Exhibit 99.1
Allegheny Technologies Announces Fourth Quarter Results
PITTSBURGH--(BUSINESS WIRE)--Jan. 21, 2004--Allegheny Technologies
Incorporated (NYSE:ATI)
-- Fourth quarter net loss of $210.2 million, or $2.61 per share,
includes special charges of $175.9 million, or $2.18 per share
-- Excluding special charges, fourth quarter net loss of
$34.3 million, or $0.43 per share, which includes:
-- Inventory accounting charges of $11.0 million, or $0.14
per share
-- Retirement benefit expense of $20.4 million, or $0.25 per
share
-- Fourth quarter cash flow from operations of $30 million
-- 2003 cost reductions of $117 million exceeded plan
Allegheny Technologies Incorporated (NYSE:ATI) reported a net
loss of $210.2 million, or $2.61 per share, on sales of $484.4 million
for the fourth quarter ended December 31, 2003. Results included
previously announced special charges, after tax, of $175.9 million, or
$2.18 per share. Excluding these special charges, the net loss for the
fourth quarter 2003 was $34.3 million, or $0.43 per share. Retirement
benefit expense, primarily non-cash, was $20.4 million, or $0.25 per
share, in the quarter. In addition, fourth quarter 2003 results were
negatively impacted by non-cash inventory accounting charges of $11.0
million, or $0.14 per share, primarily due to the effects of rapidly
rising raw materials costs under the Company's LIFO inventory
accounting methodology.
"During 2003, ATI continued to generate positive cash flow from
operations and make important investments in our core businesses. We
ended 2003 with $20 million more cash on hand than at the end of 2002
and continued to have no cash borrowings under our secured domestic
credit facility," said Pat Hassey, ATI's President and Chief Executive
Officer.
"Our two major strategic capital investments are on schedule. The
first of our two new flat-rolled products electric arc furnaces
successfully began operation in the fourth quarter 2003 and is ahead
of its cost savings plan. The upgrade to our long products rolling
mill is on schedule to begin operation in the first half of this year.
We expect to further improve operating performance as this new
equipment becomes operational.
"As a result of actions taken in 2003, we believe ATI should
benefit from improving business conditions in 2004. We introduced a
number of new alloys to better serve our customers' needs,
demonstrating our ongoing commitment to technology and product
development. Through our joint venture Uniti Titanium, we expanded our
market presence to participate in global growth for industrial
titanium. Our 2003 cost reductions reached $117 million, exceeding our
goal of $115 million, and we significantly lowered our fixed costs as
a result of restructuring actions taken in 2003.
"The ATI Business System is driving lean manufacturing throughout
the Company. Even though costs of our major raw materials increased
approximately 27% during 2003, gross inventory increased by less than
1% as a result of ATI Business System initiatives.
"In 2004, our goal is to achieve profitability in our Flat-Rolled
Products segment and improve operating earnings in our High
Performance Metals and Engineered Products segments. Our 2004 cost
reduction objective is $104 million. While retirement benefit expense
will again be a significant negative to financial results, it will
remain largely non-cash. Our current 2004 capital expenditures are
expected to be between $60 and $70 million, which is within our
forecasted depreciation expense of $72 million. While we are concerned
about raw material and energy price volatility, especially for nickel
and natural gas, we are taking actions to manage the impact of this
volatility internally and we are now able to increase selling prices.
"As 2004 begins, we are seeing improvement in market conditions,
particularly in our Flat-Rolled Products segment. Price increases
announced in December for most of our flat-rolled products and the
pricing policy revision for our nickel and cobalt alloys and specialty
steel long products are in effect. We announced additional price
increases for stainless steel and silicon electrical steel products
last week. Our exotic alloys business continues to do very well. The
current valuation of the US dollar provides potential for improved
non-domestic sales. We expect overall business conditions for most of
our major end markets to steadily improve in 2004."
Three Months Ended Twelve Months Ended
December 31 December 31
In Millions In Millions
------------------- --------------------
2003 2002 2003 2002
--------- --------- ---------- ---------
Sales $484.4 $454.2 $1,937.4 $1,907.8
Net loss (210.2) (39.7) (292.1) (65.8)
Special charges, net (175.9) (29.0) (178.9) (33.5)
Cumulative effect of change
in accounting principle - - (1.3) -
Net loss before special
charges and the
cumulative effect of change
in accounting principle $ (34.3) $ (10.7) $ (111.9) $ (32.3)
Per Diluted Share Per Diluted Share
------------------- --------------------
Net loss $(2.61) $(0.49) $(3.62) $(0.82)
Special charges, net (2.18) (0.36) (2.22) (0.42)
Cumulative effect of change
in accounting principle - - (0.02) -
Net loss before special
charges and the
cumulative effect of change
in accounting principle $ (0.43) $ (0.13) $ (1.38) $ (0.40)
Fourth Quarter 2003 Financial Overview
-- Sales of $484.4 million were up 7% compared to fourth quarter
2002. Flat-Rolled Products sales were 11% higher, primarily
due to raw materials surcharges. Sales were 3% lower in the
High Performance Metals segment and sales were 13% higher in
the Engineered Products segment.
-- Net loss was $210.2 million, or $2.61 per share, compared to a
fourth quarter 2002 net loss of $39.7 million, or $0.49 per
share. Results in the fourth quarter 2003 included special
charges, largely non-cash, of $175.9 million, or $2.18 per
share, which included $130.0 million, or $1.61 per share, to
establish a valuation allowance for a portion of the Company's
net deferred tax assets. In the same period in 2002, special
charges were $29.0 million, or $0.36 per share.
-- Retirement benefit expense, after tax, in the fourth quarter
2003 was $20.4 million, or $0.25 per share, compared to $3.5
million, or $0.04 per share, in the fourth quarter 2002. For
the year, after-tax retirement benefit expense was $83.9
million, or $1.04 per share, in 2003 compared to $13.8
million, or $0.17 per share, in 2002. Substantially all of the
increase in retirement benefit expense in 2003 compared to
2002 was non-cash.
-- Inventory accounting charges, primarily related to the
Company's LIFO methodology, were $17.8 million pretax and
$11.0 million after tax, or $0.14 per share, in the fourth
quarter 2003 compared to $1.1 million pretax and $0.7 million
after tax, or $0.01 per share, in the fourth quarter 2002.
-- Cash flow from operations in the fourth quarter 2003 was $29.9
million and cash on hand increased to $79.6 million, $20.2
million higher than at the end of 2002.
-- Cost reductions, before the effects of inflation, totaled $33
million company wide in the fourth quarter 2003, bringing cost
reductions to $117 million for the year. Our 2003 cost
reduction goal was $115 million.
Flat-Rolled Products Segment
Market Conditions
-- Demand from consumer durable markets remained good and demand
improved from some capital goods markets. Raw material
surcharges escalated during the quarter due to rising LME
nickel prices, resulting in higher average transaction prices,
although base-selling prices remained substantially the same
as in the third quarter. Base-selling price increases for most
products were announced in December 2003 and January 2004.
Fourth quarter 2003 compared to fourth quarter 2002
-- Sales increased 11% to $268.6 million, primarily due to higher
raw materials surcharges. Total tons shipped increased 4% as
demand increased in some markets. Average transaction prices
were 7% higher due to higher raw materials surcharges;
however, average base-selling prices, which do not include
surcharges, declined by approximately 1%.
-- The segment had an operating loss of $1.7 million compared to
an operating loss of $11.8 million last year. While the
benefits of cost reduction initiatives and lower depreciation
expense favorably affected results, the segment reported an
operating loss for the period due to the effects of higher raw
materials and energy costs and lower average base-selling
prices. Results for 2002 included the settlement of a labor
dispute regarding profit sharing for prior years, which
resulted in a pretax special charge of $3.9 million.
-- The rapid rise in nickel and other raw material costs,
combined with continuing efforts to reduce inventory volumes,
resulted in a $7.6 million increase in inventory accounting
charges, primarily LIFO, in the fourth quarter 2003 compared
to the prior year fourth quarter.
-- Energy costs, primarily natural gas, increased $0.5 million
compared to 2002.
-- Results for the fourth quarter of 2003 benefited from $16
million in cost reductions, before the effects of inflation
and higher energy costs, bringing cost reductions to $59
million for the year.
High Performance Metals Segment
Market Conditions
-- Demand for nickel-based alloys and titanium alloys from the
commercial aerospace market appears to have stabilized. A
pricing policy revision for this segment's nickel and cobalt
alloys and specialty steel products took effect at the end of
December 2003. The exotic alloys business had another good
quarter and continued to benefit from sustained high demand
from high-energy physics and government markets, as well as
corrosion markets in Asia.
Fourth quarter 2003 compared to fourth quarter 2002
-- Sales decreased 3% to $151.6 million. Shipments were up 6% for
nickel-based alloys. Shipments were down 30% for specialty
steel alloys, primarily due to lower shipments to European
markets. Shipments were down 5% for titanium alloys due to
significant deliveries for the Goro mining project in 2002.
Excluding Goro shipments, titanium volume increased by 11% in
the fourth quarter 2003 compared to the same period in 2002.
Shipments increased 28% for exotic alloys.
-- The segment had an operating loss of $3.2 million compared to
an operating profit of $9.0 million due to higher raw material
and energy costs and lower sales, which offset the benefits
from cost reductions.
-- The rapid rise in nickel and other raw materials costs
resulted in an $8.7 million increase in LIFO inventory
accounting charges.
-- Energy costs, primarily natural gas, increased $1.8 million.
-- Results for the fourth quarter of 2003 benefited from $12
million of cost reductions, before the effects of inflation,
bringing cost reductions to $45 million for the year.
Engineered Products Segment
Market Conditions
-- Demand for our tungsten products remained strong from the oil
and gas and medical markets and improved from the automotive
market. Demand improved for forged and cast products.
Fourth quarter 2003 compared to fourth quarter 2002
-- Sales improved 13% to $64.2 million.
-- Operating profit improved to $1.6 million compared to $0.6
million last year due to higher sales volumes and the benefits
from cost reductions, which offset higher raw material costs
and lower prices.
-- Results for the fourth quarter 2003 benefited from $3 million
of cost reductions, before the effects of inflation, bringing
cost reductions to $9 million for the year.
Retirement Benefit Expense
-- Fourth quarter 2003 pretax retirement benefit expense was
$32.7 million compared to $5.2 million in the fourth quarter
of 2002. This increase resulted in a $27.5 million pretax and
$16.9 million after-tax, or $0.21 per share, reduction in
fourth quarter 2003 results compared to the same period of
2002.
-- Approximately $24.8 million of the fourth quarter 2003 pretax
retirement benefit expense was non-cash.
-- The higher retirement benefit expense resulted primarily from
the severe decline in the equity markets from 2000 through
2002, lower expected returns on benefit plan investments and a
lower discount rate assumption for determining liabilities.
-- In the fourth quarter 2003, retirement benefit expense
increased cost of sales by $23.6 million, and selling and
administrative expenses by $9.1 million. In the fourth quarter
2002, retirement benefit expense increased cost of sales by
$8.3 million, and reduced selling and administrative expenses
by $3.1 million.
-- ATI is not required to make cash contributions to its defined
benefit pension plan for 2004 and, based upon current
actuarial studies, does not expect to be required to make cash
contributions to its defined benefit pension plan during the
next several years.
-- Pension expense is expected to decline to approximately $75
million pretax for 2004 from $92 million for 2003 as actual
returns on pension assets in 2003 were higher than expected,
partially offset by a lower assumed discount rate to value
pension benefit liabilities. The projected rise in medical
benefits inflation and the lower assumed discount rate is
expected to result in postretirement medical expenses of
approximately $68 million for 2004 compared to $42 million for
2003. The projected 2004 postretirement medical expense does
not include the expected favorable impact from the enactment
of the new Federal Medicare prescription drug benefit program
in December 2003, pending authoritative accounting guidance
regarding how the benefit is to be recognized in the financial
statements.
Special Charges
-- Results for the fourth quarter 2003 included previously
announced special charges related to actions taken to reduce
fixed costs and streamline operations of $73.4 million pretax
and $45.8 million after tax, or $0.57 per share. Substantially
all of these charges are non-cash and included:
-- $13.7 million pretax and $8.6 million after tax from a
reduction in salaried workforce of approximately 10%
across ATI operations and corporate headquarters, which
was substantially completed in the fourth quarter.
-- $52.1 million pretax and $32.5 million after tax for the
impairment of certain assets in the Flat-Rolled Products
segment. The majority of these charges relate to Allegheny
Ludlum's remaining assets located in Houston, PA and its
Washington Flat Roll coil facility located in Washington,
PA. These charges do not impact current operations at
these facilities.
-- $7.6 million pretax and $4.7 million after tax related to
closed company environmental and insurance matters.
-- In addition, as previously announced a non-cash accounting
special charge of $130.0 million was recognized in the fourth
quarter 2003 to establish a valuation allowance for a portion
of the Company's net deferred tax assets, as prescribed by
Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes". This charge, which resulted
from the Company's recent history of losses, does not affect
the Company's liquidity or its ability to utilize and realize
the deferred tax assets in the future. The charge may be
reversed in a future period based on consideration of all
available evidence as prescribed in SFAS 109. It should be
noted that as a result of establishing the valuation
allowance, the Company does not expect to recognize a tax
benefit for any losses in 2004 when reporting after-tax
results. Future tax provisions or benefits will be recognized
when taxable income exceeds the 2003 tax loss, or when future
losses, if any, are recoverable as cash refunds.
-- Results for the fourth quarter 2002 included net charges of
$45.7 million pretax and $29.0 million after tax, or $0.36 per
share, for an asset impairment charge related to the
indefinite idling of the Company's Massillon, OH stainless
steel coil plate facility, the settlement of a labor dispute
regarding profit sharing for certain employees of the
Flat-Rolled Products segment for prior years, salaried
workforce reductions, and a non-cash charge related to ATI's
minority interest in New Piper Aircraft, Inc.
Other Expenses
-- Corporate expenses for the fourth quarter 2003 increased to
$6.3 million compared to $4.8 million in the year-ago period
primarily due to non-cash accrual of expenses associated with
the Company's stock-based long-term incentive compensation
plan as a result of the significant increase in ATI's stock
price during the fourth quarter of 2003. This accrual offset
cost reductions at the corporate headquarters resulting from
reductions in staffing and other efforts to control costs.
-- Excluding the effects of postretirement benefits expenses,
special charges and non-cash stock-based compensation expense,
selling and administrative expenses as a percent of sales
declined to 9.6% in the 2003 fourth quarter from 9.8% in the
same period 2002.
Cash Flow and Working Capital
-- Cash on hand was $79.6 million at December 31, 2003, an
increase of $20.2 million from 2002 year-end.
-- Cash flow from operating activities for the 2003 fourth
quarter was $29.9 million, and for the 2003 year was $82.0
million.
-- At December 31, 2003, managed working capital was 30.7% of
annualized sales compared to 32.4% of annualized sales at 2002
year-end. We define managed working capital as accounts
receivable and gross inventories less accounts payable.
-- Managed working capital decreased $24.8 million in the fourth
quarter of 2003 compared to the third quarter 2003, primarily
due to a decline in accounts receivable resulting from the
timing of shipments. However, for the year managed working
capital increased $11.8 million in 2003 resulting primarily
from an increase in accounts receivable due to a higher level
of sales in the 2003 fourth quarter compared to the fourth
quarter of 2002, and a $3.3 million increase in inventory
mostly as a result of higher raw material costs, primarily
nickel. The increase in raw material costs should largely be
recovered through surcharges.
-- Capital expenditures were $74.4 million for 2003. Capital
expenditures for 2004 are projected to be approximately $60
million to $70 million.
-- Cash provided by financing activities was $8.5 million for
2003 and included proceeds of $15.3 million on the termination
of certain interest rate swap arrangements, primarily in the
first quarter of 2003, and net proceeds primarily from capital
project financing of $12.6 million, partially offset by $19.4
million of dividend payments.
-- There are no borrowings currently outstanding under ATI's
secured domestic credit facility, although a portion of the
letters of credit capacity is being utilized.
New Accounting Pronouncement
The adoption of Statement of Financial Accounting Standards No.
143 "Accounting for Asset Retirement Obligations" ("SFAS 143")
resulted in an after-tax charge of $1.3 million, or $0.02 per share in
the 2003 first quarter. This charge is reported as a cumulative effect
of change in accounting principle.
Allegheny Technologies will conduct a conference call with
investors and analysts on January 21, 2004, at 1 p.m. ET to discuss
the financial results. The conference call will be broadcast live on
www.alleghenytechnologies.com. To access the broadcast, click on
"Conference Call". In addition, the conference call will be available
through the CCBN website located at www.ccbn.com.
This news release contains "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995.
Certain statements in this news release relate to future events and
expectations and, as such, constitute forward-looking statements.
Forward-looking statements include those containing such words as
"anticipates," "believes," "estimates," "expects," "would," "should,"
"will," "will likely result," "forecast," "outlook," "projects," and
similar expressions. Such forward-looking statements are based on
management's current expectations and include known and unknown risks,
uncertainties and other factors, many of which we are unable to
predict or control, that may cause our actual results or performance
to materially differ from any future results or performance expressed
or implied by such statements. Various of these factors are described
from time to time in our filings with the Securities and Exchange
Commission, including our Annual Report on Form 10-K for the year
ended December 31, 2002, and our Quarterly Reports on Form 10-Q. We
assume no duty to update our forward-looking statements.
Allegheny Technologies Incorporated (NYSE:ATI) is one of the
largest and most diversified specialty materials producers in the
world, with revenues of approximately $1.9 billion in 2003. The
Company has approximately 8,800 employees world-wide and its talented
people use innovative technologies to offer growing global markets a
wide range of specialty materials. High-value products include
nickel-based and cobalt-based alloys and superalloys, titanium and
titanium alloys, specialty steels, super stainless steel, exotic
alloys, which include zirconium, hafnium and niobium, tungsten
materials, and highly engineered strip and Precision Rolled Strip(R)
products. In addition, we produce commodity specialty materials such
as stainless steel sheet and plate, silicon and tool steels, and
forgings and castings. The Allegheny Technologies website can be found
at www.alleghenytechnologies.com.
Allegheny Technologies Incorporated and Subsidiaries
Consolidated Statements of Operations
(Quarterly periods unaudited - Dollars in millions,
except per share amounts)
Three Months Ended Twelve Months Ended
December 31 December 31
------------------ -------------------
2003 2002 2003 2002
--------- -------- --------- ---------
Sales $484.4 $454.2 $1,937.4 $1,907.8
Costs and expenses:
Cost of sales 474.2 428.0 1,873.6 1,744.5
Selling and administrative
expenses 64.9 41.4 226.3 188.3
Restructuring costs 61.2 37.3 62.4 42.8
--------- -------- --------- ---------
Loss before interest, other
expense and income taxes (115.9) (52.5) (224.9) (67.8)
Interest expense, net 7.8 8.2 27.7 34.3
Other expense, net (4.9) (1.0) (5.1) (1.7)
--------- -------- --------- ---------
Loss before income tax
provision (benefit)
and cumulative effect of
change in accounting
principle (128.6) (61.7) (257.7) (103.8)
Income tax provision (benefit) 81.6 (22.0) 33.1 (38.0)
--------- -------- --------- ---------
Net loss before cumulative
effect of change in
accounting principle (210.2) (39.7) (290.8) (65.8)
Cumulative effect of change in
accounting principle - - (1.3) -
--------- -------- --------- ---------
Net loss $(210.2) $(39.7) $(292.1) $(65.8)
========= ======== ========= =========
Basic and diluted net loss per
common share before
cumulative effect of change
in accounting principle $(2.61) $(0.49) $(3.60) $(0.82)
Cumulative effect of change in
accounting principle - - (0.02) -
--------- -------- --------- ---------
Basic and diluted net loss
per common share $(2.61) $(0.49) $(3.62) $(0.82)
========= ======== ========= =========
Weighted average common shares
outstanding -- basic and
diluted (millions) 80.6 80.6 80.8 80.6
Actual common shares outstanding--
end of period (millions) 80.7 80.6 80.7 80.6
Allegheny Technologies Incorporated and Subsidiaries
Sales and Operating Profit (Loss) by Business Segment
(Quarterly periods unaudited - Dollars in millions)
2003 2002 Q4 2003 Q3 2003 Q2 2003 Q1 2003 Q4 2002
- --------- --------- -------- ------- ------- ------- -------
Sales:
Flat-
Rolled
$1,043.5 $1,040.3 Products $268.6 $258.9 $258.7 $257.3 $241.5
High
Perform-
ance
641.7 630.0 Metals 151.6 162.3 166.8 161.0 156.1
Engineered
Prod-
252.2 237.5 ucts/b 64.2 61.4 64.4 62.2 56.6
- --------- --------- -------- ------- ------- ------- ------
Total
External
$1,937.4 $1,907.8 Sales $484.4 $482.6 $489.9 $480.5 $454.2
========= ========= ======== ======= ======= ====== =======
Operating
Profit
(Loss):
Flat-
Rolled
$(14.1) $(8.6) Products $(1.7) $(4.9) $(6.2) $(1.3) $(11.8)
% of
-1.4% -0.8% Sales -0.6% -1.9% -2.4% -0.5% -4.9%
High
Perform-
ance
26.2 31.2 Metals (3.2) 9.5 11.6 8.3 9.0
% of
4.1% 5.0% Sales -2.1% 5.9% 7.0% 5.2% 5.8%
Engineered
7.8 4.7 Products/b 1.6 1.2 3.2 1.8 0.6
% of
3.1% 2.0% Sales 2.5% 2.0% 5.0% 2.9% 1.1%
- --------- --------- -------- ------- ------- ------- ------
Operating
Profit
19.9 27.3 (Loss) (3.3) 5.8 8.6 8.8 (2.2)
% of
1.0% 1.4% Sales -0.7% 1.2% 1.8% 1.8% -0.5%
Corporate
(20.5) (20.6) expenses (6.3) (4.1) (5.3) (4.8) (4.8)
Interest
expense,
(27.7) (34.3) net (7.8) (4.1) (8.4) (7.4) (8.2)
- --------- --------- -------- ------- ------- ------- ------
(28.3) (27.6) Subtotal (17.4) (2.4) (5.1) (3.4) (15.2)
Management
transition
and restruc-
turing
(69.8) (42.8) costs (61.2) (8.6) - - (37.3)
Other costs,
net of
gains on
asset
(25.2) (11.6) sales (17.3) (3.8) (2.3) (1.8) (4.0)
Retirement
benefit
expense
(134.4) (21.8) /a (32.7)/a (33.5)/a (33.4)/a (34.8) (5.2)
- --------- --------- -------- ------ ------ ------ ------
Loss before
income
$(257.7) $(103.8) taxes $(128.6) $(48.3) $(40.8) $(40.0) $(61.7)
========= ========= ======== ======= ======= ======= =======
/a Includes non-cash expenses of $24.8 million, $25.6 million, $24.9
million and $28.2 million for the 2003 fourth quarter, 2003 third
quarter, 2003 second quarter and 2003 first quarter, respectively.
/b Formerly the Industrial Products Segment. In the 2003 fourth
quarter, based upon organization changes Rome Metals became part of
Engineered Products. Rome Metals was previously included in Flat-
Rolled Products. Prior periods have been restated to reflect this
change.
Allegheny Technologies Incorporated and Subsidiaries
Consolidated Balance Sheets
(Dollars in millions)
December 31, December 31,
2003 2002
------------ ------------
ASSETS
Current Assets:
Cash and cash equivalents $79.6 $59.4
Accounts receivable, net of allowances for
doubtful accounts of $10.2 and $10.1 at
December 31, 2003 and December 31, 2002,
respectively 248.8 239.3
Inventories, net 359.7 392.3
Deferred income taxes - 20.8
Income tax refunds receivable 7.2 51.9
Prepaid expenses and
other current assets 48.0 32.0
------------ ------------
Total current assets 743.3 795.7
Property, plant and equipment, net 711.1 757.6
Cost in excess of net assets acquired 198.4 194.4
Deferred pension asset 144.0 165.1
Deferred income taxes 34.3 85.4
Other assets 53.8 95.0
------------ ------------
Total Assets $1,884.9 $2,093.2
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $172.3 $171.3
Accrued liabilities 172.1 161.0
Short term debt and current
portion of long-term debt 18.3 9.7
------------ ------------
Total current liabilities 362.7 342.0
Long-term debt 513.8 509.4
Accrued postretirement benefits 507.2 496.4
Pension liabilities 220.6 216.0
Other long-term liabilities 83.4 80.6
------------ ------------
Total liabilities 1,687.7 1,644.4
------------ ------------
Total stockholders' equity 197.2 448.8
------------ ------------
Total Liabilities and Stockholders' Equity $1,884.9 $2,093.2
============ ============
Allegheny Technologies Incorporated and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Dollars in millions)
Twelve Months Ended
December 31
--------------------
2003 2002
---------- ---------
Operating Activities:
Net loss $(292.1) $(65.8)
Cumulative effect of change in accounting
principle 1.3 -
Depreciation and amortization 74.6 90.0
Change in pension assets/liabilities 67.7 (4.2)
Deferred income taxes 72.6 25.6
Income tax refunds received 48.5 45.6
Non-cash restructuring charges and asset write
offs 52.6 39.2
Change in managed working capital (11.8) 155.0
Income tax refunds receivable (3.8) (49.0)
Accrued liabilities and other 72.4 (32.2)
---------- ---------
Cash provided by operating activities 82.0 204.2
---------- ---------
Investing Activities:
Purchases of property, plant and equipment (74.4) (48.7)
Asset disposals and other 4.1 8.9
---------- ---------
Cash used in investing activities (70.3) (39.8)
---------- ---------
Financing Activities:
Net increase (decrease) in debt 12.4 (85.5)
Interest rate swap termination 15.3 -
Dividends paid (19.4) (53.2)
Other 0.2 -
---------- ---------
Cash provided by (used in) financing activities 8.5 (138.7)
---------- ---------
Increase in cash and cash equivalents 20.2 25.7
Cash and cash equivalents at beginning of period 59.4 33.7
---------- ---------
Cash and cash equivalents at end of period $79.6 $59.4
========== =========
Allegheny Technologies Incorporated and Subsidiaries
Selected Financial Data
(Unaudited)
2003 2002 Q4 2003 Q3 2003 Q2 2003 Q1 2003 Q4 2002
- -------- -------- ------- ------- ------- ------- -------
Volume:
Flat-Rolled
478,353 487,335 Products 119,271 119,564 120,554 118,964 114,803
- -------- -------- ------- ------- ------- ------- -------
Commodity
(finished
342,689 350,301 tons) 85,341 86,519 87,337 83,492 82,503
High value
135,664 137,034 (tons) 33,930 33,045 33,217 35,472 32,300
High Performance
Metals
(000's lbs.)
Nickel-based
and specialty
35,168 35,832 steel alloys 8,054 8,965 9,457 8,692 8,719
Titanium
18,436 19,044 mill products 4,391 4,813 4,617 4,615 4,633
Exotic
4,245 3,712 alloys 1,101 1,052 1,160 932 861
Average Prices:
Flat-Rolled
$2,178 $2,134 Products $2,247 $2,165 $2,144 $2,159 $2,102
Commodity
(per finished
$1,581 $1,529 tons) $1,642 $1,570 $1,550 $1,564 $1,490
High value
$3,687 $3,677 (per ton) $3,768 $3,722 $3,708 $3,557 $3,663
High Performance
Metals (per
lb.)
Nickel-based
and specialty
$6.57 $6.39 steel alloys $6.64 $6.44 $6.47 $6.73 $6.09
Titanium mill
$11.50 $11.83 products $10.92 $11.05 $11.16 $12.85 $12.36
Exotic
$37.64 $36.29 alloys $36.56 $38.16 $38.10 $37.75 $43.33
Allegheny Technologies Incorporated and Subsidiaries
Other Financial Information
Managed Working Capital
(Unaudited - Dollars in millions)
Dec. 31,
2003
Change in
Managed
Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Working
2003 2003 2003 2003 2002 Capital
--------- --------- --------- --------- --------- --------
Accounts
receivable $248.8 $275.5 $274.8 $260.4 $239.3
Inventory 359.7 377.1 401.5 396.6 392.3
Accounts
payable (172.3) (175.5) (175.1) (178.1) (171.3)
--------- --------- --------- --------- ---------
Subtotal 436.2 477.1 501.2 478.9 460.3
Allowance
for doubtful
accounts 10.2 9.8 9.3 10.3 10.1
LIFO reserve 111.7 97.5 87.0 77.7 74.7
Corporate
and other 17.4 15.9 20.4 18.4 18.6
--------- --------- --------- --------- --------- --------
Managed
working
capital $575.5 $600.3 $617.9 $585.3 $563.7 $11.8
========= ========= ========= ========= ========= ========
Annualized
prior 2
months
sales $1,874.0 $1,962.0 $1,953.0 $1,992.0 $1,741.0
========= ========= ========= ========= =========
Managed
working
capital
as a % of
annualized
sales 30.7% 30.6% 31.6% 29.4% 32.4%
Certain amounts from prior periods have been reclassified to conform
with the 2003 presentation.
CONTACT: Allegheny Technologies Incorporated
Dan L. Greenfield, 412-394-3004