UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 28, 2008

o	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 1-10582

Alliant Techsystems Inc.

(Exact name of Registrant as specified in its charter)

Delaware		41-1672694
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

7480 Flying Cloud Drive Minneapolis, Minnesota		55344-3720
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (952) 351-3000

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed under Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer x		Accelerated Filer o		Non-Accelerated Filer o		Smaller Reporting Company o
				(Do not check if a smaller reporting company)

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

As of January 25, 2009, 32,730,755 shares of the Registrant’s common stock, par value $.01 per share, were outstanding.

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PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ALLIANT TECHSYSTEMS INC.

CONDENSED CONSOLIDATED INCOME STATEMENTS

(Unaudited)

	QUARTERS ENDED						NINE MONTHS ENDED
(In thousands except per share data)	December 28, 2008			December 30, 2007			December 28, 2008			December 30, 2007
Sales	$	1,109,450		$	1,054,865		$	3,326,266		$	3,042,582
Cost of sales	879,866			842,201			2,637,179			2,439,359
Gross profit	229,584			212,664			689,087			603,223
Operating expenses:
Research and development	16,105			14,360			63,245			44,368
Selling	39,584			31,639			117,392			92,430
General and administrative	54,611			56,109			160,189			149,290
Total operating expenses	110,300			102,108			340,826			286,088
Income before interest, income taxes, and minority interest	119,284			110,556			348,261			317,135
Interest expense	(15,518		)	(18,659		)	(49,077		)	(64,011		)
Interest income	142			306			741			1,006
Income before income taxes and minority interest	103,908			92,203			299,925			254,130
Income tax provision	38,947			33,716			112,009			91,800
Income before minority interest	64,961			58,487			187,916			162,330
Minority interest, net of income taxes	(61		)	157			45			421
Net income	$	65,022		$	58,330		$	187,871		$	161,909

Earnings per common share:
Basic	$	1.99		$	1.79		$	5.74		$	4.91
Diluted	1.96			1.65			5.48			4.60

Weighted-average number of common shares outstanding:
Basic	32,628			32,626			32,758			32,980
Diluted	33,117			35,434			34,283			35,205

See Notes to the Condensed Consolidated Financial Statements.

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ALLIANT TECHSYSTEMS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands except share data)	December 28, 2008			March 31, 2008
ASSETS
Current assets:
Cash and cash equivalents	$	162,092		$	119,773
Net receivables	919,843			798,468
Net inventories	207,921			205,825
Deferred income tax assets	79,932			88,282
Other current assets	29,618			35,568
Total current assets	1,399,406			1,247,916
Net property, plant, and equipment	510,395			492,336
Goodwill	1,243,696			1,236,196
Prepaid pension assets	28,634			25,280
Deferred charges and other non-current assets	190,248			194,466
Total assets	$	3,372,379		$	3,196,194
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	290,850		—
Accounts payable	193,542			$	215,755
Contract advances and allowances	83,009			81,624
Accrued compensation	126,392			147,287
Accrued income taxes	6,916			41,681
Other accrued liabilities	180,953			144,540
Total current liabilities	881,662			630,887
Long-term debt	1,164,140			1,455,000
Deferred income tax liabilities	52,467			38,316
Postretirement and postemployment benefits liabilities	134,486			138,378
Accrued pension liability	98,672			84,267
Other long-term liabilities	116,556			108,238
Total liabilities	2,447,983			2,455,086
Contingencies (Note 12)
Common stock - $.01 par value
Authorized — 90,000,000 shares
Issued and outstanding — 32,717,398 shares at December 28, 2008 and 32,795,800 at March 31, 2008	327			328
Additional paid-in-capital	473,638			467,857
Retained earnings	1,503,795			1,315,924
Accumulated other comprehensive loss	(370,463		)	(376,636		)
Common stock in treasury, at cost — 8,837,663 shares held at December 28, 2008 and 8,759,261 shares held at March 31, 2008	(682,901		)	(666,365		)
Total stockholders’ equity	924,396			741,108
Total liabilities and stockholders’ equity	$	3,372,379		$	3,196,194

See Notes to the Condensed Consolidated Financial Statements.

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ALLIANT TECHSYSTEMS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	NINE MONTHS ENDED
(In thousands)	December 28, 2008			December 30, 2007
Operating activities
Net income	$	187,871		$	161,909
Adjustments to net income to arrive at cash used for operating activities:
Depreciation	57,412			52,988
Amortization of intangible assets	4,213			4,420
Amortization of deferred financing costs	2,148			3,145
Write-off of debt issuance costs associated with convertible notes	—			5,600
Deferred income taxes	18,431			4,858
Loss on disposal of property	331			2,433
Minority interest, net of income taxes	45			421
Share-based plans expense	14,753			17,751
Excess tax benefits from share-based plans	(3,235		)	(8,836		)
Changes in assets and liabilities:
Net receivables	(121,375		)	(67,411		)
Net inventories	295			(53,755		)
Accounts payable	(16,299		)	4,537
Contract advances and allowances	1,385			(1,307		)
Accrued compensation	(24,075		)	(33,055		)
Accrued income taxes	(24,909		)	50,378
Pension and other postretirement benefits	19,744			26,218
Other assets and liabilities	40,779			27,021
Cash provided by operating activities	157,514			197,315
Investing activities
Capital expenditures	(80,352		)	(63,959		)
Acquisition of business, net of cash acquired	(13,560		)	(101,195		)
Proceeds from the disposition of property, plant, and equipment	489			292
Cash used for investing activities	(93,423		)	(164,862		)
Financing activities
Change in cash overdrafts	—			32,220
Net borrowings on line of credit	—			24,000
Payments made to extinguish debt	(10		)	—
Payments made for debt issue costs	(5		)	(102		)
Net purchase of treasury shares	(31,609		)	(100,068		)
Proceeds from employee stock compensation plans	6,617			13,231
Excess tax benefits from share-based plans	3,235			8,836
Cash used for financing activities	(21,772		)	(21,883		)
Increase in cash and cash equivalents	42,319			10,570
Cash and cash equivalents - beginning of period	119,773			16,093
Cash and cash equivalents - end of period	$	162,092		$	26,663

Supplemental Cash Flow Disclosure:
Noncash investing activity:
Capital expenditures included in accounts payable	$	7,091		$	6,167

See Notes to the Condensed Consolidated Financial Statements.

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Alliant Techsystems Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Quarter Ended December 28, 2008

(Dollar amounts in thousands except share and per share data and unless otherwise indicated)

1. Basis of Presentation and Responsibility for Interim Financial Statements

The unaudited condensed consolidated financial statements of Alliant Techsystems Inc. (the Company or ATK) as set forth in this quarterly report have been prepared in accordance with the requirements of the U.S. Securities and Exchange Commission for interim reporting. As permitted under those rules, certain footnotes and other financial information that are normally required by accounting principles generally accepted in the United States can be condensed or omitted. ATK’s accounting policies are described in the notes to the consolidated financial statements in its Annual Report on Form 10-K for the fiscal year ended March 31, 2008 (fiscal 2008). Management is responsible for the unaudited condensed consolidated financial statements included in this document. The condensed consolidated financial statements included in this document are unaudited but, in the opinion of management, include all adjustments necessary for a fair presentation of ATK’s financial position as of December 28, 2008, and its results of operations and cash flows for the quarters and nine months ended December 28, 2008 and December 30, 2007.

Sales, expenses, cash flows, assets, and liabilities can and do vary during the year. Therefore, the results and trends in these interim financial statements may not be the same as those for the full year.

2. New Accounting Pronouncements

In May 2008, the Financial Accounting Standards Board (FASB) issued FASB Staff Position (FSP) No. APB 14-1, Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement) (FSP No. APB 14-1). This FSP specifies that issuers of such instruments should separately account for the liability and equity components in a manner that will reflect the entity’s nonconvertible debt borrowing rate when interest cost is recognized in subsequent periods. The provisions of this FSP apply to ATK’s $200,000 aggregate principal amount of 3.00% Convertible Notes, the $280,000 aggregate principal amount of 2.75% Convertible Notes due 2024, and the $300,000 aggregate principal amount of 2.75% Convertible Notes due 2011, discussed in Note 8. This FSP is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years (ATK’s fiscal 2010), and shall be applied retrospectively to all periods presented. Early adoption is not permitted. ATK estimates that adoption of the FSP will result in an increase to fiscal 2005 through fiscal 2009 non-cash interest expense in the range of $9,300 ($5,600 net of tax or $0.15 diluted earnings per share (EPS) impact) to $23,800 ($14,300 net of tax or $0.42 diluted EPS impact) per year. The impact to fiscal 2010 non-cash interest expense is expected to be an increase of approximately $19,900 ($11,900 net of tax or $0.35 diluted EPS impact) with a declining impact in future fiscal years.

In May 2008, the FASB issued Statement of Financial Accounting Standards (SFAS) No. 162, The Hierarchy of Generally Accepted Accounting Principles (GAAP). SFAS No. 162 provides a framework for selecting accounting principles for financial statements that are presented in conformity with GAAP. SFAS No. 162 is effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles. ATK does not expect the adoption of SFAS No. 162 to have a material impact on its financial statements.

In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities (SFAS No. 161). This statement establishes enhanced disclosures about derivative and hedging activities. This statement is effective for fiscal years and interim periods beginning after November 15, 2008 (ATK’s fiscal 2010). Adoption of SFAS No. 161 will result in enhanced disclosure regarding ATK’s derivatives should ATK have any outstanding.

In December 2007, the FASB issued SFAS No. 141(R), Business Combinations. This statement replaces SFAS No. 141, “Business Combinations.” This statement retains the fundamental requirements in Statement No. 141 that the acquisition method of accounting (which Statement No. 141 called the purchase method) be used for all business combinations and for an acquirer to be identified for each business combination. This statement also establishes principles and requirements for how the acquirer: a) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree; b) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase; and c) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. SFAS No. 141(R) will apply prospectively to business combinations for which the acquisition date is after

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fiscal years beginning on or after December 15, 2008 (ATK’s fiscal 2010). While ATK continues to evaluate this statement for the impact that SFAS No. 141(R) will have on its consolidated financial statements, ATK will be required to expense costs related to any acquisitions after March 31, 2009.

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interest in Consolidated Financial Statements. This Statement amends Accounting Research Bulletin 51 to establish accounting and reporting standards for the noncontrolling (minority) interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. SFAS No. 160 is effective for fiscal years beginning after December 15, 2008 (ATK’s fiscal 2010). ATK does not believe the adoption of SFAS No. 160 will have a material impact on its financial statements.

In June 2007, the FASB ratified Emerging Issues Task Force (EITF) Issue No. 07-03, Accounting for Nonrefundable Advance Payments for Goods and Services Received for Use in Future Research and Development Activities (EITF 07-03). EITF 07-03 requires companies to defer nonrefundable advance payments for goods and services and to expense that advance payment as the goods are delivered or services are rendered. If the company does not expect to have the goods delivered or services performed, the advance should be expensed. EITF 07-03 was effective for ATK on April 1, 2008 and the adoption did not have a significant impact on ATK’s financial statements.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities - Including an amendment of FASB Statement No. 115. SFAS No. 159 permits entities to choose to measure eligible items at fair value at specified election dates and report unrealized gains and losses on items for which the fair value option has been elected in earnings at each subsequent reporting date. SFAS No. 159 was effective for ATK on April 1, 2008. ATK did not choose the fair value option; therefore, the adoption of SFAS No. 159 did not have an impact on ATK’s financial statements.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements, which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007, with the exception of the application of the statement to the determination of fair value of nonfinancial assets and liabilities that are recognized or disclosed on a nonrecurring basis, which is effective for fiscal years beginning after November 15, 2008. The adoption of the applicable provisions of SFAS No. 157 on April 1, 2008 did not have an impact on ATK’s financial statements. ATK is evaluating the effect that adoption of the remaining provisions of this statement will have on its financial statements.

3. Acquisitions, Goodwill, and Other Intangible Assets

There were no material acquisitions during the quarter or nine months ended December 28, 2008.

On June 8, 2007, ATK acquired Swales Aerospace (Swales), a provider of satellite components and subsystems, small spacecraft and engineering services for NASA, Department of Defense and commercial satellite customers, for $101,195, net of cash acquired. ATK believes that the acquisition strengthened ATK’s satellite components, subsystems and small spacecraft portfolios and further increased ATK’s position as a supplier to the U.S. Government and industry. ATK also believes the acquisition enhanced ATK’s systems engineering as ATK pursues strategic initiatives in space exploration programs. Headquartered in Beltsville, Maryland, Swales employs approximately 629 people and is included in ATK Space Systems. The purchase price allocation for Swales was completed during fiscal 2008. A portion of the goodwill generated in this acquisition will be deductible for tax purposes.

ATK used the purchase method of accounting to account for this acquisition and, accordingly, the results of Swales are included in ATK’s consolidated financial statements since the date of the acquisition. The purchase price for the acquisition was allocated to the acquired assets and liabilities based on estimated fair value. The excess purchase price over estimated fair value of the net assets acquired was recorded as goodwill. Pro forma information on results of operations for fiscal 2008, as if the acquisition had occurred at the beginning of fiscal 2007, is not being presented because the acquisition is not material to ATK for that purpose.

The changes in the carrying amount of goodwill by operating segment during the quarter and nine months ended December 28, 2008 were as follows:

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	ATK Armament Systems		ATK Mission Systems		ATK Space Systems		Total
Balance at April 1, 2008	$	171,337	$	354,976	$	709,883	$	1,236,196
Adjustments	—		—		—		—
Balance at June 29, 2008	171,337		354,976		709,883		1,236,196
Adjustments	—		7,500		—		7,500
Balance at September 28, 2008	171,337		362,476		709,883		1,243,696
Adjustments	—		—		—		—
Balance at December 28, 2008	$	171,337	$	362,476	$	709,883	$	1,243,696

The adjustment within ATK Mission Systems relates to the fiscal 2003 acquisition of assets of Science and Applied Technology, Inc. (now included in ATK Mission Systems). The sellers of this acquired business were given the ability to earn up to an additional $7,500 of cash consideration if certain pre-specified milestones were attained with respect to one of the contracts acquired. The pre-specified milestones were met in September 2008 and the additional contingent consideration earned pursuant to the purchase agreement resulted in an increase to goodwill.

Included in deferred charges and other non-current assets as of December 28, 2008 and March 31, 2008 are other intangible assets of $74,504 and $87,973, respectively, which consist of trademarks, patented technology, and brand names that are not being amortized because ATK considers their estimated useful lives to be indefinite. During the nine months ended December 28, 2008, ATK began amortizing a tradename that it had previously determined to have an indefinite life over an estimated useful life of 10 years. Included in deferred charges and other non-current assets as of December 28, 2008 and March 31, 2008 are amortizing intangible assets, as follows:

	December 28, 2008							March 31, 2008
	Gross carrying amount		Accumulated amortization			Total		Gross carrying amount		Accumulated amortization			Total
Contracts	$	22,644	$	(21,253	)	$	1,391	$	22,644	$	(20,024	)	$	2,620
Tradename	16,777		(1,258		)	15,519		—		—			—
Customer relationships and other	27,407		(11,090		)	16,317		27,407		(9,364		)	18,043
Total	$	66,828	$	(33,601	)	$	33,227	$	50,051	$	(29,388	)	$	20,663

These assets are being amortized over their estimated useful lives over a weighted average remaining period of approximately 7.9 years. Amortization expense for the quarter and nine months ended December 28, 2008 was $1,405, and $4,213, respectively. Amortization expense for the quarter and nine months ended December 30, 2007 was $1,555 and $4,420, respectively. ATK expects amortization expense related to these assets to be as follows:

Remainder of fiscal 2009	$	1,450
Fiscal 2010	4,940
Fiscal 2011	3,955
Fiscal 2012	3,946
Fiscal 2013	3,916
Thereafter	15,020
Total	$	33,227

4. Earnings Per Share Data

Basic earnings per share (EPS) is computed based upon the weighted-average number of common shares outstanding for each period. Diluted EPS is computed based on the weighted-average number of common shares and common equivalent shares. Common equivalent shares represent the effect of stock-based awards and contingently issuable shares related to ATK’s Convertible Senior Subordinated Notes (see Note 8) during each period presented, which, if exercised, earned, or converted, would have a dilutive effect on EPS. In computing EPS for the quarters and nine months ended December 28, 2008 and December 30, 2007, net income as reported for each respective period is divided by (in thousands):

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	Quarters Ended		Nine Months Ended
	December 28, 2008	December 30, 2007	December 28, 2008	December 30, 2007
Weighted-average basic shares outstanding	32,628	32,626	32,758	32,980
Dilutive effect of stock-based awards	339	510	409	475
Dilutive effect of contingently issuable shares	150	2,298	1,116	1,750
Weighted-average diluted shares outstanding	33,117	35,434	34,283	35,205

Stock options excluded from the calculation of diluted EPS because the option exercise/threshold price was greater than the average market price of the common shares	—	—	—	—

Contingently issuable shares related to ATK’s 3.00% Convertible Senior Subordinated Notes, 2.75% Convertible Senior Subordinated Notes due 2024, as discussed in Note 8, are included in diluted EPS for the quarters and nine months ended December 28, 2008 and December 30, 2007. Contingently issuable shares related to ATK’s 2.75% Convertible Senior Subordinated Notes due 2011, as discussed in Note 8, are included in diluted EPS for the nine months ended December 28, 2008 and the quarter and nine months ended December 30, 2007. These contingently issuable shares are not included in diluted EPS for the quarter ended December 28, 2008 as ATK’s average stock price during the quarter did not exceed $96.51. The Warrants, as discussed in Note 8, are not included in diluted EPS as ATK’s average stock price during the quarters and nine months ended December 28, 2008 and December 30, 2007 did not exceed $116.75. The Call Options, also discussed in Note 8, are anti-dilutive and are therefore excluded from the calculation of diluted shares outstanding.

5. Comprehensive Income

The components of comprehensive income, net of income taxes, for the quarters and nine months ended December 28, 2008 and December 30, 2007 were as follows:

	Quarters Ended					Nine Months Ended
	December 28, 2008			December 30, 2007		December 28, 2008			December 30, 2007
Net income	$	65,022		$	58,330	$	187,871		$	161,909
Other comprehensive income (OCI):
Pension and other postretirement benefit liabilities, net of income taxes of $(2,126), $(3,601), $(5,007), and $(10,746), respectively	3,233			5,492		7,578			16,456
Change in fair value of derivatives, net of income taxes of $6, $(84), $13, and $(247), respectively	(9		)	124		(19		)	455
Change in fair value of available-for-sale securities, net of income taxes of $808, $(68), $923, and $11, respectively	(1,212		)	101		(1,385		)	31
Total OCI	2,012			5,717		6,174			16,942
Total comprehensive income	$	67,034		$	64,047	$	194,045		$	178,851

The components of accumulated OCI, net of income taxes, are as follows:

	December 28, 2008			March 31, 2008
Derivatives	$	(569	)	$	(550	)
Pension and other postretirement benefit liabilities	(368,665		)	(376,242		)
Available-for-sale securities	(1,229		)	156
Total accumulated other comprehensive loss	$	(370,463	)	$	(376,636	)

Commodity Forward Contracts

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designated and qualify as effective cash flow hedges of purchases of the commodity. Ineffectiveness is calculated as the amount by which the change in the fair value of the derivatives exceeds the change in the fair value of the anticipated commodity purchases. The fair value of these contracts is recorded as a current liability and the effective portion is reflected in accumulated OCI in the financial statements. The gains or losses on these contracts are recorded in inventory as the commodities are purchased. The following table summarizes the pre-tax activity in OCI related to these forward contracts during the quarter and nine months ended December 28, 2008:

	Quarter Ended December 28, 2008			Nine Months Ended December 28, 2008
Beginning of period unrealized loss in accumulated OCI	$	(484	)	$	—
Decrease in fair value of derivatives	(1,060		)	(1,907		)
Losses reclassified from OCI, increasing the price paid to suppliers	888			1,251
End of period unrealized loss in accumulated OCI	$	(656	)	$	(656	)

The amount of ineffectiveness recognized in earnings for these contracts during the quarter and nine months ended December 28, 2008 was insignificant. ATK expects that substantially all of the unrealized losses will be realized and reported in cost of sales during the next 12 months as the cost of the commodities is included in cost of sales. Estimated and actual gains or losses will change as market prices change. During the quarter and nine months ended December 30, 2007, ATK had no such commodity contracts.

6. Inventories

Inventories consist of the following:

	December 28, 2008		March 31, 2008
Raw materials	$	66,048	$	50,964
Work in process	46,777		55,824
Finished goods	73,672		50,840
Contracts in progress	21,424		48,197
Net inventories	$	207,921	$	205,825

7. Other Liabilities

Other current and long-term accrued liabilities consist of the following:

	December 28, 2008		March 31, 2008
Employee benefits and insurance, including pension and other postretirement benefits	$	69,919	$	56,545
Warranty	10,890		9,657
Interest	14,089		2,166
Environmental remediation	8,658		7,554
Rebate	12,588		8,454
Other	64,809		60,164
Total other accrued liabilities – current	$	180,953	$	144,540

Environmental remediation	$	50,791	$	48,819
Management nonqualified deferred compensation plan	22,453		28,514
Long-term portion of accrued income tax liability	22,621		19,337
Minority interest in joint venture	8,456		8,411
Other	12,235		3,157
Total other long-term liabilities	$	116,556	$	108,238

ATK provides product warranties, which entail repair or replacement of non-conforming items, in conjunction with sales of certain products. Estimated costs related to warranties are recorded in the period in which the related product sales occur. The warranty liability recorded at each balance sheet date reflects the estimated liability for warranty coverage for products delivered based on historical information and current trends. The following is a reconciliation of the changes in ATK’s product warranty liability during the quarter and nine months ended December 28, 2008:

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Balance at April 1, 2008	$	9,657
Warranties issued	937
Payments made	(167		)
Changes related to preexisting warranties	284
Balance at June 29, 2008	10,711
Warranties issued	413
Payments made	(119		)
Changes related to preexisting warranties	(238		)
Balance at September 28, 2008	10,767
Warranties issued	427
Payments made	—
Changes related to preexisting warranties	(304		)
Balance at December 28, 2008	$	10,890

8. Long-Term Debt and Interest Rate Swaps

Long-term debt, including the current portion, consisted of the following:

	December 28, 2008		March 31, 2008
Senior Credit Facility dated March 29, 2007:
Term A Loan due 2012	$	275,000	$	275,000
Revolving Credit Facility due 2012	—		—
2.75% Convertible Senior Subordinated Notes due 2011	300,000		300,000
6.75% Senior Subordinated Notes due 2016	400,000		400,000
2.75% Convertible Senior Subordinated Notes due 2024	279,990		280,000
3.00% Convertible Senior Subordinated Notes due 2024	200,000		200,000
Total debt	1,454,990		1,455,000
Less current portion	290,850		—
Long-term debt	$	1,164,140	$	1,455,000

In March 2007, ATK entered into an amended and restated Senior Credit Facility dated March 29, 2007 (the Senior Credit Facility), which is comprised of a Term A Loan of $275,000 and a $500,000 Revolving Credit Facility, both of which mature in 2012. The Term A Loan is subject to quarterly principal payments of $0 in the year ending March 31, 2009; $3,438 in the years ending March 31, 2010 and 2011; and $6,875 in the year ending March 31, 2012; with the remaining balance due on March 29, 2012. Substantially all domestic, tangible and intangible assets of ATK and its subsidiaries are pledged as collateral under the Senior Credit Facility. Borrowings under the Senior Credit Facility bear interest at a rate equal to the sum of a base rate (currently equal to the bank’s prime rate) or a Eurodollar rate plus an applicable margin, which is based on ATK’s senior secured credit ratings. The weighted average interest rate for the Term A Loan was 1.39% at December 28, 2008. The annual commitment fee in effect on the unused portion of ATK’s Revolving Credit Facility was 0.20% at December 28, 2008. As of December 28, 2008, ATK had no borrowings outstanding against its $500,000 revolving credit facility and had outstanding letters of credit of $93,817, which reduced amounts available on the revolving facility to $406,183. ATK’s weighted average interest rate on short-term borrowings was 4.00% and 4.99% during the quarter and nine months ended December 28, 2008, respectively, and 6.28% and 6.59% during the quarter and nine months ended December 30, 2007, respectively. Debt issuance costs of approximately $3,100 are being amortized over the term of the Senior Credit Facility.

During March 2006, ATK terminated a $100,000 notional amount interest rate swap, resulting in a cash payout of $2,496. This amount was included in accumulated other comprehensive loss and was amortized to interest expense, at a rate of $936 per year, through November 2008, the original maturity date of the swap.

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transactions; or (3) during the last month prior to maturity. ATK is required to satisfy 100% of the principal amount of these notes solely in cash, with any amounts above the principal amount to be satisfied in cash, common stock, or a combination of cash and common stock, at the sole election of ATK. If certain fundamental changes occur prior to maturity, ATK will in certain circumstances increase the conversion rate by a number of additional shares of common stock or, in lieu thereof, ATK may in certain circumstances elect to adjust the conversion rate and related conversion obligation so that these notes are convertible into shares of the acquiring or surviving company. These contingently issuable shares increased the number of ATK’s diluted shares outstanding during the nine months ended December 28, 2008 by 22,255; and by 477,162 and 266,255, respectively, for the quarter and nine months ended December 30, 2007 because ATK’s average stock price exceeded the conversion price during those periods. There was no impact on the diluted shares outstanding for the quarter ended December 28, 2008 because ATK’s average stock price during the quarter was below the conversion price. Debt issuance costs of approximately $7,200 are being amortized to interest expense over five years. Approximately $100,000 of the net proceeds from the issuance of these notes was used to concurrently repurchase 1,285,200 shares of ATK’s common stock.

In connection with the issuance of the 2.75% Convertible Notes due 2011, ATK purchased, at a cost of $50,850, call options (the Call Options) on its common stock. The Call Options, which become exercisable upon conversion of the related convertible notes, allow ATK to purchase approximately 3.1 million shares of ATK’s common stock and/or cash from the counterparty at an amount equal to the amount of common stock and/or cash related to the excess conversion value that ATK would pay to the holders of the related convertible notes upon conversion. For income tax reporting purposes, the related convertible notes and the Call Options are integrated. This creates an original issue discount for income tax reporting purposes, and therefore the cost of the Call Options will be accounted for as interest expense over the term of the convertible notes for income tax reporting purposes. The associated income tax benefits will be recognized in the period in which the deduction is taken for income tax reporting purposes as an increase in additional paid-in capital (APIC) in stockholders’ equity. In addition, ATK sold warrants (the Warrants) to issue approximately 3.3 million shares of ATK’s common stock at an exercise price of $116.75 per share. The proceeds from the sale of the Warrants totaled $23,220. In accordance with SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities (SFAS No. 133), and Emerging Issues Task Force (EITF) Issue No. 00-19, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock, ATK recorded the net cost of the Call Options and the Warrants of $27,630 in APIC and will not recognize any changes in the fair value of the instruments. On a combined basis, the Call Options and the Warrants are intended to reduce the potential dilution of ATK’s common stock in the event that the 2.75% Convertible Notes due 2011 are converted by effectively increasing the conversion price of these notes from $96.51 to $116.75. The Call Options are anti-dilutive and are therefore excluded from the calculation of diluted shares outstanding. The Warrants will result in additional diluted shares outstanding if ATK’s average common stock price exceeds $116.75. The Call Options and the Warrants are separate and legally distinct instruments that bind ATK and the counterparty and have no binding effect on the holders of the convertible notes.

In fiscal 2006, ATK issued $400,000 aggregate principal amount of 6.75% Senior Subordinated Notes (the 6.75% Notes) that mature on April 1, 2016. These notes are general unsecured obligations. Interest on these notes accrues at a rate of 6.75% per annum and is payable semi-annually on April 1 and October 1 of each year. ATK has the right to redeem some or all of these notes from time to time on or after April 1, 2011, at specified redemption prices. Prior to April 1, 2011, ATK may redeem some or all of these notes at a price equal to 100% of their principal amount plus accrued and unpaid interest to the date of redemption and a specified make-whole premium. In addition, prior to April 1, 2009, ATK may redeem up to 35% of the aggregate principal amount of these notes, at a price equal to 106.75% of their principal amount plus accrued and unpaid interest to the date of redemption, with the proceeds of certain equity offerings. Debt issuance costs related to these notes of approximately $7,700 are being amortized to interest expense over ten years.

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(1) when, during any fiscal quarter, the last reported sale price of ATK stock is greater than or equal to 130% of the conversion price, or $103.68, for at least 20 trading days in the period of 30 consecutive trading days ending on the last trading day of the preceding fiscal quarter; (2) if ATK calls these notes for redemption; or (3) upon the occurrence of certain corporate transactions. The stock price condition was first satisfied during fiscal 2008 and, accordingly, the unamortized debt issuance costs of approximately $3,200, which were previously being amortized through the first redemption date of these notes, were written off. The stock price condition was met during the quarter ended September 28, 2008, and $547 of these notes were converted during the quarter ended December 28, 2008, (settlement occurred in January 2009). The stock price condition was not satisfied during the third quarter of fiscal 2009 or the fourth quarter of fiscal 2008, therefore the remaining principal amount of $199,453 as of December 28, 2008, and $200,000 as of March 31, 2008, was classified as long-term. In fiscal 2005, ATK amended the indenture to require ATK to satisfy up to the principal amount of these notes solely in cash, with any amounts above the principal amount to be satisfied in cash, common stock, or a combination of cash and common stock, at the sole election of ATK. If certain fundamental changes occur on or prior to August 15, 2014, ATK will in certain circumstances increase the conversion rate by a number of additional shares of common stock or, in lieu thereof, ATK may in certain circumstances elect to adjust the conversion rate and related conversion obligation so that these notes are convertible into shares of the acquiring or surviving company. These contingently issuable shares increased the number of ATK’s diluted shares outstanding during the quarter and nine months ended December 28, 2008 by 57,270 and 450,337, respectively; and by 753,608 and 613,003, respectively, for the quarter and nine months ended December 30, 2007, because ATK’s average stock price exceeded the conversion price during those periods.

In fiscal 2004, ATK issued $280,000 aggregate principal amount of 2.75% Convertible Senior Subordinated Notes (the 2.75% Convertible Notes due 2024) that mature on February 15, 2024. Interest on these notes is payable on February 15 and August 15 of each year. Starting with the period beginning on August 20, 2009 and ending on February 14, 2010, and for each of the six-month periods thereafter beginning on February 15, 2010, ATK will pay contingent interest during the applicable interest period if the average trading price of these notes on the five trading days ending on the third day immediately preceding the first day of the applicable interest period equals or exceeds 120% of the principal amount of these notes. The contingent interest payable per note within any applicable interest period will equal an annual rate of 0.30% of the average trading price of a note during the measuring period. The contingent interest feature is treated as an embedded derivative under SFAS No. 133, and the fair value of this feature was insignificant at December 28, 2008 and March 31, 2008. ATK may redeem some or all of these notes in cash at any time on or after August 20, 2009. Holders of these notes may require ATK to repurchase in cash some or all of these notes on August 15, 2009, February 15, 2014, or February 15, 2019. Holders may also convert their 2.75% Convertible Notes at a conversion rate of 12.5843 shares of ATK’s common stock per $1 principal amount of 2.75% Convertible Notes (a conversion price of $79.46 per share) under the following circumstances: (1) when, during any fiscal quarter, the last reported sale price of ATK stock is greater than or equal to 130% of the conversion price, or $103.30, for at least 20 trading days in the period of 30 consecutive trading days ending on the last trading day of the preceding fiscal quarter; (2) if ATK calls these notes for redemption; or (3) upon the occurrence of certain corporate transactions. The stock price condition was first satisfied during fiscal 2008 and, accordingly, the unamortized debt issuance costs of approximately $2,400, which were previously being amortized through the first redemption date of these notes, were written off. The stock price condition was met during the quarter ended September 28, 2008, and $71 of these notes were converted during the quarter ended December 28, 2008, ($10 settled in November 2008 and the remaining $61 settled in January 2009). The stock price condition was not satisfied during the third quarter of fiscal 2009 or the fourth quarter of fiscal 2008. Because the remaining notes can be put to ATK at the option of each holder in August 2009, the remaining principal amount of $279,990 is classified as current as of December 28, 2008. In fiscal 2005, ATK amended the indenture to require ATK to satisfy up to the principal amount of these notes solely in cash, with any amounts above the principal amount to be satisfied in cash, common stock, or a combination of cash and common stock, at the sole election of ATK. These contingently issuable shares increased the number of ATK’s diluted shares outstanding during the quarter and nine months ended December 28, 2008 by 92,805 and 643,099, respectively; and by 1,067,679, and 870,833 shares, respectively, for the quarter and nine months ended December 30, 2007, because ATK’s average stock price exceeded the conversion price during those periods.

The 3.00% Convertible Notes, the 2.75% Convertible Notes due 2024, the 2.75% Convertible Notes due 2011, and the 6.75% Notes rank equal in right of payment with each other and all of ATK’s future senior subordinated indebtedness and are subordinated in right of payment to all existing and future senior indebtedness, including the Senior Credit Facility. The outstanding notes are guaranteed on an unsecured basis, jointly and severally and fully and unconditionally, by substantially all of ATK’s domestic subsidiaries. Subsidiaries of ATK other than the subsidiary guarantors are minor. All of these guarantor subsidiaries are 100% owned by ATK. These guarantees are senior subordinated obligations of the applicable subsidiary guarantors.

The scheduled minimum payments on outstanding long-term debt are as follows:

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Remainder of fiscal 2009	$	608
Fiscal 2010	293,679
Fiscal 2011	13,750
Fiscal 2012	547,500
Fiscal 2013	—
Thereafter	599,453
Total payments	$	1,454,990

Although the 2.75% Convertible Notes due 2024 do not contractually mature until 2024, these notes are classified as current in the consolidated balance sheet and within the “Fiscal 2010” category above because the notes can be put to ATK at the option of each holder in August 2009.

ATK’s total debt (current portion of debt and long-term debt) as a percentage of total capitalization (total debt and stockholders’ equity) was 61% as of December 28, 2008 and 66% as of March 31, 2008.

ATK’s Senior Credit Facility and the indentures governing the 6.75% Notes, the 2.75% Convertible Notes due 2011, the 2.75% Convertible Notes due 2024, and the 3.00% Convertible Notes impose restrictions on ATK, including limitations on its ability to incur additional debt, enter into capital leases, grant liens, pay dividends and make certain other payments, sell assets, or merge or consolidate with or into another entity. In addition, the Senior Credit Facility limits ATK’s ability to enter into sale-and-leaseback transactions. The Senior Credit Facility also requires that ATK meet and maintain specified financial ratios, including a minimum interest coverage ratio and a maximum consolidated leverage ratio. ATK’s ability to comply with these covenants and to meet and maintain the financial ratios may be affected by events beyond its control. Borrowings under the Senior Credit Facility are subject to compliance with these covenants. As of December 28, 2008, ATK was in compliance with the financial covenants.

ATK has limited payment requirements under the Senior Credit Facility over the next few years. ATK’s other debt service requirements consist principally of interest expense on its long-term debt. As discussed above, additional cash may be required to repurchase or convert any or all of the convertible notes under certain circumstances. ATK’s short-term cash requirements for operations are expected to consist mainly of capital expenditures to maintain and expand production facilities and working capital requirements.

Net cash paid for interest totaled $34,155 in the nine months ended December 28, 2008 and $42,024 in the nine months ended December 30, 2007.

Shelf Registration. On March 2, 2006, ATK filed a shelf registration statement with the Securities and Exchange Commission allowing ATK to issue debt and/or equity securities at any time. As of December 28, 2008, ATK has the capacity to issue approximately 48.4 million shares of common stock and 5 million shares of preferred stock.

Interest Rate Swaps

ATK may use interest rate swaps to hedge forecasted interest payments and the risk associated with changing interest rates of long-term debt. ATK did not have any outstanding interest rate swaps as of December 28, 2008 or March 31, 2008.

9. Employee Benefit Plans

	Pension Benefits
	Quarters Ended						Nine Months Ended
Components of Net Periodic Benefit Cost	December 28, 2008			December 30, 2007			December 28, 2008			December 30, 2007
Service cost	$	15,088		$	15,229		$	45,264		$	45,687
Interest cost	34,949			32,488			104,849			97,465
Expected return on plan assets	(46,915		)	(45,536		)	(140,746		)	(136,609		)
Amortization of unrecognized net loss	6,968			10,512			20,904			31,535
Amortization of unrecognized prior service cost	(97		)	(145		)	(292		)	(434		)
Net periodic benefit cost	$	9,993		$	12,548		$	29,979		$	37,644

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	Postretirement Benefits
	Quarters Ended						Nine Months Ended
Components of Net Periodic Benefit Cost	December 28, 2008			December 30, 2007			December 28, 2008			December 30, 2007
Service cost	$	72		$	107		$	215		$	383
Interest cost	2,952			3,023			8,855			9,136
Expected return on plan assets	(944		)	(1,015		)	(2,831		)	(3,031		)
Amortization of unrecognized net loss	664			929			1,992			2,808
Amortization of unrecognized prior service cost	(2,176		)	(2,204		)	(6,528		)	(6,707		)
Net periodic benefit cost before curtailment gain	568			840			1,703			2,589
Curtailment gain	—			(778		)	—			(778		)
Net periodic benefit cost	$	568		$	62		$	1,703		$	1,811

During the nine months ended December 30, 2007, ATK recorded a curtailment gain of $778 to recognize the impact on postretirement benefit (PRB) plans associated with the elimination of future subsidized medical benefits under a negotiated union contract.

Employer Contributions. During the nine months ended December 28, 2008, ATK contributed $1,807 directly to retirees and $9,998 to its other postretirement benefit (PRB) plans. ATK anticipates making additional contributions of approximately $2,252 directly to retirees and approximately $6,036 to its other PRB plans during the remainder of fiscal 2009. ATK does not anticipate making any contributions to its qualified pension plans during the remainder of fiscal 2009.

10. Income Taxes

ATK’s provision for income taxes includes both federal and state income taxes. Income tax provisions for interim periods are based on estimated effective annual income tax rates.

The income tax provisions for the quarters ended December 28, 2008 and December 30, 2007 represent effective tax rates of 37.5% and 36.6%, respectively. The increase in the rate for the quarter ended December 28, 2008 from the prior year period is primarily due to a change in the benefit related to the Domestic Manufacturing Deduction (DMD) and nondeductible losses on life insurance policies related to our nonqualified deferred compensation plans, offset by the extension of the federal research and development (R&D) credit and nonrecurring tax charges.

The income tax provisions for the nine months ended December 28, 2008 and December 30 2007 represent effective tax rates of 37.3% and 36.1%, respectively. The increase in the rate for the nine months ended December 28, 2008 from the prior year period is primarily due to a change in the benefit related to DMD, nondeductible losses on life insurance policies related to our nonqualified deferred compensation plans, and nonrecurring tax charges.

On October 3, 2008 the President signed the Emergency Economic Stabilization Act of 2008 which reinstated the federal R&D credit retroactively from January 1, 2008 through December 31, 2009. The prior period impact of this extension increased EPS by $0.06.

The current quarter’s tax rate was also impacted by the decision to make a pre-payment into our pension plan during fiscal 2010. This increased the amount of tax expense by reducing the current year DMD which reduced EPS by $0.06.

11. Stock-Based Compensation

ATK sponsors four stock-based incentive plans, which are the Alliant Techsystems Inc. 1990 Equity Incentive Plan, the Non-Employee Director Restricted Stock Plan, the 2000 Stock Incentive Plan, and the 2005 Stock Incentive Plan. As of December 28, 2008, ATK has authorized up to 1,532,360 common shares under the 2005 Stock Incentive Plan, of which 440,121 common shares are yet available to be granted. No new grants will be made out of the other three plans.

Total pre-tax stock-based compensation expense recognized during the quarter and nine months ended December 28, 2008 was $5,035 and $14,753, respectively. Total pre-tax stock-based compensation expense recognized during the quarter and nine months ended

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December 30, 2007 was $5,982 and $17,751, respectively. The total income tax benefit recognized in the income statement for share-based compensation during the quarter and nine months ended December 28, 2008 was $1,998 and $5,847, respectively. The total income tax benefit recognized in the income statement for share-based compensation during the quarter and nine months ended December 30, 2007 was $2,384 and $7,072, respectively.

There are three types of awards outstanding under ATK’s stock incentive plans: performance awards, restricted stock, and stock options. ATK issues treasury shares upon the payment of performance awards, grant of restricted stock, or exercise of stock options. As of December 28, 2008, there were up to 532,720 shares reserved for performance awards for key employees. Performance shares are valued at the fair value of ATK stock as of the grant date and expense is recognized based on the number of shares expected to vest under the terms of the award under which they are granted. Of these shares, up to 176,162 shares will become payable only upon achievement of certain financial performance goals, including sales and EPS, for fiscal 2007 through fiscal 2009 period; up to 200,179 shares will become payable only upon achievement of certain financial performance goals, including sales and EPS, for fiscal 2008 through fiscal 2010 period; and up to 156,379 shares will become payable only upon achievement of certain financial performance goals, including sales and EPS, for fiscal 2009 through fiscal 2011 period. In April 2008, 168,821 shares were distributed or deferred into ATK’s non-qualified management deferred compensation plans based upon achievement of a specified performance goal relating to supply chain management savings in fiscal 2008.

Restricted stock issued to non-employee directors and certain key employees totaled 16,392 shares during the nine months ended December 28, 2008. Restricted shares vest over periods ranging from one to five years from the date of award and are valued at the fair value of ATK’s common stock as of the grant date.

Stock options may be granted periodically, with an exercise price equal to the fair market value of ATK’s common stock on the date of grant, and generally vest from one to three years from the date of grant. Since fiscal 2004, options are generally issued with a seven-year term; most grants prior to that had a ten-year term. The weighted average fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model and represents the difference between fair market value on the date of grant and the estimated market value on the expected exercise date. The option pricing model requires ATK to make assumptions. The risk-free rate is based on U.S. Treasury zero-coupon issues with a remaining term that approximates the expected life assumed at the date of grant. Expected volatility is based on the historical volatility of ATK’s stock over the past five years. The expected option life is based on the contractual term of the stock option and expected employee exercise and post-vesting employment termination trends. The fair value of options granted during the nine months ended December 28, 2008 was $24.83. The following assumptions were used for the grants:

	Nine Months Ended December 28, 2008

Risk-free rate	2.96	%
Expected volatility	19.11	%
Expected dividend yield	0	%
Expected option life	5 years

12. Contingencies

Litigation. From time to time, ATK is subject to various legal proceedings, including lawsuits, which arise out of, and are incidental to, the conduct of ATK’s business. ATK does not consider any of such proceedings that are currently pending, individually or in the aggregate, to be material to its business or likely to result in a material adverse effect on its operating results, financial condition, or cash flows.

On or about April 10, 2006, a former ATK employee filed a qui tam complaint in federal court in Utah alleging that ATK knowingly submitted claims for payment to the U.S. government for defective LUU series illuminating flares that failed to conform to certain safety specifications and falsely certified compliance with those specifications. The lawsuit was initially filed under seal. ATK was first informed of the lawsuit by the United States Department of Justice (DOJ) on March 13, 2007. Thereafter, the DOJ intervened in the qui tam action and filed an amended complaint on November 2, 2007. On May 29, 2008, ATK filed its answer to the complaint. The DOJ subsequently filed a motion to strike the affirmative defenses set forth in ATK’s answer. On July 14, 2008, ATK filed its opposition to the motion to strike. On October 16, 2008, the court granted the motion in part and denied it in part. Discovery is now underway in the case.

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ATK denies any allegations of improper conduct. Based on what is known to ATK about the subject matter of the complaint, ATK does not believe that it has violated any law or regulation and believes it has valid defenses to all allegations of improper conduct. Although it is not possible at this time to predict the outcome of the litigation, ATK believes, based on all available information, that the outcome will not have a material adverse effect on its operating results, financial condition or cash flows. Some potential, however, does remain for an adverse judgment that could be material to ATK’s financial position, results of operations, or cash flows. As a result of the uncertainty regarding the outcome of this matter, no provision has been made in the financial statements with respect to this contingent liability.

U.S. Government Investigations. ATK is also subject to U.S. Government investigations from which civil, criminal, or administrative proceedings could result. Such proceedings could involve claims by the U.S. Government for fines, penalties, compensatory and treble damages, restitution, and/or forfeitures. Under government regulations, a company, or one or more of its operating divisions or subdivisions, can also be suspended or debarred from government contracts, or lose its export privileges, based on the results of investigations. ATK believes, based upon all available information, that the outcome of any such pending government investigations will not have a material adverse effect on its operating results, financial condition, or cash flows.

Environmental Liabilities. ATK’s operations and ownership or use of real property are subject to a number of federal, state, and local environmental laws and regulations, including those for discharge of hazardous materials, remediation of contaminated sites, and restoration of damage to the environment. At certain sites that ATK owns or operates or formerly owned or operated, there is known or potential contamination that ATK is required to investigate or remediate. ATK could incur substantial costs, including remediation costs, resource restoration costs, fines, and penalties, or third-party property damage or personal injury claims, as a result of liabilities associated with past practices or violations of environmental laws or non-compliance with environmental permits.

The liability for environmental remediation represents management’s best estimate of the present value of the probable and reasonably estimable costs related to known remediation obligations. The receivable represents the present value of the amount that ATK expects to recover, as discussed below. Both the liability and receivable have been discounted to reflect the present value of the expected future cash flows, using a discount rate, net of estimated inflation, of 1.00% and 2.50% as of December 28, 2008 and March 31, 2008, respectively. The following is a summary of the amounts recorded for environmental remediation:

	December 28, 2008						March 31, 2008
	Liability			Receivable			Liability			Receivable
Amounts (payable) receivable	$	(63,302	)	$	38,616		$	(64,204	)	$	39,253
Unamortized discount	3,853			(1,983		)	7,831			(3,811		)
Present value amounts (payable) receivable	$	(59,449	)	$	36,633		$	(56,373	)	$	35,442

Amounts expected to be paid or received in periods more than one year from the balance sheet date are classified as non-current. Of the $59,449 discounted liability as of December 28, 2008, $8,658 was recorded within other current liabilities and $50,791 was recorded within other long-term liabilities. Of the $36,633 discounted receivable, ATK recorded $6,881 within other current assets and $29,752 within other non-current assets. As of December 28, 2008, the estimated discounted range of reasonably possible costs of environmental remediation was $59,449 to $91,504.

ATK expects that a portion of its environmental compliance and remediation costs will be recoverable under U.S. Government contracts. Some of the remediation costs that are not recoverable from the U.S. Government that are associated with facilities purchased in a business acquisition may be covered by various indemnification agreements, as described below.

· As part of its acquisition of the Hercules Aerospace Company in fiscal 1995, ATK assumed responsibility for environmental compliance at the facilities acquired from Hercules (the Hercules Facilities). ATK believes that a portion of the compliance and remediation costs associated with the Hercules Facilities will be recoverable under U.S. Government contracts, and that those environmental remediation costs not recoverable under these contracts will be covered by Hercules Incorporated (Hercules) under environmental agreements entered into in connection with the Hercules acquisition. Under these agreements, Hercules has agreed to indemnify ATK for environmental conditions relating to releases or hazardous waste activities occurring prior to ATK’s purchase of the Hercules Facilities; fines relating to pre-acquisition environmental compliance; and environmental claims arising out of breaches of Hercules’s representations and warranties. Hercules is not required to indemnify ATK for any individual claims below $50. Hercules is obligated to indemnify ATK for the lowest cost response of remediation required at the

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facility that is acceptable to the applicable regulatory agencies. ATK is not responsible for conducting any remedial activities with respect to the Kenvil, NJ facility or the Clearwater, FL facility. In accordance with its agreement with Hercules, ATK notified Hercules of all known contamination on non-federal lands on or before March 31, 2000 and on federal lands on or before March 31, 2005.

· ATK generally assumed responsibility for environmental compliance at the Thiokol Facilities acquired from Alcoa Inc. in fiscal 2002. While ATK expects that a portion of the compliance and remediation costs associated with the acquired Thiokol Facilities will be recoverable under U.S. Government contracts, ATK has recorded an accrual to cover those environmental remediation costs at these facilities that will not be recovered through U.S. Government contracts. In accordance with its agreement with Alcoa, ATK notified Alcoa of all known environmental remediation issues as of January 30, 2004. Of these known issues, ATK is responsible for any costs not recovered through U.S. Government contracts at Thiokol Facilities up to $29,000, ATK and Alcoa have agreed to split evenly any amounts between $29,000 and $49,000, and ATK is responsible for any payments in excess of $49,000.

· With respect to the commercial products business’ facilities purchased from Blount in fiscal 2002, Blount has agreed to indemnify ATK for certain compliance and remediation liabilities, to the extent those liabilities are related to pre-closing environmental conditions at or related to these facilities. Some other remediation costs are expected to be paid directly by a third party pursuant to an existing indemnification agreement with Blount. Blount’s indemnification obligations relating to environmental matters, which extended through December 7, 2006, are capped at $30,000, less any other indemnification payments made for breaches of representations and warranties. The third party’s obligations, which extended through November 4, 2007, are capped at approximately $125,000, less payments previously made.

ATK cannot ensure that the U.S. Government, Hercules, Alcoa, Blount, or other third parties will reimburse it for any particular environmental costs or reimburse ATK in a timely manner or that any claims for indemnification will not be disputed. U.S. Government reimbursements for cleanups are financed out of a particular agency’s operating budget and the ability of a particular governmental agency to make timely reimbursements for cleanup costs will be subject to national budgetary constraints. ATK’s failure to obtain full or timely reimbursement from the U.S. Government, Hercules, Alcoa, Blount, or other third parties could have a material adverse effect on its operating results, financial condition, or cash flows. While ATK has environmental management programs in place to mitigate these risks, and environmental laws and regulations have not had a material adverse effect on ATK’s operating results, financial condition, or cash flows in the past, it is difficult to predict whether they will have a material impact in the future.

Other Contingencies. ATK is also subject to a number of other potential risks and contingencies. These risks and contingencies are described in Item 1A of ATK’s Annual Report on Form 10-K for the fiscal year ended March 31, 2008 and in Item 1A of this Form 10-Q for the quarter ended December 28, 2008.

13. Share Repurchases

On January 31, 2006, ATK’s Board of Directors authorized the repurchase of 5,000,000 shares through January 31, 2008. In February and March 2006, ATK repurchased 1,315,104 shares for $100,000. During fiscal 2007, ATK repurchased 2,585,200 shares for $201,880. During fiscal 2008, ATK repurchased 942,200 shares for $100,068. The Board’s authorization expired on January 31, 2008. On August 5, 2008, ATK’s Board authorized the repurchase of up to an additional 5,000,000 shares. The Board has determined that the repurchase program will serve primarily to offset dilution from the Company’s employee and director benefit compensation programs, but it may also be used for other corporate purposes, as determined by the Board. During the quarter ended September 28, 2008, ATK repurchased 299,956 shares for $31,600. During the quarter ended December 28, 2008, ATK repurchased no additional shares. As of December 28, 2008 there were 4,700,044 remaining shares authorized to be repurchased.

14. Operating Segment Information

During the quarter ended June 29, 2008, ATK realigned its business operations. As a result of this realignment, ATK combined the Space division of ATK Mission Systems with ATK Launch Systems into a single group now known as ATK Space Systems. Following this realignment, ATK has three segments: ATK Armament Systems, ATK Mission Systems, and ATK Space Systems. The realignment is reflected in the information contained in this report.

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· ATK Armament Systems, which generated 39% of ATK’s external sales in the nine months ended December 28, 2008, develops and produces military ammunition and gun systems; commercial products; and propellant and energetic materials. It also operates the U.S. Army ammunition plants in Independence, Missouri and Radford, Virginia.

· ATK Mission Systems, which generated 25% of ATK’s external sales in the nine months ended December 28, 2008, operates in two business lanes, Weapon Systems and Aerospace Systems, across the following market areas: large caliber direct fires, force protection, precision guided munitions, missiles, propulsion, missile defense, fuzes and warheads, composites, special mission aircraft, electronic warfare, military aircraft structures, commercial aircraft structures and launch structures.

· ATK Space Systems, which generated 36% of ATK’s external sales in the nine months ended December 28, 2008, produces rocket motor systems for human and cargo launch vehicles, conventional and strategic missiles, missile defense interceptors, small and micro-satellites, satellite components, structures, and subsystems, lightweight space deployables and solar arrays, and provides engineering and technical services. Other products include ordnance, such as decoy and illuminating flares.

The military small-caliber ammunition contract, which is reported within ATK Armament Systems, contributed approximately 13% and 12% of total external sales during the nine months ended December 28, 2008 and December 30, 2007, respectively.

The following summarizes ATK’s results by operating segment:

	Quarters Ended						Nine Months Ended
	December 28, 2008			December 30, 2007			December 28, 2008			December 30, 2007
Sales to external customers:
ATK Armament Systems	$	438,167		$	381,313		$	1,302,603		$	1,071,512
ATK Mission Systems	285,336			279,650			842,381			809,688
ATK Space Systems	385,947			393,902			1,181,282			1,161,382
Total external sales	1,109,450			1,054,865			3,326,266			3,042,582
Intercompany sales:
ATK Armament Systems	6,622			4,364			13,950			11,550
ATK Mission Systems	38,978			37,276			130,532			109,818
ATK Space Systems	3,139			3,883			8,387			14,469
Eliminations	(48,739		)	(45,523		)	(152,869		)	(135,837		)
Total intercompany sales	—			—			—			—
Total sales	$	1,109,450		$	1,054,865		$	3,326,266		$	3,042,582

Income before interest, income taxes, and minority interest:
ATK Armament Systems	$	43,695		$	37,261		$	130,824		$	98,320
ATK Mission Systems	35,802			30,684			104,421			88,016
ATK Space Systems	44,303			49,299			128,527			148,624
Corporate	(4,516		)	(6,688		)	(15,511		)	(17,825		)
Total income before interest, income taxes, and minority interest	$	119,284		$	110,556		$	348,261		$	317,135

Certain administrative functions are primarily managed by ATK at the corporate headquarters (“Corporate”). Some examples of such functions are human resources, pension and postretirement benefits, corporate accounting, legal, tax, and treasury. Significant assets and liabilities managed at Corporate include those associated with debt, pension and postretirement benefits, environmental liabilities, and income taxes. Pension and postretirement benefit expenses are allocated to each segment based on relative headcount and types of benefits offered in each respective segment. Environmental expenses are allocated to each segment based on the origin of the underlying environmental cost. Transactions between segments are recorded at the segment level, consistent with ATK’s financial accounting policies. Intercompany balances and transactions involving different segments are eliminated at ATK’s consolidated financial statements level. These eliminations are shown above in “Corporate” and were $6,228 and $18,766 for the quarter and nine months ended December 28, 2008, respectively, and $5,154 and $16,247 for the quarter and nine months ended December 30, 2007, respectively.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(Dollar amounts in thousands except share and per share data and unless otherwise indicated)

Forward-Looking Information is Subject to Risk and Uncertainty

Some of the statements made and information contained in this report, excluding historical information, are “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements give our current expectations or forecasts of future events. Words such as “may,” “will,” “expected,” “intend,” “estimate,” “anticipate,” “believe,” “project,” or “continue,” and similar expressions are used to identify forward-looking statements. From time to time, ATK also may provide oral or written forward-looking statements in other materials released to the public. Any or all forward-looking statements in this report and in any public statements ATK makes could be materially different. They can be affected by assumptions used or by known or unknown risks or uncertainties. Consequently, no forward-looking statements can be guaranteed. Actual results may vary materially. You are cautioned not to place undue reliance on any forward-looking statements. You should also understand that it is not possible to predict or identify all such factors and should not consider the following list to be a complete statement of all potential risks and uncertainties. Any change in the following factors may impact the achievement of results:

· reductions or changes in NASA or U.S. Government military spending and budgetary policies and sourcing strategy,

· increases in costs, which ATK may not be able to react to due to the nature of certain contracts or for other reasons,

· the potential termination of U.S. Government contracts,

· government laws and other rules and regulations applicable to ATK, such as procurement and import-export control,

· the novation of U.S. Government contracts,

· other risks associated with U.S. Government contracts that might expose ATK to adverse consequences,

· changes in cost estimates and/or timing of programs,

· costs of servicing ATK’s debt, including cash requirements and interest rate fluctuations,

· intense competition,

· performance of ATK’s subcontractors,

· supply, availability, and costs of raw materials and components, including commodity price fluctuations,

· development of key technologies and retention of a qualified workforce,

· fires or explosions at any of ATK’s facilities,

· environmental laws that govern past practices and rules and regulations, noncompliance with which may expose ATK to adverse consequences,

· actual pension asset returns and assumptions regarding future returns, discount rates, service costs, mortality rates, and health care cost trend rates,

· capital market volatility and corresponding assumptions related to ATK’s capital structure such as share count and interest rates,

· risks associated with diversification into new markets,

· impacts of financial market disruptions or volatility to ATK’s customers and vendors,

· greater risk associated with international business,

· results of acquisitions,

· costs incurred for pursuits and proposed acquisitions that have not yet or may not close, and

· unanticipated changes in the tax provision or exposure to additional tax liabilities.

This list of factors is not exhaustive and new factors may emerge or changes to the foregoing factors may occur that would impact ATK’s business. ATK undertakes no obligation to update any forward-looking statements. A more detailed description of risk factors can be found in Item 1A, Risk Factors, of ATK’s Annual Report on Form 10-K for the fiscal year ended March 31, 2008 and in Item 1A of this Form 10-Q for the quarter ended December 28, 2008. Additional information regarding these factors may be contained in ATK’s subsequent filings with the Securities and Exchange Commission, including Forms 8-K.

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Overview

ATK is a supplier of aerospace and defense products to the U.S. Government, allied nations, and prime contractors. ATK is also a supplier of ammunition and related accessories to law enforcement agencies and commercial customers. ATK is headquartered in Minneapolis, Minnesota and has operating locations throughout the United States.

The majority of ATK’s sales are recognized as costs are incurred. ATK’s customers pay ATK cash based on costs incurred and profit earned, upon achievement of program milestones, or upon delivery of the product.

As a supplier to the U.S. aerospace and defense industry, ATK is dependent on funding levels of the U.S. Department of Defense (DoD) and NASA. The U.S. defense industry has experienced significant changes over the past few years. During the 1990s, the DoD budget declined, but that trend has reversed during the 2000s due to continuing geopolitical uncertainties. While the DoD’s budget for procurement and research, development, test, and evaluation continues to grow each year, the degree of future growth is not known and it may slow or even contract. However, ATK believes it is well positioned in this budget environment to maintain or even increase its relative participation in the DoD budget, as it derives the majority of its DoD sales from products that are consumed (and then reprocured) in both tactical and training operations. ATK anticipates that, to the extent that future budget pressures mount, the majority of budget cuts would come in the areas where the DoD is developing new “platforms” - the vehicles used to deliver the weapons, including ships, aircraft, tanks and helicopters. Much of ATK’s product portfolio is “platform independent,” meaning it can be used in the legacy platforms of today, as well as in the platforms being developed for future use. Therefore, if and when these future platform development programs come under budget pressures, ATK believes that it has limited exposure, relative to its industry peers.

ATK management believes that the key to ATK’s continued success is to focus on performance, simplicity, and affordability, and that ATK’s future lies in being a leading provider of advanced weapon and space systems. ATK is positioning itself where management believes there will be continued strong defense funding, even as pressures on procurement and research and development accounts mount. ATK will concentrate on developing the systems that will extend the life and improve the capability of existing platforms. ATK anticipates budget pressures will increasingly drive the life extension of platforms such as ships, aircrafts, and main battle tanks. ATK’s transformational weapons such as its Advanced Anti-Radiation Guided Missile and the Precision Guidance Kit are aimed squarely at this growing market. At the same time, ATK believes it is on the leading edge of technologies essential to “generation after next” weapons and platforms - advanced sensor/seeker integration, directed energy, weapon data links, high-speed, long-range projectiles, thermal-resistant materials, reactive materials, and scramjet engines are examples.

Critical Accounting Policies

ATK’s significant accounting policies are described in Note 1 to the consolidated financial statements included in ATK’s Annual Report on Form 10-K for the year ended March 31, 2008 (fiscal 2008). The accounting policies used in preparing ATK’s interim fiscal 2009 consolidated financial statements are the same as those described in ATK’s Annual Report, except as described in this report in Note 2, New Accounting Pronouncements, to the unaudited condensed consolidated financial statements.

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In preparing the consolidated financial statements, ATK follows accounting principles generally accepted in the United States. The preparation of these financial statements requires ATK to make estimates and judgments that affect the reported amounts of assets, liabilities, sales and expenses, and related disclosure of contingent assets and liabilities. ATK re-evaluates its estimates on an on-going basis. ATK’s estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.

ATK believes its critical accounting policies are those related to:

· revenue recognition,

· environmental remediation and compliance,

· employee benefit plans,

· income taxes, and

· acquisitions and goodwill.

More information on these policies can be found in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of ATK’s Annual Report on Form 10-K for the fiscal year ended March 31, 2008.

Results of Operations

Acquisitions

There were no material acquisitions during the quarter or nine months ended December 28, 2008.

ATK used the purchase method of accounting to account for the Swales acquisition and, accordingly, the results of Swales are included in ATK’s consolidated financial statements since the date of acquisition.

Sales

The following is a summary of each operating segment’s external sales:

	Quarters Ended									Nine Months Ended
	December 28, 2008		December 30, 2007		$ Change			% Change		December 28, 2008		December 30, 2007		$ Change		% Change

ATK Armament Systems	$	438,167	$	381,313	$	56,854		14.9	%	$	1,302,603	$	1,071,512	$	231,091	21.6	%
ATK Mission Systems	285,336		279,650		5,686			2.0	%	842,381		809,688		32,693		4.0	%
ATK Space Systems	385,947		393,902		(7,955		)	(2.0	)%	1,181,282		1,161,382		19,900		1.7	%
Total external sales	$	1,109,450	$	1,054,865	$	54,585		5.2	%	$	3,326,266	$	3,042,582	$	283,684	9.3	%

Quarter.

ATK Armament Systems. The increase in sales was driven by:

· an increase of $22,500 in commercial products due to an increase in volume of law enforcement and international sales,

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· a $20,000 increase in propellant and energetic materials, and

· a $10,300 increase in medium-caliber ammunition primarily due to higher volume.

ATK Mission Systems. The increase in sales was driven by:

· an increase of $17,600 due to higher volume in aircraft integration across numerous programs as well as the new contract for the attitude control motor on the Orion Crew Exploration Vehicle (CEV) launch abort system.

These increases were partially offset by:

· a $17,900 decrease in defense electronics and technical services due to reduced volume across numerous programs.

ATK Space Systems. The decrease in sales was driven by:

· a decrease in Minuteman volume of $20,100 due to the contract nearing successful completion, and

· a $12,400 decrease in Spacecraft Systems due to performance issues, schedule delays, and scheduled contract completions.

These decreases were partially offset by an increase of $27,200 on the ARES I and Space Shuttle programs.

Nine Months.

The increase in sales was due to organic growth as well as the acquisition of Swales late in the first quarter of fiscal 2008, as discussed above, which is reported within ATK Space Systems.

ATK Armament Systems. The increase in sales was driven by:

· a $109,400 increase in medium-caliber systems due to higher volume across multiple ammunition programs as well as higher demand in medium-caliber guns,

· an increase of $87,400 in commercial products due to an increase in volume of law enforcement, international, and government sales,

· a $19,800 increase in military small-caliber ammunition sales at the Lake City Army Ammunition Plant as a result of continued strong customer requirements, and

· an increase of $19,500 in propellant and energetic materials relating to modernization project sales and MK90.

ATK Mission Systems. The increase in sales was driven by:

· an increase of $29,100 in tactical rocket motors due to higher volume across numerous programs,

· a $23,000 increase due to the new contract for the attitude control motor on the Orion Crew Exploration Vehicle (CEV) launch abort system,

· an increase of $20,000 due to higher volume in aircraft integration, and

· a new composites program which added $10,400.

These increases were partially offset by:

· a decrease of $18,300 in apertures and radomes due to lower tooling efforts on classified programs over the prior year period,

· a $15,100 decline in technical services due to less volume across all lines of services

· a $12,000 decrease in missiles due to the ramp down of system design and development on the Advanced Anti-Radiation Guided Missile (AARGM) program, and

· a $13,400 decrease resulting from the successful completion of the Shielder Canister program and reduced volume on the Standard Missile-3 program.

ATK Space Systems. The increase in sales was driven by:

· a net increase of $75,600 on ARES I and Space Shuttle programs, and

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· an increase of $33,900 due to the inclusion of Swales which was acquired late in the first quarter of fiscal 2008.

These increases were partially offset by:

· a decrease in Minuteman volume of $33,800 due to the contract nearing successful completion,

· a decrease of $21,500 due to lower customer demand and production delays in decoys and flares,

· a $13,500 decrease in bus structures due to performance issues and schedule delays,

· a decrease in solar arrays of $12,000 as a result of decreased volume and performance issues, and

· a $9,800 decrease on the Launch Abort System due to funding limitations.

Gross Profit

	Quarters Ended										Nine Months Ended
	December 28, 2008		As a % of Sales		December 30, 2007		As a % of Sales		Change		December 28, 2008		As a % of Sales		December 30, 2007		As a % of Sales		Change

Gross profit	$	229,584	20.7	%	$	212,664	20.2	%	$	16,920	$	689,087	20.7	%	$	603,223	19.8	%	$	85,864

Quarter and Nine Months. The increase in gross profit was driven by higher sales and increased operating efficiencies.

Operating Expenses

	Quarters Ended											Nine Months Ended
	December 28, 2008		As a % of Sales		December 30, 2007		As a % of Sales		Change			December 28, 2008		As a % of Sales		December 30, 2007		As a % of Sales		Change

Research and development	$	16,105	1.5	%	$	14,360	1.4	%	$	1,745		$	63,245	1.9	%	$	44,368	1.5	%	$	18,877
Selling	39,584		3.6	%	31,639		3.0	%	7,945			117,392		3.5	%	92,430		3.0	%	24,962
General and administrative	54,611		4.9	%	56,109		5.3	%	(1,498		)	160,189		4.8	%	149,290		4.9	%	10,899
Total	$	110,300	10.0	%	$	102,108	9.7	%	$	8,192		$	340,826	10.2	%	$	286,088	9.4	%	$	54,738

Operating expenses for the quarter and nine months increased primarily due to higher selling expenses consistent with higher sales over the prior year period, as well as increased program proposal efforts within ATK Mission Systems and ATK Space Systems. Research and development expenses were up due to increased spending on major launch vehicle programs within ATK Space Systems. General and administrative (G&A) expenses for the quarter decreased primarily due to lower share-based compensation expenses compared to the prior year period. G&A expenses for the nine months increased as a result of increased spending to support increasing sales, partially offset by a decrease related to share-based compensation expense.

Income before Interest, Income Taxes, and Minority Interest

	Quarters Ended									Nine Months Ended
	December 28, 2008			December 30, 2007			Change			December 28, 2008			December 30, 2007			Change

ATK Armament Systems	$	43,695		$	37,261		$	6,434		$	130,824		$	98,320		$	32,504
ATK Mission Systems	35,802			30,684			5,118			104,421			88,016			16,405
ATK Space Systems	44,303			49,299			(4,996		)	128,527			148,624			(20,097		)
Corporate	(4,516		)	(6,688		)	2,172			(15,511		)	(17,825		)	2,314
Total	$	119,284		$	110,556		$	8,728		$	348,261		$	317,135		$	31,126

The increase in income before interest, income taxes, and minority interest was due to higher sales as well as program-related changes within the operating segments as described below.

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Quarter.

ATK Armament Systems. The increase primarily relates to higher overall sales volume and efficiencies within medium caliber ammunition.

ATK Mission Systems. The increase was primarily driven by improved program performance on aircraft integration, large caliber direct fires, and missile defense, partially offset by lower sales volume on the AAR-47 missile warning system.

ATK Space Systems. The decrease was primarily driven by lower sales and lower profit in the Spacecraft Structures business, along with the favorable resolution of an overhead rate matter in the comparable period of the prior year, partially offset by increased profit on the Ares I and Space Shuttle programs.

Corporate. The net expense of Corporate primarily reflects expenses incurred for administrative functions that are performed centrally at the corporate headquarters, and the elimination of intercompany profits.

Nine Months.

ATK Armament Systems. The increase primarily relates to higher overall sales volume as well as improved margins in commercial products and medium-caliber guns and ammunition programs.

ATK Mission Systems. The increase was primarily driven by higher sales within aircraft integration, tactical rocket motors, space launch vehicles, and space stage motors, partially offset by margin declines within force protection and fuze operations due to technical issues on the FMU-139 bomb fuze program, as well as lower sales volume on the AAR-47 missile warning system..

ATK Space Systems. The decrease was primarily driven by performance issues and schedule delays in the Spacecraft Structures business. These items were partially offset by higher sales volume.

Net Interest Expense

Quarter.

Net interest expense for the quarter ended December 28, 2008 was $15,376, a decrease of $2,977 compared to $18,353 in the comparable quarter of fiscal 2008 primarily due to a decrease in the average borrowing rate and average outstanding debt balance.

Nine Months.

Net interest expense for the nine months ended December 28, 2008 was $48,336, a decrease of $14,669 compared to $63,005 in the comparable quarter of fiscal 2008 primarily due to the accelerated noncash write-off of $5,600 of debt issuance costs which was the result of the 3.00% Convertible Senior Subordinated Notes and the 2.75% Convertible Senior Subordinated Notes due 2024 becoming convertible in the second quarter of fiscal 2008 as well as a decrease in the average borrowing rate and average outstanding debt balance.

As discussed in Note 2, New Accounting Pronouncements, to the unaudited condensed consolidated financial statements, the Financial Accounting Standards Board (FASB) issued FASB Staff Position (FSP) No. APB 14-1, Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement) (FSP No. APB 14-1). The provisions of this FSP apply to ATK’s $200,000 aggregate principal amount of 3.00% Convertible Notes, the $280,000 aggregate principal amount of 2.75% Convertible Notes due 2024, and the $300,000 aggregate principal amount of 2.75% Convertible Notes due 2011, discussed in Note 8, Long-Term Debt and Interest Rate Swaps. This FSP is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years (ATK’s fiscal 2010), and shall be applied retrospectively to all periods presented. Early adoption is not permitted. ATK estimates that adoption of the FSP will result in an increase to fiscal 2005 through fiscal 2009 non-cash interest expense in the range of $9,300 to $23,800 per year. The impact to fiscal 2010 non-cash interest expense is expected to be an increase of approximately $19,900 with a declining impact in future fiscal years.

Income Tax Provision

	Quarters Ended										Nine Months Ended
	December 28, 2008		Effective Rate		December 30, 2007		Effective Rate		Change		December 28, 2008		Effective Rate		December 30, 2007		Effective Rate		Change

Income tax provision	$	38,947	37.5	%	$	33,716	36.6	%	$	5,231	$	112,009	37.3	%	$	91,800	36.1	%	$	20,209

ATK’s provision for income taxes includes both federal and state income taxes. Income tax provisions for interim periods are based on estimated effective annual income tax rates.

Quarter.

Nine Months.

The income tax provisions for the nine months ended December 28, 2008 and December 30, 2007 represent effective tax rates of 37.3% and 36.1%, respectively. The increase in the rate for the nine months ended December 28, 2008 from the prior year period is primarily due to a change in the benefit related to DMD, nondeductible losses on the life insurance policies related to our nonqualified deferred compensation plans, and nonrecurring tax charges.

For the Quarter and Nine Months

The tax rate was also impacted by the decision to make a pre-payment into ATK’s pension plan during fiscal 2010. This increased the amount of tax expense by reducing the current year DMD which reduced EPS by $0.06.

Minority Interest

The minority interest in each period represents the minority owners’ portion of the income of a joint venture in which ATK is the primary owner. This joint venture is consolidated into ATK’s financial statements.

Net Income

Quarter.

Net income for the quarter ended December 28, 2008 was $65,022, an increase of $6,692 compared to $58,330 in the comparable period of fiscal 2008. This increase was due to an increase of $16,920 in gross profit and a decrease in net interest expense of $2,977, partially offset by increases in operating expenses of $8,192, and income tax expense of $5,231.

Nine Months.

Net income for the nine months ended December 28, 2008 was $187,871, an increase of $25,962 compared to $161,909 in the comparable period of fiscal 2008. This increase was due to an increase of $85,864 in gross profit and a decrease in net interest expense of $14,669, partially offset by increases in operating expenses of $54,738 and income tax expense of $20,209.

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LIQUIDITY AND CAPITAL RESOURCES

Cash Flows

	Nine Months Ended
	December 28, 2008			December 30, 2007			Change

Cash flows provided by operating activities	$	157,514		$	197,315		$	(39,801	)
Cash flows used for investing activities	(93,423		)	(164,862		)	71,439
Cash flows used for financing activities	(21,772		)	(21,883		)	111
Net cash flows	$	42,319		$	10,570		$	31,749

Cash provided by operating activities for the nine months ended December 28, 2008 totaled $157,514, compared to $197,315 provided in the comparable period of the prior year. The decrease was primarily due to a $18,058 increase in cash used for working capital (defined as net receivables plus net inventories less accounts payable less contract advances and allowances) as a result of higher receivables consistent with higher sales and timing of receivables, as well as a reduction in accounts payable due to timing of payments to vendors. Cash paid for income taxes also increased $81,808 due to increased income and timing of payments. These items were partially offset by an increase of $25,962 in net income.

Cash used for investing activities totaled $93,423, a decrease of $71,439 compared to $164,862 used in the comparable period of the prior year primarily as a result of the acquisition of Swales for $101,195 during fiscal 2008, as discussed above. This decrease was partially offset by an increase in capital expenditures of $16,393 primarily due to increased capital expenditures to support business growth, along with $6,049 in additional contingent consideration paid relating to the 2003 acquisition of assets of Science and Applied Technology, Inc.

Cash used for financing activities totaled $21,772, a decrease of $111 compared to $21,883 provided in the comparable period of the prior year. The decrease was driven by a $68,459 decrease in cash paid for the repurchase of treasury shares, the absence of a $24,000 borrowing on the Company’s line of credit in fiscal 2009 and a reduction in proceeds from employee stock compensation plans due to a reduction in stock options exercised. There were no cash overdrafts at December 28, 2008 compared to an increase in the comparable prior year period of $32,200 due to the timing of payments.

ATK’s principal sources of liquidity continue to be cash generated by operations and our borrowings under credit facilities. Based on ATK’s current financial condition, management believes that our cash position, combined with anticipated generation of cash flow and the availability of funding, if needed, under our revolving credit facilities, will be adequate to fund future growth as well as to service our currently anticipated long-term debt and pension obligations, make capital expenditures, and fund any share repurchases over the next 12 months.

Benefit Plan Contributions

During the nine months ended December 28, 2008, ATK contributed $1,807 directly to retirees and $9,998 to its other postretirement benefit (PRB) plans. ATK anticipates making additional contributions of approximately $2,252 directly to retirees and approximately $6,036 to its other PRB plans during the remainder of fiscal 2009. ATK does not anticipate making any contributions to its qualified pension plans during the remainder of fiscal 2009.

ATK anticipates making minimum required contributions of approximately $10,000 and additional discretionary contributions of approximately $150,000 to its qualified pension plans during fiscal 2010.

Debt

Long-term debt, including the current portion, consisted of the following:

	December 28, 2008		March 31, 2008
Senior Credit Facility dated March 29, 2007:
Term A Loan due 2012	$	275,000	$	275,000
Revolving Credit Facility due 2012	—		—
2.75% Convertible Senior Subordinated Notes due 2011	300,000		300,000
6.75% Senior Subordinated Notes due 2016	400,000		400,000
2.75% Convertible Senior Subordinated Notes due 2024	279,990		280,000
3.00% Convertible Senior Subordinated Notes due 2024	200,000		200,000
Total debt	1,454,990		1,455,000
Less current portion	290,850		—
Long-term debt	$	1,164,140	$	1,455,000

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In fiscal 2007, ATK issued $300,000 aggregate principal amount of 2.75% Convertible Senior Subordinated Notes (the 2.75% Convertible Notes due 2011) that mature on September 15, 2011. Interest on these notes is payable on March 15 and September 15 of each year. Holders may convert their notes at a conversion rate of 10.3617 shares of ATK’s common stock per $1 principal amount of these notes (a conversion price of $96.51 per share) under the following circumstances: (1) during any fiscal quarter if the last reported sale price of ATK stock is greater than or equal to 130% of the conversion price, or $125.46, for at least 20 trading days in the period of 30 consecutive trading days ending on the last trading day of the preceding fiscal quarter; (2) upon the occurrence of certain corporate transactions; or (3) during the last month prior to maturity. ATK is required to satisfy 100% of the principal amount of these notes solely in cash, with any amounts above the principal amount to be satisfied in cash, common stock, or a combination of cash and common stock, at the sole election of ATK. If certain fundamental changes occur prior to maturity, ATK will in certain circumstances increase the conversion rate by a number of additional shares of common stock or, in lieu thereof, ATK may in certain circumstances elect to adjust the conversion rate and related conversion obligation so that these notes are convertible into shares of the acquiring or surviving company. These contingently issuable shares increased the number of ATK’s diluted shares outstanding during the nine months ended December 28, 2008, by 22,255, and by 477,162 and 266,255 shares, respectively, for the quarter and nine months ended December 30, 2007 because ATK’s average stock price exceeded the conversion price during those periods. There was no impact on the diluted shares outstanding for the quarter ended December 28, 2008 because ATK’s average stock price during the quarter was below the conversion price. Debt issuance costs of approximately $7,200 are being amortized to interest expense over five years. Approximately $100,000 of the net proceeds from the issuance of these notes was used to concurrently repurchase 1,285,200 shares of ATK’s common stock.

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an exercise price of $116.75 per share. The proceeds from the sale of the Warrants totaled $23,220. In accordance with SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities (SFAS No. 133), and Emerging Issues Task Force (EITF) Issue No. 00-19, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock, ATK recorded the net cost of the Call Options and the Warrants of $27,630 in APIC and will not recognize any changes in the fair value of the instruments. On a combined basis, the Call Options and the Warrants are intended to reduce the potential dilution of ATK’s common stock in the event that the 2.75% Convertible Notes due 2011 are converted by effectively increasing the conversion price of these notes from $96.51 to $116.75. The Call Options are anti-dilutive and are therefore excluded from the calculation of diluted shares outstanding. The Warrants will result in additional diluted shares outstanding if ATK’s average common stock price exceeds $116.75. The Call Options and the Warrants are separate and legally distinct instruments that bind ATK and the counterparty and have no binding effect on the holders of the convertible notes.

In fiscal 2005, ATK issued $200,000 aggregate principal amount of 3.00% Convertible Senior Subordinated Notes (the 3.00% Convertible Notes) that mature on August 15, 2024. Interest on these notes is payable on February 15 and August 15 of each year. Starting with the period beginning on August 20, 2014 and ending on February 14, 2015, and for each of the six-month periods thereafter beginning on February 15, 2015, ATK will pay contingent interest during the applicable interest period if the average trading price of these notes on the five trading days ending on the third day immediately preceding the first day of the applicable interest period equals or exceeds 120% of the principal amount of these notes. The contingent interest payable per note within any applicable interest period will equal an annual rate of 0.30% of the average trading price of a note during the measuring period. The contingent interest feature is treated as an embedded derivative under SFAS No. 133, and the fair value of this feature was insignificant at December 28, 2008 and March 31, 2008. ATK may redeem some or all of these notes in cash at any time on or after August 20, 2014. Holders of these notes may require ATK to repurchase in cash some or all of these notes on August 15, 2014 and August 15, 2019. Holders may also convert their 3.00% Convertible Notes at a conversion rate of 12.5392 shares of ATK’s common stock per $1 principal amount of 3.00% Convertible Notes (a conversion price of $79.75 per share) under the following circumstances: (1) when, during any fiscal quarter, the last reported sale price of ATK stock is greater than or equal to 130% of the conversion price, or $103.68, for at least 20 trading days in the period of 30 consecutive trading days ending on the last trading day of the preceding fiscal quarter; (2) if ATK calls these notes for redemption; or (3) upon the occurrence of certain corporate transactions. The stock price condition was first satisfied during fiscal 2008 and, accordingly, the unamortized debt issuance costs of approximately $3,200, which were previously being amortized through the first redemption date of these notes, were written off. The stock price condition was met during the quarter ended September 28, 2008, and $547 of these notes were converted during the quarter ended December 28, 2008, (settlement occurred in January 2009). The stock price condition was not satisfied during the third quarter of fiscal 2009 or the fourth quarter of fiscal 2008, therefore the remaining principal amount of $199,453 as of December 28, 2008, and $200,000 as of March 31, 2008, was classified as long-term In fiscal 2005, ATK amended the indenture to require ATK to satisfy up to the principal amount of these notes solely in cash, with any amounts above the principal amount to be satisfied in cash, common stock, or a combination of cash and common stock, at the sole election of ATK. If certain fundamental changes occur on or prior to August 15, 2014, ATK will in certain circumstances increase the conversion rate by a number of additional shares of common stock or, in lieu thereof, ATK may in certain circumstances elect to adjust the conversion rate and related conversion obligation so that these notes are convertible into shares of the acquiring or surviving company. These contingently issuable shares increased the number of ATK’s diluted shares outstanding during the quarters and nine months ended December 28, 2008 by 57,270 and 450,337 shares, respectively and by 753,608 and 613,003 shares, respectively, for the quarter and nine months ended December 30, 2007, because ATK’s average stock price exceeded the conversion price during those periods.

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trading price of these notes on the five trading days ending on the third day immediately preceding the first day of the applicable interest period equals or exceeds 120% of the principal amount of these notes. The contingent interest payable per note within any applicable interest period will equal an annual rate of 0.30% of the average trading price of a note during the measuring period. The contingent interest feature is treated as an embedded derivative under SFAS No. 133, and the fair value of this feature was insignificant at December 28, 2008 and March 31, 2008. ATK may redeem some or all of these notes in cash at any time on or after August 20, 2009. Holders of these notes may require ATK to repurchase in cash some or all of these notes on August 15, 2009, February 15, 2014, or February 15, 2019. Holders may also convert their 2.75% Convertible Notes at a conversion rate of 12.5843 shares of ATK’s common stock per $1 principal amount of 2.75% Convertible Notes (a conversion price of $79.46 per share) under the following circumstances: (1) when, during any fiscal quarter, the last reported sale price of ATK stock is greater than or equal to 130% of the conversion price, or $103.30, for at least 20 trading days in the period of 30 consecutive trading days ending on the last trading day of the preceding fiscal quarter; (2) if ATK calls these notes for redemption; or (3) upon the occurrence of certain corporate transactions. The stock price condition was first satisfied during fiscal 2008 and, accordingly, the unamortized debt issuance costs of approximately $2,400, which were previously being amortized through the first redemption date of these notes, were written off. The stock price condition was met during the quarter ended September 28, 2008, and $71 of these notes were converted during the quarter ended December 28, 2008, ($10 settled in November 2008 and the remaining $61 settled in January 2009). The stock price condition was not satisfied during the third quarter of fiscal 2009 or the fourth quarter of fiscal 2008. Because the remaining notes can be put to ATK at the option of each holder in August 2009, the remaining principal amount of $279,990 is classified as current as of December 31, 2008. In fiscal 2005, ATK amended the indenture to require ATK to satisfy up to the principal amount of these notes solely in cash, with any amounts above the principal amount to be satisfied in cash, common stock, or a combination of cash and common stock, at the sole election of ATK. These contingently issuable shares increased the number of ATK’s diluted shares outstanding during the quarter and nine months ended December 28, 2008 by 92,805 and 643,099 shares, respectively, and by 1,067,679 and 870,833 shares, respectively, for the quarter and nine months ended December 30, 2007, because ATK’s average stock price exceeded the conversion price during those periods.

The scheduled minimum payments on outstanding long-term debt are as follows:

Remainder of fiscal 2009	$	608
Fiscal 2010	293,679
Fiscal 2011	13,750
Fiscal 2012	547,500
Fiscal 2013	—
Thereafter	599,453
Total payments	$	1,454,990

Based on ATK’s current financial condition, management believes that cash generated from operating activities, combined with the availability of funding, if needed, under its revolving credit facilities, as well as through future sources of funding, including additional bank financing, accessing equity markets through its existing shelf registration statement (described below) as well as debt markets, will be adequate to fund its current and long-term debt obligations, make capital expenditures, and fund future growth at ATK over the next 12 months.

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As of December 28, 2008, Moody’s Investors Service (Moody’s) had assigned ATK an issuer rating of Ba3, Standard & Poor’s Ratings Services (S&P) had assigned ATK a BB corporate credit rating, and Fitch Ratings (Fitch) had assigned ATK an issuer rating of BB.

Shelf Registration. On March 2, 2006, ATK filed a shelf registration statement with the Securities and Exchange Commission allowing ATK to issue debt and/or equity securities at any time. As of December 28, 2008, ATK has the capacity under the registration statement to issue approximately 48.4 million shares of common stock and 5.0 million shares of preferred stock.

Interest Rate Swaps

Commodity Forward Contracts

ATK periodically uses derivatives to hedge certain commodity price risks. ATK entered into forward contracts for lead during the nine months ended December 28, 2008. The contracts essentially establish a fixed price for the underlying commodity and are designated and qualify as effective cash flow hedges of purchases of the commodity. Ineffectiveness is calculated as the amount by which the change in the fair value of the derivatives exceeds the change in the fair value of the anticipated commodity purchases. The fair value of these contracts is recorded as a current liability and the effective portion is reflected in accumulated OCI in the financial statements. The gains or losses on these contracts are recorded in inventory as the commodities are purchased. The following table summarizes the pre-tax activity in OCI related to these forward contracts during the quarter and nine months ended December 28, 2008:

	Quarter Ended December 28, 2008			Nine Months Ended December 28, 2008
Beginning of period unrealized loss in accumulated OCI	$	(484	)	$	—
Increase (decrease) in fair value of derivatives	(1,060		)	(1,907		)
Losses reclassified from OCI, offsetting the price paid to suppliers	888			1,251
End of period unrealized loss in accumulated OCI	$	(656	)	$	(656	)

Other Contractual Obligations and Commitments

There have been no material changes with respect to the contractual obligations and commitments or off-balance sheet arrangements described in ATK’s Annual Report on Form 10-K for fiscal 2008.

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Contingencies

	December 28, 2008						March 31, 2008
	Liability			Receivable			Liability			Receivable
Amounts (payable) receivable	$	(63,302	)	$	38,616		$	(64,204	)	$	39,253
Unamortized discount	3,853			(1,983		)	7,831			(3,811		)
Present value amounts (payable) receivable	$	(59,449	)	$	36,633		$	(56,373	)	$	35,442

As of December 28, 2008, the estimated discounted range of reasonably possible costs of environmental remediation was $59,449 to $91,504.

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NEW ACCOUNTING PRONOUNCEMENTS

See Note 2 to the unaudited condensed consolidated financial statements in Item 1 of this report.

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INFLATION AND COMMODITY PRICE RISK

In management’s opinion, inflation has not had a significant impact upon the results of ATK’s operations. The selling prices under contracts, the majority of which are long term, generally include estimated costs to be incurred in future periods. These cost projections can generally be negotiated into new buys under fixed-price government contracts, while actual cost increases are recoverable on cost-type contracts.

ATK, however, has been impacted by increases in the prices of raw materials used in production as well as rising oil and energy costs. In particular, the prices of commodity metals, such as lead, steel, zinc, and copper, continue to be volatile. These prices generally impact our small caliber ammunition business.

With respect to ATK’s commercial products business, ATK has improved manufacturing efficiencies and initiated price changes to mitigate the impact of commodity costs. ATK will continue to evaluate the need for future price changes in light of these trends, ATK’s competitive landscape, and its financial results. If commodity costs continue to change, and if ATK is unable to offset these changes with ongoing manufacturing efficiencies and price changes, ATK’s future results from operations and cash flows would be materially impacted.

With respect to ATK’s firm fixed-price contract to supply the DoD’s small-caliber ammunition needs through April 1, 2010, ATK has purchase orders in place for the copper to be used in this contract.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

See discussion within Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, in the section titled “Inflation and Commodity Price Risk”.

There have been no material changes in ATK’s market risk during the quarter or nine months ended December 28, 2008. For additional information, refer to Item 7A of ATK’s Annual Report on Form 10-K for the fiscal year ended March 31, 2008.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As of December 28, 2008, ATK’s Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of the design and operation of ATK’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) and have concluded that ATK’s disclosure controls and procedures are effective in timely alerting them to material information required to be disclosed by ATK in reports that ATK files or submits under the Securities Exchange Act of 1934 and that such information is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. These disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports ATK files or submits is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

During the quarter ended December 28, 2008, there were no changes in ATK’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) that have materially affected, or are reasonably likely to materially affect, ATK’s internal control over financial reporting.

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PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, ATK is subject to various legal proceedings, including lawsuits, which arise out of, and are incidental to, the conduct of ATK’s business. ATK does not consider any of such proceedings that are currently pending, individually or in the aggregate, to be material to its business or likely to result in a material adverse effect on its future operating results, financial condition, or cash flows.

ATK is also subject to U.S. Government investigations from which civil, criminal, or administrative proceedings could result. Such proceedings could involve claims by the U.S. Government for fines, penalties, compensatory and treble damages, restitution, and/or forfeitures. Under government regulations, a company, or one or more of its operating divisions or subdivisions, can also be suspended or debarred from government contracts, or lose its export privileges, based on the results of investigations. ATK believes, based upon all available information, that the outcome of any such pending government investigations will not have a material adverse effect on its operating results, financial condition, or cash flows.

In late 2007, ATK discovered that a photographic development operation at its ATK Launch Systems facility in Magna, Utah had been intermittently discharging wastewater containing silver above regulated levels into a septic system, in violation of ATK’s hazardous waste management permit. ATK immediately ceased discharging the wastewater and notified the State of Utah. In December 2007, ATK provided the State of Utah with a more detailed report of the matter. In response, the State of Utah issued a notice of violation in February 2008 ordering ATK to investigate and, if necessary, mitigate the hazardous waste discharge. In May 2008, the State of Utah issued a proposed stipulation and consent order. Discussions between ATK and the State of Utah resulted in agreement of a penalty of $131,310. In July 2008, the State of Utah issued a final stipulation and consent order settling the matter and sent this consent order for public comment. The public comment period has now been completed and ATK paid the agreed-upon amount in the third quarter of fiscal year 2009.

The description of certain environmental matters contained in Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under the heading “Contingencies,” is incorporated herein by reference.

ITEM 1A. RISK FACTORS

While ATK attempts to identify, manage and mitigate risks and uncertainties associated with its business to the extent practical under the circumstances, some level of risk and uncertainty will always be present. Item 1A of ATK’s Annual Report on Form 10-K for the fiscal year ended March 31, 2008 describes some of the risks and uncertainties associated with its business. These risks and uncertainties have the potential to materially affect ATK’s business, financial condition, results of operations, cash flows, projected results, and future prospects. The discussion below includes updates to those risk factor disclosures.

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Capital market volatility could adversely impact ATK’s earnings because of ATK’s capital structure.

As of December 28, 2008, there was a total of $780 million of ATK’s convertible senior subordinated notes outstanding, subject to the terms of various indentures. The indentures require ATK to satisfy up to the principal amount of these notes solely in cash. In addition, the indentures require ATK to pay any additional amounts above that in cash, common stock, or a combination of cash and common stock at ATK’s discretion. As the price of ATK’s common stock increases above the conversion price of the notes, ATK includes the dilutive impact of the number of shares that would be issued if converted, which decreases earnings per share.

ATK is also exposed to the risk of fluctuation in interest rates. If interest rates increase, ATK may incur increased interest expense on variable interest-rate debt or short-term borrowings, which could have an adverse impact on ATK’s operating results and cash flows.

ATK is exposed to risks associated with diversification into new markets.

ATK’s long-term business growth strategy includes diversification into new markets. Such efforts involve a number of risks, including increased capital expenditures, diversion of management attention, additional credit risk associated with new customers, and costs incurred in competing with companies with strong brand names and market positions. An unfavorable event or trend in any one or more of these factors could adversely affect ATK’s operating results, financial condition, or cash flows.

Financial market disruptions or volatility in the United States and elsewhere may impact ATK’s customers and vendors and create challenges that could have a material adverse effect on ATK’s business and results of operations.

Recent economic turmoil, including the failure of financial service companies and the related liquidity crisis, has caused significant volatility within the capital and credit markets. This disruption could result in decreased economic activity and increased economic uncertainty. As a result, ATK’s commercial customers’ ability to make timely payments may be adversely impacted and there may be an increase in customer and vendor bankruptcies. A prolonged recession could result in a decline in demand within the commercial sector, which may adversely affect ATK’s operating results, financial condition, or cash flows.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

ISSUER PURCHASES OF EQUITY SECURITIES

Period	Total Number of Shares Purchased (1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Program	Maximum Number of Shares that May Yet Be Purchased Under the Program (2)
September 29 – October 26	7,164	$	87.27	—
October 27 – November 23	285	78.87		—
November 24 – December 28, 2008	—	—		—
Fiscal quarter ended December 28, 2008	7,449	$	86.94	—	4,700,044

(1) All of the shares purchased represent shares withheld to pay taxes upon vesting of restricted stock or payment of performance shares earned, which shares were issued under ATK’s stock—based incentive compensation plans.

(2) On August 5, 2008, ATK’s Board authorized the repurchase of 5 million shares. The Board has currently determined that the repurchase program will serve primarily to offset dilution from the Company’s employee and director benefit compensation programs, but it may also be used for other corporate purposes, as determined by the Board. During the quarter ended September 28, 2008, ATK repurchased 299,956 shares for $31.6 million. During the quarter ended December 28, 2008, ATK repurchased no additional shares. As of December 28, 2008, there were 4,700,044 remaining shares authorized to be repurchased.

The discussion of limitations upon the payment of dividends as a result of the indentures governing ATK’s debt instruments as discussed in Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under the heading “Debt,” is incorporated herein by reference.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

PART I — Financial Information
Item 1.	Financial Statements
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 3.	Quantitative and Qualitative Disclosures about Market Risk
Item 4.	Controls and Procedures
PART II — Other Information
Item 1.	Legal Proceedings
Item 1A.	Risk Factors
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds
Item 3.	Defaults Upon Senior Securities
Item 4.	Submission of Matters to a Vote of Security Holders
Item 5.	Other Information
Item 6.	Exhibits
Signatures

Exhibit Number		Description of Exhibit (and document from which incorporated by reference, if applicable)
31.1		Rule 13a-14(a) Certification of Chief Executive Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Rule 13a-14(a) Certification of Chief Financial Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32		Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

		ALLIANT TECHSYSTEMS INC.


Date: January 30, 2009	By:	/s/ John L. Shroyer
	Name:	John L. Shroyer
	Title:	Senior Vice President and Chief Financial Officer
		(On behalf of the Registrant and as principal financial and accounting officer)

I, Daniel J. Murphy, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Alliant Techsystems Inc.,

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

	a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: January 30, 2009	By:	/s/ Daniel J. Murphy
	Name:	Daniel J. Murphy
	Title:	Chief Executive Officer

I, John L. Shroyer, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Alliant Techsystems Inc.,

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

	a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Commodity Forward Contracts

Interest Rate Swaps

Forward-Looking Information is Subject to Risk and Uncertainty

Overview

Operating Expenses

Income before Interest, Income Taxes, and Minority Interest

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Income Tax Provision

Minority Interest

Net Income

Benefit Plan Contributions

Interest Rate Swaps

Commodity Forward Contracts

NEW ACCOUNTING PRONOUNCEMENTS

INFLATION AND COMMODITY PRICE RISK

ITEM 6. EXHIBITS

Senior Vice President and Chief Financial Officer