²/2ÿñH<    d 1$&|&A%|Page #*ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ7ñ'ALLEGHENY TELEDYNE INCORPORATED AND SUBSIDIARIES(ñ'CONSOLIDATED STATEMENTS OF INCOME-ñ'(In millions except per share amounts)ñ"DECEMBER 31,ñ"December 31,ñ"December 31,ñ'For the Years Ended ñ"1997 ñ"1996 ñ"1995 ñ'SALESñ"$ 3,745.1ñ"$ 3,815.6ñ"$ 4,048.1ñ'Costs and expenses:ñ 'Cost of salesñ "2,828.8ñ "2,901.7ñ "3,158.9*ñ 'Selling and administrative expenses ñ "484.1 ñ "515.5 ñ "479.0%ñ 'Merger and restructuring costs ñ "11.2 ñ "57.5 ñ "6.4ñ 'Interest expense, net ñ "19.6 ñ "34.7 ñ "37.6ñ "3,343.7ñ "3,509.4ñ "3,681.9#ñ'Earnings before Other Income ñ"401.4 ñ"306.2 ñ"366.2ñ'Other Income ñ"73.8 ñ"78.5 ñ"74.78ñ'INCOME BEFORE INCOME TAXES AND EXTRAORDINARY LOSS ñ"475.2 ñ"384.7 ñ"440.9!ñ'Provision for Income Taxes ñ"177.6 ñ"158.2 ñ"164.1'ñ'INCOME BEFORE EXTRAORDINARY LOSS ñ"297.6 ñ"226.5 ñ"276.8'ñ'Extraordinary Loss on Redemption)ñ'of Debt, Net of Income Tax Benefit ñ"-- ñ"(13.5) ñ"(2.9)ñ'NET INCOME ñ"297.6 ñ"213.0 ñ"273.9#ñ'Dividends on Preferred Stock ñ"-- ñ"2.0 ñ"1.62ñ'NET INCOME AVAILABLE TO COMMON STOCKHOLDERSñ"$ 297.6ñ"$ 211.0ñ"$ 272.3)ñ'Basic Net Income per Common Share:'ñ'Income before Extraordinary Lossñ"$ 1.70ñ"$ 1.28ñ"$ 1.56ñ'Extraordinary Loss ñ"-- ñ"(0.08) ñ"(0.02)(ñ'BASIC NET INCOME PER COMMON SHAREñ"$ 1.70ñ"$ 1.20ñ"$ 1.54+ñ'Diluted Net Income per Common Share:'ñ'Income before Extraordinary Lossñ"$ 1.67ñ"$ 1.27ñ"$ 1.53ñ'Extraordinary Loss ñ"-- ñ"(0.08) ñ"(0.02)*ñ'DILUTED NET INCOME PER COMMON SHAREñ"$ 1.67ñ"$ 1.19ñ"$ 1.51Gñ 'The accompanying notes are an integral part of these statements.7ñ#'ALLEGHENY TELEDYNE INCORPORATED AND SUBSIDIARIES"ñ$'CONSOLIDATED BALANCE SHEETS7ñ%'(In millions except share and per share amounts)ñ("DECEMBER 31,ñ("December 31, ñ)"1997 ñ)"1996 ñ*'ASSETS ñ+'Cash and cash equivalentsñ+"$ 50.3ñ+"$ 62.5ñ,'Accounts receivable ñ,"518.0 ñ,"522.5ñ-'Inventories ñ-"582.4 ñ-"518.4ñ.'Deferred income taxes ñ."37.0 ñ."70.1ñ/'Tax refund ñ/"9.4 ñ/"--0ñ0'Prepaid expenses and other current assets ñ0"31.6 ñ0"26.3ñ1'TOTAL CURRENT ASSETSñ1"1,228.7ñ1"1,199.8$ñ2'Property, plant and equipment ñ2"687.7 ñ2"731.4ñ3'Prepaid pension cost ñ3"379.7 ñ3"352.5,ñ4'Cost in excess of net assets acquired ñ4"169.9 ñ4"177.1ñ5'Other assets ñ5"138.5 ñ5"145.6ñ6'TOTAL ASSETSñ6"$ 2,604.5ñ6"$ 2,606.4+ñ7'LIABILITIES AND STOCKHOLDERS' EQUITYñ8'Accounts payableñ8"$ 247.5ñ8"$ 241.7ñ9'Accrued liabilities ñ9"314.0 ñ9"344.1 ñ:'TOTAL CURRENT LIABILITIES ñ:"561.5 ñ:"585.8ñ;'Long-term debt ñ;"326.1 ñ;"443.4&ñ<'Accrued postretirement benefits ñ<"572.8 ñ<"567.5 ñ='Other ñ="144.4 ñ="138.2ñ>'TOTAL LIABILITIESñ>"1,604.8ñ>"1,734.9ñ?'Stockholders' Equity:Yñ@'Preferred stock, par value $0.10: authorized - 50,000,000 shares; issued - none  ñ@" -- ñ@"--OñA'Common stock, par value $0.10: authorized - 600,000,000 shares; issued -MñB'176,346,720 in 1997 and 174,389,377 in 1996; outstanding - 174,329,6044ñC'shares in 1997 and 174,389,377 shares in 1996 ñC"17.6 ñC"17.4!ñD'Additional paid-in capital ñD"290.7 ñD"246.6ñE'Retained earnings ñE"752.7 ñE"596.7/ñF'Treasury stock: 2,017,116 shares in 1997 ñF"(60.2) ñF"-- ñG'Other ñG"(1.1) ñG"10.8!ñH'TOTAL STOCKHOLDERS' EQUITY ñH"999.7 ñH"871.51ñI'TOTAL LIABILITIES AND STOCKHOLDERS' EQUITYñI"$ 2,604.5ñI"$ 2,606.4GñJ'The accompanying notes are an integral part of these statements.7ñM'ALLEGHENY TELEDYNE INCORPORATED AND SUBSIDIARIES,ñN'CONSOLIDATED STATEMENTS OF CASH FLOWSñO'(In millions)ñR"DECEMBER 31,ñR"December 31,ñR"December 31,ñS'For the Years Ended ñS"1997 ñS"1996 ñS"1995ñT'OPERATING ACTIVITIES:ñU'Net incomeñU"$ 297.6ñU"$ 213.0ñU"$ 273.9-ñV'Adjustments to reconcile net income to;ñW'net cash provided by (used in) operating activities:$ñX'Depreciation and amortization ñX"98.5 ñX"105.3 ñX"110.9#ñY'Gains on sales of businesses ñY"(69.2) ñY"(64.5) ñY"(51.1)ñZ'Deferred income taxes ñZ"(5.7) ñZ"18.6 ñZ"42.4/ñ['Extraordinary loss on redemption of debt ñ["-- ñ["13.5 ñ["2.92ñ\'Change in operating assets and liabilities:ñ]'Inventories ñ]"(68.8) ñ]"(67.1) ñ]"(12.9)ñ^'Accrued liabilities ñ^"(43.5) ñ^"(13.8) ñ^"(30.8)ñ_'Tax refund ñ_"37.7 ñ_"-- ñ_"--ñ`'Accrued income taxes ñ`"36.4 ñ`"17.9 ñ`"12.5ña'Prepaid pension costs ña"(24.7) ña"(41.8) ña"(83.6)ñb'Accounts payable ñb"10.6 ñb"21.3 ñb"(46.3))ñc'Long-term postretirement liability ñc"5.3 ñc"11.6 ñc"(0.6)ñd'Accounts receivable ñd"(4.7) ñd"13.0 ñd"(7.5) ñe'Other ñe"(12.8) ñe"6.4 ñe"3.3,ñf'CASH PROVIDED BY OPERATING ACTIVITIES ñf"256.7 ñf"233.4 ñf"213.1ñg'INVESTING ACTIVITIES:<ñh'Proceeds from the sales of businesses and investments ñh"112.1 ñh"124.8 ñh"69.01ñi'Purchases of property, plant and equipment ñi"(96.3) ñi"(88.6) ñi"(93.8)1ñj'Disposals of property, plant and equipment ñj"30.7 ñj"16.0 ñj"14.89ñk'Investment in ventures and purchases of businesses ñk"(15.2) ñk"(23.6) ñk"(43.2) ñl'Other ñl"(5.9) ñl"(9.3) ñl"(15.1)6ñm'CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES ñm"25.4 ñm"19.3 ñm"(68.3)ñn'FINANCING ACTIVITIES:4ño'Payments on long-term debt and capital leasesño"(114.2)ño"(436.5)ño"(114.9)!ñp'Increase in long-term debt ñp"4.4 ñp"290.5 ñp"167.30ñq'Net increase (decrease) in long-term debtñq"(109.8)ñq"(146.0) ñq"52.42ñr'Dividends paid - common and preferred stockñr"(112.2)ñr"(106.1) ñr"(57.1) ñs'Purchases of common stockñs"(107.7) ñs"(23.7) ñs"(75.6)!ñt'Exercises of stock options ñt"35.4 ñt"13.9 ñt"6.4$ñu'Redemption of preferred stock ñu"-- ñu"(41.4) ñu"-- ñv'Other ñv"-- ñv"0.5 ñv"0.8(ñw'CASH USED IN FINANCING ACTIVITIESñw"(294.3)ñw"(302.8) ñw"(73.1)7ñx'INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ñx"(12.2) ñx"(50.1) ñx"71.75ñy'Cash and cash equivalents at beginning of year ñy"62.5 ñy"112.6 ñy"40.9/ñz'CASH AND CASH EQUIVALENTS AT END OF YEARñz"$ 50.3ñz"$ 62.5ñz"$ 112.6ñ{'NON-CASH TRANSACTIONS:0ñ|'Preferred stock dividends on common stockñ|"$ --ñ|"$ 8.3ñ|"$ 33.1Mñ}'Amounts presented on the Statements of Cash Flows may not agree to theWñ~'corresponding changes in balance sheet items due to the accounting for purchasesPñ'and sales of businesses, and the effects of foreign currency translation.Gñ'The accompanying notes are an integral part of these statements.7ñƒ'ALLEGHENY TELEDYNE INCORPORATED AND SUBSIDIARIES6ñ„'CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY-ñ†'(In millions except per share amounts)ñˆ"Additional ñ‰"Commonñ‰"Paid-Inñ‰"Retainedñ‰"Treasuryñ‰"Stockholders' ñŠ"StockñŠ"CapitalñŠ"Earnings ñŠ"Stock ñŠ"Other ñŠ"Equity!ñ‹'BALANCE, DECEMBER 31, 1994ñ‹"$ 17.8ñ‹"$ 319.4ñ‹"$ 314.3 ñ‹"$ --ñ‹"$ 3.9ñ‹"$ 655.4ñŒ'Net income ñŒ"-- ñŒ"-- ñŒ"273.9 ñŒ"-- ñŒ"-- ñŒ"273.9*ñ'Preferred stock dividends on common'ñŽ'stock (Teledyne $0.31 per share) ñŽ"-- ñŽ"-- ñŽ"(33.1) ñŽ"-- ñŽ"-- ñŽ"(33.1)#ñ'Cash dividends on common and(ñ'preferred stock (Allegheny Ludlumñ‘'$0.49 per common share,&ñ’'Teledyne $0.21 per common share%ñ“'and $0.60 per preferred share) ñ“"-- ñ“"-- ñ“"(57.1) ñ“"-- ñ“"-- ñ“"(57.1)ñ”'Employee stock plans ñ”"-- ñ”"11.6 ñ”"0.1 ñ”"-- ñ”"-- ñ”"11.7 ñ•'Purchase and cancellationñ–'of common stock ñ–"(0.4) ñ–"(75.2) ñ–"-- ñ–"-- ñ–"-- ñ–"(75.6).ñ—'Increase in net unrealized appreciation ñ—"-- ñ—"-- ñ—"-- ñ—"-- ñ—"9.9 ñ—"9.9&ñ˜'Currency translation adjustment ñ˜"-- ñ˜"-- ñ˜"-- ñ˜"-- ñ˜"0.7 ñ˜"0.7!ñ™'BALANCE, DECEMBER 31, 1995 ñ™"17.4 ñ™"255.8 ñ™"498.1 ñ™"-- ñ™"14.5 ñ™"785.8ñš'Net income ñš"-- ñš"-- ñš"213.0 ñš"-- ñš"-- ñš"213.0*ñ›'Preferred stock dividends on common'ñœ'stock (Teledyne $0.08 per share) ñœ"-- ñœ"-- ñœ"(8.3) ñœ"-- ñœ"-- ñœ"(8.3)-ñ'Cash dividends on common and preferred*ñž'stock (Allegheny Teledyne $0.16 per%ñŸ'common share, Allegheny Ludlum'ñ '$0.42 per common share, Teledyne'ñ¡'$0.44 per common share and $1.20ñ¢'per preferred share) ñ¢"-- ñ¢"--ñ¢"(106.1) ñ¢"-- ñ¢"--ñ¢"(106.1)ñ£'Employee stock plans ñ£"-- ñ£"14.5 ñ£"-- ñ£"-- ñ£"-- ñ£"14.5 ñ¤'Purchase and cancellationñ¥'of common stock ñ¥"-- ñ¥"(23.7) ñ¥"-- ñ¥"-- ñ¥"-- ñ¥"(23.7).ñ¦'Decrease in net unrealized appreciation ñ¦"-- ñ¦"-- ñ¦"-- ñ¦"-- ñ¦"(1.6) ñ¦"(1.6)&ñ§'Currency translation adjustment ñ§"-- ñ§"-- ñ§"-- ñ§"-- ñ§"(2.1) ñ§"(2.1)!ñ¨'BALANCE, DECEMBER 31, 1996 ñ¨"17.4 ñ¨"246.6 ñ¨"596.7 ñ¨"-- ñ¨"10.8 ñ¨"871.5ñ©'Net income ñ©"-- ñ©"-- ñ©"297.6 ñ©"-- ñ©"-- ñ©"297.6%ñª'Cash dividends on common stockñ«'($0.64 per common share) ñ«"-- ñ«"--ñ«"(112.2) ñ«"-- ñ«"--ñ«"(112.2)ñ¬'Employee stock plans ñ¬"0.2 ñ¬"44.1 ñ¬"(29.4) ñ¬"47.5 ñ¬"-- ñ¬"62.4ñ­'Purchase of common stock ñ­"-- ñ­"-- ñ­"--ñ­"(107.7) ñ­"--ñ­"(107.7).ñ®'Decrease in net unrealized appreciation ñ®"-- ñ®"-- ñ®"-- ñ®"-- ñ®"(7.3) ñ®"(7.3)&ñ¯'Currency translation adjustment ñ¯"-- ñ¯"-- ñ¯"-- ñ¯"-- ñ¯"(4.6) ñ¯"(4.6)!ñ°'BALANCE, DECEMBER 31, 1997 ñ°"$ 17.6 ñ°"$290.7 ñ°"$752.7ñ°"$(60.2)ñ°"$ (1.1) ñ°"$999.7Gñ²'The accompanying notes are an integral part of these statements.