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, 1999 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 April 28, 2000, the Registrant had outstanding 83,204,001 shares of its Common Stock. The aggregate market value of the Registrant's voting stock held by non-affiliates at this date was approximately $2.0 billion, based on the closing price per share of Common Stock on this date of $24.1875 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. 2 Documents Incorporated By Reference Selected portions of the 1999 Annual Report to Stockholders ("1999 Annual Report") - Part I, Part II and Part IV of this Report. Selected portions of the Proxy Statement for the 2000 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 3 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, 1999 ("1999 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 Ludlum Retirement Savings Plan; (2) 401(k) Savings Account Plan for Employees of the Washington 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; (5) Teledyne 401(k) Plan; and (6) Oregon Metallurgical Corporation Savings Plan. "Item 8. Financial Statements and Supplementary Data" of Part II of the 1999 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 29 to 51 of the 1999 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 Ludlum Retirement Savings Plan.............................. 4 401(k) Savings Account Plan for Employees of the Washington Plant..... 21 Savings and Security Plan of the Lockport and Waterbury Facilities of Allegheny Ludlum Corporation............................ 36 Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan........................................... 52 Teledyne 401(k) Plan.................................................. 67 Oregon Metallurgical Corporation Savings Plan......................... 82 3 4 Audited Financial Statements and Supplemental Schedule Allegheny Ludlum Retirement Savings Plan Years ended December 31, 1999 and 1998 with Report of Independent Auditors 4 5 Allegheny Ludlum Retirement Savings Plan Audited Financial Statements and Supplemental Schedule Years ended December 31, 1999 and 1998 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 for Investment Purposes at End of Year................................................................19 5 6 Report of Independent Auditors Personnel and Compensation Committee Allegheny Ludlum Corporation We have audited the accompanying statements of net assets available for benefits of the Allegheny Ludlum Retirement Savings Plan as of December 31, 1999 and 1998, 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, 1999 and 1998, 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 made for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedule of assets held for investment purposes as of December 31, 1999 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 audit 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 June 9, 2000 6 7 Allegheny Ludlum Retirement Savings Plan Statements of Net Assets Available for Benefits DECEMBER 31 1999 1998 ---------------------------------- ASSETS Investments: Interest in Allegheny Ludlum Corporation Master Trusts $188,502,545 $183,378,342 Interest in registered investment companies 22,920,560 14,760,429 Interest in common collective trusts 33,760,823 29,922,237 Common stock 11,310 -- Participant notes receivable 3,908,588 3,749,111 ---------------------------------- Total investments 249,103,826 231,810,119 Other payables (2,277) (537,964) ---------------------------------- Net assets available for benefits $249,101,549 $231,272,155 ================================== See accompanying notes. 7 8 Allegheny Ludlum Retirement Savings Plan Statements of Changes in Net Assets Available for Benefits YEAR ENDED DECEMBER 31 1999 1998 --------------------------------- Additions: Contributions: Employer $ 8,856,452 $ 9,213,107 Employee 6,800,720 6,992,306 Investment income: Net gain from interest in Allegheny Ludlum Corporation Master Trusts 15,876,181 6,472,497 Net gain from interest in registered investment companies 5,499,995 2,588,546 Net gain from common interest in collective trusts 3,214,351 3,051,160 Interest income 341,925 377,538 Other (904) (11,172) Transfers in from outside of Plan 38,758 2,208,714 --------------------------------- Total additions 40,627,478 30,892,696 Deductions: Distributions to participants 22,766,058 51,707,763 Administrative expenses 1,526 550 Pending transfer to SDA account 30,500 -- --------------------------------- Total deductions 22,798,084 51,708,313 --------------------------------- Net additions (deductions) 17,829,394 (20,815,617) Net assets available for benefits at beginning of year 231,272,155 252,087,772 --------------------------------- Net assets available for benefits at end of year $249,101,549 $231,272,155 ================================= See accompanying notes. 8 9 Allegheny Ludlum Retirement Savings Plan Notes to Financial Statements December 31, 1999 1. SIGNIFICANT ACCOUNTING POLICIES Investments are stated at fair value determined as follows: The Common Stock Master Trusts consist of investments in either Allegheny Technologies Incorporated (Allegheny Teledyne as of December 31, 1998), Teledyne Technologies Incorporated or Water Pik Technologies Inc. common stock and are stated at the quoted market price as listed on the New York Stock Exchange. The Fixed Income Fund is stated at cost plus net earnings, which approximates market value and is provided by the Plan's trustee. 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 generally accepted accounting principles requires management to make estimates and assumptions 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 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. Allegheny Ludlum Corporation (ALC) is a wholly owned indirect subsidiary of Allegheny Technologies Incorporated (ATI). Depending on participants' years of service, participants can defer between 1% and 14%, subject to Internal Revenue Service limitations, of their eligible wages, including profit sharing awards, and contribute them to the Plan. The 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. Effective April 1, 1997, participants can elect to participate in the self-directed account if they have at least a $10,000 balance in the Plan. The minimum initial investment amount in the self-directed fund, which is comprised of various mutual funds, is $5,000. 9 10 Allegheny Ludlum Retirement Savings 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. Under certain provisions of the Plan, contributions by the Plan Sponsor, which have been allocated to the accounts of the participants, may be subject to forfeiture upon participants' termination of employment. Such forfeitures will be used to reduce future contributions by the employer. Employer contributions allocated to a participant's account become fully vested after a participant completes five full years of service. Employee contributions and the fixed dollar retirement contributions are fully vested at all times. 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 periods up to 180 months. Payments are made by payroll deductions. Effective November 29, 1999, Allegheny Teledyne's (the Plan Sponsor) name was changed to Allegheny Technologies Incorporated. Also, the Aerospace and Electronics and Consumer segments of Allegheny Teledyne were spunoff 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 master trusts will be terminated and the assets will be transferred to one of the other plan investment options. In conjunction with the spin-off of the Aerospace and Electronics and Consumer segments of Allegheny Teledyne into two new freestanding companies, the Plan as a holder of shares of common stock prior to the spin-off received the following distributions on November 29, 1999: one share of Water Pik Technologies Inc. for every seven shares held of Allegheny Teledyne and one share of Teledyne Technologies Incorporated for every twenty shares held of Allegheny Teledyne. Additionally, a reverse stock split occurred on the spin-off date and resulted in one share of Allegheny Technologies Incorporated common stock for every two shares held of Allegheny Teledyne common stock. 10 11 Allegheny Ludlum Retirement Savings Plan Notes to Financial Statements (continued) 2. DESCRIPTION OF THE PLAN (CONTINUED) Certain financial information for the year ended December 31, 1998 has been reclassified to conform with the financial statement presentation for the year ended December 31, 1999. These reclassifications did not impact total net assets available for benefits. In the event that the Plan is partially or completely terminated, or the Plan Sponsor permanently discontinues making contributions, all amounts credited to the accounts of the affected participants become fully vested and nonforfeitable. Further information about the Plan, including eligibility, vesting, contributions, and withdrawals, is contained in the Summary Plan Description and related contracts. Copies of this Summary Plan Description 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 1999 1998 --------------------------------- Dreyfus Lifestyle Growth and Income Fund $20,820,050 $20,517,539 Alliance Equity Fund 46,304,854 37,713,059 Fixed Income Fund 89,488,628 87,061,673 Allegheny Technologies Disciplined Stock Fund 35,700,077 35,146,629 Company Stock Fund 14,654,933 22,824,448 11 12 Allegheny Ludlum Retirement Savings Plan Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) As of December 31, 1999, the Plan is a participant in the Fixed Income Master Trust, the Alliance Equity Master Trust, the ATI Common Stock Master Trust, and the Allegheny Technologies Disciplined Stock Fund Master Trust. During 1998, the Dreyfus Lifestyle Growth and Income Fund, the Dreyfus Lifestyle Growth Fund, and the Dreyfus Lifestyle Income Fund were reclassified as common collective trusts from master trusts while the Allegheny Technologies Disciplined Stock Fund was reclassified to a master trust from the Dreyfus Disciplined Stock Fund, a registered investment company. The Plan's participating interests in these master trusts as of December 31, 1999 and 1998 were as follows: 1999 1998 -------------------------------- Fixed Income Master Trust 66.52% 68.81% Alliance Equity Master Trust 78.49 80.47 ATI Common Stock Master Trust 72.40 70.95 Allegheny Technologies Disciplined Stock Fund Master Trust 78.61 81.55 Teledyne Technologies Incorporated Common Stock Master Trust 72.70 -- Water Pik Technologies Inc. Common Stock Master Trust 72.78 -- 12 13 Allegheny Ludlum 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, 1999 and 1998 was as follows: 1999 1998 --------------------------------------- Guaranteed investment contracts: Confederation Life Insurance Company $ -- $ 2,575 John Hancock Life Insurance Company 8,328,120 5,100,000 New York Life Insurance Company -- 13,258,607 Pacific Mutual Life Insurance Company 6,565,846 6,167,430 Peoples Security Life Insurance Company 6,474,471 10,367,671 Southland Life Insurance Company 5,796,035 10,752,479 Transamerica Occidental 11,678,338 11,296,810 Sun America, Inc. 3,007,834 3,000,000 Business Mens Assurance Company of America 2,497,621 2,505,536 Protective Life Insurance Company 2,999,471 3,002,482 Safeco Life Insurance 3,000,504 3,000,000 United of Omaha 5,044,635 -- Ohio National Life 4,577,686 -- Combined Life Insurance Company 4,658,686 -- Canada Life 4,136,813 -- Monumental Life Insurance Company 1,999,853 -- Hartford Life Insurance Company 2,000,000 -- Pruco Pace Credit Enhanced 3,062,854 -- --------------------------------------- 75,828,767 68,453,590 Synthetic contracts: Caisse des Depots et Consignations 11,135,225 12,865,126 Peoples Security Life Insurance Company 2,977,064 2,968,196 Transamerica Occidental 13,970,912 13,859,523 Union Bank of Switzerland 5,949,968 5,935,391 Westdeutsche Landesbank Girozentrale 17,030,049 16,952,480 --------------------------------------- 51,063,218 52,580,716 Temporary short-term investments 6,293,422 4,248,515 Accrued interest receivable 1,435,635 1,572,918 Other payables (85,522) (88,501) --------------------------------------- Total net assets $134,535,520 $126,667,238 ======================================= 13 14 Allegheny Ludlum 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, 1999 and 1998 was as follows: 1999 1998 --------------------------------------- Investment in registered investment companies: Alliance Equity Fund S.A. #4 (6,387.664 and 6,966.434 shares, respectively) $59,022,910 $47,408,255 Cash -- 117 Operating payables (28,676) (26,007) --------------------------------------- Total net assets $58,994,234 $47,382,365 ======================================= The composition of net assets of the ATI Common Stock Master Trust at December 31, 1999 and 1998 was as follows: 1999 1998 --------------------------------------- Allegheny Technologies Incorporated common stock (883,159 and 1,544,975 shares, respectively) $19,815,880 $31,575,427 Receivables 101,879 196,291 Short-Term Investment Fund 326,907 450,324 Operating payables (4,276) (10,492) --------------------------------------- Total net assets $20,240,390 $32,211,550 ======================================= The composition of net assets of the Allegheny Technologies Disciplined Stock Fund Master Trust at December 31, 1999 and 1998 was as follows: 1999 1998 --------------------------------------- Corporate common stock $44,796,765 $41,699,413 Noninterest-bearing cash 13,151 (5,217) Receivables 44,689 58,761 Short-Term Investment Fund 589,843 1,499,311 Operating payables (28,719) (51,809) --------------------------------------- Total net assets $45,415,729 $43,200,459 ======================================= 14 15 Allegheny Ludlum Retirement Savings Plan Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) The composition of net assets of the Teledyne Technologies Incorporated Common Stock Master Trust at December 31, 1999 and 1998 was as follows: 1999 1998 ------------------------------- Teledyne Technologies Incorporated common stock (248,073 and -0- shares, respectively) $2,341,189 $-- Short-Term Investment Fund 41,774 -- Receivables 6,135 -- Operating payables (133) -- ------------------------------- Total net assets $2,388,965 $-- =============================== The composition of net assets of the Water Pik Technologies Inc. Common Stock Master Trust at December 31, 1999 and 1998 was as follows: 1999 1998 ------------------------------- Water Pik Technologies Inc. common stock (87,153 and -0- shares, respectively) $833,401 $-- Short-Term Investment Fund 2,765 -- Receivables 11,909 -- Operating payables (41) -- ------------------------------- Total net assets $848,034 $-- =============================== 15 16 Allegheny Ludlum 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: FIXED INCOME MASTER ALLIANCE EQUITY MASTER ATI COMMON STOCK MASTER TRUST TRUST TRUST ----------------------------------------------------------------------------------------------- YEAR ENDED DECEMBER 31 ----------------------------------------------------------------------------------------------- 1999 1998 1999 1998 1999 1998 ----------------------------------------------------------------------------------------------- Investment income (loss): Interest income (loss) $ 7,765,761 $ 8,359,937 $ -- $ -- $ (465) $ (113) Realized gain (loss) on sale of -- -- -- -- 387,154 (620,712) investments Unrealized depreciation in fair value of investments -- -- -- -- (11,018,180) (5,308,345) Dividends -- -- -- -- 960,419 934,022 Net gain (loss), registered investment companies -- -- 15,731,932 (2,106,215) -- -- Net gain, common collective trusts 293,007 413,402 -- -- 34,305 41,352 Other income 18,993 1,138 -- -- -- -- Administrative expenses (183,985) (191,163) (202,397) (237,876) (21,480) (24,196) Transfers (25,494) (17,218,779) (3,917,666) (10,462,912) (2,312,913) 1,574,676 ----------------------------------------------------------------------------------------------- Net increase (decrease) 7,868,282 (8,635,465) 11,611,869 (12,807,003) (11,971,160) (3,403,316) Total net assets at beginning of year 126,667,238 135,302,703 47,382,365 60,189,368 32,211,550 35,614,866 ----------------------------------------------------------------------------------------------- Total net assets at end of year $134,535,520 $126,667,238 $58,994,234 $ 47,382,365 $ 20,240,390 $32,211,550 =============================================================================================== 16 17 Allegheny Ludlum Retirement Savings Plan Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) DREYFUS DREYFUS DREYFUS LIFESTYLE GROWTH AND ALLEGHENY TECHNOLOGIES LIFESTYLE GROWTH LIFESTYLE INCOME FUND INCOME FUND MASTER DISCIPLINED STOCK FUND FUND MASTER TRUST MASTER TRUST TRUST MASTER TRUST ------------------------------------------------------------------------------------------------- YEAR ENDED DECEMBER 31 ------------------------------------------------------------------------------------------------- 1999 1998* 1999 1998* 1999 1998* 1999 1998* ------------------------------------------------------------------------------------------------- Investment income (loss): Interest loss $-- $ -- $-- -- $-- $ -- $ (383) $ (925) Realized (loss) gain on sale of -- -- -- -- -- -- (58,566) 107,964 investments Unrealized appreciation (depreciation) in -- -- -- -- -- -- 7,190,385 4,322,009 fair value of investments Dividends -- -- -- -- -- -- 531,414 87,868 Net gain, common collective trusts -- 514,556 -- 109,828 -- 1,558,031 43,173 26,165 Other loss -- (14) -- -- -- (10) -- -- Administrative expenses -- (94) -- (34) -- (229) (347,043) (51,809) Transfers -- (5,631,496) -- (1,935,424) -- (24,298,600) (5,143,710) 38,709,187 ---------------------------------------------------------------------------------------------- Net (decrease) increase -- (5,117,048) -- (1,825,630) -- (22,740,808) 2,215,270 43,200,459 Total net assets at beginning of year -- 5,117,048 -- 1,825,630 -- 22,740,808 43,200,459 -- ---------------------------------------------------------------------------------------------- Total net assets at end of year $-- $ -- $-- $ -- $-- $ -- $45,415,729 $43,200,459 ============================================================================================== TELEDYNE WATER PIK TECHNOLOGIES TECHNOLOGIES INC. INCORPORATED COMMON COMMON STOCK MASTER STOCK MASTER TRUST TRUST -------------------------------------------- -------------------------------------------- 1999 1998 1999 1998 -------------------------------------------- Investment income (loss): Interest loss $ 9 $-- $ -- $-- Realized (loss) gain on sale of (21,035) -- (3,052) -- investments Unrealized appreciation (depreciation) in (640,748) -- (88,259) -- fair value of investments Dividends -- -- -- -- Net gain, common collective trusts 176 -- 38 -- Other loss -- -- -- -- Administrative expenses (133) -- (41) -- Transfers 3,050,696 -- 939,348 -- ---------- --- --------- --- Net (decrease) increase 2,388,965 -- 848,034 -- Total net assets at beginning of year -- -- -- -- ---------- --- --------- --- Total net assets at end of year $2,388,965 $-- $ 848,034 $-- ========== === ========= === * Partial year only. Reclassified as common collective trusts. The investment contracts underlying the Fixed Income Master Trust have fully benefit-responsive features. The average yield for 1999 and 1998 for the Fixed Income Master Trust was 6.46% and 6.55%, respectively. Credited interest rates on the contracts ranged from 5.13% to 7.28% and 5.13% to 8.18% for 1999 and 1998, respectively, and are determined at contract inception. Interest, realized and unrealized gains and losses, and management fees from the master trusts are included in the net gain (loss) from interest in Allegheny Ludlum Corporation Master Trusts on the statement of changes in net assets available for benefits. 17 18 Allegheny Ludlum Retirement Savings Plan Notes to Financial Statements (continued) 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. 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 part-in-interest. Trustee and investment fees paid during 1999 and 1998 were based upon customary and reasonable rates for such services. One of the investment vehicles available to employees, the Allegheny Technologies Incorporated Company Stock Fund, contains stock of Allegheny Technologies (Allegheny Teledyne as of December 31, 1998). Allegheny Teledyne changed its name to Allegheny Technologies on November 29, 1999. In conjunction with the spin-offs of the Aerospace and Electronics and Consumer segments of Allegheny Teledyne into two new freestanding companies on November 29, 1999 (see Note 2), the Plan as a holder of shares of common stock prior to the spin-off received shares of the two new freestanding companies. Additionally, a reverse stock split occurred on the spin-off date (see Note 2). 18 19 Allegheny Ludlum Retirement Savings Plan EIN 25-1364894 Plan 004 Schedule H, Line 4(i)--Schedule of Assets Held for Investment Purposes at End of Year December 31, 1999 CURRENT DESCRIPTION UNITS/SHARES VALUE ---------------------------------------------------------------------------------------------------------------------- Common Collective Trusts ------------------------ Dreyfus Lifestyle Growth and Income Fund*: Interest in Dreyfus Lifestyle Growth and Income Fund 1,230,563.390 shares $20,820,050 Dreyfus Lifestyle Growth Fund*: Interest in Dreyfus Lifestyle Growth Fund 525,349.077 shares 10,843,803 Dreyfus Lifestyle Income Fund*: Interest in Dreyfus Lifestyle Income Fund 151,921.774 shares 2,096,970 ------------------- Total common collective trusts $33,760,823 =================== Registered Investment Companies ------------------------------- Dreyfus Emerging Leaders Fund*: Interest in Dreyfus Emergency Leaders Fund 356,500.550 shares $13,094,265 Dreyfus International Value Fund*: Interest in Dreyfus International Value Fund 194,107.813 shares 3,507,528 ------------------- 16,601,793 Self-Directed Fund: AIM Weingarten Fund Class A Shares 1,086.500 shares 32,714 AIM Blue Chip Fund Class A Shares 591.394 shares 30,823 AIM Group Value Fund 632.691 shares 30,894 Alliance Premier Growth Fund 1,271.262 shares 46,401 Alliance Technology Fund 147.609 shares 17,945 American Century Quantitative Equity Growth Fund 1,415.990 shares 37,141 American Century Target Mats 556.881 shares 13,738 American Century 20th Century Ultra Fund 310.465 shares 14,213 Barron Asset Fund 164.999 shares 9,697 Barron Asset Fund Small Cap Fund 1,909.587 shares 34,373 Berger Small Cap Value Fund 1,714.921 shares 37,111 Capital World Growth & Income Fund 578.921 shares 17,269 Dreyfus 100% U.S. Treasury Money Market Fund* 564,969.870 shares 564,970 Dreyfus Appreciation Fund, Inc.* 501.703 shares 22,943 Dreyfus Technology Growth Fund* 11,179.073 shares 595,286 Dreyfus Short Term Income Fund* 870.209 shares 10,164 Dreyfus Investment Grade Bond Fund* 803.544 shares 9,860 Dreyfus/Laurel S&P 500 Stock Index Fund* 7,230.651 shares 221,764 Dreyfus/Laurel Disciplined Stock Fund* 209.100 shares 8,941 Dreyfus Index Funds--S&P 500 Fund* 65.022 shares 2,790 Dreyfus High Yield Securities Fund* 856.257 shares 9,667 Fidelity Puritan Fund 1,321.642 shares 25,151 Fidelity Low Priced Stock Fund 539.488 shares 12,214 Fidelity Growth & Income Fund 342.363 shares 16,146 Fidelity Dividend Growth Fund 583.131 shares 16,905 Fidelity Select Electronics Portfolio 3,582.719 shares 318,432 Fidelity Select Computer Portfolio 2,959.305 shares 309,277 Fidelity Investment Trust Diversified International Fund 217.419 shares 5,570 Fidelity Select Technology Portfolio 187.308 shares 28,544 19 20 Schedule H, Line 4(i)--Schedule of Assets Held for Investment Purposes at End of Year (continued) CURRENT DESCRIPTION UNITS/SHARES VALUE ---------------------------------------------------------------------------------------------------------------------- Fidelity Select Health Care Portfolio 73.432 shares 9,166 Fidelity Select Software and Computer Services Portfolio 298.436 shares 28,907 Gabelli Global Interactive Couch Potato Fund 196.582 shares 6,914 Gabelli Growth Fund 1,035.872 shares 48,178 Growth Fund America, Inc. 422.482 shares 12,311 Invesco Health Science Fund 1,339.558 shares 73,528 Invesco Specialty--Worldwide Communications Fund 861.142 shares 44,461 Investment Co. of America 491.100 shares 15,941 Janus Investment Fund 3,811.151 shares 167,881 Janus Global Technology Fund 14,801.880 shares 457,822 Janus Olympus Fund 5,071.923 shares 270,131 Janus High Yield Fund 947.315 shares 9,739 Janus Enterprise Fund 1,597.820 shares 122,505 Janus Mercury Fund 12,520.594 shares 548,527 Janus Balanced Fund 1,022.602 shares 23,919 Janus Growth and Income Fund 4,663.742 shares 195,597 Janus Worldwide Fund 3,612.203 shares 276,081 Janus Twenty Fund 5,272.964 shares 439,923 Janus Overseas Fund 3,047.632 shares 113,372 Kaufmann Fund Inc. 17,452.619 shares 103,843 Massachusetts Growth Stock Fund 1,596.584 shares 32,459 Park Avenue Portfolio Guardian Park Avenue Fund 1,065.999 shares 63,342 PBHG Technology & Communications Fund 742.689 shares 50,548 Phoenix Strategic Equity Series Theme Fund Class A 150.072 shares 3,022 RS Emerging Growth Fund 1,647.699 shares 99,950 RS Information Age Fund 943.482 shares 30,000 T. Rowe Price International Funds 346.681 shares 5,519 T. Rowe Price Science and Technology Fund 2,521.468 shares 160,643 T. Rowe Price Equity Income Fund 448.994 shares 11,140 T. Rowe Price Mid-Cap Growth Fund 314.344 shares 12,615 T. Rowe Price Value Fund 2,071.365 shares 36,249 Rydex Series Trust OTC Fund 122.205 shares 10,065 Scudder International Fund Greater Europe Growth Fund 98.192 shares 3,488 Scudder Securities Trust Technology Fund 1,075.763 shares 44,031 Strong Conservative Equity Funds--American Utilities Fund 4,792.702 shares 70,644 Van Kampen American Cap Emerging Growth Fund 376.205 shares 32,869 Vanguard Index Trust 500 Portfolio 888.000 shares 120,173 Vanguard/Primecap Fund 537.965 shares 33,391 Vanguard International Equity Index Fund 594.976 shares 17,153 Vanguard Index--Growth Portfolio 110.730 shares 4,366 Warburg Pincus Japan Growth Fund 84.459 shares 2,916 Wilshire Target Funds--Large Growth Portfolio Investment 103.101 shares 4,495 ------------------- Total Self-Directed Fund 6,318,767 ------------------- Total registered investment companies $22,920,560 =================== Common Stock Telebanc Financial Corp 435.000 shares $ 11,310 =================== Participant notes receivable* 8.75% to 9.5% $ 3,908,588 =================== *Party-in-interest 20 21 Audited Financial Statements and Supplemental Schedule 401(k) Savings Account Plan for Employees of the Washington Plant Years ended December 31, 1999 and 1998 with Report of Independent Auditors 21 22 401(k) Savings Account Plan for Employees of the Washington Plant Audited Financial Statements and Supplemental Schedule Years ended December 31, 1999 and 1998 CONTENTS Report of Independent Auditors..............................................23 Audited Financial Statements Statements of Net Assets Available for Benefits.............................24 Statements of Changes in Net Assets Available for Benefits..................25 Notes to Financial Statements ..............................................26 Supplemental Schedule Schedule H, Line 4(i)--Schedule of Assets Held for Investment Purposes at End of Year...............................................................35 22 23 Report of Independent Auditors The Plan Administrator 401(k) Savings Account Plan for Employees of the Washington Plant We have audited the accompanying statements of net assets available for benefits of the 401(k) Savings Account Plan for Employees of the Washington Plant as of December 31, 1999 and 1998, 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 as of December 31, 1999 and 1998, and the changes in net assets available for benefits for the years then ended, in conformity with accounting principles generally accepted in the United States. Our audits were made for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedule of assets held for investment purposes as of December 31, 1999 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 June 9, 2000 23 24 401(k) Savings Account Plan for Employees of the Washington Plant Statements of Net Assets Available for Benefits DECEMBER 31 1999 1998 ------------------------------------ ASSETS Investments, at fair value: Interest in Allegheny Ludlum Corporation Master Trusts $1,385,099 $ 941,901 Interest in registered investment companies 138,514 68,673 Interest in common collective trusts 333,101 208,329 ------------------------------------ Net assets available for benefits $1,856,714 $1,218,903 ==================================== See accompanying notes. 24 25 401(k) Savings Account Plan for Employees of the Washington Plant Statements of Changes in Net Assets Available for Benefits YEAR ENDED DECEMBER 31 1999 1998 ---------------------------------------- Additions: Employee contributions $ 436,376 $ 386,172 Investment income: Net gain from interest in common collective trusts 28,477 20,407 Net gain from interest in Allegheny Ludlum Corporation Master Trusts 172,185 44,134 Net gain from interest in registered investment companies 34,508 17,014 ---------------------------------------- Total additions 671,546 467,727 Deductions: Distributions to participants 33,735 -- ---------------------------------------- Net additions 637,811 467,727 Net assets available for benefits at beginning of year 1,218,903 751,176 ---------------------------------------- Net assets available for benefits at end of year $1,856,714 $1,218,903 ======================================== See accompanying notes. 25 26 401(k) Savings Account Plan for Employees of the Washington Plant Notes to Financial Statements December 31, 1999 1. SIGNIFICANT ACCOUNTING POLICIES Investments are stated at fair value determined as follows: The Common Stock Master Trusts consist of investments in either Allegheny Technologies Incorporated (Allegheny Teledyne as of December 31, 1998), Teledyne Technologies Incorporated or Water Pik Technologies Inc. common stock and are stated at the quoted market price as listed on the New York Stock Exchange. The Fixed Income Fund is stated at cost plus net earnings, which approximates market value and is provided by the Plan's trustee. 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 generally accepted accounting principles requires management to make estimates and assumptions 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 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 in accumulating a fund to supplement retirement income by allowing eligible employees to make tax-deferred contributions to the Plan. Employee contributions to the Plan can range between 1% and 18% of eligible wages subject to Internal Revenue Service 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. The Plan is comprised, solely, of employee contributions. 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. 26 27 401(k) Savings Account Plan for Employees of the Washington Plant Notes to Financial Statements (continued) 2. DESCRIPTION OF THE PLAN (CONTINUED) Effective November 29, 1999, Allegheny Teledyne's (the Plan Sponsor) name was changed to Allegheny Technologies Incorporated (ATI). Also, the Aerospace and Electronics and Consumer segments of Allegheny Teledyne were spunoff 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 master trusts will be terminated and the assets will be transferred to one of the other plan investment options. In conjunction with the spin-offs of the Aerospace and Electronics and Consumer segments of Allegheny Teledyne into two new freestanding companies, the Plan as a holder of shares of common stock prior to the spin-off received the following distributions on November 29, 1999: one share of Water Pik Technologies Inc. for every seven shares held of Allegheny Teledyne and one share of Teledyne Technologies Incorporated for every twenty shares held of Allegheny Teledyne. Additionally, a reverse stock split occurred on the spin-off date and resulted in one share of Allegheny Technologies Incorporated common stock for every two shares held of Allegheny Teledyne common stock. Certain financial information for the year ended December 31, 1998 has been reclassified to conform with the financial statement presentation for the year ended December 31, 1999. These reclassifications did not impact total net assets available for benefits. In the event that the Plan is partially or completely terminated, all amounts credited to the accounts of the affected participants become fully vested. Further information about the Plan, including eligibility, vesting, contributions, and withdrawals, is contained in the Summary Plan Description and related contracts. Copies of this Summary Plan Description are available from the Allegheny Technologies Personnel and Compensation Committee. 27 28 401(k) Savings Account Plan for Employees of the Washington 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 1999 1998 --------------------------------- Dreyfus Lifestyle Growth Fund $108,766 $ 57,108 Dreyfus Lifestyle Growth and Income Fund 211,393 143,554 Alliance Equity Fund 456,980 279,582 Fixed Income Fund 258,094 143,364 Allegheny Technologies Disciplined Stock Fund 585,847 403,630 Company Stock Fund 72,709 115,325 Dreyfus Emerging Leaders Fund 111,837 -- As of December 31, 1999, the Plan is a participant in the Fixed Income Master Trust, the Alliance Equity Master Trust, the ATI Common Stock Master Trust, and the Allegheny Technologies Disciplined Stock Fund Master Trust. During 1998, the Dreyfus Lifestyle Growth and Income Fund, the Dreyfus Lifestyle Growth Fund, and the Dreyfus Lifestyle Income Fund were reclassified as common collective trusts from master trusts, while the Allegheny Technologies Disciplined Stock Fund was reclassified to a master trust from the Dreyfus Disciplined Stock Fund, a registered investment company. The Plan's participating interests in these master trusts as of December 31, 1999 and 1998 were as follows: 1999 1998 -------------------------------- Fixed Income Master Trust 0.19% 0.11% Alliance Equity Master Trust 0.77 0.59 ATI Common Stock Master Trust 0.36 0.36 Allegheny Technologies Disciplined Stock Fund Master Trust 1.29 0.93 Teledyne Technologies Incorporated Common Stock Master Trust 0.35 -- Water Pik Technologies Inc. Common Stock Master Trust 0.35 -- 28 29 401(k) Savings Account Plan for Employees of the Washington Plant Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) The composition of the net assets of the Fixed Income Master Trust at December 31, 1999 and 1998 was as follows: 1999 1998 ---------------------------------- Guaranteed investment contracts: Confederation Life Insurance Company $ -- $ 2,575 John Hancock Life Insurance Company 8,328,120 5,100,000 New York Life Insurance Company -- 13,258,607 Pacific Mutual Life Insurance Company 6,565,846 6,167,430 Peoples Security Life Insurance Company 6,474,471 10,367,671 Southland Life Insurance Company 5,796,035 10,752,479 Transamerica Occidental 11,678,338 11,296,810 Sun America, Inc. 3,007,834 3,000,000 Business Mens Assurance Company of America 2,497,621 2,505,536 Protective Life Insurance Company 2,999,471 3,002,482 Safeco Life Insurance 3,000,504 3,000,000 United of Omaha 5,044,635 -- Ohio National Life 4,577,686 -- Combined Life Insurance Company 4,658,686 -- Canada Life 4,136,813 -- Monumental Life Insurance Company 1,999,853 -- Hartford Life Insurance Company 2,000,000 -- Pruco Pace Credit Enhanced 3,062,854 -- --------------------------------- 75,828,767 68,453,590 Synthetic contracts: Caisse des Depots et Consignations 11,135,225 12,865,126 Peoples Security Life Insurance Company 2,977,064 2,968,196 Transamerica Occidental 13,970,912 13,859,523 Union Bank of Switzerland 5,949,968 5,935,391 Westdeutsche Landesbank Girozentrale 17,030,049 16,952,480 --------------------------------- 51,063,218 52,580,716 Temporary short-term investments 6,293,422 4,248,515 Accrued interest receivable 1,435,635 1,572,918 Other payables (85,522) (88,501) --------------------------------- Total net assets $134,535,520 $126,667,238 ================================= 29 30 401(k) Savings Account Plan for Employees of the Washington Plant Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) The composition of net assets of the Alliance Equity Master Trust at December 31, 1999 and 1998 was as follows: 1999 1998 --------------------------------------- Investment in registered investment companies: Alliance Equity Fund S.A. #4 (6,387.664 and 6,966.434 shares, respectively) $59,022,910 $47,408,255 Cash -- 117 Operating payables (28,676) (26,007) --------------------------------------- Total net assets $58,994,234 $47,382,365 ======================================= The composition of net assets of the ATI Common Stock Master Trust at December 31, 1999 and 1998 was as follows: 1999 1998 --------------------------------------- Allegheny Technologies Incorporated common stock (883,159 and 1,544,975 shares, respectively) $19,815,880 $31,575,427 Receivables 101,879 196,291 Short-Term Investment Fund 326,907 450,324 Operating payables (4,276) (10,492) --------------------------------------- Total net assets $20,240,390 $32,211,550 ======================================= 30 31 401(k) Savings Account Plan for Employees of the Washington Plant Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) The composition of net assets of the Allegheny Technologies Disciplined Stock Fund Master Trust at December 31, 1999 and 1998 was as follows: 1999 1998 ----------------------------------- Corporate common stock $44,796,765 $41,699,413 Noninterest-bearing cash 13,151 (5,217) Receivables 44,689 58,761 Short-Term Investment Fund 589,843 1,499,311 Operating payables (28,719) (51,809) ----------------------------------- Total net assets $45,415,729 $43,200,459 =================================== The composition of net assets of the Teledyne Technologies Incorporated Common Stock Master Trust at December 31, 1999 and 1998 was as follows: 1999 1998 ----------------------------------- Teledyne Technologies Incorporated common stock (248,073 and -0- shares, respectively) $2,341,189 $-- Short-Term Investment Fund 41,774 -- Receivables 6,135 -- Operating payables (133) -- ----------------------------------- Total net assets $2,388,965 $-- =================================== The composition of net assets of the Water Pik Technologies Inc. Common Stock Master Trust at December 31, 1999 and 1998 was as follows: 1999 1998 ----------------------------------- Water Pik Technologies Inc. common stock (87,153 and -0- shares, respectively) $833,401 $-- Short-Term Investment Fund 2,765 -- Receivables 11,909 -- Operating payables (41) -- ----------------------------------- Total net assets $848,034 $-- =================================== 31 32 401(k) Savings Account Plan for Employees of the Washington 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: FIXED INCOME MASTER ALLIANCE EQUITY MASTER ATI COMMON STOCK MASTER TRUST TRUST TRUST ----------------------------------------------------------------------------------------------------- YEAR ENDED DECEMBER 31 ----------------------------------------------------------------------------------------------------- 1999 1998 1999 1998 1999 1998 ----------------------------------------------------------------------------------------------------- Investment income (loss): Interest income (loss) $ 7,765,761 $ 8,359,937 $ -- $ -- $ (465) $ (113) Realized gain (loss) on sale of investments -- -- -- -- 387,154 (620,712) Unrealized depreciation in fair value of investments -- -- -- -- (11,018,180) (5,308,345) Dividends -- -- -- -- 960,419 934,022 Net gain (loss), registered investment companies -- -- 15,731,932 (2,106,215) -- -- Net gain, common collective trusts 293,007 413,402 -- -- 34,305 41,352 Other income 18,993 1,138 -- -- -- -- Administrative expenses (183,985) (191,163) (202,397) (237,876) (21,480) (24,196) Transfers (25,494) (17,218,779) (3,917,666) (10,462,912) (2,312,913) 1,574,676 ----------------------------------------------------------------------------------------------------- Net increase (decrease) 7,868,282 (8,635,465) 11,611,869 (12,807,003) (11,971,160) (3,403,316) Total net assets at beginning of year 126,667,238 135,302,703 47,382,365 60,189,368 32,211,550 35,614,866 ----------------------------------------------------------------------------------------------------- Total net assets at end of year $134,535,520 $126,667,238 $58,994,234 $ 47,382,365 $ 20,240,390 $32,211,550 ===================================================================================================== 32 33 401(k) Savings Account Plan for Employees of the Washington Plant Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) DREYFUS DREYFUS DREYFUS LIFESTYLE GROWTH AND LIFESTYLE GROWTH LIFESTYLE INCOME FUN INCOME FUND MASTER DISCIPLINED STOCK FUND FUND MASTER TRUST MASTER TRUST TRUST MASTER TRUST -------------------------------------------------------------------------------------------------------- YEAR ENDED DECEMBER 31 -------------------------------------------------------------------------------------------------------- 1999 1998* 1999 1998* 1999 1998* 1999 1998* -------------------------------------------------------------------------------------------------------- Investment income (loss): Interest loss $-- $ -- $-- $ -- $-- $ -- $ (383) $ (925) Realized (loss) gain on sale of investments -- -- -- -- -- -- (58,566) 107,964 Unrealized appreciation (depreciation) in fair value of investments -- -- -- -- -- -- 7,190,385 4,322,009 Dividends -- -- -- -- -- -- 531,414 87,868 Net gain, common collective trusts -- 514,556 -- 109,828 -- 1,558,031 43,173 26,165 Other loss -- (14) -- -- -- (10) -- -- Administrative expenses -- (94) -- (34) -- (229) (347,043) (51,809) Transfers -- (5,631,496) -- (1,935,424) -- (24,298,600) (5,143,710) 38,709,187 -------------------------------------------------------------------------------------------------------- Net (decrease) increase -- (5,117,048) -- (1,825,630) -- (22,740,808) 2,215,270 43,200,459 Total net assets at beginning of year -- 5,117,048 -- 1,825,630 -- 22,740,808 43,200,459 -- -------------------------------------------------------------------------------------------------------- Total net assets at end of year $-- $ -- $-- $ -- $-- $ -- $45,415,729 $43,200,459 ======================================================================================================== TELEDYNE WATER PIK TECHNOLOGIES TECHNOLOGIES INC. INCORPORATED COMMON COMMON STOCK MASTER STOCK MASTER TRUST TRUST -------------------------------------------- -------------------------------------------- 1999 1998 1999 1998 -------------------------------------------- Investment income (loss): Interest loss $ 9 $-- $ -- $-- Realized (loss) gain on sale of investments (21,035) -- (3,052) -- Unrealized appreciation (depreciation) in fair value of investments (640,748) -- (88,259) -- Dividends -- -- -- -- Net gain, common collective trusts 176 -- 38 -- Other loss -- -- -- -- Administrative expenses (133) -- (41) -- Transfers 3,050,696 -- 939,348 -- ---------------------------------------- Net (decrease) increase 2,388,965 -- 848,034 -- Total net assets at beginning of year -- -- -- -- ---------------------------------------- Total net assets at end of year $2,388,965 $-- $848,034 $-- ======================================== * Partial year only. Reclassfied as common collective trusts. The investment contracts underlying the Fixed Income Master Trust have fully benefit-responsive features. The average yield for 1999 and 1998 for the Fixed Income Master Trust was 6.46% and 6.55%, respectively. Credited interest rates on the contracts ranged from 5.13% to 7.28% and 5.13% to 8.18% for 1999 and 1998, respectively, and are determined at contract inception. Interest, realized and unrealized gains and losses, and management fees from the master trusts are included in the net gain (loss) from interest in Allegheny Ludlum Corporation Master Trusts on the statement of changes in net assets available for benefits. 33 34 401(k) Savings Account Plan for Employees of the Washington Plant Notes to Financial Statements (continued) 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. 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 1999 and 1998 were based upon customary and reasonable rates for such services. One of the investment vehicles available to employees, the Allegheny Technologies Incorporated Company Stock Fund, contains stock of Allegheny Technologies (Allegheny Teledyne as of December 31, 1998). Allegheny Teledyne changed its name to Allegheny Technologies on November 29, 1999. In conjunction with the spin-offs of the Aerospace and Electronics and Consumer segments of Allegheny Teledyne into two new freestanding companies on November 29, 1999 (see Note 2), the Plan as a holder of shares of common stock prior to the spin-off received shares of the two new freestanding companies. Additionally, a reverse stock split occurred on the spin-off date (see Note 2). 6. SUBSEQUENT EVENT Effective January 1, 2000, a loan provision for general purpose loans was added to this Plan. An eligible participant may take up to two (2) loans at any one time. The minimum amount for a loan is $500 and the maximum is 50% of the participant's entire 401(k) savings balance or $50,000, whichever is less, minus any existing loan amount. The repayment period is a minimum of 6 months and a maximum of 60 months. The interest rate charged will be the prime rate plus 1%. Loans are repaid through regular payroll deductions. 34 35 401(k) Savings Account Plan for Employees of the Washington Plant EIN 25-0575410 Plan 020 Schedule H, Line 4(i)--Schedule of Assets Held for Investment Purposes at End of Year December 31, 1999 DESCRIPTION UNITS/SHARES CURRENT VALUE ---------------------------------------------------------------------------------------------------------------------- Common Collective Trusts ------------------------ Dreyfus Lifestyle Growth and Income Fund* 12,494.328 shares $211,393 Dreyfus Lifestyle Growth Fund* 5,269.399 shares 108,766 Dreyfus Lifestyle Income Fund* 937.618 shares 12,942 ------------------- Total common collective trusts $333,101 =================== Registered Investment Companies ------------------------------- Dreyfus Emerging Leaders Fund*: Interest in Dreyfus Emerging Leaders Fund 3,044.834 shares $111,837 Dreyfus International Value Fund*: Interest in Dreyfus International Value Fund 1,476.329 shares 26,677 ------------------- Total registered investment companies $138,514 =================== *Party-in-interest 35 36 Audited Financial Statements and Supplemental Schedule Savings and Security Plan of the Lockport and Waterbury Facilities of Allegheny Ludlum Corporation Years ended December 31, 1999 and 1998 with Report of Independent Auditors 36 37 Savings and Security Plan of the Lockport and Waterbury Facilities of Allegheny Ludlum Corporation Audited Financial Statements and Supplemental Schedule Years ended December 31, 1999 and 1998 CONTENTS Report of Independent Auditors .............................................38 Audited Financial Statements Statements of Net Assets Available for Benefits.............................39 Statements of Changes in Net Assets Available for Benefits..................40 Notes to Financial Statements ..............................................41 Supplemental Schedule Schedule H, Line 4(i)--Schedule of Assets Held for Investment Purposes at End of Year.............................................................51 37 38 Report of Independent Auditors Personnel and Compensation Committee Allegheny Ludlum Corporation We have audited the accompanying statements of net assets available for benefits of the Savings and Security Plan of the Lockport and Waterbury Facilities of Allegheny Ludlum Corporation as of December 31, 1999 and 1998, 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 as of December 31, 1999 and 1998, 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 made for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedule of assets held for investment purposes as of December 31, 1999 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 June 9, 2000 38 39 Savings and Security Plan of the Lockport and Waterbury Facilities of Allegheny Ludlum Corporation Statements of Net Assets Available for Benefits DECEMBER 31 1999 1998 ------------------------------------------- ASSETS Investments, at fair value: Interest in Allegheny Ludlum Corporation Master Trusts $5,087,089 $4,501,027 Interest in registered investment companies 723,456 523,115 Interest in common collective trusts 449,111 372,238 Participant notes receivable 137,888 128,691 ------------------------------------------- Total investments 6,397,544 5,525,071 Contributions receivable 13,570 11,573 Other receivables 1,382 1,311 ------------------------------------------- Net assets available for benefits $6,412,496 $5,537,955 =========================================== See accompanying notes. 39 40 Savings and Security Plan of the Lockport and Waterbury Facilities of Allegheny Ludlum Corporation Statements of Changes in Net Assets Available for Benefits YEAR ENDED DECEMBER 31 1999 1998 ------------------------------------------- Additions: Contributions: Employer $ 347,322 $ 265,893 Employee 244,700 220,272 Investment income: Net gain from interest in Allegheny Ludlum Corporation Master Trusts 299,580 156,049 Net gain from interest in registered investment companies 181,357 52,956 Net gain from interest in common collective trusts 43,552 39,227 Interest income 10,481 12,981 Other income -- 109 ------------------------------------------- Total additions 1,126,992 747,487 Deductions: Transfers out of Plan 9,559 -- Distributions to participants 242,892 416,674 ------------------------------------------- Total deductions 252,451 416,674 ------------------------------------------- Net additions 874,541 330,813 Net assets available for benefits at beginning of year 5,537,955 5,207,142 ------------------------------------------- Net assets available for benefits at end of year $6,412,496 $5,537,955 =========================================== See accompanying notes. 40 41 Savings and Security Plan of the Lockport and Waterbury Facilities of Allegheny Ludlum Corporation Notes to Financial Statements December 31, 1999 1. SIGNIFICANT ACCOUNTING POLICIES Investments are stated at fair value determined as follows: The Common Stock Master Trusts consist of investments in either Allegheny Technologies Incorporated (Allegheny Teledyne as of December 31, 1998), Teledyne Technologies Incorporated or Water Pik Technologies Inc. common stock and are stated at the quoted market price as listed on the New York Stock Exchange. The Fixed Income Fund is stated at cost plus net earnings, which approximates market value and is provided by the Plan's trustee. 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 generally accepted accounting principles requires management to make estimates and assumptions 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 purpose of the Savings and Security Plan of the Lockport and Waterbury Facilities of Allegheny Ludlum Corporation (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. The Plan is a defined contribution plan and is subject to the provisions of the Employee Retirement Income Security Act of 1974. ALC is a wholly owned indirect subsidiary of Allegheny Technologies Incorporated (ATI). 41 42 Savings and Security Plan of the Lockport and Waterbury Facilities of Allegheny Ludlum Corporation Notes to Financial Statements (continued) 2. DESCRIPTION OF THE PLAN (CONTINUED) Depending on participants' years of service, participants can defer between 1% and 16%, subject to Internal Revenue Service limitations, of their eligible wages and contribute them to the Plan. The Plan Sponsor will match 50% of participant deferrals up to 8% of each participant's deferral based on years of service as described in the Plan. Any contributions made by participants in excess of the eligible matched portion will not be matched by the Plan Sponsor. In addition, the Plan Sponsor will contribute 6.5% of monthly eligible wages regardless if participants elect to contribute to the savings portion of the Plan. The Plan Sponsor also contributes $.50 for each hour participants work. Effective July 1, 1998, the Plan Sponsor increased this contribution to $.59 for each hour participants work. 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. 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's (the Plan Sponsor) name was changed to Allegheny Technologies Incorporated. Also, the Aerospace and Electronics and Consumer segments of Allegheny Teledyne were spunoff 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 master trusts will be terminated and the assets will be transferred to one of the other plan investment options. 42 43 Savings and Security Plan of the Lockport and Waterbury Facilities of Allegheny Ludlum Corporation Notes to Financial Statements (continued) 2. DESCRIPTION OF THE PLAN (CONTINUED) In conjunction with the spin-offs of the Aerospace and Electronics and Consumer segments of Allegheny Teledyne into two new freestanding companies, the Plan as a holder of shares of common stock prior to the spin-off received the following distributions on November 29, 1999: one share of Water Pik Technologies Inc. for every seven shares held of Allegheny Teledyne and one share of Teledyne Technologies Incorporated for every twenty shares held of Allegheny Teledyne. Additionally, a reverse stock split occurred on the spin-off date and resulted in one share of Allegheny Technologies Incorporated common stock for every two shares held of Allegheny Teledyne common stock. Certain financial information for the year ended December 31, 1998 has been reclassified to conform with the financial statement presentation for the year ended December 31, 1999. These reclassifications did not impact total net assets available for benefits. In the event that the Plan is partially or completely terminated, or the Plan Sponsor permanently discontinues making contributions, all amounts credited to the accounts of affected participants become fully vested and nonforfeitable. Further information about the Plan, including eligibility, vesting, contributions, and withdrawals, is contained in the Summary Plan Description and related contracts. Copies of this Summary Plan Description 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 1999 1998 -------------------------------------------- Alliance Equity Fund $ 408,444 $ 283,603 Fixed Income Fund 3,705,595 3,102,337 Allegheny Technologies Disciplined Stock Fund 696,006 722,434 Dreyfus Small Company Value Fund -- 508,230 Company Stock Fund -- 404,296 Dreyfus Emerging Leaders Fund 699,809 - 43 44 Savings and Security Plan of the Lockport and Waterbury Facilities of Allegheny Ludlum Corporation Notes to Financial Statements (continued) 3. INVESTMENTS As of December 31, 1999, the Plan is a participant in the Fixed Income Master Trust, the Alliance Equity Master Trust, the ATI Common Stock Master Trust, and the Allegheny Technologies Disciplined Stock Fund Master Trust. During 1998, the Dreyfus Lifestyle Growth and Income Fund, the Dreyfus Lifestyle Growth Fund and the Dreyfus Lifestyle Income Fund were reclassified as common collective trusts from master trusts while the Allegheny Technologies Disciplined Stock Fund was reclassified to a master trust from the Dreyfus Disciplined Stock Fund, a registered investment company. The Plan's participating interests in these master trusts as of December 31, 1999 and 1998 were as follows: 1999 1998 ---------------------------------------- Fixed Income Master Trust 2.75% 2.44% Alliance Equity Master Trust 0.69 0.60 ATI Common Stock Master Trust 1.18 1.25 Allegheny Technologies Disciplined Stock Fund Master Trust 1.53 1.67 Teledyne Technologies Incorporated Common Stock Master Trust 1.18 -- Water Pik Technologies Inc. Common Stock Master Trust 1.18 -- 44 45 Savings and Security Plan of the Lockport and Waterbury Facilities of Allegheny Ludlum Corporation Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) The composition of the net assets of the Fixed Income Master Trust at December 31, 1999 and 1998 was as follows: 1999 1998 --------------------------------------- Guaranteed investment contracts: Confederation Life Insurance Company $ -- $ 2,575 John Hancock Life Insurance Company 8,328,120 5,100,000 New York Life Insurance Company -- 13,258,607 Pacific Mutual Life Insurance Company 6,565,846 6,167,430 Peoples Security Life Insurance Company 6,474,471 10,367,671 Southland Life Insurance Company 5,796,035 10,752,479 Transamerica Occidental 11,678,338 11,296,810 Sun America, Inc. 3,007,834 3,000,000 Business Mens Assurance Company of America 2,497,621 2,505,536 Protective Life Insurance Company 2,999,471 3,002,482 Safeco Life Insurance 3,000,504 3,000,000 United of Omaha 5,044,635 -- Ohio National Life 4,577,686 -- Combined Life Insurance Company 4,658,686 -- Canada Life 4,136,813 -- Monumental Life Insurance Company 1,999,853 -- Hartford Life Insurance Company 2,000,000 -- Pruco Pace Credit Enhanced 3,062,854 -- ---------------------------------------- 75,828,767 68,453,590 Synthetic contracts: Caisse des Depots et Consignations 11,135,225 12,865,126 Peoples Security Life Insurance Company 2,977,064 2,968,196 Transamerica Occidental 13,970,912 13,859,523 Union Bank of Switzerland 5,949,968 5,935,391 Westdeutsche Landesbank Girozentrale 17,030,049 16,952,480 ---------------------------------------- 51,063,218 52,580,716 Temporary short-term investments 6,293,422 4,248,515 Accrued interest receivable 1,435,635 1,572,918 Other payables (85,522) (88,501) ---------------------------------------- Total net assets $ 134,535,520 $ 126,667,238 ======================================== 45 46 Savings and Security Plan of the Lockport and Waterbury Facilities of Allegheny Ludlum Corporation Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) The composition of net assets of the Alliance Equity Master Trust at December 31, 1999 and 1998 was as follows: 1999 1998 -------------------------------------------- Investment in registered investment companies: Alliance Equity Fund S.A. #4 (6,387.664 and 6,966.434 shares, respectively) $59,022,910 $47,408,255 Cash -- 117 Operating payables (28,676) (26,007) -------------------------------------------- Total net assets $58,994,234 $47,382,365 ============================================ The composition of net assets of the ATI Common Stock Master Trust at December 31, 1999 and 1998 was as follows: 1999 1998 -------------------------------------------- Allegheny Technologies Incorporated common stock (883,159 and 1,544,975 shares, respectively) $19,815,880 $31,575,427 Receivables 101,879 196,291 Short-Term Investment Fund 326,907 450,324 Operating payables (4,276) (10,492) -------------------------------------------- Total net assets $20,240,390 $32,211,550 ============================================ The composition of net assets of the Allegheny Technologies Disciplined Stock Fund Master Trust at December 31, 1999 and 1998 was as follows: 1999 1998 ------------------------------------------- Corporate common stock $44,796,765 $41,699,413 Noninterest-bearing cash 13,151 (5,217) Receivables 44,689 58,761 Short-Term Investment Fund 589,843 1,499,311 Operating payables (28,719) (51,809) ------------------------------------------- Total net assets $45,415,729 $43,200,459 =========================================== 46 47 Savings and Security Plan of the Lockport and Waterbury Facilities of Allegheny Ludlum Corporation Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) The composition of net assets of the Teledyne Technologies Incorporated Common Stock Master Trust at December 31, 1999 and 1998 was as follows: 1999 1998 ----------------------------------------- Teledyne Technologies Incorporated common stock (248,073 and -0- shares, respectively) $2,341,189 $ -- Short-Term Investment Fund 41,774 -- Receivables 6,135 -- Operating payables (133) -- ----------------------------------------- Total net assets $2,388,965 $ -- ========================================= The composition of net assets of the Water Pik Technologies Inc. Common Stock Master Trust at December 31, 1999 and 1998 was as follows: 1999 1998 -----------------------------------------