/2ÿñH9    d 1$&%*ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ;ñ'ALLEGHENY TECHNOLOGIES INCORPORATED AND SUBSIDIARIES(ñ'CONSOLIDATED STATEMENTS OF INCOME-ñ'(In millions except per share amounts)'ñ'For the Years Ended December 31, ñ^2000 ñ^1999 ñ^1998 ñ'SALESñ"$ 2,460.4ñ"$ 2,296.1ñ"$ 2,402.4ñ 'Costs and expenses:ñ 'Cost of salesñ "1,998.5ñ "1,877.9ñ "1,831.7*ñ 'Selling and administrative expenses ñ "203.7 ñ "229.1 ñ "244.45ñ 'Transformation, merger and restructuring costs ñ "29.5 ñ "5.6 ñ "67.8ñ 'Interest expense, net ñ "34.4 ñ "25.9 ñ "19.4ñ"2,266.1ñ"2,138.5ñ"2,163.3#ñ'Earnings before other income ñ"194.3 ñ"157.6 ñ"239.1ñ'Other income ñ"14.5 ñ"16.6 ñ"10.76ñ'INCOME FROM CONTINUING OPERATIONS BEFORE INCOME$ñ'TAXES AND EXTRAORDINARY GAINS ñ"208.8 ñ"174.2 ñ"249.8!ñ'Provision for income taxes ñ"76.3 ñ"63.2 ñ"94.8/ñ'INCOME FROM CONTINUING OPERATIONS BEFOREñ'EXTRAORDINARY GAINS ñ"132.5 ñ"111.0 ñ"155.0+ñ'Income from discontinued operations,ñ'net of income taxes ñ"-- ñ"59.6 ñ"86.22ñ'Extraordinary gains on sales of operations,ñ'net of income taxes ñ"-- ñ"129.6 ñ"--ñ'NET INCOMEñ"$ 132.5ñ"$ 300.2ñ"$ 241.2)ñ"'Basic net income per common share:/ñ#'Income from continuing operations beforeñ$'extraordinary gainsñ$"$ 1.60ñ$"$ 1.17ñ$"$ 1.57*ñ%'Income from discontinued operations ñ%"-- ñ%"0.62 ñ%"0.881ñ&'Extraordinary gains on sales of operations ñ&"-- ñ&"1.36 ñ&"--(ñ('BASIC NET INCOME PER COMMON SHAREñ("$ 1.60ñ("$ 3.15ñ("$ 2.45+ñ*'Diluted net income per common share:/ñ+'Income from continuing operations beforeñ,'extraordinary gainsñ,"$ 1.60ñ,"$ 1.16ñ,"$ 1.56*ñ-'Income from discontinued operations ñ-"-- ñ-"0.62 ñ-"0.871ñ.'Extraordinary gains on sales of operations ñ."-- ñ."1.35 ñ."--*ñ0'DILUTED NET INCOME PER COMMON SHAREñ0"$ 1.60ñ0"$ 3.13ñ0"$ 2.43Gñ3'The accompanying notes are an integral part of these statements.;ñ5'ALLEGHENY TECHNOLOGIES INCORPORATED AND SUBSIDIARIES"ñ6'CONSOLIDATED BALANCE SHEETS7ñ7'(In millions except share and per share amounts)ñ9^DECEMBER 31,ñ9^December 31, ñ:^2000 ñ:^1999 ñ<'ASSETS ñ='Cash and cash equivalentsñ="$ 26.2ñ="$ 50.7ñ>'Accounts receivable ñ>"325.3 ñ>"341.2ñ?'Inventories ñ?"585.7 ñ?"558.3ñ@'Deferred income taxes ñ@"61.2 ñ@"62.60ñA'Prepaid expenses and other current assets ñA"24.4 ñA"20.7ñC'TOTAL CURRENT ASSETSñC"1,022.8ñC"1,033.5$ñD'Property, plant and equipment ñD"872.0 ñD"912.4ñE'Prepaid pension cost ñE"593.6 ñE"503.7,ñF'Cost in excess of net assets acquired ñF"194.5 ñF"204.2ñG'Other assets ñG"93.3 ñG"96.8ñI'TOTAL ASSETSñI"$2,776.2ñI"$2,750.6+ñK'LIABILITIES AND STOCKHOLDERS' EQUITYñL'Accounts payableñL"$ 169.3ñL"$ 172.9ñM'Accrued liabilities ñM"191.0 ñM"214.4<ñN'Short-term debt and current portion of long-term debt ñN"53.2 ñN"152.7 ñP'TOTAL CURRENT LIABILITIES ñP"413.5 ñP"540.0ñQ'Long-term debt ñQ"490.6 ñQ"200.3&ñR'Accrued postretirement benefits ñR"525.9 ñR"544.8ñS'Deferred income taxes ñS"158.7 ñS"103.1 ñT'Other ñT"148.3 ñT"162.2ñV'TOTAL LIABILITIESñV"1,737.0ñV"1,550.4ñX'Stockholders' Equity:VñY'Preferred stock, par value $0.10: authorized - 50,000,000 shares; issued - none ñY"-- ñY"--OñZ'Common stock, par value $0.10: authorized - 500,000,000 shares; issued -Kñ['98,951,490 in 2000 and 1999; outstanding - 80,339,957 shares in 2000$ñ\'and 90,368,196 shares in 1999 ñ\"9.9 ñ\"9.9!ñ]'Additional paid-in capital ñ]"481.2 ñ]"481.0ñ^'Retained earningsñ^"1,050.0 ñ^"994.5Mñ_'Treasury stock: 18,611,533 shares in 2000 and 8,583,294 shares in 1999ñ_"(482.3)ñ_"(288.7)@ñ`'Accumulated other comprehensive income (loss), net of tax ñ`"(19.6) ñ`"3.5!ñb'TOTAL STOCKHOLDERS' EQUITYñb"1,039.2ñb"1,200.21ñd'TOTAL LIABILITIES AND STOCKHOLDERS' EQUITYñd"$2,776.2ñd"$2,750.6Gñg'The accompanying notes are an integral part of these statements.;ñi'ALLEGHENY TECHNOLOGIES INCORPORATED AND SUBSIDIARIES,ñj'CONSOLIDATED STATEMENTS OF CASH FLOWSñk'(In millions)'ñm'For the Years Ended December 31, ñm^2000 ñm^1999 ñm^1998ño'OPERATING ACTIVITIES:ñp'Net incomeñp"$ 132.5ñp"$ 300.2ñp"$ 241.2Cñq'Less: Extraordinary gains on sales of operations, net of tax ñq"-- ñq"129.6 ñq"--6ñr'Income from discontinued operations, net of tax ñr"-- ñr"59.6 ñr"86.2(ñt'INCOME FROM CONTINUING OPERATIONS ñt"132.5 ñt"111.0 ñt"155.0-ñv'Adjustments to reconcile net income to1ñw'net cash provided by operating activities:$ñx'Depreciation and amortization ñx"99.7 ñx"95.3 ñx"82.1ñy'Deferred income taxes ñy"57.8 ñy"(11.3) ñy"(6.7)#ñz'Non-cash restructuring costs ñz"30.8 ñz"-- ñz"50.93ñ{'Gains on sales of investments and businesses ñ{"(11.6) ñ{"-- ñ{"--2ñ|'Change in operating assets and liabilities:ñ}'Prepaid pension cost ñ}"(89.8) ñ}"(66.9) ñ}"(47.4)ñ~'Accrued liabilities ñ~"(61.5) ñ~"28.0 ñ~"1.2ñ'Inventories ñ"(20.4) ñ"(0.5) ñ"49.6ñ€'Accounts receivable ñ€"15.9 ñ€"(26.5) ñ€"59.2ñ'Accounts payable ñ"(3.6) ñ"31.9 ñ"(54.7)ñ‚'Accrued income taxes ñ‚"0.2 ñ‚"(69.4) ñ‚"(0.3) ñƒ'Other ñƒ"(14.5) ñƒ"11.3 ñƒ"3.4,ñ…'CASH PROVIDED BY OPERATING ACTIVITIES ñ…"135.5 ñ…"102.9 ñ…"292.3ñ‡'INVESTING ACTIVITIES:1ñˆ'Purchases of property, plant and equipment ñˆ"(60.2) ñˆ"(74.1)ñˆ"(138.9)9ñ‰'Purchases of businesses and investment in ventures ñ‰"(28.1) ñ‰"(23.9)ñ‰"(218.9)8ñŠ'Proceeds from sales of businesses and investments ñŠ"17.0 ñŠ"370.4 ñŠ"--1ñ‹'Disposals of property, plant and equipment ñ‹"5.2 ñ‹"28.5 ñ‹"19.68ñŒ'Proceeds from spin-offs of Teledyne and Water Pik ñŒ"-- ñŒ"134.0 ñŒ"--%ñ'Short-term investments - sales ñ"-- ñ"-- ñ"34.4 ñŽ'Other ñŽ"(3.9) ñŽ"(5.2) ñŽ"(3.4)6ñ'CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES ñ"(70.0) ñ"429.7ñ"(307.2)ñ’'FINANCING ACTIVITIES: ñ“'Purchases of common stockñ“"(221.0)ñ“"(257.6) ñ“"(49.4):ñ”'Net borrowings (repayments) under credit facilities ñ”"195.1 ñ”"(82.2) ñ”"121.5ñ•'Dividends paid ñ•"(66.0)ñ•"(122.1)ñ•"(122.3)!ñ–'Exercises of stock options ñ–"3.3 ñ–"8.2 ñ–"8.3"ñ—'Payments on short-term debt ñ—"-- ñ—"(70.0) ñ—"--4ñ˜'Payments on long-term debt and capital leases ñ˜"(1.4) ñ˜"(1.7) ñ˜"(6.9)(ñš'CASH USED IN FINANCING ACTIVITIES ñš"(90.0)ñš"(525.4) ñš"(48.8)=ñœ'NET CASH PROVIDED BY (USED IN) DISCONTINUED OPERATIONS ñœ"-- ñœ"(30.7) ñœ"84.67ñž'INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ñž"(24.5) ñž"(23.5) ñž"20.95ñŸ'Cash and cash equivalents at beginning of year ñŸ"50.7 ñŸ"74.2 ñŸ"53.3/ñ¡'CASH AND CASH EQUIVALENTS AT END OF YEARñ¡"$ 26.2ñ¡"$ 50.7ñ¡"$ 74.2ñ£'NON-CASH TRANSACTIONS:,ñ¤'Assets acquired under promissory noteñ¤"$ --ñ¤"$ --ñ¤"$ 65.9ñ§'Amounts presented on the>ñ¨' Consolidated Statements of Cash Flows may not agree to$ñ©'the corresponding changes in 4ñª'balance sheet items due to the accounting for,ñ«'purchases and sales of businesses and'ñ¬' the effects of foreign currency/ñ­'translation. Cash provided by operating /ñ®'activities in 1999 is net of payments of/ñ¯'taxes on gains on sales of operations of*ñ°' $79.9 million. Excluding these tax,ñ±'payments, cash provided by operating %ñ²'activities was $182.8 million.Gñ´'The accompanying notes are an integral part of these statements.;ñ¶'ALLEGHENY TECHNOLOGIES INCORPORATED AND SUBSIDIARIES6ñ·'CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY-ñ¸'(In millions except per share amounts)ñ¹^Accumulatedñº^Additional ñº^Other ñ»^Commonñ»^Paid-Inñ»^Retainedñ»^Treasury ñ»^Comprehensive ñ»^Stockholders' ñ¼^Stockñ¼^Capitalñ¼^Earnings ñ¼^Stock ñ¼^Income ñ¼^Equity!ñ¾'BALANCE, DECEMBER 31, 1997 ñ¾"$ 9.9ñ¾"$ 473.4ñ¾"$ 822.6ñ¾"$ (60.2)ñ¾"$ (1.1)ñ¾"$ 1,244.6ñÀ'Net income ñÀ"-- ñÀ"-- ñÀ"241.2 ñÀ"-- ñÀ"-- ñÀ"241.2.ñÁ'Other comprehensive income, net of tax:*ñÂ'Foreign currency translation losses ñÂ"-- ñÂ"-- ñÂ"-- ñÂ"-- ñÂ"(3.5) ñÂ"(3.5)&ñÃ'Unrealized gains on securities:'ñÄ'Unrealized holding gains arisingñÅ'during period ñÅ"-- ñÅ"-- ñÅ"-- ñÅ"-- ñÅ"2.2 ñÅ"2.2ñÆ'Realized gains includedñÇ'in net income ñÇ"-- ñÇ"-- ñÇ"-- ñÇ"-- ñÇ"(1.1) ñÇ"(1.1)"ñÉ'Comprehensive income (loss) ñÉ"-- ñÉ"-- ñÉ"241.2 ñÉ"-- ñÉ"(2.4) ñÉ"238.8)%ñË'Cash dividends on common stockñÌ'($1.28 per share) ñÌ"-- ñÌ"--ñÌ"(122.3) ñÌ"-- ñÌ"--ñÌ"(122.3)ñÍ'Purchase of common stock ñÍ"-- ñÍ"-- ñÍ"-- ñÍ"(49.4) ñÍ"-- ñÍ"(49.4)ñÎ'Employee stock plans ñÎ"-- ñÎ"3.8 ñÎ"(17.6) ñÎ"42.0 ñÎ"-- ñÎ"28.2!ñÐ'BALANCE, DECEMBER 31, 1998 ñÐ"9.9 ñÐ"477.2 ñÐ"923.9 ñÐ"(67.6) ñÐ"(3.5)ñÐ"1,339.9ñÒ'Net income ñÒ"-- ñÒ"-- ñÒ"300.2 ñÒ"-- ñÒ"-- ñÒ"300.2.ñÓ'Other comprehensive income, net of tax:+ñÔ'Foreign currency translation losses:#ñÕ'Foreign currency translation#ñÖ'losses arising during period ñÖ"-- ñÖ"-- ñÖ"-- ñÖ"-- ñÖ"(2.5) ñÖ"(2.5)*ñ×'Foreign currency translation losses*ñØ'due to disposal of foreign entities ñØ"-- ñØ"-- ñØ"-- ñØ"-- ñØ"5.2 ñØ"5.2&ñÙ'Unrealized gains on securities:'ñÚ'Unrealized holding gains arisingñÛ'during period ñÛ"-- ñÛ"-- ñÛ"-- ñÛ"-- ñÛ"5.8 ñÛ"5.8ñÜ'Realized gains includedñÝ'in net income ñÝ"-- ñÝ"-- ñÝ"-- ñÝ"-- ñÝ"(1.0) ñÝ"(1.0)ñß'Comprehensive income ñß"-- ñß"-- ñß"300.2 ñß"-- ñß"7.5 ñß"307.7ñá'Purchase of common stock ñá"-- ñá"-- ñá"--ñá"(257.6) ñá"--ñá"(257.6)%ñâ'Cash dividends on common stockñã'($1.28 per share) ñã"-- ñã"--ñã"(122.1) ñã"-- ñã"--ñã"(122.1)/ñä'Spin-off of Water Pik Technologies, Inc. ñä"-- ñä"-- ñä"(54.6) ñä"-- ñä"0.3 ñä"(54.3)(ñå'Spin-off of Teledyne Technologiesñæ'Incorporated ñæ"-- ñæ"-- ñæ"(41.6) ñæ"-- ñæ"(0.8) ñæ"(42.4)ñç'Employee stock plans ñç"-- ñç"3.8 ñç"(11.3) ñç"36.5 ñç"-- ñç"29.0!ñé'BALANCE, DECEMBER 31, 1999 ñé"9.9 ñé"481.0 ñé"994.5ñé"(288.7) ñé"3.5ñé"1,200.2ñë'Net income ñë"-- ñë"-- ñë"132.5 ñë"-- ñë"-- ñë"132.5.ñì'Other comprehensive income, net of tax:+ñí'Foreign currency translation losses:#ñî'Foreign currency translation#ñï'losses arising during period ñï"-- ñï"-- ñï"-- ñï"-- ñï"(21.7) ñï"(21.7)*ñð'Foreign currency translation losses*ññ'due to disposal of foreign entities ññ"-- ññ"-- ññ"-- ññ"-- ññ"2.3 ññ"2.3&ñò'Unrealized gains on securities:'ñó'Unrealized holding gains arisingñô'during period ñô"-- ñô"-- ñô"-- ñô"-- ñô"3.8 ñô"3.8ñõ'Realized gains includedñö'in net income ñö"-- ñö"-- ñö"-- ñö"-- ñö"(7.5) ñö"(7.5)"ñø'Comprehensive income (loss) ñø"-- ñø"-- ñø"132.5 ñø"-- ñø"(23.1) ñø"109.4%ñú'Cash dividends on common stockñû'($.80 per share) ñû"-- ñû"-- ñû"(66.0) ñû"-- ñû"-- ñû"(66.0)ñü'Purchase of common stock ñü"-- ñü"-- ñü"--ñü"(221.0) ñü"--ñü"(221.0)ñý'Employee stock plans ñý"-- ñý"0.2 ñý"(11.0) ñý"27.4 ñý"-- ñý"16.6!ñÿ'BALANCE, DECEMBER 31, 2000 ñÿ"$ 9.9ñÿ"$ 481.2ñÿ"$1,050.0ñÿ"$ (482.3)ñÿ"$ (19.6)ñÿ"$ 1,039.2Gñ'The accompanying notes are an integral part of these statements.