SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [NO FEE REQUIRED]
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
FOR THE TRANSITION PERIOD FROM TO
--------------- ---------------
COMMISSION FILE NUMBER 1-12001
TDY Industries, Inc. Profit Sharing Plan
for Certain Employees of Metalworking Products
----------------------------------------------
(Title of Plan)
ALLEGHENY TECHNOLOGIES INCORPORATED
(Name of Issuer of securities held pursuant to the Plan)
1000 Six PPG Place, Pittsburgh, Pennsylvania 15222-5479
(Address of Plan and of principal executive office of Issuer)
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE
TDY Industries, Inc. Profit Sharing Plan for Certain Employees of Metalworking
Products
Year ended December 31, 2002
Financial Statements
And Supplemental Schedule
TDY Industries, Inc. Profit Sharing Plan for
Certain Employees of Metalworking Products
Year ended December 31, 2002
(Unaudited)
TDY Industries, Inc. Profit Sharing Plan for
Certain Employees of Metalworking Products
Financial Statements
and Supplemental Schedule
Year ended December 31, 2002
(Unaudited)
CONTENTS
Financial Statements (Unaudited)
Statements of Net Assets Available for Benefits ...............................................................1
Statement of Changes in Net Assets Available for Benefits......................................................2
Notes to Financial Statements .................................................................................3
Supplemental Schedule
Schedule H, Line 4(i)--Schedule of Assets (Held at End of Year)................................................11
EXHIBITS
99 Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
TDY Industries, Inc. Profit Sharing Plan for
Certain Employees of Metalworking Products
Statements of Net Assets Available for Benefits
(Unaudited)
DECEMBER 31
2002 2001
--------------------------------------------
Investments:
Interest in Allegheny Technologies Incorporated Savings Plan Trust $1,197,399 $ 869,222
Interest in registered investment companies 584,977 753,101
Interest in common collective trusts 320,045 299,772
Participant loans 248,161 212,324
Corporate common stocks 2,611 3,534
--------------------------------------------
Net assets available for benefits $2,353,193 $2,137,953
============================================
See accompanying notes.
-1-
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, 2002
Contributions:
Employer $ 284,158
Employee 366,626
---------------------
650,784
Investment income (loss):
Net loss from interest in registered investment companies (127,751)
Net loss from interest in Allegheny Technologies Incorporated Savings Plan Trust
(46,700)
Net loss from interest in common collective trusts (45,745)
Interest income 15,328
Net unrealized/realized loss on corporate common stocks (2,978)
Dividend income 169
---------------------
Total investment loss (207,677)
---------------------
443,107
Distributions to participants (227,867)
---------------------
Net increase in net assets available for benefits 215,240
Net assets available for benefits at beginning of year 2,137,953
---------------------
Net assets available for benefits at end of year $2,353,193
=====================
See accompanying notes.
-2-
TDY Industries, Inc. Profit Sharing Plan for
Certain Employees of Metalworking Products
Notes to Financial Statements
December 31, 2002
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. The Plan allows employees to contribute a portion of
eligible wages each pay period through payroll deductions subject to Internal
Revenue Code limitations. Allegheny Technologies Incorporated (ATI), the Plan
Sponsor, will match 100% up to the first 3% of employee contributions and 50% of
the next 2% of employee contributions. In addition, profit sharing contributions
can be made to participant accounts at the Company's discretion. These
contributions follow an age-weighted formula, based on the following schedule:
-3-
TDY Industries, Inc. Profit Sharing Plan for
Certain Employees of Metalworking Products
Notes to Financial Statements (continued)
CURRENT AGE COMPANY CONTRIBUTION
Less than age 35 2.0%
35 - 39 2.5%
40 - 44 3.0%
45 - 49 3.5%
50 - 54 4.0%
55 - 59 4.5%
Age 60 or above 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,
Mellon Bank, N.A., 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.
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 12 to 60 months, and primary residence loans are repaid over 12
months 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 Plan Sponsor.
-4-
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, 2002 and 2001.
DECEMBER 31,
2002 2001
-------------------------------------
(Unaudited)
Fixed Income Master Trust $911,412 $548,276
Dreyfus Emerging Leaders Fund 453,205 460,011
Alliance Capital Fund 236,030 259,327
Dreyfus LifeStyle Growth Fund 138,909 144,500
Dreyfus LifeStyle Growth & Income Fund 110,412 93,458
Morgan Stanley Institutional Fund - Mid Cap Growth Portfolio* - 178,536
Dreyfus Growth & Value International Fund* - 81,523
* Shown for comparative purposes only.
Certain of the Plan's investments are in the Allegheny Technologies Incorporated
Savings Plan Trust, which has three subsidiary Master Trusts; the Allegheny
Technologies Disciplined Stock Fund Master Trust, the Alliance Equity Master
Trust and the Fixed Income Master Trust, which are institutional separate
accounts valued on a unitized trust basis (collectively, the "Master Trust").
The Master Trust 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, 2002 and 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:
DECEMBER 31,
2002 2001
----------------------------
(Unaudited)
Alliance Equity Master Trust 0.89% 0.65%
Fixed Income Master Trust 0.50 0.33
Allegheny Technologies Disciplined Stock Fund Master Trust 0.09 0.08
Investment income and expenses are allocated to the Plan based upon its pro rata
share in the net assets of the Master Trust.
-5-
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, 2002 was as follows:
2002
----------------------
(Unaudited)
Guaranteed investment contracts:
Canada Life $ 2,757,412
GE Life and Annuity 10,420,327
Hartford Life Insurance Company 10,460,185
John Hancock Life Insurance Company 9,854,982
Monumental Life Insurance Company 2,363,422
New York Life Insurance Company 7,808,955
Ohio National Life 5,976,900
Pacific Mutual Life Insurance Company 6,074,436
Principal Life 1,134,634
Protective Life Insurance Company 1,006,463
Pruco Pace Credit Enhanced 8,689,223
Safeco Life Insurance 1,973,290
Security Life of Denver 6,465,137
Sun America, Inc. 2,988,024
United of Omaha 7,226,335
----------------------
85,199,725
Synthetic guaranteed investment contracts:
Caisse des Depots et Consignations 4,953,210
CIT Equipment 996,925
Common Wealth Edison 2,999,980
Commit to purchase FNMA 02-74 LC 3,071,979
Conn RRB Spec Trust 2,948,436
Detroit Edison 2,027,941
FHLMC 5,977,227
Illinois Power Sp Trust 1,971,078
MBNA Master CC Trust 1,993,490
MDA Monumental BGI Wrap 41,868,727
Peco Energy Company 1,970,899
Peoples Security Life Insurance Company 2,491,608
Public Service 2,036,624
Transamerica Occidental 6,568,303
Union Bank of Switzerland 174,682
Westdeutsche Landesbank Girozentrale 3,556,463
----------------------
85,607,572
Interest in common collective trusts 7,972,257
Interest bearing cash 212,167
Other 1,817,668
----------------------
Total net assets $180,809,389
======================
-6-
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 $88,750,762 and $55,854,607 at December 31, 2002 and
2001, respectively. The contract value minus the market value of the wrapper
contracts at December 31, 2002 and 2001 is ($2,667,261) and $(1,397,030),
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, 2002 and 2001, the interest crediting rates for GICs and Fixed Maturity SICs
ranged from 3.27% to 8.05% and 3.49% to 8.05%, respectively.
For the year ended December 31, 2002, the average annual yield for the
investment contracts in the Fund was 5.74%. 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, 2002 and 2001.
-7-
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, 2002 and 2001 was as follows:
2002 2001
--------------------------------------------
(Unaudited)
Investment in registered investment companies:
Alliance Equity Fund S.A. #4 $26,603,639 $40,024,274
Operating payables (49,895) (64,365)
--------------------------------------------
Total net assets $26,553,744 $39,959,909
============================================
The composition of net assets of the Allegheny Technologies Disciplined Stock
Fund Master Trust at December 31, 2002 and 2001 was as follows:
2002 2001
-------------------------------------------
(Unaudited)
Corporate common stocks $53,256,475 $76,016,770
Investment in common collective trusts 1,630,752 1,410,015
Receivables 67,848 103,913
Operating payables (25,733) -
-------------------------------------------
Total net assets $54,929,342 $77,530,698
===========================================
-8-
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
-------------------------------------------------------------
2002 2002 2002
-------------------------------------------------------------
(Unaudited)
Investment income (loss):
Interest income $ 9,786,577 $ - $ -
Net realized/unrealized loss on
corporate common stocks 1,528 - (17,406,255)
Dividends - - 948,623
Net loss, registered
investment companies - (10,652,634) -
Net gain, common collective
Trusts 172,081 - 13,761
Other income 69,815 - -
Administrative expenses (236,944) (118,618) (424,085)
Transfers 5,374,077 (2,634,913) (5,733,400)
-------------------------------------------------------------
Net increase (decrease) 15,167,134 (13,406,165) (22,601,356)
Total net assets at beginning
of year 165,642,255 39,959,909 77,530,698
-------------------------------------------------------------
Total net assets at end of year $180,809,389 $ 26,553,744 $54,929,342
=============================================================
-9-
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 from interest in Allegheny
Technologies Incorporated Savings Plan Trust 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
Dreyfus Corporation is the manager of the Dreyfus Mutual Funds that are offered
as investment options under this Plan. Dreyfus Service Corporation is the funds'
distributor. Dreyfus Corporation and Dreyfus Service Corporation are both wholly
owned subsidiaries of Mellon Financial Corporation. Mellon Financial Corporation
also owns Mellon Bank, N.A., the Trustee for this Plan. Therefore, transactions
with these entities qualify as party-in-interest. Trustee and investment fees
paid during 2002 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.
-10-
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, 2002
INVESTMENT DESCRIPTION UNITS/SHARES CURRENT VALUE
----------------------------------------------------------------------------------------------------------------------------
Interest in registered investment companies:
Dreyfus Bond Market Index Fund* 2,419.986 $ 25,386
Dreyfus Emerging Leaders Fund* 16,325.830 453,205
Dreyfus Growth & Value International Fund* 6,799.350 81,864
MAS Mid Cap Growth Fund, Institutional Shares 1,341.596 16,206
Prudential Jennison Growth Fund, Class A Shares 826.624 8,316
------------------------
$ 584,977
========================
Interest in common collective investment funds:
Dreyfus LifeStyle Growth & Income Fund* 7,663.116 $ 110,412
Dreyfus LifeStyle Growth Fund* 10,335.296 138,909
Dreyfus LifeStyle Income Fund* 4,682.104 70,681
Dreyfus Short Term Investment Fund* 43.180 43
------------------------
$ 320,045
========================
Participant loans (5.25% to 10.50%)* $ 248,161
========================
Interest in corporate common stocks:
Allegheny Technologies Incorporated common stock* 419.000 $ 2,611
========================
* Party-in-interest
-11-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
administrators of the Plan have duly caused this annual report to be signed on
its behalf by the undersigned hereunto duly authorized.
ALLEGHENY TECHNOLOGIES INCORPORATED
TDY INDUSTRIES, INC. PROFIT SHARING PLAN
FOR CERTAIN EMPLOYEES OF METALWORKING PRODUCTS
By: /s/ Richard J. Harshman
------------------------------------
Date: June 27, 2003 Richard J. Harshman
Senior Vice President-Finance and
Chief Financial Officer
(Principal Financial Officer and Duly
Authorized Officer)
12