invests in U.S. Government and agency securities, investment contracts, and other short-term, fixed-income securities. The objective of this fund is to provide a stable level of income without significant principal fluctuations. 85 86 Teledyne 401(k) Plan Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) Pioneer Growth Fund: The objective of this mutual fund is to seek appreciation of capital by investing in common stocks, preferred stocks, bonds and convertible securities. In selecting its investments, this fund seeks companies that have competitive strengths and benefit from industry dynamics and broader trends. This fund also seeks to invest in companies in a variety of industries in order to reduce its overall exposure to investment and market risks. This fund may also invest in the securities of foreign issuers. All balances in the Growth Stock Fund, a collective investment fund, were automatically transferred to this fund on December 18, 1998. Teledyne Bond Index Fund: This Teledyne custom fund invests in a diversified portfolio of high-quality U.S. Government and investment-grade corporate bonds. The objective of this fund is to earn moderate returns with a moderate level of risk. Teledyne Country Selector Fund: This Teledyne custom fund invests in international stocks from up to 20 countries, after first determining the appropriate allocation among the countries. The fund seeks high returns by selecting the mix of foreign equities believed to offer the best reward given the overall fund risk. Allegheny Teledyne Stock Fund: This Teledyne custom fund invests principally in Allegheny Teledyne stock. The rate of return is based on the performance of Allegheny Teledyne stock and dividends received. Teledyne S&P 500 Stock Fund: This Teledyne custom fund invests in a large portfolio of stocks, represented in the Standard and Poor's 500 Composite Index, and emphasizes long-term performance. There is no fixed rate of return; the fund is designed to conform as closely as possible to the performance of the Standard and Poor's 500 Composite Index, and may increase or decrease in value. 86 87 Teledyne 401(k) Plan Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) Teledyne LifePath Funds: There are five Teledyne LifePath Funds: Teledyne LifePath 2000, Teledyne LifePath 2010, Teledyne LifePath 2020, Teledyne LifePath 2030, and Teledyne LifePath 2040. The numbers in the names refer to the target date of the fund. These Teledyne custom funds invest in a mix of U.S. and international stocks, bonds, and money market instruments. Each fund adjusts its mix of investments based on the expected risk and return of the different asset classes in which they invest. The objective of each fund is to maximize returns while maintaining a level of risk appropriate to its target date. The nearer the target date, the more conservatively the fund invests. Teledyne custom funds are unregistered separate accounts created for the Plan. Although these investments are referred to as funds, they are legally structured as nonpooled separate accounts. The only investors in these accounts are participants in the Plan. The funds, with the exception of the Allegheny Teledyne Stock Fund, invest in underlying collective investment funds, which in turn invest in securities. The Allegheny Teledyne Stock Fund provides the participant with a vehicle for investing in Allegheny Teledyne common stock. The funds or the underlying funds may also invest in cash and use derivatives (including futures) for nonspeculative purposes which involves certain risks. All income, dividends, and capital gains are reinvested in the funds and are reflected in the unit values. The number of units held by the Teledyne custom funds was as follows as of December 31, 1998 and 1997 (000s omitted, except for unit information):
DECEMBER 31, 1998 ----------------------------------------- NUMBER OF UNITS FAIR VALUE ----------------------------------------- Teledyne Bond Index Fund 743,084.951 $ 9,266 Teledyne Country Selector Fund 485,954.533 5,793 Allegheny Teledyne Stock Fund 948,007.286 15,936 Teledyne S&P 500 Stock Fund 5,203,557.376 109,171 Teledyne LifePath 2000 Fund 210,445.745 2,696 Teledyne LifePath 2010 Fund 548,237.301 7,845 Teledyne LifePath 2020 Fund 1,905,859.634 30,589 Teledyne LifePath 2030 Fund 429,929.649 7,120 Teledyne LifePath 2040 Fund 379,574.551 6,623 --------- $ 195,039 =========
87 88 Teledyne 401(k) Plan Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED)
DECEMBER 31, 1997 ----------------------------------------- NUMBER OF UNITS FAIR VALUE ----------------------------------------- Teledyne Bond Index Fund 481,493.555 $ 5,475 Teledyne Country Selector Fund 445,439.210 4,450 Allegheny Teledyne Stock Fund 885,900.624 18,329 Teledyne S&P 500 Stock Fund 4,837,566.418 78,949 Teledyne LifePath 2000 Fund 177,424.209 2,067 Teledyne LifePath 2010 Fund 473,807.864 5,904 Teledyne LifePath 2020 Fund 1,828,633.782 24,741 Teledyne LifePath 2030 Fund 364,961.643 4,967 Teledyne LifePath 2040 Fund 307,459.216 4,298 --------- $ 149,180 =========
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 of 1986 ("the Code") and, therefore, the related trust is exempt from taxation. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The plan administrator believes 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. YEAR 2000 READINESS DISCLOSURE (UNAUDITED) The Plan Sponsor has determined that it will be necessary to take certain steps in order to ensure that the Plan's information systems are prepared to handle Year 2000 dates. The Plan Sponsor is taking a two-phase approach. The first phase addresses internal systems that must be modified or replaced to function properly. Both internal and external resources are being utilized to replace or modify existing software applications, and test the software and equipment for the Year 2000 modifications. The Plan Sponsor anticipates substantially completing this phase of the project by June 1999. Costs associated with modifying software and equipment are not estimated to be significant and will be paid by the Plan Sponsor. 88 89 Teledyne 401(k) Plan Notes to Financial Statements (continued) 5. YEAR 2000 READINESS DISCLOSURE (UNAUDITED) (CONTINUED) For the second phase of the project, plan management established formal communications with its third party service providers to determine that they have developed plans to address their own Year 2000 problems as they relate to the Plan's operations. All third party service providers have indicated that they expect to be Year 2000 compliant by mid-1999. If modification of data processing systems of either the Plan, the Plan Sponsor, or its service providers are not completed timely, the Year 2000 problem could have a material impact on the operations of the Plan. Plan management has not developed a contingency plan because they are confident that all material systems will be Year 2000 ready. 6. SUBSEQUENT EVENTS On January 19, 1999, Allegheny Teledyne announced that it intends to pursue a course of action that would result in a significant transformation and reconfiguration of the company during 1999. Assuming legal, tax, financial and other considerations can be resolved successfully, the anticipated transformation would include a tax-free spin-off of a new public company and a public offering of the new company's stock. The new company would be comprised of four former Teledyne companies in the Aerospace and Electronics Segment. The four businesses are Electronic Technologies headquartered in Los Angeles, California; Brown Engineering headquartered in Huntsville, Alabama; Continental Motors headquartered in Mobile, Alabama; and Cast Parts located in southern California. Additionally, Allegheny Teledyne will be proceeding simultaneously with a spin-off and public offering of the Consumer Segment into a freestanding public company that will be headquartered in the Los Angeles area. On May 27, 1999, Allegheny Teledyne announced that Northrop Grumman Corporation has agreed to acquire Ryan Aeronautical for $140 million in cash. A definitive agreement has been signed which should lead to a closing in the third quarter of 1999. The closing is subject to various regulatory approvals and conditions. Allegheny Teledyne is currently working with the Plan Trustee to determine how the proposed transformation and reconfiguration of Allegheny Teledyne will affect the Plan. 89 90 Teledyne 401(k) Plan EIN 95-2282626 Plan 098 Line 27a--Schedule of Assets Held for Investment Purposes December 31, 1998 (000s Omitted) Except for unit/share information
INVESTMENT DESCRIPTION UNITS/SHARES COST VALUE CURRENT VALUE - ---------------------------------------------------------- ---------------------- ---------------- ----------------- Collective Investment Fund: Income Accumulation Fund* 1,261,659.667 $ 18,689 $ 18,689 Mutual Fund: Pioneer Growth Fund 1,162,704.932 22,013 23,626 Teledyne Custom Funds: Teledyne Bond Index Fund* 743,084.951 8,288 9,266 Teledyne Country Selector Fund* 485,954.533 5,167 5,793 Allegheny Teledyne Stock Fund* 948,007.286 14,621 15,936 Teledyne S&P 500 Stock Fund* 5,203,557.376 62,582 109,171 Teledyne LifePath 2000 Fund* 210,445.745 2,355 2,696 Teledyne LifePath 2010 Fund* 548,237.301 6,174 7,845 Teledyne LifePath 2020 Fund* 1,905,859.634 20,842 30,589 Teledyne LifePath 2030 Fund* 429,929.649 5,125 7,120 Teledyne LifePath 2040 Fund* 379,574.551 4,980 6,623 ---------------- ----------------- Total Teledyne Custom Funds 130,134 195,039 Participant loans 5.95% to 8.9% -- 7,002 ---------------- ----------------- $ 170,836 $ 244,356 ================ =================
* Party-in-interest 90 91 Teledyne 401(k) Plan EIN 95-2282626 Plan 098 Line 27d--Schedule of Reportable Transactions Year ended December 31, 1998 (000s Omitted)
CURRENT VALUE OF ASSETS ON PURCHASE SELLING TRANSACTION DESCRIPTION OF ASSETS PRICE PRICE COST OF ASSET DATE NET GAIN - ------------------------------------------------------------------------------------------------------------------------ Type (iii) transactions - ----------------------- Income Accumulation Fund $ 9,202 $ -- $ 9,202 $ 9,202 $ -- Income Accumulation Fund -- 6,200 6,200 6,200 -- Growth Stock Fund 4,958 -- 4,958 4,958 -- Growth Stock Fund -- 26,682 24,914 26,682 1,768 Pioneer Growth Fund 22,056 -- 22,056 22,056 -- Pioneer Growth Fund -- 45 42 45 3 Allegheny Teledyne Stock Fund 6,104 -- 6,104 6,104 -- Allegheny Teledyne Stock Fund -- 5,170 4,208 5,170 962 Teledyne S&P 500 Stock Fund 15,035 -- 15,035 15,035 -- Teledyne S&P 500 Stock Fund -- 8,201 5,237 8,201 2,964
There were no Type (i), (ii) or (iv) transactions during the year ended December 31, 1998. 91 92 Audited Financial Statements Oregon Metallurgical Corporation Savings Plan Years ended December 31, 1998 and 1997 with Report of Independent Auditors 92 93 Oregon Metallurgical Corporation Savings Plan Audited Financial Statements Years ended December 31, 1998 and 1997
CONTENTS Report of Independent Auditors ......................................................94 Audited Financial Statements Statement of Net Assets Available for Benefits, with Fund Information-- December 31, 1998 ................................................................96 Statement of Net Assets Available for Benefits, with Fund Information-- December 31, 1997 ................................................................97 Statement of Changes in Net Assets Available for Benefits, with Fund Information-- Year ended December 31, 1998 .....................................................98 Statement of Changes in Net Assets Available for Benefits, with Fund Information-- Year ended December 31, 1997 .....................................................99 Notes to Financial Statements ......................................................100 Supplemental Schedules Line 27a--Schedule of Assets Held for Investment Purposes .........................105 Line 27d--Schedule of Reportable Transactions......................................106 Line 27f--Schedule of Nonexempt Transactions.......................................107
93 94 Report of Independent Auditors To the Plan Administrator and Plan Participants Oregon Metallurgical Corporation Savings Plan We have audited the accompanying statements of net assets available for benefits of Oregon Metallurgical Corporation Savings Plan as of December 31, 1998 and 1997, 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 generally accepted auditing standards. 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, 1998 and 1997, and the changes in net assets available for benefits for the years then ended in conformity with generally accepted accounting principles. Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The supplemental schedules of assets held for investment purposes and nonexempt transactions as of December 31, 1998, and reportable transactions for the year then ended, are presented for the purpose of additional analysis and are not a required part of the basic financial statements, but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The Fund Information in the statements of net assets available for benefits and the statements of changes in net assets available for benefits is presented for purposes of additional analysis rather than to present the net assets available for benefits and changes in net assets available for benefits of each fund. The supplemental schedules and Fund Information have been subjected to the auditing procedures applied in the audits of the financial statements and, in our opinion, are fairly stated in all material respects in relation to the financial statements taken as a whole. 94 95 The schedule of assets held for investment purposes that accompanies the Plan's financial statements does not disclose the historical cost of plan assets held by the plan trustee because this information is not available. Disclosure of this information is required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. /s/ Ernst & Young LLP Pittsburgh, Pennsylvania May 20, 1999 95 96 Oregon Metallurgical Corporation Savings Plan Statement of Net Assets Available for Benefits, with Fund Information December 31, 1998
PARTICIPANT DIRECTED ---------------------------------------------------------------------------------------------- U.S. FIXED COMMON INTERNATIONAL REAL GOVERNMENT BALANCED INCOME STOCK STOCK SPECIAL ESTATE ---------------------------------------------------------------------------------------------- ASSETS Cash $ 38 $ 133 $ 15,126 $ 283 $ 34,558 $ 712 $ 45,645 Investments, at fair value 305,418 1,941,291 367,893 2,415,140 910,253 2,286,917 731,848 Receivables: Participants' contribution 3,970 23,726 3,532 30,687 11,049 30,886 9,111 Employer's matching contribution -- -- -- -- -- -- -- Employer's share-per-day contribution -- -- -- -- -- -- -- Interfund transfers 21,768 9,535 (14,228) 91,050 (58,578) (1,251) (48,296) ---------------------------------------------------------------------------------------------- Total assets 331,194 1,974,685 372,323 2,537,160 897,282 2,317,264 738,308 LIABILITIES Payable to participants (1,432) (18,536) (3,119) (23,298) (5,654) (17,358) (1,694) Other 12,754 18,212 (2,663) 20,403 (5,952) 28,822 4,304 ---------------------------------------------------------------------------------------------- Net assets available for benefits $ 342,516 $ 1,974,361 $ 366,541 $ 2,534,265 $ 885,676 $ 2,328,728 $ 740,918 ==============================================================================================
NONPARTICIPANT DIRECTED -------------- ALLEGHENY TELEDYNE INCORPORATED PARTICIPANT COMMON STOCK LOANS TOTAL -------------------------------------------- ASSETS Cash $ 75,227 $ -- $ 171,722 Investments, at fair value 7,596,884 1,164,764 17,720,408 Receivables: Participants' contribution -- -- 112,961 Employer's matching contribution 690,595 -- 690,595 Employer's share-per-day contribution 3,045,790 -- 3,045,790 Interfund transfers -- -- -- -------------------------------------------- Total assets 11,408,496 1,164,764 21,741,476 LIABILITIES Payable to participants -- -- (71,091) Other (94,110) -- (18,230) -------------------------------------------- Net assets available for benefits $ 11,314,386 $ 1,164,764 $ 21,652,155 ============================================
See accompanying notes. 96 97 Oregon Metallurgical Corporation Savings Plan Statement of Net Assets Available for Benefits, with Fund Information December 31, 1997
PARTICIPANT DIRECTED --------------------------------------------------------------------------------------------- U.S. FIXED COMMON INTERNATIONAL REAL GOVERNMENT BALANCED INCOME STOCK STOCK SPECIAL ESTATE --------------------------------------------------------------------------------------------- ASSETS Investments, at fair value $ 208,315 $1,162,980 $ 315,615 $1,199,560 $ 598,492 $1,499,511 $ 222,199 Receivables: Participants' contribution 2,248 13,861 4,225 12,955 10,799 19,945 1,531 Employer's matching contribution -- -- -- -- -- -- -- Employer's share-per-day contribution -- -- -- -- -- -- -- Interfund transfers (1,680) 11,879 (949) 7,326 3,556 2,822 (22,954) --------------------------------------------------------------------------------------------- Total assets 208,883 1,188,720 318,891 1,219,841 612,847 1,522,278 200,776 LIABILITIES Payable to participants 13,656 86,008 15,097 114,863 45,376 122,192 10,901 --------------------------------------------------------------------------------------------- Net assets available for benefits $ 195,227 $1,102,712 $ 303,794 $1,104,978 $ 567,471 $1,400,086 $ 189,875 =============================================================================================
NONPARTICIPANT DIRECTED -------------- OREGON METALLURGICAL CORPORATION PARTICIPANT STOCK LOANS TOTAL ------------------------------------------ ASSETS Investments, at fair value $ 9,336,361 $ 263,943 $14,806,976 Receivables: Participants' contribution -- -- 65,564 Employer's matching contribution 912,105 -- 912,105 Employer's share-per-day contribution 3,062,606 -- 3,062,606 Interfund transfers -- -- -- ------------------------------------------ Total assets 13,311,072 263,943 18,847,251 LIABILITIES Payable to participants -- -- 408,093 ------------------------------------------ Net assets available for benefits $13,311,072 $ 263,943 $18,439,158 ==========================================
See accompanying notes. 97 98 Oregon Metallurgical Corporation Savings Plan Statement of Changes in Net Assets Available for Benefits, with Fund Information Year ended December 31, 1998
PARTICIPANT DIRECTED -------------------------------------------------------------------------------------------- U.S. FIXED COMMON INTERNATIONAL REAL GOVERNMENT BALANCED INCOME STOCK STOCK SPECIAL ESTATE -------------------------------------------------------------------------------------------- Additions: Additions to net assets attributed to: Contributions: Participants' pretax wage reductions $ 74,019 $ 361,202 $ 57,060 $ 465,305 $ 197,298 $ 512,954 $ 132,329 Participants' after-tax wage reductions 1,000 3,929 -- 4,929 4,429 3,429 4,429 Employer's matching contribution -- -- -- -- -- -- -- Employer's share-per-day contribution -- -- -- -- -- -- -- Participants' rollovers 3,351 13,912 4,104 18,052 3,633 14,289 32,364 -------------------------------------------------------------------------------------------- Total contributions 78,370 379,043 61,164 488,286 205,360 530,672 169,122 Investment income (loss): Dividend and interest income 13,690 190,779 25,955 295,345 442 1,142 34,514 Net appreciation (depreciation) in fair value of investments 2,971 112,914 604 160,366 95,574 314,849 (126,915) -------------------------------------------------------------------------------------------- Total investment income (loss) 16,661 303,693 26,559 455,711 96,016 315,991 (92,401) -------------------------------------------------------------------------------------------- Total additions 95,031 682,736 87,723 943,997 301,376 846,663 76,721 Deductions: Benefits paid to participants (34,000) (104,987) (23,384) (138,452) (60,170) (200,899) (11,085) -------------------------------------------------------------------------------------------- Increase prior to transfers 61,031 577,749 64,339 805,545 241,206 645,764 65,636 Transfers: Stock transfer -- -- -- -- -- -- -- Participant directed transfers 86,258 293,900 (1,592) 623,742 76,999 282,878 485,407 -------------------------------------------------------------------------------------------- Net increase (decrease) 147,289 871,649 62,747 1,429,287 318,205 928,642 551,043 Net assets available for benefits: Beginning of year 195,227 1,102,712 303,794 1,104,978 567,471 1,400,086 189,875 -------------------------------------------------------------------------------------------- End of year $ 342,516 $ 1,974,361 $ 366,541 $ 2,534,265 $ 885,676 $ 2,328,728 $ 740,918 ============================================================================================
NONPARTICIPANT DIRECTED ------------------------------- ALLEGHENY OREGON TELEDYNE METALLURGICAL INCORPORATED CORPORATION COMMON PARTICIPANT STOCK STOCK LOANS TOTAL ------------------------------------------------------------ Additions: Additions to net assets attributed to: Contributions: Participants' pretax wage reductions $ -- $ -- $ -- $ 1,800,167 Participants' after-tax wage reductions -- -- -- 22,145 Employer's matching contribution -- 690,595 -- 690,595 Employer's share-per-day contribution -- 3,045,790 -- 3,045,790 Participants' rollovers -- -- -- 89,705 ------------------------------------------------------------ Total contributions -- 3,736,385 -- 5,648,402 Investment income (loss): Dividend and interest income -- 185,828 45,495 793,190 Net appreciation (depreciation) in fair value of investments 1,264,328 (3,531,108) -- (1,706,417) ------------------------------------------------------------ Total investment income (loss) 1,264,328 (3,345,280) 45,495 (913,227) ------------------------------------------------------------ Total additions 1,264,328 391,105 45,495 4,735,175 Deductions: Benefits paid to participants (99,090) (832,473) (17,638) (1,522,178) ------------------------------------------------------------ Increase prior to transfers 1,165,238 (441,368) 27,857 3,212,997 Transfers: Stock transfer (12,524,143) 12,524,143 -- -- Participant directed transfers (1,952,167) (768,389) 872,964 -- ------------------------------------------------------------ Net increase (decrease) (13,311,072) 11,314,386 900,821 3,212,997 Net assets available for benefits: Beginning of year 13,311,072 -- 263,943 18,439,158 ------------------------------------------------------------ End of year $ -- $ 11,314,386 $ 1,164,764 $ 21,652,155 ============================================================
See accompanying notes. 98 99 Oregon Metallurgical Corporation Savings Plan Statement of Changes in Net Assets Available for Benefits, with Fund Information Year ended December 31, 1997
PARTICIPANT DIRECTED ----------------------------------------------------------------------------------------- U.S. FIXED COMMON INTERNATIONAL REAL GOVERNMENT BALANCED INCOME STOCK STOCK SPECIAL ESTATE ----------------------------------------------------------------------------------------- Additions: Additions to net assets attributed to: Contributions: Participants' pretax wage reductions $ 71,499 $ 322,180 $ 73,143 $ 305,135 $ 173,582 $ 490,465 $ 13,303 Participants' after-tax wage reductions 560 6,015 -- 5,112 4,832 4,692 945 Employer's matching contribution -- -- -- -- -- -- -- Employer's share-per-day contribution -- -- -- -- -- -- -- Participants' rollovers 15,510 70,471 27,362 75,135 15,648 54,220 -- ----------------------------------------------------------------------------------------- Total contributions 87,569 398,666 100,505 385,382 194,062 549,377 14,248 Investment income: Dividend and interest income 8,153 126,210 16,729 103,496 67,748 140,425 10,199 Net appreciation (depreciation) in fair value of investments 1,343 18,774 7,648 73,008 (24,988) 7,977 3,267 ----------------------------------------------------------------------------------------- Total investment income 9,496 144,984 24,377 176,504 42,760 148,402 13,466 ----------------------------------------------------------------------------------------- Total additions 97,065 543,650 124,882 561,886 236,822 697,779 27,714 Deductions: Benefits paid to participants (44) (18,987) (594) (7,671) (8,447) (39,895) (6,664) ----------------------------------------------------------------------------------------- Increase prior to interfund transfers 97,021 524,663 124,288 554,215 228,375 657,884 21,050 Participant directed transfers 7,881 114,746 10,047 146,609 73,953 45,882 168,825 ----------------------------------------------------------------------------------------- Net increase 104,902 639,409 134,335 700,824 302,328 703,766 189,875 Net assets available for benefits: Beginning of year 90,325 463,303 169,459 404,154 265,143 696,320 -- ----------------------------------------------------------------------------------------- End of year $ 195,227 $ 1,102,712 $ 303,794 $ 1,104,978 $ 567,471 $ 1,400,086 $ 189,875 =========================================================================================
NONPARTICIPANT DIRECTED ---------------- OREGON METALLURGICAL CORPORATION PARTICIPANT STOCK LOANS TOTAL --------------------------------------------- Additions: Additions to net assets attributed to: Contributions: Participants' pretax wage reductions $ -- $ -- $ 1,449,307 Participants' after-tax wage reductions -- -- 22,156 Employer's matching contribution 912,105 -- 912,105 Employer's share-per-day contribution 4,489,154 -- 4,489,154 Participants' rollovers -- -- 258,346 --------------------------------------------- Total contributions 5,401,259 -- 7,131,068 Investment income: Dividend and interest income -- 6,650 479,610 Net appreciation (depreciation) in fair value of investments 1,139,533 -- 1,226,562 --------------------------------------------- Total investment income 1,139,533 6,650 1,706,172 --------------------------------------------- Total additions 6,540,792 6,650 8,837,240 Deductions: Benefits paid to participants (139,079) (2,770) (224,151) --------------------------------------------- Increase prior to interfund transfers 6,401,713 3,880 8,613,089 Participant directed transfers (799,261) 231,318 -- --------------------------------------------- Net increase 5,602,452 235,198 8,613,089 Net assets available for benefits: Beginning of year 7,708,620 28,745 9,826,069 --------------------------------------------- End of year $ 13,311,072 $ 263,943 $ 18,439,158 =============================================
See accompanying notes. 99 100 Oregon Metallurgical Corporation Savings Plan Notes to Financial Statements December 31, 1998 1. PLAN DESCRIPTION The following description of the Oregon Metallurgical Corporation Savings Plan (the Plan) provides only general information. Participants should refer to the plan agreement for a more complete description of the Plan's provisions. GENERAL On March 24, 1998, the common stock of Oregon Metallurgical Corporation (OREMET or Company) was acquired by Allegheny Teledyne Incorporated (ATI). Under the terms of the merger agreement, OREMET shareholders received 1.296 shares of ATI common stock in a tax-free exchange for each share of OREMET common stock. Other than the exchange of shares, the acquisition had no effect on the operation or administration of the Plan. The Plan is a profit sharing plan covering all employees of the former OREMET who have completed 120 calendar days of employment. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). CONTRIBUTIONS Salary Reduction and Matching Contributions--Each year, participants may contribute up to 15%, subject to Internal Revenue Service limitations, of pretax annual compensation, as defined in the Plan. Participants may also contribute amounts representing distributions from other qualified defined benefit or defined contribution plans. The Company contributes, based on its return on equity, matching contributions of up to 3% of participant's salary reduction contributions. Equity Contributions--Each year the Company will contribute 1 share of Company common stock for each day worked by a salaried employee, and .125 shares of Company common stock for each regular hour worked by hourly employees subject to collective bargaining agreements. The equity contributions are subject to an annual limitation. Company Voluntary Contributions--Each year the Company may contribute a supplemental Company contribution in an amount to be determined by the discretion of the Board of Directors. These contributions are subject to certain provisions of the Plan. There were no Company voluntary contributions in 1998 and 1997. 100 101 Oregon Metallurgical Corporation Savings Plan Notes to Financial Statements (continued) 1. PLAN DESCRIPTION (CONTINUED) PARTICIPANT ACCOUNTS Each participant's account is credited with the participant's contributions and allocations of (a) the Company's matching, equity and discretionary contributions and (b) plan earnings. A participant is entitled to the total benefit which can be provided from the account, subject to the Plan's vesting provisions. VESTING Participants are immediately vested in their salary reduction and equity contributions plus actual earnings thereon. Vesting in the Company's matching and discretionary contribution portion of their accounts plus actual earnings thereon is based on years of continuous service. A participant is 100% vested after five years of credited service. LOANS TO PARTICIPANTS Active participants may borrow from their salary reduction contribution, voluntary contribution and rollover accounts a minimum of $1,000 up to a maximum of $50,000 or 50% of their account balance. Loan transactions are treated as a transfer from (to) the investment fund to (from) the loan fund. Loan payments are credited to participant directed funds in accordance with participant contribution instructions. For participants who have not provided the plan administrators with contribution instructions, loan payments are credited to the U.S. Government fund. Loan terms range from one to five years or up to ten years for the purchase of a primary residence. The loans are secured by the balance in the participant's account and bear interest at a rate commensurate with local prevailing rates as determined quarterly by the plan administrator. Principal and interest are paid ratably through monthly payroll deductions. PAYMENT OF BENEFITS On termination of service, a participant may receive a lump-sum amount equal to the vested value of his or her account, or upon death, disability or retirement, elect to receive annual installments over a ten-year period. 101 102 Oregon Metallurgical Corporation Savings Plan Notes to Financial Statements (continued) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING The financial statements of the Plan are prepared under the accrual method of accounting. INVESTMENT VALUATION AND INCOME RECOGNITION The Plan's investments are stated at fair value. The shares of registered investment companies are valued at quoted market prices which represent the net asset values of shares held by the Plan at year-end. Company common stock is stated at the quoted market price on the New York Stock Exchange. The participant notes receivable are valued at their outstanding balances, which approximate fair value. Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. RISKS AND UNCERTAINTIES The Plan provides for various investment options in several mutual funds and the Company's common stock. Investment options are exposed to certain risks, such as interest rate, market and credit. Due to the level of risk associated with these investment options and the level of uncertainty related to changes in the value of these investments, it is at least reasonably possible that changes in risks in the near term would materially affect participants' account balances and the amounts reported in the statements of net assets available for benefits and the statements of changes in net assets available for benefits. 3. CONTRIBUTIONS RECEIVABLE The receivable for the employer share-per-day contribution is determined based upon the number of shares to be contributed and based upon the share price of the Company's common stock on the dates contributed. 102 103 Oregon Metallurgical Corporation Savings Plan Notes to Financial Statements (continued) 4. TRANSACTIONS WITH RELATED PARTIES Certain legal and accounting fees, and administrative fees are paid by the Company. 5. INCOME TAX STATUS The Plan has received a determination letter from the Internal Revenue Service dated February 4, 1997, stating that the Plan is qualified under Section 401(a) of the Internal Revenue Code of 1986 (the Code) and that the trust, therefore, is exempt from taxation under Section 501(a) of the Code. Once qualified, the Plan is required to operate in conformity with the Code and ERISA to maintain its tax-exempt status. The Plan was amended subsequent to the IRS determination letter. Therefore, the amendment is not covered by the determination letter. The plan administrator is not aware of any course of action or series of events that have occurred that might adversely affect the Plan's qualified status. 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. In the event of plan termination, participants will become 100% vested in their accounts. 7. YEAR 2000 READINESS DISCLOSURE (UNAUDITED) OREMET determined that it was necessary to take certain steps in order to ensure that the Plan's information systems will be prepared to handle Year 2000 dates. OREMET took a two-phase approach. The first phase addressed internal systems that were modified or replaced to function properly. Both internal and external resources were utilized to replace or modify existing software applications, and test the software and equipment for the Year 2000 modifications. OREMET believes that the phase of the project relating to systems which affect the Plan's operations is complete. Costs associated with modifying software and equipment were not significant and were paid by OREMET. For the second phase of the project, plan management established communications with its third party service providers to determine that they have developed plans to address their own Year 2000 problems as they relate to the Plan's operations. OREMET believes that third party service providers will be Year 2000 compliant. If modification of data processing systems of either the Plan, OREMET, or its service providers are not completed timely, the Year 2000 problem could have a material impact on the operations of the Plan. Plan management has not developed a contingency plan, because they are confident that all material systems will be Year 2000 ready. 103 104 Oregon Metallurgical Corporation Savings Plan Notes to Financial Statements (continued) 8. SUBSEQUENT EVENT Effective January 1, 1999, salaried employees became participants in another plan sponsored by ATI, the Teledyne 401(k) Plan (Teledyne Plan). In April 1999, approximately $6.3 million was transferred out of the Plan into the Teledyne Plan. 9. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500 The following is a reconciliation of net assets available for benefits per the financial statements to the Form 5500:
DECEMBER 31 1998 1997 ------------------------------------------- Net assets available for benefits per the financial statements $ 21,652,155 $ 18,439,158 Amounts allocated to withdrawing participants (750,755) (142,574) ------------------------------------------- Net assets available for benefits per the Form 5500 $ 20,901,400 $ 18,296,584 ===========================================
The following is a reconciliation of benefits paid to participants per the financial statements to the Form 5500:
YEAR ENDED DECEMBER 31 1998 1997 ------------------------------------------- Benefits paid to participants per the financial statements $ 1,522,178 $ 224,151 Add: Amounts allocated to withdrawing participants at December 31, 1998 750,755 142,574 Deduct: Amounts allocated to withdrawing participants at December 31, 1997 (142,574) -- ------------------------------------------- Benefits paid to participants per the Form 5500 $ 2,130,359 $ 366,725 ===========================================
Amounts allocated to withdrawing participants are recorded on the Form 5500 for requests for benefit payments that have been processed and approved for payment prior to December 31 but not yet paid as of that date. 104 105 Oregon Metallurgical Corporation Savings Plan EIN 93-0448167 Plan 004 Line 27a--Schedule of Assets Held for Investment Purposes December 31, 1998
DESCRIPTION CURRENT IDENTITY OF ISSUE OF INVESTMENT COST VALUE - ---------------------------------------------------------------------------------------------------------------------- (a) (b) (c) (d) (e) * Columbia Funds: U.S. Government 36,403 shares N/A $ 305,418 Balanced 83,785 shares N/A 1,941,291 Fixed Income 27,414 shares N/A 367,893 Common Stock 98,981 shares N/A 2,415,140 International Stock 58,916 shares N/A 910,253 Special 96,821 shares N/A 2,286,917 Real Estate 46,437 shares N/A 731,848 * Allegheny Teledyne Incorporated Common Stock 371,713 shares N/A 7,596,884 Participant loans 6.00% to 7.25% -- 1,164,764 --------------------------------------- -- $ 17,720,408 =======================================
*Party-in-interest to the Plan N/A--Not Available 105 106 Oregon Metallurgical Corporation Savings Plan EIN 93-0448167 Plan 004 Line 27d--Schedule of Reportable Transactions Year ended December 31, 1998
CURRENT EXPENSE VALUE ON IDENTITY OF PURCHASE SELLING INCURRED WITH COST OF TRANSACTION NET GAIN OR PARTY INVOLVED DESCRIPTION OF ASSET PRICE PRICE TRANSACTION ASSET DATE (LOSS) - ------------------------------------------------------------------------------------------------------------------------------ (a) (b) (c) (d) (f) (g) (h) ( i ) Category (i)--Individual transactions in excess of 5% of plan assets: - --------------------------------------------------------------------- Key Trust Oregon Metallurgical Corporation Common Stock $ -- $ 735,174 $ 25 $ 569,176 $ 735,174 $165,973 Category (iii)--Series of transactions in excess of 5% of plan assets: - ---------------------------------------------------------------------- Key Trust Allegheny Teledyne Incorporated Common Stock 6,385 -- -- -- 6,385 -- Allegheny Teledyne Incorporated Common Stock -- 958,753 3,191 836,765 958,753 118,797 Colombia Common Stock 1,295,624 -- -- 1,295,624 1,295,624 -- Colombia Common Stock -- 525,448 70 479,936 525,448 45,442 Columbia Balanced Fund 1,107,337 -- -- 1,107,337 1,107,337 -- Columbia Balanced Fund -- 441,913 90 417,782 441,913 24,041 Columbia International Stock 483,040 -- -- 483,040 483,040 -- Columbia International Stock -- 266,192 30 260,148 266,192 6,014 Columbia Real Estate 945,444 -- -- 945,444 945,444 -- Columbia Real Estate -- 264,301 60 279,503 264,301 (15,262) Columbia Special Fund 1,172,163 -- -- 1,172,163 1,172,163 -- Columbia Special Fund -- 695,321 110 686,500 695,321 8,711 Mutual Fund Receivable -- 3,849,067 -- 3,849,067 3,849,067 -- Mutual Fund Receivable 3,849,067 -- -- 3,849,067 3,849,067 -- Oregon Metallurgical Corporation Common Stock -- 2,002,681 562 1,499,373 2,002,681 502,746 Victory Institutional Money Market Fund -- 6,857,070 -- 6,857,070 6,857,070 -- Victory Institutional Money Market Fund 6,960,851 -- -- 6,968,851 6,960,851 --
There were no Category (ii) or (iv) transactions during the year ended December 31, 1998. Column (e) was not used. 106 107 Oregon Metallurgical Corporation Savings Plan EIN 93-0448167 Plan 004 Line 27f--Schedule of Nonexempt Transactions December 31, 1998
IDENTITY RELATIONSHIP TO PLAN, EMPLOYER OF PARTY INVOLVED OR OTHER PARTY-IN-INTEREST DESCRIPTION OF TRANSACTION - ---------------------------------------------------------------------------------------------------------------------- (a) (b) (c) - ---------------------------------------------------------------------------------------------------------------------- OREMET Plan Sponsor Failure to timely segregate participant contributions for October 1998 in the amount of $18,058.
No information to report in columns (d) through (j). 107 108 "Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K" of Part IV of the 1998 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 30 to 51 of the 1998 Annual Report are incorporated herein by reference: Consolidated Statements of Income - Years Ended December 31, 1998, 1997 and 1996 Consolidated Balance Sheets at December 31, 1998 and 1997 Consolidated Statements of Cash Flows - Years Ended December 31, 1998, 1997 and 1996 Consolidated Statements of Stockholders' Equity - Years Ended December 31, 1998, 1997 and 1996 Report of Ernst & Young LLP, Independent Auditors Notes to Consolidated Financial Statements The report of Coopers & Lybrand L.L.P. (now PricewaterhouseCoopers LLP) relating to the consolidated financial statements of Oregon Metallurgical Corporation as of December 31, 1997 and 1996 and for the years then ended is filed as Exhibit 99.1 to the 1998 Form 10-K. (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 Ludlum Retirement Savings Plan Report of Independent Auditors Statement of Net Assets Available for Benefits, with Fund Information as of December 31, 1998 Statement of Net Assets Available for Benefits, with Fund Information as of December 31, 1997 Statement of Changes in Net Assets Available for Benefits, with Fund Information, Year Ended December 31, 1998 Statement of Changes in Net Assets Available for Benefits, with Fund Information, Year Ended December 31, 1997 Notes to Financial Statements (ii) 401(k) Savings Account Plan for Employees of the Washington Plant Report of Independent Auditors Statement of Net Assets Available for Benefits, with Fund Information, as of December 31, 1998 Statement of Net Assets Available for Benefits, with Fund Information as of December 31, 1997 108 109 Statement of Changes in Net Assets Available for Benefits, with Fund Information, Year Ended December 31, 1998 Statement of Changes in Net Assets Available for Benefits, with Fund Information, Year Ended December 31, 1997 Notes to Financial Statements (iii) Savings and Security Plan of the Lockport and Waterbury Facilities of Allegheny Ludlum Corporation Report of Independent Auditors Statement of Net Assets Available for Benefits, with Fund Information as of December 31, 1998 Statement of Net Assets Available for Benefits, with Fund Information as of December 31, 1997 Statement of Changes in Net Assets Available for Benefits, with Fund Information, Year Ended December 31, 1998 Statement of Changes in Net Assets Available for Benefits, with Fund Information, Year Ended December 31, 1997 Notes to Financial Statements (iv) Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan Report of Independent Auditors Statement of Net Assets Available for Benefits, with Fund Information, as of December 31, 1998 Statement of Net Assets Available for Benefits, with Fund Information, as of December 31, 1997 Statement of Changes in Net Assets Available for Benefits, with Fund Information, Year Ended December 31, 1998 Statement of Changes in Net Assets Available for Benefits, with Fund Information, Year Ended December 31, 1997 Notes to Financial Statements (v) Teledyne 401(k) Plan Report of Independent Auditors Statement of Net Assets Available for Benefits, December 31, 1998 and December 31, 1997 Statement of Changes in Net Assets Available for Benefits, with Fund Information, Year Ended December 31, 1998 Statement of Changes in Net Assets Available for Benefits, with Fund Information, Year Ended December 31, 1997 Notes to Financial Statements (vi) Oregon Metallurgical Corporation Savings Plan Report of Independent Auditors 109 110 Statement of Net Assets Available for Benefits, with Fund Information -- December 31, 1998 Statement of Net Assets Available for Benefits, with Fund Information -- December 31, 1997 Statement of Changes in Net Assets Available for Benefits, with Fund Information -- Year Ended December 31, 1998 Statement of Changes in Net Assets Available for Benefits, with Fund Information -- Year Ended December 31, 1997 Notes to Financial Statements (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 Ludlum Retirement Savings Plan Item 27a - Schedule of Assets Held for Investment Purposes - December 31, 1998 Item 27d - Schedule of Reportable Transactions - Year Ended December 31, 1998 (ii) 401(k) Savings Account Plan for Employees of the Washington Plant Item 27a - Schedule of Assets Held for Investment Purposes - December 31, 1998 Item 27d - Schedule of Reportable Transactions - Year Ended December 31, 1998 (iii) Savings and Security Plan of the Lockport and Waterbury Facilities of Allegheny Ludlum Corporation Item 27a - Schedule of Assets Held for Investment Purposes - December 31, 1998 Item 27d - Schedule of Reportable Transactions - Year Ended December 31, 1998 (iv) Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan Item 27a - Schedule of Assets Held for Investment Purposes - December 31, 1998 Item 27d - Schedule of Reportable Transactions - Year Ended December 31, 1998 (v) Teledyne 401(k) Plan Item 27a - Schedule of Assets Held for Investment Purposes - December 31, 1998 Item 27d - Schedule of Reportable Transactions - Year Ended December 31, 1998 (vi) Oregon Metallurgical Corporation Savings Plan Item 27a - Schedule of Assets Held for Investment Purposes - December 31, 1998 Item 27d - Schedule of Reportable Transactions - Year Ended December 31, 1998 Item 27f - Schedule of Nonexempt Transactions - Year Ended December 31, 1998 110 111 (3) EXHIBITS A list of exhibits included in the 1998 Form 10-K or incorporated by reference is found in the Exhibit Index beginning on page 33 of the 1998 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, after Exhibit 23.2, and filed with Amendment No. 1: Exhibit No. Description ----------- ----------- 23.3 Consent of Ernst & Young LLP (b) REPORTS ON FORM 8-K FILED IN THE FOURTH QUARTER OF 1998: None. 111 112 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 Teledyne Incorporated Date: June 28, 1999 By: /s/ Judd R. Cool --------------------------------------- Judd R. Cool Senior Vice President, Human Resources 112 113 EXHIBIT INDEX Exhibit No. Description Method of Filing - ----------- ----------- ---------------- 23.3 Consent of Ernst & Young LLP Filed herewith 113 EX-23.3 2 CONSENT OF ERNST & YOUNG LLP 1 Exhibit 23.3 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 Ludlum Retirement Savings Plan of our report dated June 11, 1999 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 Ludlum Retirement Savings Plan Teledyne 401(k) Plan and in the Registration Statement (Form S-8 No. 333-10227) pertaining to the Teledyne 401(k) Plan of our report dated June 11, 1999 with respect to the financial statements and supplemental schedules of the Teledyne 401(k) Plan and in the Registration Statement, as amended (Form S-8 No. 333-48649) pertaining to the Oregon Metallurgical Corporation Savings Plan of our report dated May 20, 1999 with respect to the financial statements and supplemental schedules of the Oregon Metallurgical Corporation Savings Plan, all of which are included in the Annual Report on Form 10-K/A (Amendment No. 1) for the year ended December 31, 1998. /s/ ERNST & YOUNG LLP Pittsburgh, Pennsylvania June 28, 1999 11 -----END PRIVACY-ENHANCED MESSAGE-----