UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
(AMENDMENT NO. 1)
(Mark One)
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934 for the fiscal year ended December 31, 2001
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from ________ to _________
Commission file number: 1-12001
ALLEGHENY TECHNOLOGIES INCORPORATED
-----------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 25-1792394
-------------------------------------------- -------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification
No.)
1000 Six PPG Place, Pittsburgh, Pennsylvania 15222-5479
-------------------------------------------- -------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (412) 394-2800
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class: Name of Each Exchange On Which Registered:
------------------------------ ------------------------------------------
Common Stock, $0.10 par value New York Stock Exchange
Preferred Stock Purchase
Rights New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None.
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Indicate by check mark if disclosure of delinquent files pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. X
At May 31, 2002, the Registrant had outstanding 80,576,717 shares of its
Common Stock. The aggregate market value of the Registrant's voting stock held
by non-affiliates at this date was approximately $1.3 billion, based on the
closing price per share of Common Stock on this date of $17.56 as reported on
the New York Stock Exchange. Shares of Common Stock known by the Registrant to
be owned beneficially by directors of the Registrant and officers of the
Registrant subject to the reporting requirements of Section 16 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), are not included in the
computation. The Registrant, however, has made no determination that such
persons are "affiliates" within the meaning of Rule 12b-2 under the Exchange
Act.
Documents Incorporated By Reference
Selected portions of the 2001 Annual Report to Stockholders ("2001 Annual
Report") - Part I, Part II and Part IV of this Report.
Selected portions of the Proxy Statement for the 2002 Annual Meeting of
Stockholders - Part III of this Report. The information included in the
Proxy Statement as required by paragraphs (k) and (l) of Item 402 of
Regulation S-K is not incorporated by reference in this Form 10-K/A
(Amendment No. 1).
-2-
EXPLANATORY NOTE: Pursuant to this Form 10-K/A (Amendment No. 1) ("Amendment
No. 1"), Allegheny Technologies Incorporated (the "Registrant" or the
"Company") amends and restates in its entirety "Item 8. Financial Statements
and Supplementary Data" of Part II and "Item 14. Exhibits, Financial
Statement Schedules, and Reports on Form 8-K" of Part IV of its Annual
Report on Form 10-K for the year ended December 31, 2001 ("2001 Form 10-K"),
in order to file in accordance with Rule 15d-21 under the Exchange Act,
financial statements required by Form 11-K for the following plans: (1)
Allegheny Technologies Retirement Savings Plan; (2) 401(k) Savings Account
Plan for Employees of the Washington Plate Plant; (3) Savings and Security
Plan of the Lockport and Waterbury Facilities of Allegheny Ludlum
Corporation; (4) Allegheny Ludlum Corporation Personal Retirement and 401(k)
Savings Account Plan; and (5) The 401(k) Plan.
"Item 8. Financial Statements and Supplementary Data" of Part II of the 2001
Form 10-K is hereby amended and restated in its entirety to read as follows:
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Consolidated Financial Statements and Notes to Consolidated Financial
Statements listed in Item 14(a)(1) are incorporated by reference from pages 25
to 52 of the 2001 Annual Report.
The following financial statements are filed by the Company with respect to
the following plans in accordance with Rule 15d-21 under the Exchange Act:
PLAN PAGE NO.
--------------------------------------------------------------- ---------
Allegheny Technologies Retirement Savings Plan 4
401(k) Savings Account Plan for Employees of the Washington
Plate Plant................................................ 22
Savings and Security Plan of the Lockport and Waterbury
Facilities of Allegheny Ludlum Corporation................. 37
Allegheny Ludlum Corporation Personal Retirement and
401(k) Savings Account Plan................................ 52
The 401(k) Plan............................................ 67
TDY Industries, Inc. Profit Sharing Plan for Certain
Employees of Metalworking Products......................... 82
Allegheny Rodney (ALstrip) Profit Sharing Plan............. 95
-3-
AUDITED FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE
Allegheny Technologies Retirement Savings Plan
Years ended December 31, 2001 and 2000 with Report of Independent Auditors
-4-
Allegheny Technologies Retirement Savings Plan
Audited Financial Statements and Supplemental Schedule
Years ended December 31, 2001 and 2000
CONTENTS
Report of Independent Auditors .............................................6
Audited Financial Statements
Statements of Net Assets Available for Benefits.............................7
Statements of Changes in Net Assets Available for Benefits..................8
Notes to Financial Statements ..............................................9
Supplemental Schedule
Schedule H, Line 4(i)--Schedule of Assets (Held at End of Year).............18
-5-
Report of Independent Auditors
Allegheny Technologies Incorporated
We have audited the accompanying statements of net assets available for benefits
of the Allegheny Technologies Retirement Savings Plan as of December 31, 2001
and 2000, and the related statements of changes in net assets available for
benefits for the years then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 2001 and 2000, and the changes in its net assets available for
benefits for the years then ended, in conformity with accounting principles
generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule of assets
held at end of year as of December 31, 2001 is presented for purposes of
complying with the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974, and is not
a required part of the financial statements. The supplemental schedule has been
subjected to the auditing procedures applied in our audits of the financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ Ernst & Young LLP
Pittsburgh, Pennsylvania
May 24, 2002
-6-
Allegheny Technologies Retirement Savings Plan
Statements of Net Assets Available for Benefits
DECEMBER 31
2001 2000
-----------------------------------
ASSETS
Investments:
Interest-bearing cash $ -- $ 33,984
Interest in Allegheny Ludlum Corporation Master Trusts 152,644,352 155,224,928
Interest in registered investment companies 35,107,084 34,281,115
Interest in common collective trusts 27,709,529 30,817,957
Corporate common stocks 12,847,133 13,871,318
Participant loans 3,942,809 3,876,612
-----------------------------------
Total investments 232,250,907 238,105,914
Contributions receivable -- 29,474
Other receivables 221,582 597,365
Other payables (72,161) (692,659)
Cash overdraft (151,796) (79,119)
-----------------------------------
Net assets available for benefits $ 232,248,532 $ 237,960,975
===================================
See accompanying notes.
-7-
Allegheny Technologies Retirement Savings Plan
Statements of Changes in Net Assets Available for Benefits
YEAR ENDED DECEMBER 31
2001 2000
-----------------------------------
Additions:
Contributions:
Employer $ 9,492,507 $ 8,817,420
Employee 6,989,652 6,606,246
Investment income:
Net loss from interest in Allegheny Ludlum Corporation Master
Trusts (6,112,130) (4,157,630)
Net loss from interest in registered investment companies (5,099,993) (1,068,800)
Net loss from interest in common collective trusts (2,145,405) (77,949)
Interest income 357,733 348,601
Dividend income 504,859 123,114
Net realized/unrealized loss on corporate common stocks (57,789) (2,128,403)
Other 36 2,396
Transfers into Plan 6,356,533 --
-----------------------------------
Total additions 10,286,003 8,464,995
Deductions:
Distributions to participants 15,986,006 19,602,033
Administrative expenses 12,440 3,536
-----------------------------------
Total deductions 15,998,446 19,605,569
-----------------------------------
Net deductions (5,712,443) (11,140,574)
Net assets available for benefits at beginning of year 237,960,975 249,101,549
-----------------------------------
Net assets available for benefits at end of year $ 232,248,532 $ 237,960,975
===================================
See accompanying notes.
-8-
Allegheny Technologies Retirement Savings Plan
Notes to Financial Statements
December 31, 2001
1. SIGNIFICANT ACCOUNTING POLICIES
Investments are valued as follows:
Bank and insurance contracts with varying contract rates and maturity dates
are stated at contract value.
Although it is management's intention to hold the investment contracts in
the Fixed Income Fund until maturity, certain investment contracts provide
for adjustments to contract value for withdrawals made prior to maturity.
All other funds are stated at their net asset value, based on the quoted
market prices of the securities held in such funds on applicable exchanges.
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
that affect the amounts reported in the financial statements and accompanying
notes. Actual results could differ from those estimates.
2. DESCRIPTION OF THE PLAN
The Allegheny Technologies Retirement Savings Plan (the Plan) is a defined
contribution plan and is subject to the provisions of the Employee Retirement
Income Security Act of 1974 (ERISA).
The purpose of the Plan is to provide retirement benefits to eligible employees
through company contributions and to encourage employee thrift by permitting
eligible employees to defer a part of their compensation and contribute such
deferral to the Plan. Participants can defer between 1% and 14%, subject to
Internal Revenue Code limitations, of their eligible wages, including profit
sharing awards, and contribute them to the Plan. Depending on participants'
years of service, qualifying employee contributions are matched by the Plan
Sponsor up to 4% of participants' salary. In addition, Plan Sponsor contributes
6.5% of participants' monthly pensionable earnings, as described in the Plan,
and in addition contributes $43.34 per month per participant.
Separate accounts are maintained by the Plan Sponsor for each participating
employee. Trustee fees and asset management fees charged by the Plan's trustee,
Dreyfus Retirement Services, for the administration of all funds are charged
against net assets available for benefits of the respective fund. Certain other
expenses of administering the Plan are paid by the Plan Sponsor.
-9-
Allegheny Technologies Retirement Savings Plan
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE PLAN (CONTINUED)
Participants may make "in-service" and hardship withdrawals as outlined in the
plan document.
Active employees can borrow up to 50% of their vested account balances minus any
outstanding loans. The loan amounts are further limited to a minimum of $1,000
and a maximum of $50,000, and an employee can obtain no more than three loans at
one time. Interest rates are determined based on commercially accepted criteria,
and payment schedules vary based on the type of the loan. General purpose loans
are repaid over 6 to 60 months, and primary residence loans are repaid over
periods up to 180 months. Payments are made by payroll deductions.
Effective November 29, 1999, Allegheny Teledyne Incorporated's (the Plan
Sponsor) name was changed to Allegheny Technologies Incorporated. Also, the
Aerospace and Electronics and Consumer segments of Allegheny Teledyne were spun
off into two new freestanding public companies--Teledyne Technologies
Incorporated and Water Pik Technologies, Inc. Stockholders of Allegheny Teledyne
became stockholders of Teledyne Technologies Incorporated and Water Pik
Technologies, Inc., thus creating two new master trusts. Participants may
continue to hold interest in the two new companies until December 31, 2002, at
which time these two holdings will be terminated and the assets will be
transferred to one of the other plan investment options. Effective October 1,
2000, the Allegheny Technologies Incorporated (ATI) Common Stock Master Trust,
Teledyne Technologies Incorporated Common Stock Master Trust, and Water Pik
Technologies, Inc. Common Stock Master Trust were deunitized, enabling each
participating plan to hold actual shares of the common stocks versus holding
each stock in separate master trusts.
Effective April 1, 2001, the salaried employees who were participants in the
Alstrip profit sharing plan and the salaried employees at the Plan Sponsor's
Rodney Metals plant became eligible to participate in the Plan. Accordingly,
plan investments related to these participants were transferred into the Plan.
Further information about the Plan, including eligibility, vesting,
contributions, and withdrawals, is contained in the Plan documents and related
contracts. These documents are available from the Allegheny Technologies
Personnel and Compensation Committee.
-10-
Allegheny Technologies Retirement Savings Plan
Notes to Financial Statements (continued)
3. INVESTMENTS
The following presents investments that represent 5% or more of the Plan's net
assets:
DECEMBER 31
2001 2000
--------------------------------------------
Allegheny Technologies Disciplined Stock Fund $26,513,154 $30,710,160
Alliance Equity Fund 30,328,009 39,467,959
Dreyfus Emerging Leaders Fund 18,372,326 19,855,407
Dreyfus Lifestyle Growth and Income Fund 17,328,573 18,814,507
Fixed Income Fund 95,803,188 85,046,809
Certain of the Plan's investments are in the Allegheny Technologies Disciplined
Stock Fund Master Trust, the Alliance Equity Master Trust and the Fixed Income
Master Trust, which was established for the investment of assets of the Plan,
and several other ATI sponsored retirement plans. Each participating retirement
plan has an undivided interest in the Master Trust. At December 31, 2001 and
2000, the Plan's interest in the net assets of the Allegheny Technologies
Disciplined Stock Fund Master Trust, the Alliance Equity Master Trust and the
Fixed Income Master Trust were as follows:
2001 2000
-----------------------------------------
Allegheny Technologies Disciplined Stock Fund
Master Trust 34.20% 33.66%
Alliance Equity Master Trust 75.90 77.14
Fixed Income Master Trust 57.84 58.87
Investment income and expenses are allocated to the Plan based upon its pro rata
share in the net assets of the Master Trust.
-11-
Allegheny Technologies Retirement Savings Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
The composition of the net assets of the Fixed Income Master Trust at December
31, 2001 and 2000 was as follows:
2001 2000
-----------------------------------
Registered investment companies:
Merrill Lynch Income Accumulation Fund $ -- $ 6,258,870
-----------------------------------
-- 6,258,870
Guaranteed investment contracts:
Business Mens Assurance Company of America 1,246,890 2,498,807
Canada Life 2,743,536 4,136,118
Combined Life Insurance Company 3,097,946 4,668,459
GE Life and Annuity 11,812,375 5,163,549
Hartford Life Insurance Company 10,025,160 5,641,680
John Hancock Life Insurance Company 14,218,029 11,001,797
Monumental Life Insurance Company 3,331,280 1,867,053
New York Life Insurance Company 7,729,985 3,136,760
Ohio National Life 7,936,620 4,576,017
Pacific Mutual Life Insurance Company 6,036,924 6,200,078
Principal Life 3,000,000 --
Protective Life Insurance Company 1,002,333 2,012,650
Pruco Pace Credit Enhanced 9,950,359 7,691,842
Safeco Life Insurance 3,000,505 2,998,449
Security Life of Denver 6,181,488 5,131,606
Sun America, Inc. 2,992,868 2,998,064
United of Omaha 7,188,790 5,137,380
-----------------------------------
101,495,088 74,860,309
Synthetic guaranteed investment contracts:
Caisse des Depots et Consignations 7,800,826 8,950,177
CIT Equipment 992,755 --
Common Wealth Edison 1,976,061 --
Conn RRB Spec Trust 2,987,164 --
Detroit Edison 2,018,460 --
FHLMC 2,466,660 --
Illinois Power Sp. Trust 1,957,161 --
MBNA Master CC Trust 1,983,492 --
Peco Energy Company 1,982,788 --
Peoples Security Life Insurance Company 6,602,162 9,137,201
Public Service 1,998,629 --
Transamerica Occidental 9,559,425 14,066,106
Union Bank of Switzerland 2,737,675 5,967,640
Westdeutsche Landesbank Girozentrale 9,387,186 15,715,408
-----------------------------------
54,450,444 53,836,532
Interest in common trusts 7,680,629 8,087,097
Receivables 381,024 1,191,139
Other 1,635,070 231,457
-----------------------------------
Total net assets $ 165,642,255 $ 144,465,404
===================================
-12-
Allegheny Technologies Retirement Savings Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
The Fixed Income Fund (the Fund) invests in guaranteed investment contracts
(GICs) and actively managed structured or synthetic investment contracts (SICs).
The GICs are promises by a bank or insurance company to repay principal plus a
fixed rate of return through contract maturity. SICs differ from GICs in that
there are specific assets supporting the SICs, and these assets are owned by the
Master Trust. The bank or insurance company issues a wrapper contract that
allows participant-directed transactions to be made at contract value. The
assets supporting the SICs are comprised of government agency bonds, corporate
bonds, asset-backed securities (ABOs) and collateralized mortgage obligations
(CMOs) with fair values of $55,854,607 and $53,822,660 at December 31, 2001 and
2000, respectively. The contract value minus the market value of the wrapper
contracts at December 31, 2001 and 2000 is ($1,397,030) and $396,172,
respectively.
Interest crediting rates on the GICs in the Fund are determined at the time of
purchase. Interest crediting rates on the SICs are either: (1) set at the time
of purchase for a fixed term and crediting rate; (2) set at the time of purchase
for a fixed term and variable crediting rate or (3) set at the time of purchase
and reset monthly within a "constant duration." A constant duration contract may
specify a duration of 2.5 years and the crediting rate is adjusted monthly based
upon quarterly rebalancing of eligible 2.5 year duration investment instruments
at the time of each resetting; in effect the contract never matures. At December
31, 2001 and 2000, the interest crediting rates for GICs and Fixed Maturity SICs
ranged from 3.49% to 8.05% and 5.53% to 8.05%, respectively.
For the years ended December 31, 2001 and 2000, the average annual yield for the
investment contracts in the Fund was 6.25% and 6.39%, respectively. Fair value
of the GICs was estimated by discounting the weighted average of the Fund's cash
flows at the then-current interest crediting rate for a comparable maturity
investment contract. Fair value for the SICs was estimated based on the fair
value of each contract's supporting assets at December 31, 2001 and 2000.
-13-
Allegheny Technologies Retirement Savings Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
The composition of net assets of the Alliance Equity Master Trust at December
31, 2001 and 2000 was as follows:
2001 2000
---------------------------------------
Investment in registered investment companies:
Alliance Equity Fund S.A. #4 $ 40,024,274 $ 51,215,520
Cash overdraft -- (19,387)
Operating payables (64,365) (31,413)
-----------------------------------
Total net assets $ 39,959,909 $ 51,164,720
===================================
The composition of net assets of the Allegheny Technologies Disciplined Stock
Fund Master Trust at December 31, 2001 and 2000 was as follows:
2001 2000
---------------------------------------
Corporate common stocks $ 76,016,770 $ 89,911,418
Investment in common collective trusts 1,410,015 1,415,662
Receivables 103,913 62,651
Operating payables -- (147,875)
-----------------------------------
Total net assets $ 77,530,698 $ 91,241,856
===================================
-14-
Allegheny Technologies Retirement Savings Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
The composition of the changes in net assets of the various master trusts is as
follows:
ALLEGHENY TECHNOLOGIES
FIXED INCOME ALLIANCE EQUITY MASTER DISCIPLINED STOCK FUND MASTER
MASTER TRUST TRUST TRUST
--------------------------------- ---------------------------- -----------------------------------
YEAR ENDED DECEMBER 31
--------------------------------------------------------------------------------------------------
2001 2000 2001 2000 2001 2000
------------- ------------- ------------- ------------- ------------- -------------
Investment income (loss):
Interest income (loss) $ 9,147,492 $ 7,954,724 $ -- $ -- $ (639) $ --
Net realized/unrealized
loss on corporate
common stocks -- -- -- -- (12,375,289) (8,472,618)
Dividends -- -- -- -- 941,613 525,391
Net gain (loss),
registered invest-
ment companies 32,606 108,612 (9,248,179) (9,783,261) -- --
Net gain, common
collective trusts 401,062 404,170 -- -- 53,202 138,084
Other income -- 468 -- -- -- --
Administrative expenses (208,589) (185,368) (170,195) (218,831) (519,489) (414,238)
Transfers 11,804,280 1,647,278 (1,786,437) 2,172,578 (1,810,556) 54,049,508
------------- ------------- ------------- ------------- ------------- -------------
Net increase (decrease) 21,176,851 9,929,884 (11,204,811) (7,829,514) (13,711,158) 45,826,127
Total net assets at
beginning of year 144,465,404 134,535,520 51,164,720 58,994,234 91,241,856 45,415,729
------------- ------------- ------------- ------------- ------------- -------------
Total net assets at
end of year $ 165,642,255 $ 144,465,404 $ 39,959,909 $ 51,164,720 $ 77,530,698 $ 91,241,856
============= ============= ============= ============= ============= =============
-15-
Allegheny Technologies Retirement Savings Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
TELEDYNE TECHNOLOGIES WATER PIK TECHNOLOGIES,
ATI COMMON STOCK INCORPORATED COMMON STOCK INC. COMMON STOCK MASTER
MASTER TRUST MASTER TRUST TRUST
------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31
------------------------------------------------------------------------------------------
2001 2000 2001 2000 2001 2000
-------------- --------------- -------------- -------------- -------------- --------------
Investment income (loss):
Net realized/unrealized
gain (loss) on
corporate
common stocks $- $ (3,205,592) $- $ 3,930,711 $- $ (33,206)
Dividends - 525,069 - -- - --
Net gain, common
collective trusts - 17,831 - 2,171 - 409
Other loss - (708) - (1,379) - (233)
Administrative expenses - (8,451) - 133 - 41
Transfers - (17,568,539) - (6,320,601) - (815,045)
---------------------------------------------------------------------------------------------
Net decrease - (20,240,390) - (2,388,965) - (848,034)
Total net assets at
beginning of year - 20,240,390 - 2,388,965 - 848,034
---------------------------------------------------------------------------------------------
Total net assets at end of year $- $ -- $- $ -- $- $ --
=============================================================================================
Interest, realized and unrealized gains and losses, and management fees from the
master trusts are included in the net (loss)/gain from interest in Allegheny
Ludlum Corporation Master Trusts on the statement of changes in net assets
available for benefits.
4. INCOME TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
dated July 23, 1996, stating that the Plan is qualified under Section 401(a) of
the Internal Revenue Code (the Code) and, therefore, the related trust is exempt
from taxation. Subsequent to this issuance of the determination letter, the Plan
was amended. Once qualified, the Plan is required to operate in conformity with
the Code to maintain its qualification. The plan administrator believes that the
Plan is being operated in compliance with the applicable requirements of the
Code and, therefore, believes that the Plan is qualified and the related trust
is tax-exempt.
5. TRANSACTIONS WITH PARTIES-IN-INTEREST
Certain plan investments are shares of mutual funds managed by Dreyfus
Retirement Services. Dreyfus Retirement Services is the trustee as defined by
the Plan and, therefore, these transactions qualify as party-in-interest.
Trustee and investment fees paid during 2001 and 2000 were based upon customary
and reasonable rates for such services.
-16-
Allegheny Technologies Retirement Savings Plan
Notes to Financial Statements (continued)
6. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA.
7. RECLASSIFICATIONS
Certain reclassifications have been made to the 2000 financial statements to
conform to the current year financial statement presentation.
-17-
Allegheny Technologies Retirement Savings Plan
EIN 25-1792394 Plan 004
Schedule H, Line 4(i)--Schedule of Assets (Held at End of Year)
December 31, 2001
CURRENT
DESCRIPTION UNITS/SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANIES
Dreyfus Emerging Leaders Fund* 528,395.929 $18,372,326
Prudential Jennison Growth Fund 77,891.635 1,138,776
Dreyfus International Value Fund* 262,414.386 3,608,198
Mas Midcap Growth Fund 159,406.852 2,781,650
Dreyfus Premier Nextech Fd* 13,000.225 63,311
MFS Mid-Cap Growth A 1,761.821 19,310
Pioneer Fd Class A SHS 327.813 12,755
Selected American SHS Inc. 297.298 9,213
Self-Directed Fund:
AIM Equity Funds Inc Weingarten Fund Class A Shares 1,272.607 17,167
AIM Equity Funds Inc Blue Chip Fund Class A Shares 2,999.672 36,446
AIM Funds Group Value Fund Class A Shares 2,100.313 22,830
Alliance Growth & Income Fund Class A 5,102.135 18,317
Alliance Premier Growth Fund Class A 1,126.185 22,884
Alliance Technology Fund Inc Class B 158.294 9,876
American Balanced Fund 200.000 3,170
American Century Quantitative Equity Funds Eq Growth Fund Inc 1,526.752 29,375
American Century Mut Fds Ultra Twentieth Century Ultra Fund Inv 543.576 15,024
American High Income Mun. Bd Fund 201.348 3,030
American Mutual Fund 206.917 4,976
Ariel Growth Fund Calvert Ariel Appreciation Fund 158.447 5,866
Berger Growth and Income Fund 1,631.699 23,725
Berger Omni Invt Fund Tr Small Cap Value Fund Inc 1,250.685 35,107
Blair William Mut Fds Inc Intl Growth 401.230 6,211
Buffalo Small Cap Fund 3,383.871 67,542
Capital Income Bldr Fund Sh Ben Int 100.000 4,359
Capital World Growth & Income Fd Inc 200.030 4,901
Citizens Fds Emerging Growth Fd 240.376 3,281
Credit Suisse Warburg Pincus Global Telecom Fund 402.057 12,098
Delaware Group Trend Fd Inc Trend Fc Cl A 544.668 9,657
Delaware Pooled Trust Real Estate Investment Trust Portfolio 264.375 3,844
Delaware Technology & Innovation Fd Cl A 303.115 685
Dreyfus 100% U.S. Treasury MM Fd 505,170.950 505,171
Dreyfus Short Term Inc Fd Inc 870.209 10,355
Dreyfus Inv Grade Bd Fds Inter Term Fd 803.544 10,189
Dreyfus/Laurel Fds Inc S&P 500 Stock Index Fd Tr Shs 6,755.398 161,454
Dreyfus/Laurel Disc Stk Fd R 219.815 7,027
-18-
Schedule H, Line 4(i)--Schedule of Assets (Held at End of Year) (continued)
CURRENT
DESCRIPTION UNITS/SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------------
Dreyfus Bond Market Index Cl R 335,941.028 3,376,207
Dreyfus Growth & Value Fds Inc Premier Techn Growth Fd Cl R 682.494 17,233
Dreyfus Mid Cap Value Fund 3,568.018 93,803
Dreyfus Technology Growth Fund 9,646.772 241,748
Dreyfus Inc Fds High Ylds Secs Fd 856.257 4,941
Eaton Vance Growth Tr Worldwide Health Sciences Fd Cl A 1,401.090 14,473
Euro Pac Growth Fd Sh Ben Int 100.237 2,693
Federated Equity Kaufmann Fund 28,283.987 124,167
Federated Eqty Fds Comm Tech Fd Cl A 1,402.279 7,670
Fidelity Invt Tr Diversified Intl Fd 231.147 4,410
Fidelity Low Priced Stock Fund 515.647 14,139
Fidelity Mt Vernon Str Tr Growth Co Fd 754.351 40,147
Fidelity Mt Vernon Str Tr Growth Co Fd 405.155 7,706
Fidelity Puritan Tr Puritan Fd 1,501.303 26,528
Fidelity Secs Fd Growth & Income Portfolio 382.772 14,308
Fidelity Secs Fd Blue Chip Growth Fd 62.132 2,668
Fidelity Secs Fd Dividend Growth Fd 1,688.088 47,824
Fidelity Select Portfolios Technology Portfolio 1,063.553 64,451
Fidelity Select Portfolios Health Care Portfolio 83.568 10,635
Fidelity Select Portfolios Development Commnts Portfolio 682.742 12,904
Fidelity Select Portfolios Reg Bks Portfolio 495.350 16,451
Fidelity Select Portfolios Biotechnology Portfolio 1,348.942 87,843
Fidelity Select Portfolios Software & Computer Svcs Portfolio 1,131.400 53,843
Fidelity Select Portfolios Telecommunications Portfolio 521.346 18,883
Fidelity Select Portfolios Brokerage * Invt Mgmt. Portfolio 739.163 32,834
Fidelity Select Portfolios Ele Portfolio 4,511.411 222,277
Fidelity Select Portfolios Computers Portfolio 3,746.339 142,473
Firsthand Fds Technology Value Fd 235.923 9,732
Firsthand Fds Technology Leaders Fund 161.067 3,038
Franklin Value Invest-Balanced Investment Fund Class A 173.600 6,947
Franklin Value Invest-Micro Cap Value Fund 201.369 4,970
Gabelli Asset Fund-Sh Ben Int 146.488 4,830
Gabelli Equity Ser Fds-Small Cap Growth Fund 389.313 7,479
Gabelli Global Growth Fund AAA 504.376 7,793
Gabelli Growth Fd Sh Ben Int 1,476.704 42,352
Gabelli Intl Growth Fund 1,707.713 23,464
Growth Fd Amer Inc Com 758.214 17,977
Harris Assoc. Invt Trust-Oakmark Balanced Fd 669.113 12,466
Harris Assoc. Invt Trust-Oakmark Select Fund 781.558 21,290
Heritage Ser Tr Growth Equity Fd Cl A 177.589 5,333
Income Fund Amer Inc 200.000 3,164
Invesco Sector Fds Inc Health Sciences Fund 1,713.797 86,787
Invesco Sector Fds Inc Technology Fd Cl II 945.407 30,792
Invesco Sector Fds Inc Telecommunications Fd Inv 2,170.119 36,067
Investment Co America Com 616.378 17,585
Janus Invt Fd Sh Ben Int 4,528.995 111,413
Janus Invt Fd Growth & Income Fd 8,883.229 266,230
Janus Invt Fd Worldwide Fd 4,812.384 210,975
Janus Invt Fd Twenty Fd 4,170.554 160,400
Janus Invt Fd Flexible Income Fd 5,173.161 47,697
Janus Invt Fd Orion Fd 10,067.829 60,206
Janus Invt Fd Strategic Value Fund 9,883.418 91,520
Janus Invt Fd Global Tech Fd 12,391.523 150,433
Janus Invt Fd Global Life Sciences Fund 4,362.129 76,643
Janus Invt Fd Olympus Fd 9,551.636 266,013
Janus Invt Fd High Yield Fd 947.315 8,876
Janus Invt Fd Enterprise Fd 2,990.298 95,690
-19-
Schedule H, Line 4(i)--Schedule of Assets (Held at End of Year) (continued)
CURRENT
DESCRIPTION UNITS/SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------------
Janus Invt Fd Overseas Fd 2,878.667 58,437
Janus Invt Fd Mercury Fd 10,879.828 226,192
Janus Invt Fd Balanced Fund 156.34 3,069
MFS Ser Tr Strategic Growth Fd Cl A 495.903 9,903
Munder Gramlington Fds Tr Healthcare Fd Cl A 220.769 5,093
Munder Fds Inc Netnet Fd Cl A 96.285 1,731
New Perspective Fd Inc Com 459.559 9,968
New World Fd Inc New Com 240.038 4,940
PBHG Fds Inc Select Equity Fd 135.692 3,310
PBHG Fds Inc New Oppty Fd 1.613 46
PBHG Fds Inc Technology & Communications Fd 935.158 15,327
Park Ave Portfolio Guardian Invt Quality Bd Fd 473.424 4,668
Park Ave Portfolio Guardian Pk Ave Fd 4,698.310 150,346
Phoenix Strategic Equity Ser Fd Theme Fd Cl A 187.869 1,894
PIMCO Fds Pac Invt Mgmt Ser Total Return 963.795 10,081
PIMCO Fds Pac Invt Mgmt Ser Short Term Fd Cl A 996.688 9,997
T. Rowe Price Health Science Fd Inc Com 499.735 10,035
Putnam Fds Tr Intl Growth & Income Fd Cl A 481.015 4,137
Putnam High Yield Tr II Cl A 724.520 4,021
Putnam Income Fund Class A 1,733.198 11,248
Putnam Invt Fds Classic Equity Fd Cl A 1,882.355 22,607
Putnam Invt Fds Global Growth & Inc Fd 503.177 5,963
Putnam U.S. Govt Income Tr Cl A 1,048.608 13,527
Putnam Voyager Fd Inc Cl A 772.165 13,358
RCM Equity Funds Inc Dresdnar RCM Biotechnology Fd 93.228 2,554
RS Invt Tr Emerging Growth Fd 2,400.565 76,842
RS Invt Tr Internet Age Fd 845.547 4,870
Reserve Private Eq Ser Small Cap Growth Fc Cl R 124.916 4,529
T. Rowe Price MidCap Growth Fd Inc Com 340.541 13,417
T. Rowe Price Intl Fds Inc Japan Fd 388.035 2,348
T. Rowe Price Science & Tech Fd Inc Cap Stk 3,883.236 81,237
Royce Fd Opportunity Fd 730.858 6,585
Rydex Ser Tr OTC Fd 1,883.371 20,811
Scudder Intl Fd Inc Greater Europe Growth Fd 102.095 2,348
Scudder Secs Tr Technology Fd 4,564.405 71,981
SIT Mut Fds Inc Small Cap Growth Fd 337.580 8,510
State Street Resh Portfolios Inc Intl Equity Fd Cl A 529.676 5,339
Strong Equity Fds Inc Growth 20 Fd 687.666 10,136
Strong Conservative Equity Fds Inc Amer Utils Fd 6,360.851 96,621
Strong Opportunity Fd Inc 468.811 18,420
Templeton Fds Inc World Fd Cl A 673.854 10,013
Tweedy Browne Fd Inc Global Value Fd 625.852 11,597
Tweedy Browne Fd Inc American Value Fd 297.877 6,976
Van Kampen Amer Cap Emerging Growth Fd Cl A 74.996 3,174
Van Wagoner Fds Inc Post Venture Fd 515.761 5,178
Van Wagoner Fds Tech Fd 277.771 4,428
Vanguard Index Tr 500 Portfolio 1,128.745 119,523
Vanguard Index Tr Growth Portfolio 221.618 5,853
Vanguard/Wellington Fd 4,467.130 121,774
Vanguard Bd Index Fd 7,912.957 80,237
Vanguard/Windsor Fd Inc II Portfolio 798.568 20,435
Vanguard Fixed Income Secs Fd Inter Term U.S. Treas Portfolio 955.021 10,534
Warburg Pincus Gbl Post Venture Cap Fd Com 335.468 5,918
-20-
Schedule H, Line 4(i)--Schedule of Assets (Held at End of Year) (continued)
CURRENT
DESCRIPTION UNITS/SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------------
Wasatch Advisors Fds-Growth Fund 35.802 1,240
Wasatch Ultra Growth Fund 382.226 9,250
Washington Mut Invs Fd Inc Com 347.464 9,816
Wilshire Target Fds Inc Large Growth Portfolio Inv Cl 104.766 3,165
-------------------
Total self-directed fund 9,101,545
-------------------
Total registered investment companies $35,107,084
===================
COMMON COLLECTIVE TRUSTS
Dreyfus Lifestyle Growth and Income Fund* 1,064,478.101 $17,328,573
Dreyfus Lifestyle Growth Fund* 483,568.978 8,405,115
Dreyfus Lifestyle Income Fund* 132,327.219 1,973,600
Dreyfus Short Term Investment Fund* 2,240.650 2,241
-------------------
Total common collective trusts $27,709,529
===================
CORPORATE COMMON STOCKS
Allegheny Technologies Incorporated* 648,275.813 $10,858,620
Teledyne Technologies Incorporated 103,479.952 1,685,688
Water Pik Technologies, Inc. 33,766.2770 293,429
Ericsson LM Tel Co Adr CL B Sek 10 1,800.000 9,396
-------------------
Total corporate common stocks $12,847,133
===================
Participant loans* (6% to 10.5%) $ 3,942,809
===================
*Party-in-interest
-21-
AUDITED FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE
401(k) Savings Account Plan for Employees of the Washington Plate Plant
Years ended December 31, 2001 and 2000 with Report of Independent Auditors
-22-
401(k) Savings Account Plan for Employees
of the Washington Plate Plant
Audited Financial Statements
and Supplemental Schedule
Years ended December 31, 2001 and 2000
CONTENTS
Report of Independent Auditors ..........................................24
Audited Financial Statements
Statements of Net Assets Available for Benefits..........................25
Statements of Changes in Net Assets Available for Benefits...............26
Notes to Financial Statements ...........................................27
Supplemental Schedule
Schedule H, Line 4(i)--Schedule of Assets (Held at End of Year)..........36
-23-
Report of Independent Auditors
Allegheny Technologies Incorporated
We have audited the accompanying statements of net assets available for benefits
of the 401(k) Savings Account Plan for Employees of the Washington Plate Plant
as of December 31, 2001 and 2000, and the related statements of changes in net
assets available for benefits for the years then ended. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 2001 and 2000, and the changes in its net assets available for
benefits for the years then ended, in conformity with accounting principles
generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule of assets at
end of year as of December 31, 2001 is presented for purposes of complying with
the Department of Labor's Rules and Regulations for Reporting and Disclosure
under the Employee Retirement Income Security Act of 1974, and is not a required
part of the financial statements. The supplemental schedule has been subjected
to the auditing procedures applied in our audits of the financial statements
and, in our opinion, is fairly stated in all material respects in relation to
the financial statements taken as a whole.
/s/ Ernst & Young LLP
Pittsburgh, Pennsylvania
May 24, 2002
-24-
401(k) Savings Account Plan for Employees
of the Washington Plate Plant
Statements of Net Assets Available for Benefits
DECEMBER 31
2001 2000
---------------------------------
ASSETS
Investments:
Interest in Allegheny Ludlum Corporation Master Trusts $1,360,089 $1,306,977
Interest in registered investment companies 487,164 359,377
Interest in common collective trusts 462,073 420,569
Corporate common stocks 98,723 64,166
Participant loans 27,110 7,982
--------------------------------
Net assets available for benefits $2,435,159 $2,159,071
================================
See accompanying notes.
-25-
401(k) Savings Account Plan for Employees
of the Washington Plate Plant
Statements of Changes in Net Assets Available for Benefits
YEAR ENDED DECEMBER 31
2001 2000
--------------------------
Additions:
Contributions:
Employer $ 174,189 $ --
Employee 367,312 455,077
Investment income:
Net loss from interest in Allegheny Ludlum
Corporation Master Trusts (142,973) (107,330)
Net (loss)/gain from interest in registered investment
companies (42,462) 13,118
Net loss from interest in common collective trusts (29,623) (868)
Interest income 1,268 609
Dividend income 2,997 587
Net realized/unrealized gain (loss) on corporate common stocks 9,090 (10,867)
--------------------------
Total additions 339,798 350,326
Deductions:
Distributions to participants 63,710 47,969
--------------------------
Total deductions 63,710 47,969
--------------------------
Net additions 276,088 302,357
Net assets available for benefits at beginning of year 2,159,071 1,856,714
--------------------------
Net assets available for benefits at end of year $ 2,435,159 $ 2,159,071
==========================
See accompanying notes.
-26-
401(k) Savings Account Plan for Employees
of the Washington Plate Plant
Notes to Financial Statements
December 31, 2001
1. SIGNIFICANT ACCOUNTING POLICIES
Investments are valued as follows:
Bank and insurance contracts with varying contract rates and maturity dates
are stated at contract value.
Although it is management's intention to hold the investment contracts in
the Fixed Income Fund until maturity, certain investment contracts provide
for adjustments to contract value for withdrawals made prior to maturity.
All other funds are stated at their net asset value, based on the quoted
market prices of the securities held in such funds on applicable exchanges.
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
that affect the amounts reported in the financial statements and accompanying
notes. Actual results could differ from those estimates.
2. DESCRIPTION OF THE PLAN
The 401(k) Savings Account Plan for Employees of the Washington Plate Plant (the
Plan) is a defined contribution plan and is subject to the provisions of the
Employee Retirement Income Security Act of 1974 (ERISA).
The purpose of the Plan is to encourage thrift and to assist union employees of
the Allegheny Ludlum Corporation (the Company) of the Washington Plate facility
in accumulating a fund to supplement retirement income by allowing eligible
employees to make tax-deferred contributions to the Plan. Allegheny Ludlum
Corporation is a wholly-owned subsidiary of Allegheny Technologies Incorporated.
Employee contributions to the Plan can range between 1% and 18% of eligible
wages subject to Internal Revenue Code limitations. In addition, the employee's
annual pretax profit sharing award and pretax Longevity Incentive Payment Plan
award may be contributed at the employee's discretion. Beginning May 1, 2001,
the Company began contributing $.50 for each hour worked per eligible union
employee. Unless otherwise specified by the participant, all contributions are
made to the Fixed Income Fund. Such contributions are made only from current
income or accumulated earnings of the Plan Sponsor.
-27-
401(k) Savings Account Plan for Employees
of the Washington Plate Plant
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE PLAN (CONTINUED)
Separate accounts are maintained by the Plan Sponsor for each participating
employee. Trustee fees and asset management fees charged by the Plan's trustee,
Dreyfus Retirement Services, for the administration of all funds are charged
against net assets available for benefits of the respective fund. Certain other
expenses of administering the Plan are paid by the Plan Sponsor.
Participants may make "in-service" and hardship withdrawals as outlined in the
plan document.
Active employees can borrow up to 50% of their vested account balances minus any
outstanding loans. The loan amounts are further limited to a minimum of $500 and
a maximum of $50,000, and an employee can obtain no more than three loans at one
time. Interest rates are determined based on commercially accepted criteria, and
payment schedules vary based on the type of the loan. General purpose loans are
repaid over 6 to 60 months, and primary residence loans are repaid over periods
up to 180 months. Payments are made by payroll deductions.
Effective November 29, 1999, Allegheny Teledyne Incorporated's (the Plan
Sponsor) name was changed to Allegheny Technologies Incorporated. Also, the
Aerospace and Electronics and Consumer segments of Allegheny Teledyne were spun
off into two new freestanding public companies--Teledyne Technologies
Incorporated and Water Pik Technologies, Inc. Stockholders of Allegheny Teledyne
became stockholders of Teledyne Technologies Incorporated and Water Pik
Technologies, Inc., thus creating two new master trusts. Participants may
continue to hold interest in the two new companies until December 31, 2002, at
which time these two holdings will be terminated and the assets will be
transferred to one of the other plan investment options. Effective October 1,
2000, the Allegheny Technologies Incorporated (ATI) Common Stock Master Trust,
Teledyne Technologies Incorporated Common Stock Master Trust, and Water Pik
Technologies, Inc. Common Stock Master Trust were deunitized, enabling each
participating plan to hold actual shares of the common stocks versus holding
each stock in separate master trusts.
Further information about the Plan, including eligibility, vesting,
contributions, and withdrawals, is contained in the plan documents and related
contracts. These documents are available from the Allegheny Technologies
Personnel and Compensation Committee.
-28-
401(k) Savings Account Plan for Employees
of the Washington Plate Plant
Notes to Financial Statements (continued)
3. INVESTMENTS
The following presents investments that represent 5% or more of the Plan's net
assets:
DECEMBER 31
2001 2000
--------------------------------------------
Allegheny Technologies Disciplined Stock Fund $516,281 $549,829
Alliance Equity Fund 418,404 473,294
Dreyfus Emerging Leaders Fund 377,069 298,029
Dreyfus Lifestyle Growth Fund 125,988 131,854
Dreyfus Lifestyle Growth and Income Fund 303,884 265,849
Fixed Income Fund 425,404 283,854
Certain of the Plan's investments are in the Allegheny Technologies Disciplined
Stock Fund Master Trust, the Alliance Equity Master Trust and the Fixed Income
Master Trust, which was established for the investment of assets of the Plan,
and several other ATI sponsored retirement plans. Each participating retirement
plan has an undivided interest in the Master Trust. At December 31, 2001 and
2000, the Plan's interest in the net assets of the Allegheny Technologies
Disciplined Stock Fund Master Trust, the Alliance Equity Master Trust and the
Fixed Income Master Trust were as follows:
2001 2000
--------------------------------------------
Allegheny Technologies Disciplined Stock Fund
Master Trust 0.67% 0.60%
Alliance Equity Master Trust 1.05 0.93
Fixed Income Master Trust 0.26 0.20
Investment income and expenses are allocated to the Plan based upon its pro rata
share in the net assets of the Master Trust.
-29-
401(k) Savings Account Plan for Employees
of the Washington Plate Plant
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
The composition of the net assets of the Fixed Income Master Trust at December
31, 2001 and 2000 was as follows:
2001 2000
--------------------------------------------
Registered investment companies:
Merrill Lynch Income Accumulation Fund $ - $ 6,258,870
--------------------------------------------
- 6,258,870
Guaranteed investment contracts:
Business Mens Assurance Company of America 1,246,890 2,498,807
Canada Life 2,743,536 4,136,118
Combined Life Insurance Company 3,097,946 4,668,459
GE Life and Annuity 11,812,375 5,163,549
Hartford Life Insurance Company 10,025,160 5,641,680
John Hancock Life Insurance Company 14,218,029 11,001,797
Monumental Life Insurance Company 3,331,280 1,867,053
New York Life Insurance Company 7,729,985 3,136,760
Ohio National Life 7,936,620 4,576,017
Pacific Mutual Life Insurance Company 6,036,924 6,200,078
Principal Life 3,000,000 -
Protective Life Insurance Company 1,002,333 2,012,650
Pruco Pace Credit Enhanced 9,950,359 7,691,842
Safeco Life Insurance 3,000,505 2,998,449
Security Life of Denver 6,181,488 5,131,606
Sun America, Inc. 2,992,868 2,998,064
United of Omaha 7,188,790 5,137,380
--------------------------------------------
101,495,088 74,860,309
Synthetic guaranteed investment contracts:
Caisse des Depots et Consignations 7,800,826 8,950,177
CIT Equipment 992,755 -
Common Wealth Edison 1,976,061 -
Conn RRB Spec Trust 2,987,164 -
Detroit Edison 2,018,460 -
FHLMC 2,466,660 -
Illinois Power Sp. Trust 1,957,161 -
MBNA Master CC Trust 1,983,492 -
Peco Energy Company 1,982,788 -
Peoples Security Life Insurance Company 6,602,162 9,137,201
Public Service 1,998,629 -
Transamerica Occidental 9,559,425 14,066,106
Union Bank of Switzerland 2,737,675 5,967,640
Westdeutsche Landesbank Girozentrale 9,387,186 15,715,408
--------------------------------------------
54,450,444 53,836,532
Interest in common collective trusts 7,680,629 8,087,097
Receivables 381,024 1,191,139
Other 1,635,070 231,457
--------------------------------------------
Total net assets $165,642,255 $144,465,404
============================================
-30-
401(k) Savings Account Plan for Employees
of the Washington Plate Plant
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
The Fixed Income Fund (the Fund) invests in guaranteed investment contracts
(GICs) and actively managed structured or synthetic investment contracts (SICs).
The GICs are promises by a bank or insurance company to repay principal plus a
fixed rate of return through contract maturity. SICs differ from GICs in that
there are specific assets supporting the SICs, and these assets are owned by the
Master Trust. The bank or insurance company issues a wrapper contract that
allows participant-directed transactions to be made at contract value. The
assets supporting the SICs are comprised of government agency bonds, corporate
bonds, asset-backed securities (ABOs) and collateralized mortgage obligations
(CMOs) with fair values of $55,854,607 and $53,822,660 at December 31, 2001 and
2000, respectively. The contract value minus the market value of the wrapper
contracts at December 31, 2001 and 2000 is ($1,397,030) and $396,172,
respectively.
Interest crediting rates on the GICs in the Fund are determined at the time of
purchase. Interest crediting rates on the SICs are either: (1) set at the time
of purchase for a fixed term and crediting rate; (2) set at the time of purchase
for a fixed term and variable crediting rate or (3) set at the time of purchase
and reset monthly within a "constant duration." A constant duration contract may
specify a duration of 2.5 years and the crediting rate is adjusted monthly based
upon quarterly rebalancing of eligible 2.5 year duration investment instruments
at the time of each resetting; in effect the contract never matures. At December
31, 2001 and 2000, the interest crediting rates for GICs and Fixed Maturity SICs
ranged from 3.49% to 8.05% and 5.53% to 8.05%, respectively.
For the years ended December 31, 2001 and 2000, the average annual yield for the
investment contracts in the Fund was 6.25% and 6.39%, respectively. Fair value
of the GICs was estimated by discounting the weighted average of the Fund's cash
flows at the then-current interest crediting rate for a comparable maturity
investment contract. Fair value for the SICs was estimated based on the fair
value of each contract's supporting assets at December 31, 2001 and 2000.
-31-
401(k) Savings Account Plan for Employees
of the Washington Plate Plant
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
The composition of net assets of the Alliance Equity Master Trust at December
31, 2001 and 2000 was as follows:
2001 2000
---------------------------------
Investment in registered investment companies:
Alliance Equity Fund S.A. #4 $40,024,274 $51,215,520
Cash overdraft - (19,387)
Operating payables (64,365) (31,413)
---------------------------------
Total net assets $39,959,909 $51,164,720
=================================
The composition of net assets of the Allegheny Technologies Disciplined Stock
Fund Master Trust at December 31, 2001 and 2000 was as follows:
2001 2000
---------------------------------
Corporate common stocks $76,016,770 $89,911,418
Interest in common collective trusts 1,410,015 1,415,662
Receivables 103,913 62,651
Operating payables - (147,875)
---------------------------------
Total net assets $77,530,698 $91,241,856
=================================
-32-
401(k) Savings Account Plan for Employees
of the Washington Plate Plant
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
The composition of the changes in net assets of the various master trusts is as
follows:
ALLEGHENY TECHNOLOGIES
DISCIPLINED STOCK FUND MASTER
FIXED INCOME MASTER TRUST ALLIANCE EQUITY MASTER TRUST TRUST
--------------------------------- ---------------------------- -------------------------------
YEAR ENDED DECEMBER 31
----------------------------------------------------------------------------------------------
2001 2000 2001 2000 2001 2000
--------------------------------------------------------------------------------------------------
Investment income (loss):
Interest income (loss) $ 9,147,492 $ 7,954,724 $ -- $ -- $ (639) $ --
Net realized/unrealized
loss on corporate
common stocks -- -- -- -- (12,375,289) (8,472,618)
Dividends -- -- -- -- 941,613 525,391
Net gain (loss),
registered invest-
ment companies 32,606 108,612 (9,248,179) (9,783,261) -- --
Net gain, common
collective trusts 401,062 404,170 -- -- 53,202 138,084
Other income -- 468 -- -- -- --
Administrative expenses (208,589) (185,368) (170,195) (218,831) (519,489) (414,238)
Transfers 11,804,280 1,647,278 (1,786,437) 2,172,578 (1,810,556) 54,049,508
--------------------------------------------------------------------------------------------------
Net increase (decrease) 21,176,851 9,929,884 (11,204,811) (7,829,514) (13,711,158) 45,826,127
Total net assets at
beginning of year 144,465,404 134,535,520 51,164,720 58,994,234 91,241,856 45,415,729
--------------------------------------------------------------------------------------------------
Total net assets at
end of year $ 165,642,255 $ 144,465,404 $ 39,959,909 $ 51,164,720 $ 77,530,698 $ 91,241,856
==================================================================================================
-33-
401(k) Savings Account Plan for Employees
of the Washington Plate Plant
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
TELEDYNE TECHNOLOGIES WATER PIK TECHNOLOGIES,
ATI COMMON STOCK MASTER TRUST INCORPORATED COMMON STOCK INC. COMMON STOCK MASTER
MASTER TRUST TRUST
---------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31
------------------------------------------------------------------------------------------
2001 2000 2001 2000 2001 2000
---------------------------------------------------------------------------------------
Investment income (loss):
Net realized/unrealized
gain (loss) on
corporate common
stocks $ -- $ (3,205,592) $ -- $ 3,930,711 $ -- $ (33,206)
Dividends -- 525,069 -- -- -- --
Net gain, common
collective trusts -- 17,831 -- 2,171 -- 409
Other loss -- (708) -- (1,379) -- (233)
Administrative expenses -- (8,451) -- 133 -- 41
Transfers -- (17,568,539) -- (6,320,601) -- (815,045)
---------------------------------------------------------------------------------------
Net decrease -- (20,240,390) -- (2,388,965) -- (848,034)
Total net assets at
beginning of year -- 20,240,390 -- 2,388,965 -- 848,034
---------------------------------------------------------------------------------------
Total net assets at end of
year $ -- $ -- $ -- $ -- $ -- $ --
=======================================================================================
Interest, realized and unrealized gains and losses, and management fees from the
master trusts are included in the net (loss)/gain from interest in Allegheny
Ludlum Corporation Master Trusts on the statements of changes in net assets
available for benefits.
4. INCOME TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
dated March 3, 1998, stating that the Plan is qualified under Section 401(a) of
the Internal Revenue Code (the Code) and, therefore, the related trust is exempt
from taxation. Subsequent to this issuance of the determination letter, the Plan
was amended. Once qualified, the Plan is required to operate in conformity with
the Code to maintain its qualification. The plan sponsor has indicated that it
will take the necessary steps, if any, to maintain the Plan's qualified status.
-34-
401(k) Savings Account Plan for Employees
of the Washington Plate Plant
Notes to Financial Statements (continued)
5. TRANSACTIONS WITH PARTIES-IN-INTEREST
Certain plan investments are shares of mutual funds managed by Dreyfus
Retirement Services. Dreyfus Retirement Services is the trustee as defined by
the Plan and, therefore, these transactions qualify as party-in-interest.
Trustee and investment fees paid during 2001 and 2000 were based upon customary
and reasonable rates for such services.
6. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA.
7. RECLASSIFICATIONS
Certain reclassifications have been made to the 2000 financial statements to
conform to the current year financial statement presentation.
-35-
401(k) Savings Account Plan for Employees
of the Washington Plate Plant
EIN 25-1792394 Plan 020
Schedule H, Line 4(i)--Schedule of Assets (Held at End of Year)
December 31, 2001
DESCRIPTION UNITS/SHARES CURRENT VALUE
- ----------------------------------------------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANIES
Interest in Dreyfus Emerging Leaders Fund* 10,844.658 $377,069
Dreyfus International Value Fund* 3,559.537 48,944
Dreyfus Bond Market Index Fund* 3,723.569 37,422
MAS Mid Cap Growth Fund 421.462 7,354
Jennison Growth Fund 1,120.055 16,375
-------------------
Total registered investment companies $487,164
===================
COMMON COLLECTIVE TRUSTS
Dreyfus Lifestyle Growth and Income Fund* 18,667.310 $303,884
Dreyfus Lifestyle Growth Fund* 7,248.418 125,988
Short-Term Investment Fund 33.750 34
Dreyfus Lifestyle Income Fund* 2,156.779 32,167
-------------------
Total common collective trusts $462,073
===================
CORPORATE COMMON STOCKS
Allegheny Technologies Incorporated* 5,194.000 $ 87,000
Teledyne Technologies Incorporated 605.000 9,855
Water Pik Technologies, Inc. 215.000 1,868
-------------------
Total corporate common stocks $ 98,723
===================
Participant loans* (6% to 10.5%) $ 27,110
===================
*Party-in-interest
-36-
Audited Financial Statements and Supplemental Schedule
Savings and Security Plan of the Lockport and Waterbury Facilities
Years ended December 31, 2001 and 2000 with Report of Independent Auditors
-37-
Savings and Security Plan of the
Lockport and Waterbury Facilities
Audited Financial Statements
and Supplemental Schedule
Years ended December 31, 2001 and 2000
CONTENTS
Report of Independent Auditors ..........................................39
Audited Financial Statements
Statements of Net Assets Available for Benefits..........................40
Statements of Changes in Net Assets Available for Benefits...............41
Notes to Financial Statements ...........................................42
Supplemental Schedule
Schedule H, Line 4(i)--Schedule of Assets (Held at End of Year)..........51
-38-
Report of Independent Auditors
Allegheny Technologies Incorporated
We have audited the accompanying statements of net assets available for benefits
of the Savings and Security Plan of the Lockport and Waterbury Facilities as of
December 31, 2001 and 2000, and the related statements of changes in net assets
available for benefits for the years then ended. These financial statements are
the responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 2001 and 2000, and the changes in its net assets available for
benefits for the years then ended, in conformity with accounting principles
generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule of assets
held at end of year as of December 31, 2001 is presented for purposes of
complying with the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974, and is not
a required part of the financial statements. The supplemental schedule has been
subjected to the auditing procedures applied in our audits of the financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ Ernst & Young LLP
Pittsburgh, Pennsylvania
May 24, 2002
-39-
Savings and Security Plan of the
Lockport and Waterbury Facilities
Statements of Net Assets Available for Benefits
DECEMBER 31
2001 2000
--------------------------
ASSETS
Investments:
Interest in Allegheny Ludlum Corporation Master Trusts $ 4,676,529 $ 4,668,897
Interest in registered investment companies 961,957 998,576
Interest in common collective trusts 363,959 456,870
Corporate common stocks 221,166 222,199
Participant loans 314,699 171,832
--------------------------
Total investments 6,538,310 6,518,374
Cash -- 9,892
Other receivables -- 24,388
Other payables (248) (34,429)
--------------------------
Net assets available for benefits $ 6,538,062 $ 6,518,225
==========================
See accompanying notes.
-40-
Savings and Security Plan of the
Lockport and Waterbury Facilities
Statements of Changes in Net Assets Available for Benefits
YEAR ENDED DECEMBER 31
2001 2000
----------------------------
Additions:
Contributions:
Employer $ 234,332 $ 400,701
Employee 242,146 254,827
Investment income:
Net gain from interest in Allegheny Ludlum Corporation Master
Trusts 105,188 126,342
Net (loss)/gain from interest in registered investment companies (153,603) 62,064
Net loss from interest in common collective trusts (23,017) (1,641)
Interest income 18,668 10,382
Dividend income 8,379 4,435
Net realized/unrealized loss on corporate
common stocks (7,558) (99,694)
--------------------------
Total additions 424,535 757,416
Deductions:
Distributions to participants 404,698 651,687
--------------------------
Total deductions 404,698 651,687
--------------------------
Net additions 19,837 105,729
Net assets available for benefits at beginning of year 6,518,225 6,412,496
--------------------------
Net assets available for benefits at end of year $ 6,538,062 $ 6,518,225
==========================
See accompanying notes.
-41-
Savings and Security Plan of the
Lockport and Waterbury Facilities
Notes to Financial Statements
December 31, 2001
1. SIGNIFICANT ACCOUNTING POLICIES
Investments are valued as follows:
Bank and insurance contracts with varying contract rates and maturity
dates are stated at contract value.
Although it is management's intention to hold the investment contracts
in the Fixed Income Fund until maturity, certain investment contracts
provide for adjustments to contract value for withdrawals made prior to
maturity.
All other funds are stated at their net asset value, based on the
quoted market prices of the securities held in such funds on applicable
exchanges.
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
that affect the amounts reported in the financial statements and accompanying
notes. Actual results could differ from those estimates.
2. DESCRIPTION OF THE PLAN
The Savings and Security Plan of the Lockport and Waterbury Facilities of
Allegheny Ludlum Corporation (the Plan) is a defined contribution plan and is
subject to the provisions of the Employee Retirement Income Security Act of 1974
(ERISA).
The purpose of the Plan is to provide a savings and retirement plan to eligible
employees of the Lockport and Waterbury Facilities of Allegheny Ludlum
Corporation (ALC) by allowing a portion of their salary to be set aside each
month through payroll deductions. ALC is a wholly owned subsidiary of Allegheny
Technologies Incorporated (ATI), the Plan Sponsor. Effective July 1, 2001,
participants can defer between 1% and 18% of their eligible wages, subject to
Internal Revenue Code limitations. The Company's contribution effective July 1,
2001 consists solely of $.50 for each hour worked by the participant (fixed
dollar retirement). Prior to July 1, 2001, participants could defer up to 8% of
their eligible wages to the Plan based on years of service (basic savings
deferral). In addition, participants could defer additional amounts such that
when combined with the basic savings deferral, the total deferral did not exceed
16% of eligible wages or Internal Revenue Code limitations. The Company, prior
to July 1, 2001, contributed 6.5% of the participant's eligible wages plus a
fixed dollar percentage as defined in the Plan regardless of whether the
participant made any basic savings deferrals. The Company also contributed a
matching contribution equal to 50% of the participant's basic savings deferral.
-42-
Savings and Security Plan of the
Lockport and Waterbury Facilities
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE PLAN (CONTINUED)
Separate accounts are maintained by the Plan Sponsor for each participating
employee. Trustee fees and asset management fees charged by the Plan's trustee,
Dreyfus Retirement Services, for the administration of all funds are charged
against net assets available for benefits of the respective fund. Certain other
expenses of administering the Plan are paid by the Plan Sponsor.
Participants may make "in-service" and hardship withdrawals as outlined in the
plan document.
Prior to July 1, 2001, under certain provisions of the Plan, contributions by
the Plan Sponsor, which have been allocated to the accounts of the participants,
were subject to forfeiture upon participant's termination of employment with
less than five years of service. Such forfeitures will be used to reduce future
contributions by the employer. Prior to July 1, 2001, employer matching
contributions allocated to a participant's account became fully vested after a
participant completed five years of service. Employee contributions and the
fixed dollar retirement contributions are fully vested at all times. Effective
July 1, 2001, participants are fully vested in their entire participant account
balance.
Active employees can borrow up to 50% of their vested account balances. The loan
amounts are further limited to a minimum of $500 and a maximum of $50,000, and
an employee can obtain no more than three loans at one time. Interest rates are
determined based on commercially accepted criteria, and payment schedules vary
based on the type of the loan. General purpose loans are repaid over 6 to 60
months, and primary residence loans are repaid over periods up to 180 months.
Payments are made by payroll deductions.
Effective November 29, 1999, Allegheny Teledyne Incorporated's (the Plan
Sponsor) name was changed to Allegheny Technologies Incorporated. Also, the
Aerospace and Electronics and Consumer segments of Allegheny Teledyne were spun
off into two new freestanding public companies--Teledyne Technologies
Incorporated and Water Pik Technologies, Inc. Stockholders of Allegheny Teledyne
became stockholders of Teledyne Technologies Incorporated and Water Pik
Technologies, Inc., thus creating two new master trusts. Participants may
continue to hold interest in the two new companies until December 31, 2002, at
which time these two holdings will be terminated and the assets will be
transferred to one of the other plan investment options. Effective October 1,
2000, the Allegheny Technologies Incorporated (ATI) Common Stock Master Trust,
Teledyne Technologies Incorporated Common Stock Master Trust, and Water Pik
Technologies, Inc. Common Stock Master Trust were deunitized, enabling each
participating plan to hold actual shares of the common stocks versus holding
each stock in separate master trusts.
-43-
Savings and Security Plan of the
Lockport and Waterbury Facilities
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE PLAN (CONTINUED)
Further information about the Plan, including eligibility, vesting,
contributions, and withdrawals, is contained in the plan documents and related
contracts. These documents are available from the Allegheny Technologies
Personnel and Compensation Committee.
3. INVESTMENTS
The following presents investments that represent 5% or more of the Plan's net
assets:
DECEMBER 31
2001 2000
--------------------------------
Fixed Income Fund $3,954,889 $3,853,103
Dreyfus Emerging Leaders Fund 800,041 921,082
Allegheny Technologies Disciplined Stock Fund 533,936 545,492
Certain of the Plan's investments are in the Allegheny Technologies Disciplined
Stock Fund Master Trust, the Alliance Equity Master Trust and the Fixed Income
Master Trust, which was established for the investment of assets of the Plan,
and several other ATI sponsored retirement plans. Each participating retirement
plan has an undivided interest in the Master Trust. At December 31, 2001 and
2000, the Plan's interest in the net assets of the Allegheny Technologies
Disciplined Stock Fund Master Trust, the Alliance Equity Master Trust and the
Fixed Income Master Trust were as follows:
2001 2000
--------------------------------
Allegheny Technologies Disciplined Stock Fund
Master Trust 0.69% 0.60%
Alliance Equity Master Trust 0.47 0.53
Fixed Income Master Trust 2.39 2.67
Investment income and expenses are allocated to the Plan based upon its pro rata
share in the net assets of the Master Trust.
-44-
Savings and Security Plan of the
Lockport and Waterbury Facilities
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
The composition of the net assets of the Fixed Income Master Trust at December
31, 2001 and 2000 was as follows:
2001 2000
---------------------------
Registered investment companies:
Merrill Lynch Income Accumulation Fund $ -- $ 6,258,870
---------------------------
-- 6,258,870
Guaranteed investment contracts:
Business Mens Assurance Company of America 1,246,890 2,498,807
Canada Life 2,743,536 4,136,118
Combined Life Insurance Company 3,097,946 4,668,459
GE Life and Annuity 11,812,375 5,163,549
Hartford Life Insurance Company 10,025,160 5,641,680
John Hancock Life Insurance Company 14,218,029 11,001,797
Monumental Life Insurance Company 3,331,280 1,867,053
New York Life Insurance Company 7,729,985 3,136,760
Ohio National Life 7,936,620 4,576,017
Pacific Mutual Life Insurance Company 6,036,924 6,200,078
Principal Life 3,000,000 --
Protective Life Insurance Company 1,002,333 2,012,650
Pruco Pace Credit Enhanced 9,950,359 7,691,842
Safeco Life Insurance 3,000,505 2,998,449
Security Life of Denver 6,181,488 5,131,606
Sun America, Inc. 2,992,868 2,998,064
United of Omaha 7,188,790 5,137,380
---------------------------
101,495,088 74,860,309
Synthetic guaranteed investment contracts:
Caisse des Depots et Consignations 7,800,826 8,950,177
CIT Equipment 992,755 --
Common Wealth Edison 1,976,061 --
Conn RRB Spec Trust 2,987,164 --
Detroit Edison 2,018,460 --
FHLMC 2,466,660 --
Illinois Power Sp. Trust 1,957,161 --
MBNA Master CC Trust 1,983,492 --
Peco Energy Company 1,982,788 --
Peoples Security Life Insurance Company 6,602,162 9,137,201
Public Service 1,998,629 --
Transamerica Occidental 9,559,425 14,066,106
Union Bank of Switzerland 2,737,675 5,967,640
Westdeutsche Landesbank Girozentrale 9,387,186 15,715,408
---------------------------
54,450,444 53,836,532
Interest in common collective trust 7,680,629 8,087,097
Receivables 381,024 1,191,139
Other 1,635,070 231,457
---------------------------
Total net assets $165,642,255 $144,465,404
===========================
-45-
Savings and Security Plan of the
Lockport and Waterbury Facilities
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
The Fixed Income Fund (the Fund) invests in guaranteed investment contracts
(GICs) and actively managed structured or synthetic investment contracts (SICs).
The GICs are promises by a bank or insurance company to repay principal plus a
fixed rate of return through contract maturity. SICs differ from GICs in that
there are specific assets supporting the SICs, and these assets are owned by the
Master Trust. The bank or insurance company issues a wrapper contract that
allows participant-directed transactions to be made at contract value. The
assets supporting the SICs are comprised of government agency bonds, corporate
bonds, asset-backed securities (ABOs) and collateralized mortgage obligations
(CMOs) with fair values of $55,854,607 and $53,822,660 at December 31, 2001 and
2000, respectively. The contract value minus the market value of the wrapper
contracts at December 31, 2001 and 2000 is ($1,397,030) and $396,172,
respectively.
Interest crediting rates on the GICs in the Fund are determined at the time of
purchase. Interest crediting rates on the SICs are either: (1) set at the time
of purchase for a fixed term and crediting rate; (2) set at the time of purchase
for a fixed term and variable crediting rate or (3) set at the time of purchase
and reset monthly within a "constant duration." A constant duration contract may
specify a duration of 2.5 years and the crediting rate is adjusted monthly based
upon quarterly rebalancing of eligible 2.5 year duration investment instruments
at the time of each resetting; in effect the contract never matures. At December
31, 2001 and 2000, the interest crediting rates for GICs and Fixed Maturity SICs
ranged from 3.49% to 8.05% and 5.53% to 8.05%, respectively.
For the years ended December 31, 2001 and 2000, the average annual yield for the
investment contracts in the Fund was 6.25% and 6.39%, respectively. Fair value
of the GICs was estimated by discounting the weighted average of the Fund's cash
flows at the then-current interest crediting rate for a comparable maturity
investment contract. Fair value for the SICs was estimated based on the fair
value of each contract's supporting assets at December 31, 2001 and 2000.
-46-
Savings and Security Plan of the
Lockport and Waterbury Facilities
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
The composition of net assets of the Alliance Equity Master Trust at December
31, 2001 and 2000 was as follows:
2001 2000
----------------------------
Investment in registered investment companies:
Alliance Equity Fund S.A. #4 $ 40,024,274 $ 51,215,520
Cash overdraft -- (19,387)
Operating payables (64,365) (31,413)
----------------------------
Total net assets $ 39,959,909 $ 51,164,720
=============================
The composition of net assets of the Allegheny Technologies Disciplined Stock
Fund Master Trust at December 31, 2001 and 2000 was as follows:
2001 2000
------------------------------
Corporate common stocks $ 76,016,770 $ 89,911,418
Interest in common collective trusts 1,410,015 1,415,662
Receivables 103,913 62,651
Operating payables -- (147,875)
-----------------------------
Total net assets $ 77,530,698 $ 91,241,856
=============================
-47-
Savings and Security Plan of the
Lockport and Waterbury Facilities
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
The composition of the changes in net assets of the various master trusts is as
follows:
ALLEGHENY TECHNOLOGIES
DISCIPLINED STOCK FUND MASTER
FIXED INCOME MASTER TRUST ALLIANCE EQUITY MASTER TRUST TRUST
--------------------------------- ---------------------------- -------------------------------
YEAR ENDED DECEMBER 31
----------------------------------------------------------------------------------------------
2001 2000 2001 2000 2001 2000
----------------------------------------------------------------------------------------------
Investment income (loss):
Interest income (loss) $ 9,147,492 $ 7,954,724 $ - $ - $ (639) $ -
Net realized/unrealized
loss on corporate
common stocks - - - - (12,375,289) (8,472,618)
Dividends - - - - 941,613 525,391
Net gain (loss),
registered invest-
ment companies 32,606 108,612 (9,248,179) (9,783,261) - -
Net gain, common
collective trusts 401,062 404,170 - - 53,202 138,084
Other income - 468 - - - -
Administrative expenses (208,589) (185,368) (170,195) (218,831) (519,489) (414,238)
Transfers 11,804,280 1,647,278 (1,786,437) 2,172,578 (1,810,556) 54,049,508
----------------------------------------------------------------------------------------------
Net increase (decrease) 21,176,851 9,929,884 (11,204,811) (7,829,514) (13,711,158) 45,826,127
Total net assets at
beginning of year 144,465,404 134,535,520 51,164,720 58,994,234 91,241,856 45,415,729
----------------------------------------------------------------------------------------------
Total net assets at
end of year $165,642,255 $144,465,404 $39,959,909 $51,164,720 $77,530,698 $91,241,856
==============================================================================================
-48-
Savings and Security Plan of the
Lockport and Waterbury Facilities
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
TELEDYNE TECHNOLOGIES WATER PIK TECHNOLOGIES,
ATI COMMON STOCK MASTER TRUST INCORPORATED COMMON STOCK INC. COMMON STOCK MASTER
MASTER TRUST TRUST
------------------------------ ----------------------------- -----------------------------
YEAR ENDED DECEMBER 31
------------------------------------------------------------------------------------------
2001 2000 2001 2000 2001 2000
------------------------------------------------------------------------------------------
Investment income (loss):
Net realized/unrealized
gain (loss) on
corporate common
stocks $ -- $ (3,205,592) $ -- $ 3,930,711 $ -- $ (33,206)
Dividends -- 525,069 -- -- -- --
Net gain, common
collective trusts -- 17,831 -- 2,171 -- 409
Other loss -- (708) -- (1,379) -- (233)
Administrative expenses -- (8,451) -- 133 -- 41
Transfers -- (17,568,539) -- (6,320,601) -- (815,045)
------------------------------------------------------------------------------------------
Net decrease -- (20,240,390) -- (2,388,965) -- (848,034)
Total net assets at
beginning of year -- 20,240,390 -- 2,388,965 -- 848,034
------------------------------------------------------------------------------------------
Total net assets at end of
year $ -- $ -- $ -- $ -- $ -- $ --
==========================================================================================
Interest, realized and unrealized gains and losses, and management fees from the
master trusts are included in the net (loss)/gain from interest in Allegheny
Ludlum Corporation Master Trusts on the statements of changes in net assets
available for benefits.
4. INCOME TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
dated February 1, 1996, stating that the Plan is qualified under Section 401(a)
of the Internal Revenue Code (the Code) and, therefore, the related trust is
exempt from taxation. Subsequent to this issuance of the determination letter,
the Plan was amended. Once qualified, the Plan is required to operate in
conformity with the Code to maintain its qualification. The plan administrator
believes that the Plan is being operated in compliance with the applicable
requirements of the Code and, therefore, believes that the Plan is qualified and
the related trust is tax-exempt.
-49-
Savings and Security Plan of the
Lockport and Waterbury Facilities
Notes to Financial Statements (continued)
5. TRANSACTIONS WITH PARTIES-IN-INTEREST
Certain plan investments are shares of mutual funds managed by Dreyfus
Retirement Services. Dreyfus Retirement Services is the trustee as defined by
the Plan and, therefore, these transactions qualify as party-in-interest.
Trustee and investment fees paid during 2001 and 2000 were based upon customary
and reasonable rates for such services.
6. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA.
7. RECLASSIFICATIONS
Certain reclassifications have been made to the 2000 financial statements to
conform to the current year financial statement presentation.
-50-
Savings and Security Plan of the
Lockport and Waterbury Facilities
EIN 25-1792394 Plan 007
Schedule H, Line 4(i)--Schedule of Assets (Held at End of Year)
December 31, 2001
DESCRIPTION UNITS/SHARES CURRENT VALUE
- ---------------------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANIES
Dreyfus Bond Market Index* 5033.318 $ 50,585
Dreyfus Emerging Leaders Fund* 23,009.507 800,041
Dreyfus International Value Fund* 2,605.846 35,830
MAS Midcap Growth Fund 2,295.470 40,056
Jennison Growth Fund 2,424.439 35,445
---------------------
Total registered investment companies $961,957
=====================
COMMON COLLECTIVE TRUSTS
Dreyfus Lifestyle Growth and Income Fund* 13,845.001 $225,382
Short Term Investment Fund 360.400 361
Dreyfus Lifestyle Growth Fund* 5,711.035 99,266
Dreyfus Lifestyle Income Fund* 2,611.5670 38,950
---------------------
Total common collective trusts $363,959
=====================
CORPORATE COMMON STOCKS
Allegheny Technologies Incorporated* 10,802.000 $180,934
Teledyne Technologies Incorporated 2,131.000 34,714
Water Pik Technologies, Inc. 635.000 5,518
---------------------
Total corporate common stocks $221,166
=====================
Participant loans* (6% to 10.5%) $314,699
======================
*Party-in-interest
-51-
AUDITED FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE
Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan
Years ended December 31, 2001 and 2000 with Report of Independent Auditors
-52-
Allegheny Ludlum Corporation
Personal Retirement and 401(k) Savings Account Plan
Audited Financial Statements
and Supplemental Schedule
Years ended December 31, 2001 and 2000
CONTENTS
Report of Independent Auditors ..............................................54
Audited Financial Statements
Statements of Net Assets Available for Benefits..............................55
Statements of Changes in Net Assets Available for Benefits...................56
Notes to Financial Statements ...............................................57
Supplemental Schedule
Schedule H, Line 4(i)--Schedule of Assets (Held at End of Year)..............66
-53-
Report of Independent Auditors
Allegheny Technologies Incorporated
We have audited the accompanying statements of net assets available for benefits
of the Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings
Account Plan as of December 31, 2001 and 2000, and the related statements of
changes in net assets available for benefits for the years then ended. These
financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 2001 and 2000, and the changes in its net assets available for
benefits for the years then ended, in conformity with accounting principles
generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule of assets
held at end of year as of December 31, 2001 is presented for purposes of
complying with the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974, and is not
a required part of the financial statements. The supplemental schedule has been
subjected to the auditing procedures applied in our audits of the financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ Ernst & Young LLP
Pittsburgh, Pennsylvania
May 24, 2002
-54-
Allegheny Ludlum Corporation
Personal Retirement and 401(k) Savings Account Plan
Statements of Net Assets Available for Benefits
DECEMBER 31
2001 2000
---------------------------
ASSETS
Investments:
Interest-bearing cash $ 351 $ --
Interest in Allegheny Ludlum Corporation Master Trusts 67,085,891 62,127,823
Interest in registered investment companies 12,684,948 8,095,070
Interest in common collective trusts 9,801,563 8,822,190
Corporate common stocks 9,862,875 5,450,485
Participant loans 6,219,132 3,592,858
---------------------------
Total investments 105,654,760 88,088,426
Cash overdraft -- (45,691)
Other receivables (payables) 88 (27,430)
---------------------------
Net assets available for benefits $105,654,848 $ 88,015,305
===========================
See accompanying notes.
-55-
Allegheny Ludlum Corporation
Personal Retirement and 401(k) Savings Account Plan
Statements of Changes in Net Assets Available for Benefits
YEAR ENDED DECEMBER 31
2001 2000
------------------------------
Additions:
Contributions:
Employer $ 2,377,780 $ 2,648,506
Employee 5,046,862 5,482,813
Investment income:
Net (loss)/gain from interest in Allegheny Ludlum Corporation
Master Trusts (26,871) 146,094
Net (loss)/gain from interest in registered investment companies (723,000) 335,404
Net loss from interest in common collective trusts (569,870) (41,496)
Interest income 341,696 305,116
Dividend income 260,396 47,706
Net realized/unrealized loss on corporate
common stocks (1,835,120) (800,720)
Transfers into Plan 17,023,296 --
------------------------------
Total additions 21,895,169 8,123,423
Deductions:
Distributions to participants 4,080,646 4,262,984
Transfers out of Plan 174,980 --
------------------------------
Total deductions 4,255,626 4,262,984
------------------------------
Net additions 17,639,543 3,860,439
Net assets available for benefits at beginning of year 88,015,305 84,154,866
------------------------------
Net assets available for benefits at end of year $ 105,654,848 $ 88,015,305
==============================
See accompanying notes.
-56-
Allegheny Ludlum Corporation
Personal Retirement and 401(k) Savings Account Plan
Notes to Financial Statements
December 31, 2001
1. SIGNIFICANT ACCOUNTING POLICIES
Investments are valued as follows:
Bank and insurance contracts with varying contract rates and maturity dates
are stated at contract value.
Although it is management's intention to hold the investment contracts in
the Fixed Income Fund until maturity, certain investment contracts provide
for adjustments to contract value for withdrawals made prior to maturity.
All other funds are stated at their net asset value, based on the quoted
market prices of the securities held in such funds on applicable exchanges.
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
that affect the amounts reported in the financial statements and accompanying
notes. Actual results could differ from those estimates.
2. DESCRIPTION OF THE PLAN
The Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account
Plan (the Plan) is a defined contribution plan and subject to the provisions of
the Employee Retirement Income Security Act of 1974 (ERISA).
The purpose of the Plan is to provide retirement benefits to eligible employees
of Allegheny Ludlum Corporation (ALC) through company contributions and to
encourage employee thrift by permitting eligible employees to defer a part of
their compensation and contribute such deferral to the Plan. ALC is a wholly
owned subsidiary of Allegheny Technologies Incorporated. ALC contributes to the
Plan fifty cents per hour worked per eligible union employee. Unless otherwise
specified by the participant, all contributions are made to the Fixed Income
Fund. Such contributions are made only from current income or accumulated
earnings of the Plan Sponsor. The Plan allows participants to direct
contributions made on their behalf to any of the investment alternatives. The
Plan allows employees to set aside up to 18% of eligible wages each pay period
through payroll deductions subject to Internal Revenue Code limitations. In
addition, the employees' annual pretax profit sharing award and pretax Longevity
Incentive Payment Plan award may be contributed at the employees' discretion as
their deferral.
-57-
Allegheny Ludlum Corporation
Personal Retirement and 401(k) Savings Account Plan
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE PLAN (CONTINUED)
Separate accounts are maintained by the plan sponsor for each participating
employee. Trustee fees and asset management fees charged by the Plan's trustee,
Dreyfus Retirement Services, for the administration of all funds are charged
against net assets available for benefits of the respective fund. Certain other
expenses of administering the Plan are paid by the plan sponsor.
Participants may make "in-service" and hardship withdrawals as outlined in the
plan document.
Active employees can borrow up to 50% of their vested account balances minus any
outstanding loans. The loan amounts are further limited to a minimum of $500 and
a maximum of $50,000, and an employee can obtain no more than three loans at one
time. Interest rates are determined based on commercially accepted criteria, and
payment schedules vary based on the type of the loan. General purpose loans are
repaid over 6 to 60 months, and primary residence loans are repaid over periods
up to 180 months. Payments are made by payroll deductions.
Effective November 29, 1999, Allegheny Teledyne Incorporated's (the Plan
Sponsor) name was changed to Allegheny Technologies Incorporated. Also,
the Aerospace and Electronics and Consumer segments of Allegheny Teledyne were
spun off into two new freestanding public companies--Teledyne Technologies
Incorporated and Water Pik Technologies, Inc. Stockholders of Allegheny Teledyne
became stockholders of Teledyne Technologies Incorporated and Water Pik
Technologies, Inc., thus creating two new master trusts. Participants may
continue to hold interest in the two new companies until December 31, 2002, at
which time these two holdings will be terminated and the assets will be
transferred to one of the other plan investment options. Effective October 1,
2000, the Allegheny Technologies Incorporated (ATI) Common Stock Master Trust,
Teledyne Technologies Incorporated Common Stock Master Trust, and Water Pik
Technologies, Inc. Common Stock Master Trust were deunitized, enabling each
participating plan to hold actual shares of the common stocks versus holding
each stock in separate master trusts.
Effective November 1, 2001, Oremet employees belonging to the bargaining unit
Local 7150 became eligible to participant in the Plan. Accordingly, plan
investments related to these participants were transferred into the Plan.
Further information about the Plan, including eligibility, vesting,
contributions and withdrawals, is contained in the Plan Document and related
contracts. Copies of these documents are available from the Allegheny
Technologies Personnel and Compensation Committee.
-58-
Allegheny Ludlum Corporation
Personal Retirement and 401(k) Savings Account Plan
Notes to Financial Statements (continued)
3. INVESTMENTS
The following presents investments that represent 5% or more of the Plan's net
assets:
DECEMBER 31
2001 2000
----------------------------------
Allegheny Technologies Disciplined Stock Fund $ 8,447,657 $ 7,874,739
Alliance Equity Fund 8,435,007 10,581,519
Allegheny Technologies Incorporated common stocks 8,450,736 -
Dreyfus Emerging Leaders 6,113,187 6,398,297
Dreyfus Lifestyle Growth and Income Fund 6,547,450 4,991,187
Fixed Income Fund 50,203,227 43,671,565
Certain of the Plan's investments are in the Allegheny Technologies Disciplined
Stock Fund Master Trust, the Alliance Equity Master Trust and the Fixed Income
Master Trust, which was established for the investment of assets of the Plan,
and several other ATI sponsored retirement plans. Each participating retirement
plan has an undivided interest in the Master Trust. At December 31, 2001 and
2000, the Plan's interest in the net assets of the Allegheny Technologies
Disciplined Stock Fund Master Trust, the Alliance Equity Master Trust and the
Fixed Income Master Trust were as follows:
2001 2000
-------------------- ------------------
Allegheny Technologies Disciplined Stock Fund
Master Trust 10.90% 8.63%
Alliance Equity Master Trust 21.11 20.68
Fixed Income Master Trust 30.31 30.23
Investment income and expenses are allocated to the Plan based upon its pro rata
share in the net assets of the Master Trust.
-59-
Allegheny Ludlum Corporation
Personal Retirement and 401(k) Savings Account Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
The composition of the net assets of the Fixed Income Master Trust at December
31, 2001 and 2000 was as follows:
2001 2000
---------------------------
Registered investment companies:
Merrill Lynch Income Accumulation Fund $ -- $ 6,258,870
---------------------------
-- 6,258,870
Guaranteed investment contracts:
Business Mens Assurance Company of America 1,246,890 2,498,807
Canada Life 2,743,536 4,136,118
Combined Life Insurance Company 3,097,946 4,668,459
GE Life and Annuity 11,812,375 5,163,549
Hartford Life Insurance Company 10,025,160 5,641,680
John Hancock Life Insurance Company 14,218,029 11,001,797
Monumental Life Insurance Company 3,331,280 1,867,053
New York Life Insurance Company 7,729,985 3,136,760
Ohio National Life 7,936,620 4,576,017
Pacific Mutual Life Insurance Company 6,036,924 6,200,078
Principal Life 3,000,000 --
Protective Life Insurance Company 1,002,333 2,012,650
Pruco Pace Credit Enhanced 9,950,359 7,691,842
Safeco Life Insurance 3,000,505 2,998,449
Security Life of Denver 6,181,488 5,131,606
Sun America, Inc. 2,992,868 2,998,064
United of Omaha 7,188,790 5,137,380
---------------------------
101,495,088 74,860,309
Synthetic guaranteed investment contracts:
Caisse des Depots et Consignations 7,800,826 8,950,177
CIT Equipment 992,755 --
Common Wealth Edison 1,976,061 --
Conn RRB Spec Trust 2,987,164 --
Detroit Edison 2,018,460 --
FHLMC 2,466,660 --
Illinois Power Sp. Trust 1,957,161 --
MBNA Master CC Trust 1,983,492 --
Peco Energy Company 1,982,788 --
Peoples Security Life Insurance Company 6,602,162 9,137,201
Public Service 1,998,629 --
Transamerica Occidental 9,559,425 14,066,106
Union Bank of Switzerland 2,737,675 5,967,640
Westdeutsche Landesbank Girozentrale 9,387,186 15,715,408
---------------------------
54,450,444 53,836,532
Interest in common collective trust 7,680,629 8,087,097
Receivables 381,024 1,191,139
Other 1,635,070 231,457
---------------------------
Total net assets $165,642,255 $144,465,404
===========================
-60-
Allegheny Ludlum Corporation
Personal Retirement and 401(k) Savings Account Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
The Fixed Income Fund (the Fund) invests in guaranteed investment contracts
(GICs) and actively managed structured or synthetic investment contracts (SICs).
The GICs are promises by a bank or insurance company to repay principal plus a
fixed rate of return through contract maturity. SICs differ from GICs in that
there are specific assets supporting the SICs, and these assets are owned by the
Master Trust. The bank or insurance company issues a wrapper contract that
allows participant-directed transactions to be made at contract value. The
assets supporting the SICs are comprised of government agency bonds, corporate
bonds, asset-backed securities (ABOs) and collateralized mortgage obligations
(CMOs) with fair values of $55,854,607 and $53,822,660 at December 31, 2001 and
2000, respectively. The contract value minus the market value of the wrapper
contracts at December 31, 2001 and 2000 is ($1,397,030) and $396,172,
respectively.
Interest crediting rates on the GICs in the Fund are determined at the time of
purchase. Interest crediting rates on the SICs are either: (1) set at the time
of purchase for a fixed term and crediting rate; (2) set at the time of purchase
for a fixed term and variable crediting rate or (3) set at the time of purchase
and reset monthly within a "constant duration." A constant duration contract may
specify a duration of 2.5 years and the crediting rate is adjusted monthly based
upon quarterly rebalancing of eligible 2.5 year duration investment instruments
at the time of each resetting; in effect the contract never matures. At December
31, 2001 and 2000, the interest crediting rates for GICs and Fixed Maturity SICs
ranged from 3.49% to 8.05% and 5.53% to 8.05%, respectively.
For the years ended December 31, 2001 and 2000, the average annual yield for the
investment contracts in the Fund was 6.25% and 6.39%, respectively. Fair value
of the GICs was estimated by discounting the weighted average of the Fund's cash
flows at the then-current interest crediting rate for a comparable maturity
investment contract. Fair value for the SICs was estimated based on the fair
value of each contract's supporting assets at December 31, 2001 and 2000.
-61-
Allegheny Ludlum Corporation
Personal Retirement and 401(k) Savings Account Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
The composition of net assets of the Alliance Equity Master Trust at December
31, 2001 and 2000 was as follows:
2001 2000
---------------------------------
Investment in registered investment companies:
Alliance Equity Fund S.A. #4 $40,024,274 $51,215,520
Cash overdraft - (19,387)
Operating payables (64,365) (31,413)
---------------------------------
Total net assets $39,959,909 $51,164,720
=================================
The composition of net assets of the Allegheny Technologies Disciplined Stock
Fund Master Trust at December 31, 2001 and 2000 was as follows:
2001 2000
----------------------------------
Corporate common stocks $76,016,770 $89,911,418
Interest in common collective trusts 1,410,015 1,415,662
Receivables 103,913 62,651
Operating payables - (147,875)
----------------------------------
Total net assets $77,530,698 $91,241,856
==================================
-62-
Allegheny Ludlum Corporation
Personal Retirement and 401(k) Savings Account Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
The composition of the changes in net assets of the various master trusts is as
follows:
ALLEGHENY TECHNOLOGIES
DISCIPLINED STOCK FUND MASTER
FIXED INCOME MASTER TRUST ALLIANCE EQUITY MASTER TRUST TRUST
--------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31
----------------------------------------------------------------------------------------------
2001 2000 2001 2000 2001 2000
--------------------------------------------------------------------------------------------------
Investment income (loss):
Interest income (loss) $ 9,147,492 $ 7,954,724 $ -- $ -- $ (639) $ --
Net realized/unrealized
loss on corporate
common stocks -- -- -- -- (12,375,289) (8,472,618)
Dividends -- -- -- -- 941,613 525,391
Net gain (loss),
registered invest-
ment companies 32,606 108,612 (9,248,179) (9,783,261) -- --
Net gain, common
collective trusts 401,062 404,170 -- -- 53,202 138,084
Other income -- 468 -- -- -- --
Administrative expenses (208,589) (185,368) (170,195) (218,831) (519,489) (414,238)
Transfers 11,804,280 1,647,278 (1,786,437) 2,172,578 (1,810,556) 54,049,508
--------------------------------------------------------------------------------------------------
Net increase (decrease) 21,176,851 9,929,884 (11,204,811) (7,829,514) (13,711,158) 45,826,127
Total net assets at
beginning of year 144,465,404 134,535,520 51,164,720 58,994,234 91,241,856 45,415,729
--------------------------------------------------------------------------------------------------
Total net assets at
end of year $ 165,642,255 $ 144,465,404 $ 39,959,909 $ 51,164,720 $ 77,530,698 $ 91,241,856
==================================================================================================
-63-
Allegheny Ludlum Corporation
Personal Retirement and 401(k) Savings Account Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
TELEDYNE TECHNOLOGIES WATER PIK TECHNOLOGIES,
ATI COMMON STOCK MASTER TRUST INCORPORATED COMMON STOCK INC. COMMON STOCK MASTER
MASTER TRUST TRUST
---------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31
------------------------------------------------------------------------------------------
2001 2000 2001 2000 2001 2000
---------------------------------------------------------------------------------------
Investment income (loss):
Net realized/
(unrealized) gain
(loss) on corporate
common stocks $ -- $ (3,205,592) $ -- $ 3,930,711 $ -- $ (33,206)
Dividends -- 525,069 -- -- -- --
Net gain, common
collective trusts -- 17,831 -- 2,171 -- 409
Other loss -- (708) -- (1,379) -- (233)
Administrative expenses -- (8,451) -- 133 -- 41
Transfers -- (17,568,539) -- (6,320,601) -- (815,045)
---------------------------------------------------------------------------------------
Net decrease -- (20,240,390) -- (2,388,965) -- (848,034)
Total net assets at
beginning of year -- 20,240,390 -- 2,388,965 -- 848,034
---------------------------------------------------------------------------------------
Total net assets at end of
year $ -- $ -- $ -- $ -- $ -- $ --
=======================================================================================
Interest, realized and unrealized gains and losses, and management fees from the
master trusts are included in the net (loss)/gain from interest in Allegheny
Ludlum Corporation Master Trusts on the statements of changes in net assets
available for benefits.
-64-
Allegheny Ludlum Corporation
Personal Retirement and 401(k) Savings Account Plan
Notes to Financial Statements (continued)
4. INCOME TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
dated November 30, 1995, stating that the Plan is qualified under Section 401(a)
of the Internal Revenue Code (the Code) and, therefore, the related trust is
exempt from taxation. Subsequent to this issuance of the determination letter,
the Plan was amended. Once qualified, the Plan is required to operate in
conformity with the Code to maintain its qualification. The plan administrator
believes the Plan is being operated in compliance with the applicable
requirements of the Code and, therefore, believes that the Plan, as amended, is
qualified and the related trust is tax-exempt.
5. TRANSACTIONS WITH PARTIES-IN-INTEREST
Certain plan investments are shares of mutual funds managed by Dreyfus
Retirement Services. Dreyfus Retirement Services is the trustee as defined by
the Plan and, therefore, these transactions qualify as party-in-interest.
Trustee and investment fees paid during 2001 and 2000 were based upon customary
and reasonable rates for such services.
6. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA.
7. RECLASSIFICATIONS
Certain reclassifications have been made to the 2000 financial statements to
conform with the current year financial statement presentation.
-65-
Allegheny Ludlum Corporation
Personal Retirement and 401(k) Savings Account Plan
EIN 25-1792394 Plan 005
Schedule H, Line 4(i)--Schedule of Assets (Held at End of Year)
December 31, 2001
DESCRIPTION UNITS/SHARES CURRENT VALUE
- -------------------------------------------------------------------------------
Interest-Bearing Cash 350.95 $ 351
===========
REGISTERED INVESTMENT COMPANIES
Dreyfus Emerging Leaders Fund* 175,817.861 $ 6,113,187
Dreyfus 100% US Treasury MM Fund* 61,479.130 61,479
Dreyfus International Value Fund* 138,279.771 1,901,347
Dreyfus Bond Market Index* 104,469.057 1,049,914
MAS Midcap Growth Fund 151,527.199 2,644,150
Jennison Growth Fund 65,576.699 914,871
-----------
Total registered investment companies $12,684,948
===========
COMMON COLLECTIVE TRUSTS
Dreyfus Lifestyle Growth and Income Fund* 402,203.752 $ 6,547,450
Short-Term Investment Fund 1,926.250 1,926
Dreyfus Lifestyle Growth Fund* 144,703.953 2,515,160
Dreyfus Lifestyle Income Fund* 49,416.685 737,027
-----------
Total common collective trusts $ 9,801,563
===========
CORPORATE COMMON STOCKS
Allegheny Technologies Incorporated* 504,521.544 $ 8,450,736
Teledyne Technologies Incorporated 72,920.424 1,187,874
Water Pik Technologies, Inc. 25,807.246 224,265
-----------
Total corporate common stocks $ 9,862,875
===========
Participant loans (6% to 10.5%)* $ 6,219,132
===========
*Party-in-interest
-66-
AUDITED FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE
The 401(k) Plan
Year ended December 31, 2001 with Report of Independent Auditors
-67-
The 401(k) Plan
Audited Financial Statements
and Supplemental Schedule
Year ended December 31, 2001
CONTENTS
Report of Independent Auditors ..............................................69
Audited Financial Statements
Statements of Net Assets Available for Benefits .............................70
Statement of Changes in Net Assets Available for Benefits....................71
Notes to Financial Statements ...............................................72
Supplemental Schedule
Schedule H, Line 4(i)--Schedule of Assets (Held at End of Year)..............80
-68-
Report of Independent Auditors
Allegheny Technologies Incorporated
We have audited the accompanying statements of net assets available for benefits
of The 401(k) Plan as of December 31, 2001 and 2000, and the related statement
of changes in net assets available for benefits for the year ended December 31,
2001. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 2001 and 2000, and the changes in its net assets available for
benefits for the year ended December 31, 2001, in conformity with accounting
principles generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule of assets
held at end of year as of December 31, 2001 is presented for purposes of
complying with Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974 and is not
a required part of the financial statements. The supplemental schedule has been
subjected to the auditing procedures applied in our audits of the financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
/s/ Ernst & Young LLP
Pittsburgh, Pennsylvania
May 24, 2002
-69-
The 401(k) Plan
Statements of Net Assets Available for Benefits
DECEMBER 31
2001 2000
---------------------------------
Investments:
Interest-bearing cash $ 1,727 $ --
Interest in Allegheny Ludlum Corporation Master Trusts 55,592,584 62,961,444
Interest in registered investment companies 25,134,460 25,289,559
Interest in common collective trusts 27,632,762 31,017,292
Corporate common stocks 7,077,011 7,011,641
Participant loans 5,131,050 4,437,039
---------------------------------
Total investments 120,569,594 130,716,975
Cash overdraft (133,688) (33,318)
Other receivables 160,169 33,448
Other payables (92,603) (41,074)
---------------------------------
Net assets available for benefits $ 120,503,472 $ 130,676,031
=================================
See accompanying notes.
-70-
The 401(k) Plan
Statement of Changes in Net Assets Available for Benefits
Year ended December 31, 2001
Additions:
Contributions:
Employer $ 2,627,766
Employee 10,059,044
Investment income:
Net loss from interest in Allegheny Ludlum Corporation Master Trusts (5,638,275)
Net loss from interest in registered investment companies (3,635,411)
Net loss from interest in common collective trusts (2,037,595)
Interest income 412,527
Dividend income 277,110
Net unrealized/realized loss on corporate common stocks (110,129)
-------------
Total additions 1,955,037
Deductions:
Distributions to participants 9,593,209
Transfers out of Plan 2,524,562
Other, net 9,825
-------------
Total deductions 12,127,596
-------------
Net deductions (10,172,559)
Net assets available for benefits at beginning of year 130,676,031
-------------
Net assets available for benefits at end of year $ 120,503,472
=============
See accompanying notes.
-71-
The 401(k) Plan
Notes to Financial Statements
December 31, 2001
1. SIGNIFICANT ACCOUNTING POLICIES
Investments are valued as follows:
Bank and insurance contracts with varying contract rates and maturity dates
are stated at contract value.
Although it is management's intention to hold the investment contracts in
the Fixed Income Fund until maturity, certain investment contracts provide
for adjustments to contract value for withdrawals made prior to maturity.
All other funds are stated at their net asset value, based on the quoted
market prices of the securities held in such funds on applicable exchanges.
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
that affect the amounts reported in the financial statements and accompanying
notes. Actual results could differ from those estimates.
2. DESCRIPTION OF THE PLAN
The 401(k) Plan (the Plan) is a defined contribution plan and is subject to the
provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
The purpose of the Plan is to provide retirement benefits to eligible employees
through company contributions and to encourage employee thrift by permitting
eligible employees to defer a part of their compensation and contribute such
deferral to the Plan. Participants can defer between 1% and 15%, subject to
Internal Revenue Code limitations, of their eligible wages and contribute them
to the Plan. Qualifying employee contributions are partially matched by
Allegheny Technologies up to the lesser of a maximum of $1,000 annually for each
participant, or 50% of participants' deferrals.
Separate accounts are maintained by the Plan Sponsor for each participating
employee. Trustee fees and asset management fees charged by the Plan's trustee,
Dreyfus Retirement Services, for the administration of all funds are charged
against net assets available for benefits of the respective fund. Certain other
expenses of administering the Plan are paid by the Plan Sponsor.
-72-
The 401(k) Plan
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE PLAN (CONTINUED)
Participants may make "in-service" and hardship withdrawals as outlined in the
plan document.
Active employees can borrow up to 50% of their vested account balances minus any
outstanding loans. The loan amounts are further limited to a minimum of $1,000
and a maximum of $50,000, and an employee can obtain no more than three loans at
one time. Interest rates are determined based on commercially accepted criteria,
and payment schedules vary based on the type of the loan. General-purpose loans
are repaid over 6 to 60 months, and primary residence loans are repaid over
periods up to 180 months. Payments are made by payroll deductions.
Effective November 29, 1999, Allegheny Teledyne Incorporated's (the Plan
Sponsor) name was changed to Allegheny Technologies Incorporated. Also, the
Aerospace and Electronics and Consumer segments of Allegheny Teledyne were spun
off into two new freestanding public companies--Teledyne Technologies
Incorporated and Water Pik Technologies, Inc. As a result of this spin-off,
changes were made to the Allegheny Teledyne Incorporated Stock Fund within The
401(k) Plan. The name of the stock fund was changed from the Allegheny Teledyne
Incorporated Stock Fund to the Allegheny Technologies Incorporated Stock Fund.
In addition, stockholders of the Allegheny Technologies Incorporated Stock Fund
became stockholders of Teledyne Technologies and Water Pik Technologies. The
Plan includes two new common stock funds--the Teledyne Technologies Incorporated
Stock Fund and the Water Pik Technologies, Inc. Stock Fund. Participants in The
401(k) Plan may continue to hold interests in the Teledyne Technologies and
Water Pik Technologies stock funds until December 31, 2002, at which time these
two stock funds will be terminated and the assets transferred to one of the
other plan investment options. Additionally, no new purchases of Teledyne
Technologies and Water Pik Technologies stocks were permitted as of April 1,
2001.
Further information about the Plan, including eligibility, vesting,
contributions, and withdrawals, is contained in the plan documents. Copies of
these documents are available from the Allegheny Technologies Personnel and
Compensation Committee.
-73-
The 401(k) Plan
Notes to Financial Statements (continued)
3. INVESTMENTS
The following presents investments that represent 5% or more of the Plan's net
assets as of December 31, 2001 and 2000.
DECEMBER 31
2001 2000
-------------------------------------
Dreyfus LifeStyle Growth & Income Fund $18,643,505 $20,858,277
Dreyfus LifeStyle Growth Fund 7,379,558 8,458,087
Allegheny Technologies Disciplined Stock Fund 40,956,787 51,301,400
Fixed Income Master Trust 14,304,314 11,498,158
Prudential Jennison Growth Fund, Class A Shares 9,844,233 11,428,707
Dreyfus Bond Market Index 7,181,316 -
Certain of the Plan's investments are in the Allegheny Technologies Disciplined
Stock Fund Master Trust, the Alliance Equity Master Trust and the Fixed Income
Master Trust, which was established for the investment of assets of the Plan,
and several other ATI sponsored retirement plans. Each participating retirement
plan has an undivided interest in the Master Trust. At December 31, 2001 and
2000, the Plan's interest in the net assets of the Allegheny Technologies
Disciplined Stock Fund Master Trust, the Alliance Equity Master Trust and the
Fixed Income Master Trust were as follows:
2001 2000
----------------------------
Allegheny Technologies Disciplined Stock Fund Master Trust 52.83% 56.23%
Fixed Income Master Trust 8.64 7.96
Alliance Equity Master Trust 0.83 0.32
Investment income and expenses are allocated to the Plan based upon its pro rata
share in the net assets of the Master Trust.
-74-
The 401(k) Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
The composition of the net assets of the Fixed Income Master Trust at December
31, 2001 and 2000 was as follows:
2001 2000
------------------------------
Registered investment companies:
Merrill Lynch Income Accumulation Fund $ -- $ 6,258,870
------------------------------
-- 6,258,870
Guaranteed investment contracts:
Business Mens Assurance Company of America 1,246,890 2,498,807
Canada Life 2,743,536 4,136,118
Combined Life Insurance Company 3,097,946 4,668,459
GE Life and Annuity 11,812,375 5,163,549
Hartford Life Insurance Company 10,025,160 5,641,680
John Hancock Life Insurance Company 14,218,029 11,001,797
Monumental Life Insurance Company 3,331,280 1,867,053
New York Life Insurance Company 7,729,985 3,136,760
Ohio National Life 7,936,620 4,576,017
Pacific Mutual Life Insurance Company 6,036,924 6,200,078
Principal Life 3,000,000 --
Protective Life Insurance Company 1,002,333 2,012,650
Pruco Pace Credit Enhanced 9,950,359 7,691,842
Safeco Life Insurance 3,000,505 2,998,449
Security Life of Denver 6,181,488 5,131,606
Sun America, Inc. 2,992,868 2,998,064
United of Omaha 7,188,790 5,137,380
------------------------------
101,495,088 74,860,309
Synthetic guaranteed investment contracts:
Caisse des Depots et Consignations 7,800,826 8,950,177
CIT Equipment 992,755 --
Common Wealth Edison 1,976,061 --
Conn RRB Spec Trust 2,987,164 --
Detroit Edison 2,018,460 --
FHLMC 2,466,660 --
Illinois Power Sp. Trust 1,957,161 --
MBNA Master CC Trust 1,983,492 --
Peco Energy Company 1,982,788 --
Peoples Security Life Insurance Company 6,602,162 9,137,201
Public Service 1,998,629 --
Transamerica Occidental 9,559,425 14,066,106
Union Bank of Switzerland 2,737,675 5,967,640
Westdeutsche Landesbank Girozentrale 9,387,186 15,715,408
------------------------------
54,450,444 53,836,532
Interest in common collective trusts 7,680,629 8,087,097
Receivables 381,024 1,191,139
Other 1,635,070 231,457
------------------------------
Total net assets $165,642,255 $144,465,404
==============================
-75-
The 401(k) Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
The Fixed Income Fund (the Fund) invests in guaranteed investment contracts
(GICs) and actively managed structured or synthetic investment contracts (SICs).
The GICs are promises by a bank or insurance company to repay principal plus a
fixed rate of return through contract maturity. SICs differ from GICs in that
there are specific assets supporting the SICs, and these assets are owned by the
Master Trust. The bank or insurance company issues a wrapper contract that
allows participant-directed transactions to be made at contract value. The
assets supporting the SICs are comprised of government agency bonds, corporate
bonds, asset-backed securities (ABOs) and collateralized mortgage obligations
(CMOs) with fair values of $55,854,607 and $53,822,660 at December 31, 2001 and
2000, respectively. The contract value minus the market value of the wrapper
contracts at December 31, 2001 and 2000 is ($1,397,030) and $396,172,
respectively.
Interest crediting rates on the GICs in the Fund are determined at the time of
purchase. Interest crediting rates on the SICs are either: (1) set at the time
of purchase for a fixed term and crediting rate; (2) set at the time of purchase
for a fixed term and variable crediting rate or (3) set at the time of purchase
and reset monthly within a "constant duration." A constant duration contract may
specify a duration of 2.5 years and the crediting rate is adjusted monthly based
upon quarterly rebalancing of eligible 2.5 year duration investment instruments
at the time of each resetting; in effect the contract never matures. At December
31, 2001 and 2000, the interest crediting rates for GICs and Fixed Maturity SICs
ranged from 3.49% to 8.05% and 5.53% to 8.05%, respectively.
For the year ended December 31, 2001, the average annual yield for the
investment contracts in the Fund was 6.25%. Fair value of the GICs was estimated
by discounting the weighted average of the Fund's cash flows at the then-current
interest crediting rate for a comparable maturity investment contract. Fair
value for the SICs was estimated based on the fair value of each contract's
supporting assets at December 31, 2001 and 2000.
-76-
The 401(k) Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
The composition of net assets of the Alliance Equity Master Trust at December
31, 2001 and 2000 was as follows:
2001 2000
---------------------------------
Investment in registered investment companies:
Alliance Equity Fund S.A. #4 $40,024,274 $51,215,520
Cash overdraft - (19,387)
Operating payables (64,365) (31,413)
---------------------------------
Total net assets $39,959,909 $51,164,720
=================================
The composition of net assets of the Allegheny Technologies Disciplined Stock
Fund Master Trust at December 31, 2001 and 2000 was as follows:
2001 2000
---------------------------------
Corporate common stocks $76,016,770 $89,911,418
Investment in common collective trusts 1,410,015 1,415,662
Receivables 103,913 62,651
Operating payables - (147,875)
---------------------------------
Total net assets $77,530,698 $91,241,856
=================================
-77-
The 401(k) Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
The composition of the changes in net assets of the various master trusts is as
follows:
ALLEGHENY
ALLIANCE TECHNOLOGIES
EQUITY DISCIPLINED
FIXED INCOME MASTER STOCK FUND
MASTER TRUST TRUST MASTER TRUST
-----------------------------------------------------
YEAR ENDED DECEMBER 31
-----------------------------------------------------
2001 2001 2001
-----------------------------------------------------
Investment income (loss):
Interest income (loss) $ 9,147,492 $ -- $ (639)
Net realized/unrealized loss on
corporate common stocks -- -- (12,375,289)
Dividends -- -- 941,613
Net gain (loss), registered
investment companies 32,606 (9,248,179) --
Net gain, common collective
trusts 401,062 -- 53,202
Administrative expenses (208,589) (170,195) (519,489)
Transfers 11,804,280 (1,786,437) (1,810,556)
-----------------------------------------------------
Net increase (decrease) 21,176,851 (11,204,811) (13,711,158)
Total net assets at beginning
of year 144,465,404 51,164,720 91,241,856
-----------------------------------------------------
Total net assets at end of year $ 165,642,255 $ 39,959,909 $ 77,530,698
=====================================================
-78-
The 401(k) Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
Interest, realized and unrealized gains and losses, and management fees from the
master trusts are included in the net (loss)/gain from interest in Allegheny
Ludlum Corporation Master Trusts on the statement of changes in net assets
available for benefits.
4. INCOME TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
dated December 2, 1997, stating that the Plan is qualified under Section 401(a)
of the Internal Revenue Code (the Code) and, therefore, the related trust is
exempt from taxation. Subsequent to this issuance of the determination letter,
the Plan was amended. Once qualified, the Plan is required to operate in
conformity with the Code to maintain its qualification. The plan administrator
believes the Plan is being operated in compliance with the applicable
requirements of the Code and, therefore, believes that the Plan, as amended, is
qualified and the related trust is tax-exempt.
5. PARTIES-IN-INTEREST
Certain plan investments are shares of mutual funds managed by Dreyfus
Retirement Services. Dreyfus Retirement Services is the trustee as defined by
the Plan and, therefore, these transactions qualify as party-in-interest.
Trustee and investment fees paid during 2001 and 2000 were based upon customary
and reasonable rates for such services.
6. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA.
7. RECLASSIFICATIONS
Certain reclassifications have been made to the 2000 financial statements to
conform to the current year financial statement presentation.
-79-
The 401(k) Plan
EIN 25-1792394 Plan 098
Schedule H, Line 4(i)--Schedule of Assets (Held at End of Year)
December 31, 2001
INVESTMENT DESCRIPTION UNITS/SHARES CURRENT VALUE
- ----------------------------------------------------------------------------------------------
Interest-bearing cash 1,727.010 $ 1,727
===============
Interest in registered investment companies:
Dreyfus Bond Market Index Fund* 714,558.851 $ 7,181,316
Dreyfus Emerging Leaders Fund* 31,044.751 1,079,426
Dreyfus Premier Nextech Fund* 175.644 855
Dreyfus Growth & Value International Fund* 232,408.645 3,195,619
MAS Mid Cap Growth Fund, Institutional Shares 218,128.318 3,806,339
Dreyfus 100% U.S. Treasury Money Market Fund* 7,804.300 7,804
Prudential Jennison Growth Fund, Class A Shares 673,340.129 9,844,233
Self-directed account:
Dreyfus Midcap Value Fund* 42.997 1,130
Dreyfus Technology Growth Fund* 79.737 1,998
Harris Assoc. Invt Tr. Oakmark Intl Fd 65.178 945
Ryder Ser Tr Dynamic Velocity 100 Fd 7.977 271
Strong Equity Fds - Technology 100 Fd 115.155 554
Van Wagoner Fds - Inc Post Venture Fd 835.434 8,388
Vanguard/Windsor Fd II Portfolio 218.130 5,582
---------------
$ 25,134,460
===============
-80-
Schedule H, Line 4(i)--Schedule of Assets (Held at End of Year) (continued)
INVESTMENT DESCRIPTION UNITS/SHARES CURRENT VALUE
- ----------------------------------------------------------------------------------------------
Interest in common collective investment funds:
Dreyfus LifeStyle Growth & Income Fund* 1,145,253.146 $ 18,643,505
Dreyfus LifeStyle Growth Fund* 424,565.917 7,379,558
Dreyfus LifeStyle Income Fund* 103,629.848 1,545,592
Dreyfus Short Term Investment Fund 64,107.570 64,107
---------------
$ 27,632,762
===============
Interest in corporate common stocks:
Allegheny Technologies Incorporated common stock* 356,790.643 $ 5,976,243
Teledyne Technologies Incorporated common stock 56,820.624 925,608
Water Pik Technologies, Inc. common stock 20,156.477 175,160
---------------
$ 7,077,011
===============
Participant loans (6% to 10.5%)* $ 5,131,050
===============
* Party-in-interest
-81-
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE
TDY Industries, Inc. Profit Sharing Plan for Certain Employees of Metalworking
Products
Year ended December 31, 2001
-82-
TDY Industries, Inc. Profit Sharing Plan for
Certain Employees of Metalworking Products
Financial Statements
and Supplemental Schedule
Year ended December 31, 2001
(Unaudited)
CONTENTS
Financial Statements (Unaudited)
Statements of Net Assets Available for Benefits .............................84
Statement of Changes in Net Assets Available for Benefits....................85
Notes to Financial Statements ...............................................86
Supplemental Schedule
Schedule H, Line 4(i)--Schedule of Assets (Held at End of Year)..............94
-83-
TDY Industries, Inc. Profit Sharing Plan for
Certain Employees of Metalworking Products
Statements of Net Assets Available for Benefits
(Unaudited)
DECEMBER 31
2001 2000
---------------------------------------
Investments:
Interest in Allegheny Ludlum Corporation Master Trusts $ 869,222 $ 513,437
Interest in registered investment companies 753,101 405,525
Interest in common collective trusts 299,772 199,040
Corporate common stocks 3,534 1,429
Participant loans 212,324 129,235
---------------------------------------
Net assets available for benefits $2,137,953 $1,248,666
=======================================
See accompanying notes.
-84-
TDY Industries, Inc. Profit Sharing Plan for
Certain Employees of Metalworking Products
Statement of Changes in Net Assets Available for Benefits
(Unaudited)
Year ended December 31, 2001
Additions:
Contributions:
Employer $ 379,693
Employee 715,418
Investment income:
Net loss from interest in Allegheny Ludlum Corporation Master Trusts (24,579)
Net loss from interest in registered investment companies (118,863)
Net loss from interest in common collective trusts (16,543)
Interest income 11,712
Dividend income 127
Net unrealized/realized loss on corporate common stocks 98
----------------
Total additions 947,063
Deductions:
Distributions to participants 57,776
----------------
Net deductions 889,287
Net assets available for benefits at beginning of year 1,248,666
----------------
Net assets available for benefits at end of year $2,137,953
================
See accompanying notes.
-85-
TDY Industries, Inc. Profit Sharing Plan for
Certain Employees of Metalworking Products
Notes to Financial Statements
December 31, 2001
1. SIGNIFICANT ACCOUNTING POLICIES
Investments are valued as follows:
Bank and insurance contracts with varying contract rates and maturity dates
are stated at contract value.
Although it is management's intention to hold the investment contracts in
the Fixed Income Fund until maturity, certain investment contracts provide
for adjustments to contract value for withdrawals made prior to maturity.
All other funds are stated at their net asset value, based on the quoted
market prices of the securities held in such funds on applicable exchanges.
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
that affect the amounts reported in the financial statements and accompanying
notes. Actual results could differ from those estimates.
2. DESCRIPTION OF THE PLAN
The TDY Industries, Inc. Profit Sharing Plan for Certain Employees of
Metalworking Products (the Plan) is a defined contribution plan and is subject
to the provisions of the Employee Retirement Income Security Act of 1974
(ERISA).
The purpose of the Plan is to provide retirement benefits to eligible employees
through company contributions and to encourage employee thrift by permitting
eligible employees to defer a part of their compensation and contribute such
deferral to the Plan. Participants can defer between 1% and 15%, subject to
Internal Revenue Code limitations, of their eligible wages and contribute them
to the Plan. Qualifying employee contributions are matched by Allegheny
Technologies as follows:
(1) Such contributions that are not greater than 3% of their eligible
wages are matched at 100%
(2) Such contributions that are greater than 3% but are not greater than
5% of their eligible wages are matched at 50%.
In addition, an employee profit-sharing contribution is matched on the basis of
the eligible employees as follows:
Employer Contribution
Age as a Percentage of Pay
--- ----------------------
Under 35 2.0%
35 - 39 2.5%
40 - 44 3.0%
45 - 49 3.5%
50 - 54 4.0%
55 - 59 4.5%
60 and Older 5.0%
Separate accounts are maintained by the Plan Sponsor for each participating
employee. Trustee fees and asset management fees charged by the Plan's trustee,
Dreyfus Retirement Services, for the administration of all funds are charged
against net assets available for benefits of the respective fund. Certain other
expenses of administering the Plan are paid by the Plan Sponsor.
-86-
TDY Industries, Inc. Profit Sharing Plan for
Certain Employees of Metalworking Products
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE PLAN (CONTINUED)
Participants may make "in-service" and hardship withdrawals as outlined in the
plan document.
Active employees can borrow up to 50% of their vested account balances minus any
outstanding loans. The loan amounts are further limited to a minimum of $1,000
and a maximum of $50,000, and an employee can obtain no more than three loans at
one time. Interest rates are determined based on commercially accepted criteria,
and payment schedules vary based on the type of the loan. General-purpose loans
are repaid over 6 to 60 months, and primary residence loans are repaid over
periods up to 180 months. Payments are made by payroll deductions.
Further information about the Plan, including eligibility, vesting,
contributions, and withdrawals, is contained in the plan documents. Copies of
these documents are available from the Allegheny Technologies Personnel and
Compensation Committee.
-87-
TDY Industries, Inc. Profit Sharing Plan for
Certain Employees of Metalworking Products
Notes to Financial Statements (continued)
3. INVESTMENTS
The following presents investments that represent 5% or more of the Plan's net
assets as of December 31, 2001 and 2000.
DECEMBER 31
2001 2000
--------------------------------
(Unaudited)
Dreyfus LifeStyle Growth & Income Fund $ 93,458 $ --
Dreyfus LifeStyle Growth Fund 144,500 101,981
Fixed Income Master Trust 548,276 275,818
Alliance Capital Fund 259,327 190,138
Dreyfus Emerging Leaders Fund 460,011 314,896
Dreyfus Growth & Value International Fund 81,523 --
Morgan Stanley Institutional Fund - Mid Cap Growth Portfolio 178,536 --
Certain of the Plan's investments are in the Allegheny Technologies Disciplined
Stock Fund Master Trust, the Alliance Equity Master Trust and the Fixed Income
Master Trust, which was established for the investment of assets of the Plan,
and several other ATI sponsored retirement plans. Each participating retirement
plan has an undivided interest in the Master Trust. At December 31, 2001 and
2000, the Plan's interest in the net assets of the Allegheny Technologies
Disciplined Stock Fund Master Trust, the Alliance Equity Master Trust and the
Fixed Income Master Trust were as follows:
2001 2000
-----------------------
(Unaudited)
Allegheny Technologies Disciplined Stock Fund Master Trust 0.08% 0.05%
Fixed Income Master Trust 0.33 0.19
Alliance Equity Master Trust 0.65 0.37
Investment income and expenses are allocated to the Plan based upon its pro rata
share in the net assets of the Master Trust.
-88-
TDY Industries, Inc. Profit Sharing Plan for
Certain Employees of Metalworking Products
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
The composition of the net assets of the Fixed Income Master Trust at
December 31, 2001 and 2000 was as follows:
2001 2000
--------------------------------------------
(Unaudited)
Registered investment companies:
Merrill Lynch Income Accumulation Fund $ - $ 6,258,870
--------------------------------------------
- 6,258,870
Guaranteed investment contracts:
Business Mens Assurance Company of America 1,246,890 2,498,807
Canada Life 2,743,536 4,136,118
Combined Life Insurance Company 3,097,946 4,668,459
GE Life and Annuity 11,812,375 5,163,549
Hartford Life Insurance Company 10,025,160 5,641,680
John Hancock Life Insurance Company 14,218,029 11,001,797
Monumental Life Insurance Company 3,331,280 1,867,053
New York Life Insurance Company 7,729,985 3,136,760
Ohio National Life 7,936,620 4,576,017
Pacific Mutual Life Insurance Company 6,036,924 6,200,078
Principal Life 3,000,000 -
Protective Life Insurance Company 1,002,333 2,012,650
Pruco Pace Credit Enhanced 9,950,359 7,691,842
Safeco Life Insurance 3,000,505 2,998,449
Security Life of Denver 6,181,488 5,131,606
Sun America, Inc. 2,992,868 2,998,064
United of Omaha 7,188,790 5,137,380
--------------------------------------------
101,495,088 74,860,309
Synthetic guaranteed investment contracts:
Caisse des Depots et Consignations 7,800,826 8,950,177
CIT Equipment 992,755 -
Common Wealth Edison 1,976,061 -
Conn RRB Spec Trust 2,987,164 -
Detroit Edison 2,018,460 -
FHLMC 2,466,660 -
Illinois Power Sp. Trust 1,957,161 -
MBNA Master CC Trust 1,983,492 -
Peco Energy Company 1,982,788 -
Peoples Security Life Insurance Company 6,602,162 9,137,201
Public Service 1,998,629 -
Transamerica Occidental 9,559,425 14,066,106
Union Bank of Switzerland 2,737,675 5,967,640
Westdeutsche Landesbank Girozentrale 9,387,186 15,715,408
--------------------------------------------
54,450,444 53,836,532
Interest in common collective trusts 7,680,629 8,087,097
Receivables 381,024 1,191,139
Other 1,635,070 231,457
--------------------------------------------
Total net assets $165,642,255 $144,465,404
============================================
-89-
TDY Industries, Inc. Profit Sharing Plan for
Certain Employees of Metalworking Products
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
The Fixed Income Fund (the Fund) invests in guaranteed investment contracts
(GICs) and actively managed structured or synthetic investment contracts (SICs).
The GICs are promises by a bank or insurance company to repay principal plus a
fixed rate of return through contract maturity. SICs differ from GICs in that
there are specific assets supporting the SICs, and these assets are owned by the
Master Trust. The bank or insurance company issues a wrapper contract that
allows participant-directed transactions to be made at contract value. The
assets supporting the SICs are comprised of government agency bonds, corporate
bonds, asset-backed securities (ABOs) and collateralized mortgage obligations
(CMOs) with fair values of $55,854,607 and $53,822,660 at December 31, 2001 and
2000, respectively. The contract value minus the market value of the wrapper
contracts at December 31, 2001 and 2000 is ($1,397,030) and $396,172,
respectively.
Interest crediting rates on the GICs in the Fund are determined at the time of
purchase. Interest crediting rates on the SICs are either: (1) set at the time
of purchase for a fixed term and crediting rate; (2) set at the time of purchase
for a fixed term and variable crediting rate or (3) set at the time of purchase
and reset monthly within a "constant duration." A constant duration contract may
specify a duration of 2.5 years and the crediting rate is adjusted monthly based
upon quarterly rebalancing of eligible 2.5 year duration investment instruments
at the time of each resetting; in effect the contract never matures. At December
31, 2001 and 2000, the interest crediting rates for GICs and Fixed Maturity SICs
ranged from 3.49% to 8.05% and 5.53% to 8.05%, respectively.
For the year ended December 31, 2001, the average annual yield for the
investment contracts in the Fund was 6.25%. Fair value of the GICs was estimated
by discounting the weighted average of the Fund's cash flows at the then-current
interest crediting rate for a comparable maturity investment contract. Fair
value for the SICs was estimated based on the fair value of each contract's
supporting assets at December 31, 2001 and 2000.
-90-
TDY Industries, Inc. Profit Sharing Plan for
Certain Employees of Metalworking Products
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
The composition of net assets of the Alliance Equity Master Trust at December
31, 2001 and 2000 was as follows:
2001 2000
--------------------------------------------
(Unaudited)
Investment in registered investment companies:
Alliance Equity Fund S.A. #4 $40,024,274 $51,215,520
Cash overdraft - (19,387)
Operating payables (64,365) (31,413)
--------------------------------------------
Total net assets $39,959,909 $51,164,720
============================================
The composition of net assets of the Allegheny Technologies Disciplined Stock
Fund Master Trust at December 31, 2001 and 2000 was as follows:
2001 2000
---------------------- --------------------
(Unaudited)
Corporate common stocks $76,016,770 $89,911,418
Investment in common collective trusts 1,410,015 1,415,662
Receivables 103,913 62,651
Operating payables - (147,875)
---------------------- --------------------
Total net assets $77,530,698 $91,241,856
====================== ====================
-91-
TDY Industries, Inc. Profit Sharing Plan for
Certain Employees of Metalworking Products
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
The composition of the changes in net assets of the various master trusts is as
follows:
ALLEGHENY
ALLIANCE TECHNOLOGIES
EQUITY DISCIPLINED
FIXED INCOME MASTER STOCK FUND
MASTER TRUST TRUST MASTER TRUST
------------------------------------------------------------
YEAR ENDED DECEMBER 31
------------------------------------------------------------
2001 2001 2001
------------------------------------------------------------
(Unaudited)
Investment income (loss):
Interest income (loss) $ 9,147,492 $ - $ (639)
Net realized/unrealized loss on
corporate common stocks - - (12,375,289)
Dividends - - 941,613
Net gain (loss), registered
investment companies 32,606 (9,248,179) -
Net gain, common collective
trusts 401,062 - 53,202
Administrative expenses (208,589) (170,195) (519,489)
Transfers 11,804,280 (1,786,437) (1,810,556)
------------------- ------------------ ---------------------
Net increase (decrease) 21,176,851 (11,204,811) (13,711,158)
Total net assets at beginning
of year 144,465,404 51,164,720 91,241,856
------------------- ------------------ ---------------------
Total net assets at end of year $165,642,255 $39,959,909 $77,530,698
=================== ================== =====================
-92-
TDY Industries, Inc. Profit Sharing Plan for
Certain Employees of Metalworking Products
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
Interest, realized and unrealized gains and losses, and management fees from the
master trusts are included in the net (loss)/gain from interest in Allegheny
Ludlum Corporation Master Trusts on the statement of changes in net assets
available for benefits.
4. INCOME TAX STATUS
The Plan has applied for an initial determination letter from the Internal
Revenue Service affirming that the Plan is qualified under Section 401(a) of the
Internal Revenue Code (the Code) and, therefore, the related trust is exempt
from taxation. Once qualified, the Plan will be required to operate in
conformity with the Code to maintain its qualification. The plan administrator
believes the Plan is being operated in compliance with the applicable
requirements of the Code and believes that the Plan is qualified and the
related trust is tax-exempt.
5. PARTIES-IN-INTEREST
Certain plan investments are shares of mutual funds managed by Dreyfus
Retirement Services. Dreyfus Retirement Services is the trustee as defined by
the Plan and, therefore, these transactions qualify as party-in-interest.
Trustee and investment fees paid during 2001 and 2000 were based upon customary
and reasonable rates for such services.
6. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA.
-93-
TDY Industries, Inc. Profit Sharing Plan for
Certain Employees of Metalworking Products
EIN 25-1792394 Plan 040
Schedule H, Line 4(i)--Schedule of Assets (Held at End of Year)
December 31, 2001
INVESTMENT DESCRIPTION UNITS/SHARES CURRENT VALUE
- ---------------------------------------------------------------------------------------------------
Interest in registered investment companies:
Dreyfus Bond Market Index Fund* 3,246.616 $ 32,628
Dreyfus Emerging Leaders Fund* 13,230.105 460,011
Dreyfus Growth & Value International Fund* 5,928.962 81,523
MAS Mid Cap Growth Fund, Institutional Shares 10,231.292 178,536
Prudential Jennison Growth Fund, Class A Shares 27.515 403
-------------------
$753,101
===================
Interest in common collective investment funds:
Dreyfus LifeStyle Growth & Income Fund* 5,741.034 $ 93,458
Dreyfus LifeStyle Growth Fund* 8,313.487 144,500
Dreyfus LifeStyle Income Fund* 4,142.116 61,778
Dreyfus Short Term Investment Fund 35.820 36
-------------------
$299,772
===================
Interest in corporate common stocks:
Allegheny Technologies Incorporated common stock* 211.000 $ 3,534
===================
Participant loans (6% to 10.5%)* $212,324
===================
* Party-in-interest
-94-
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE
Allegheny Rodney (ALstrip) Profit Sharing Plan
Year ended December 31, 2001
(Unaudited)
-95-
Allegheny Rodney (ALstrip) Profit Sharing Plan
Financial Statements
and Supplemental Schedule
Year ended December 31, 2001
(Unaudited)
CONTENTS
Financial Statements (Unaudited)
Statements of Net Assets Available for Benefits ........................97
Statement of Changes in Net Assets Available for Benefits...............98
Notes to Financial Statements ..........................................99
Supplemental Schedule
Schedule H, Line 4(i)--Schedule of Assets (Held at End of Year).........107
-96-
Allegheny Rodney (ALstrip) Profit Sharing Plan
Statements of Net Assets Available for Benefits
(Unaudited)
DECEMBER 31
2001 2000
----------------------------------
Investments:
Interest-bearing cash $ - $5,200,716
Interest in Allegheny Ludlum Corporation Master Trusts 727,715 -
Interest in registered investment companies 137,209 -
Interest in common collective trusts 57,378 198,379
Participant loans 54,058 129,272
----------------------------------
Total investments 976,360 5,528,367
Other receivables - 235,839
Other payables - (40,985)
----------------------------------
Net assets available for benefits $ 976,360 $5,723,221
==================================
See accompanying notes.
-97-
Allegheny Rodney (ALstrip) Profit Sharing Plan
Statement of Changes in Net Assets Available for Benefits
(Unaudited)
Year ended December 31, 2001
Additions:
Contributions:
Employee 7,060
Investment income:
Net loss from interest in Allegheny Ludlum Corporation Master Trusts (81,318)
Net loss from interest in registered investment companies (8,102)
Net loss from interest in common collective trusts (12,034)
Interest income 3,395
Dividend income 50
Net unrealized/realized loss on corporate common stocks 34
-----------
Total additions (90,915)
Deductions:
Distributions to participants 960,053
Transfers out of Plan 3,695,893
-----------
Total deductions 4,655,946
-----------
Net deductions (4,746,861)
Net assets available for benefits at beginning of year 5,723,221
-----------
Net assets available for benefits at end of year $ 976,360
===========
See accompanying notes.
-98-
Allegheny Rodney (ALstrip) Profit Sharing Plan
Notes to Financial Statements
December 31, 2001
1. SIGNIFICANT ACCOUNTING POLICIES
Investments are valued as follows:
Bank and insurance contracts with varying contract rates and maturity dates
are stated at contract value.
Although it is management's intention to hold the investment contracts in
the Fixed Income Fund until maturity, certain investment contracts provide
for adjustments to contract value for withdrawals made prior to maturity.
All other funds are stated at their net asset value, based on the quoted
market prices of the securities held in such funds on applicable exchanges.
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
that affect the amounts reported in the financial statements and accompanying
notes. Actual results could differ from those estimates.
2. DESCRIPTION OF THE PLAN
The Allegheny Rodney (ALstrip) Profit Sharing Plan (the Plan) is a defined
contribution plan and is subject to the provisions of the Employee Retirement
Income Security Act of 1974 (ERISA).
The purpose of the Plan is to provide retirement benefits to eligible employees
through company contributions and to encourage employee thrift by permitting
eligible employees to defer a part of their compensation and contribute such
deferral to the Plan. Participants can defer between 1% and 10%, subject to
Internal Revenue Code limitations, of their eligible wages and contribute them
to the Plan. An employer profit-sharing contribution is made each year as
determined by the Board of Directors in their sole discretion.
Separate accounts are maintained by the Plan Sponsor for each participating
employee. Trustee fees and asset management fees charged by the Plan's trustee,
Dreyfus Retirement Services, for the administration of all funds are charged
against net assets available for benefits of the respective fund. Certain other
expenses of administering the Plan are paid by the Plan Sponsor.
-99-
Allegheny Rodney (ALstrip) Profit Sharing Plan
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE PLAN (CONTINUED)
Participants may make "in-service" and hardship withdrawals as outlined in the
plan document.
Active employees can borrow up to 50% of their vested account balances minus any
outstanding loans. The loan amounts are further limited to a minimum of $500
and a maximum of $50,000, and an employee can obtain no more than three loans at
one time. Interest rates are determined based on commercially accepted criteria,
and payment schedules vary based on the type of the loan. General-purpose loans
are repaid over 6 to 60 months, and primary residence loans are repaid over
periods up to 180 months. Payments are made by payroll deductions.
Further information about the Plan, including eligibility, vesting,
contributions, and withdrawals, is contained in the plan documents. Copies of
these documents are available from the Allegheny Technologies Personnel and
Compensation Committee.
-100-
Allegheny Rodney (ALstrip) Profit Sharing Plan
Notes to Financial Statements (continued)
3. INVESTMENTS
The following presents investments that represent 5% or more of the Plan's net
assets as of December 31, 2001.
DECEMBER 31
2001 2000
-------------------------------
(Unaudited)
Allegheny Technologies Disciplined Stock Fund $ 359,484 $ -
Fixed Income Master Trust 359,336 -
Dreyfus Bond Market Index 127,325 -
ANB Multiple Short-Term Investment Fund - 5,200,716
The majority of assets held at December 31, 2000 were in interest-bearing cash
pending the January 1, 2001 transfer of assets to a new trustee.
Certain of the Plan's investments are in the Allegheny Technologies Disciplined
Stock Fund Master Trust, the Alliance Equity Master Trust and the Fixed Income
Master Trust, which was established for the investment of assets of the Plan,
and several other ATI sponsored retirement plans. Each participating retirement
plan has an undivided interest in the Master Trust. At December 31, 2001, the
Plan's interest in the net assets of the Allegheny Technologies Disciplined
Stock Fund Master Trust, the Alliance Equity Master Trust and the Fixed Income
Master Trust were as follows:
2001
-------------
(Unaudited)
Allegheny Technologies Disciplined Stock Fund Master Trust 0.46%
Fixed Income Master Trust 0.22
Alliance Equity Master Trust 0.02
Investment income and expenses are allocated to the Plan based upon its pro rata
share in the net assets of the Master Trust.
-101-
Allegheny Rodney (ALstrip) Profit Sharing Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
The composition of the net assets of the Fixed Income Master Trust at
December 31, 2001 was as follows:
2001
------------
(Unaudited)
Guaranteed investment contracts:
Business Mens Assurance Company of America $ 1,246,890
Canada Life 2,743,536
Combined Life Insurance Company 3,097,946
GE Life and Annuity 11,812,375
Hartford Life Insurance Company 10,025,160
John Hancock Life Insurance Company 14,218,029
Monumental Life Insurance Company 3,331,280
New York Life Insurance Company 7,729,985
Ohio National Life 7,936,620
Pacific Mutual Life Insurance Company 6,036,924
Principal Life 3,000,000
Protective Life Insurance Company 1,002,333
Pruco Pace Credit Enhanced 9,950,359
Safeco Life Insurance 3,000,505
Security Life of Denver 6,181,488
Sun America, Inc. 2,992,868
United of Omaha 7,188,790
------------
101,495,088
Synthetic guaranteed investment contracts:
Caisse des Depots et Consignations 7,800,826
CIT Equipment 992,755
Common Wealth Edison 1,976,061
Conn RRB Spec Trust 2,987,164
Detroit Edison 2,018,460
FHLMC 2,466,660
Illinois Power Sp. Trust 1,957,161
MBNA Master CC Trust 1,983,492
Peco Energy Company 1,982,788
Peoples Security Life Insurance Company 6,602,162
Public Service 1,998,629
Transamerica Occidental 9,559,425
Union Bank of Switzerland 2,737,675
Westdeutsche Landesbank Girozentrale 9,387,186
------------
54,450,444
Interest in common collective trusts 7,680,629
Receivables 381,024
Other 1,635,070
------------
Total net assets $165,642,255
============
-102-
Allegheny Rodney (ALstrip) Profit Sharing Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
The Fixed Income Fund (the Fund) invests in guaranteed investment contracts
(GICs) and actively managed structured or synthetic investment contracts (SICs).
The GICs are promises by a bank or insurance company to repay principal plus a
fixed rate of return through contract maturity. SICs differ from GICs in that
there are specific assets supporting the SICs, and these assets are owned by the
Master Trust. The bank or insurance company issues a wrapper contract that
allows participant-directed transactions to be made at contract value. The
assets supporting the SICs are comprised of government agency bonds, corporate
bonds, asset-backed securities (ABOs) and collateralized mortgage obligations
(CMOs) with fair values of $55,854, at December 31, 2001. The contract value
minus the market value of the wrapper contracts at December 31, 2001 is
($1,397,030).
Interest crediting rates on the GICs in the Fund are determined at the time of
purchase. Interest crediting rates on the SICs are either: (1) set at the time
of purchase for a fixed term and crediting rate; (2) set at the time of purchase
for a fixed term and variable crediting rate or (3) set at the time of purchase
and reset monthly within a "constant duration." A constant duration contract may
specify a duration of 2.5 years and the crediting rate is adjusted monthly based
upon quarterly rebalancing of eligible 2.5 year duration investment instruments
at the time of each resetting; in effect the contract never matures. At December
31, 2001, the interest crediting rates for GICs and Fixed Maturity SICs ranged
from 3.49% to 8.05%.
For the year ended December 31, 2001, the average annual yield for the
investment contracts in the Fund was 6.25%. Fair value of the GICs was estimated
by discounting the weighted average of the Fund's cash flows at the then-current
interest crediting rate for a comparable maturity investment contract. Fair
value for the SICs was estimated based on the fair value of each contract's
supporting assets at December 31, 2001.
-103-
Allegheny Rodney (ALstrip) Profit Sharing Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
The composition of net assets of the Alliance Equity Master Trust at December
31, 2001 was as follows:
2001
-----------
(Unaudited)
Investment in registered investment companies:
Alliance Equity Fund S.A. #4 $40,024,274
Operating payables (64,365)
-----------
Total net assets $39,959,909
===========
The composition of net assets of the Allegheny Technologies Disciplined Stock
Fund Master Trust at December 31, 2001 was as follows:
2001
-----------
(Unaudited)
Corporate common stocks $76,016,770
Investment in common collective trusts 1,410,015
Receivables 103,913
-----------
Total net assets $77,530,698
===========
-104-
Allegheny Rodney (ALstrip) Profit Sharing Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
The composition of the changes in net assets of the various master trusts is as
follows:
ALLEGHENY
TECHNOLOGIES
ALLIANCE DISCIPLINED
FIXED INCOME EQUITY STOCK FUND
MASTER TRUST MASTER TRUST MASTER TRUST
------------- ------------- -------------
YEAR ENDED DECEMBER 31
---------------------------------------------------------
2001 2001 2001
------------- ------------- -------------
(Unaudited)
Investment income (loss):
Interest income (loss) $ 9,147,492 $ -- $ (639)
Net realized/unrealized loss on
corporate common stocks -- -- (12,375,289)
Dividends -- -- 941,613
Net gain (loss), registered
investment companies 32,606 (9,248,179) --
Net gain, common collective
trusts 401,062 -- 53,202
Administrative expenses (208,589) (170,195) (519,489)
Transfers 11,804,280 (1,786,437) (1,810,556)
------------- ------------- -------------
Net increase (decrease) 21,176,851 (11,204,811) (13,711,158)
Total net assets at beginning
of year 144,465,404 51,164,720 91,241,856
------------- ------------- -------------
Total net assets at end of year $ 165,642,255 $ 39,959,909 $ 77,530,698
============= ============= =============
-105-
Allegheny Rodney (ALstrip) Profit Sharing Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
Interest, realized and unrealized gains and losses, and management fees from the
master trusts are included in the net (loss)/gain from interest in Allegheny
Ludlum Corporation Master Trusts on the statement of changes in net assets
available for benefits.
4. INCOME TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
dated August 16, 1993, stating that the Plan is qualified under Section 401(a)
of the Internal Revenue Code (the Code) and, therefore, the related trust is
exempt from taxation. Subsequent to this issuance of the determination letter,
the Plan was amended. Once qualified, the Plan is required to operate in
conformity with the Code to maintain its qualification. The plan administrator
believes the Plan is being operated in compliance with the applicable
requirements of the Code and, therefore, believes that the Plan, as amended, is
qualified and the related trust is tax-exempt.
5. PARTIES-IN-INTEREST
Certain plan investments are shares of mutual funds managed by Dreyfus
Retirement Services. Dreyfus Retirement Services is the trustee as defined by
the Plan and, therefore, these transactions qualify as party-in-interest.
Trustee and investment fees paid during 2001 were based upon customary and
reasonable rates for such services.
6. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA.
-106-
Allegheny Rodney (ALstrip) Profit Sharing Plan
EIN 25-1792394 Plan 002
Schedule H, Line 4(i)--Schedule of Assets (Held at End of Year)
December 31, 2001
INVESTMENT DESCRIPTION UNITS/SHARES CURRENT VALUE
- ----------------------------------------------------------------------------------------------------
Interest in registered investment companies:
Dreyfus Bond Market Index Fund* 12,669.175 $127,325
Dreyfus Emerging Leaders Fund* 112.264 3,903
Dreyfus Growth & Value International Fund* 103.991 1,430
MAS Mid Cap Growth Fund, Institutional Shares 96.078 1,677
Prudential Jennison Growth Fund, Class A Shares 196.599 2,874
--------
$137,209
========
Interest in common collective investment funds:
Dreyfus LifeStyle Growth & Income Fund* 2,384.560 $ 38,818
Dreyfus LifeStyle Growth Fund* 960.489 16,695
Dreyfus LifeStyle Income Fund* 125.073 1,865
--------
$ 57,378
========
Participant loans (6% to 10.5%)* $ 54,058
========
* Party-in-interest
-107-
"Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K"
of Part IV of the 2001 Form 10-K is hereby amended and restated in its entirety
to read as follows:
ITEM 14. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES:
(A) EXHIBITS AND FINANCIAL STATEMENT SCHEDULES:
(1) FINANCIAL STATEMENTS
(A) The following consolidated financial statements included on pages 25 to
52 of the 2001 Annual Report are incorporated herein by reference:
Consolidated Statements of Operations - Years Ended December 31, 2001, 2000
and 1999
Consolidated Balance Sheets at December 31, 2001 and 2000
Consolidated Statements of Cash Flows - Years Ended December 31, 2001, 2000
and 1999
Consolidated Statements of Stockholders' Equity - Years Ended December 31,
2001, 2000 and 1999
Report of Ernst & Young LLP, Independent Auditors
Notes to Consolidated Financial Statements
(B) The following financial statements for the plans listed below are filed
with this Amendment No. 1 under Item 8 of Part II:
(i) Allegheny Technologies Retirement Savings Plan
Report of Independent Auditors
Statements of Net Assets Available for Benefits at December 31, 2001 and
December 31, 2000
Statements of Changes in Net Assets Available for Benefits, Years Ended
December 31, 2001 and December 31, 2000
Notes to Financial Statements
(ii) 401(k) Savings Account Plan for Employees of the Washington Plate
Plant
Report of Independent Auditors
Statements of Net Assets Available for Benefits at December 31, 2001 and
December 31, 2000
Statements of Changes in Net Assets Available for Benefits, Years Ended
December 31, 2001 and December 31, 2000
Notes to Financial Statements
-108-
(iii) Savings and Security Plan of the Lockport and Waterbury Facilities
of Allegheny Ludlum Corporation
Report of Independent Auditors
Statements of Net Assets Available for Benefits at December 31, 2001 and
December 31, 2000
Statements of Changes in Net Assets Available for Benefits, Years Ended
December 31, 2001 and December 31, 2000
Notes to Financial Statements
(iv) Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings
Account Plan
Report of Independent Auditors
Statements of Net Assets Available for Benefits at December 31, 2001 and
December 31, 2000
Statements of Changes in Net Assets Available for Benefits, Years Ended
December 31, 2001 and December 31, 2000
Notes to Financial Statements
(v) The 401(k) Plan
Report of Independent Auditors
Statements of Net Assets Available for Benefits at December 31, 2001 and
December 31, 2000
Statement of Changes in Net Assets Available for Benefits, Year Ended
December 31, 2001
Notes to Financial Statements
(vi) TDY Industries, Inc. Profit Sharing Plan for Certain Employees of
Metalworking Products
Statements of Net Assets Available for Benefits at December 31, 2001 and
December 31, 2000
Statement of Changes in Net Assets Available for Benefits, Year Ended
December 31, 2001
Notes to Financial Statements
(vii) Allegheny Rodney (ALstrip) Profit Sharing Plan
Statements of Net Assets Available for Benefits at December 31, 2001 and
December 31, 2000
Statement of Changes in Net Assets Available for Benefits, Year Ended
December 31, 2001
Notes to Financial Statements
-109-
(2) FINANCIAL STATEMENT SCHEDULES
The following financial statement schedules with respect to the plans listed
below are filed with this Amendment No. 1 under Item 8 of Part II:
(i) Allegheny Technologies Retirement Savings Plan
Schedule H, Line 4(i) - Schedule of Assets (Held at end of year) -
December 31, 2001
(ii) 401(k) Savings Account Plan for Employees of the Washington Plate
Plant
Schedule H, Line 4(i) - Schedule of Assets (Held at end of year) -
December 31, 2001
(iii) Savings and Security Plan of the Lockport and Waterbury
Facilities of Allegheny Ludlum Corporation
Schedule H, Line 4(i) - Schedule of Assets (Held at end of year) -
December 31, 2001
(iv) Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings
Account Plan
Schedule H, Line 4(i) - Schedule of Assets (Held at end of year) -
December 31, 2001
(v) The 401(k) Plan
Schedule H, Line 4(i) - Schedule of Assets (Held at end of year) -
December 31, 2001
(vi) TDY Industries, Inc. Profit Sharing Plan for Certain Employees of
Metalworking Products
Schedule H, Line 4(i) - Schedule of Assets (Held at end of year) -
December 31, 2001
(vii) Allegheny Rodney (ALstrip) Profit Sharing Plan
Schedule H, Line 4(i) - Schedule of Assets (Held at end of year) -
December 31, 2001
(3) EXHIBITS
A list of exhibits included in the 2001 Form 10-K or incorporated by
reference is found in the Exhibit Index beginning on page 20 of the 2001 Form
10-K and incorporated herein by reference. In addition, by virtue of Amendment
No. 1, the following exhibit is added to such Exhibit Index, as Exhibit 23.2,
and filed with Amendment No. 1:
EXHIBIT NO. DESCRIPTION
----------- -----------------------------
23.2 Consent of Ernst & Young LLP
(B) REPORTS ON FORM 8-K
The Company filed a current report on Form 8-K on May 3, 2002 disclosing
certain supplemental financial information for the Company's Flat-Rolled
Products segment.
The Company filed a current report on Form 8-K on April 17, 2002 disclosing
a press release with respect to its first quarter 2002 earnings.
-110-
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this Form 10-K/A (Amendment No. 1)
to be signed on its behalf by the undersigned duly authorized.
Allegheny Technologies Incorporated
Date: July 1, 2002 By: /s/ Richard J. Harshman
------------------------------------------
Richard J. Harshman, Senior Vice President,
Finance and Chief Financial Officer
-111-
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION METHOD OF FILING
----------- ----------- ----------------
23.2 Consent of Ernst & Young Filed herewith
LLP
-112-