#/2H>    d 1$&%*<'ALLEGHENY TECHNOLOGIES INCORPORATED AND SUBSIDIARIES "'CONSOLIDATED BALANCE SHEETS7'(In millions except share and per share amounts) ^1999 ^1998 'ASSETS 'Cash and cash equivalents"$ 50.7"$ 74.2'Accounts receivable "341.2 "314.0'Inventories "558.3 "555.3 'Deferred income taxes  "62.6  "39.20 'Prepaid expenses and other current assets  "20.7  "24.6 'TOTAL CURRENT ASSETS "1,033.5 "1,007.3$ 'Property, plant and equipment  "912.4  "887.6 'Prepaid pension cost  "503.7  "436.8,'Cost in excess of net assets acquired "204.2 "208.6,'Net assets of discontinued operations "-- "298.5'Other assets "96.8 "104.7'TOTAL ASSETS"$2,750.6"$2,943.5+'LIABILITIES AND STOCKHOLDERS' EQUITY'Accounts payable"$ 172.9"$ 140.9'Accrued liabilities "214.4 "223.3<'Short-term debt and current portion of long-term debt "152.7 "68.2 'TOTAL CURRENT LIABILITIES "540.0 "432.4'Long-term debt "200.3 "430.6&'Accrued postretirement benefits "544.8 "549.6 'Other "265.3 "191.0'TOTAL LIABILITIES"1,550.4"1,603.6'Stockholders' Equity:V'Preferred stock, par value $0.10: authorized - 50,000,000 shares; issued - none "-- "--O'Common stock, par value $0.10: authorized - 500,000,000 shares; issued -J'98,951,490 in 1999 and 98,968,832 in 1998; outstanding - 90,368,1963'shares in 1999 and 97,436,576 shares in 1998 "9.9 "9.9! 'Additional paid-in capital  "481.0  "477.2!'Retained earnings !"994.5 !"923.9L"'Treasury stock: 8,583,294 shares in 1999 and 1,532,256 shares in 1998""(288.7) ""(67.6)*#'Foreign currency translation losses #"(3.7) #"(5.9)%$'Unrealized gains on securities $"7.2 $"2.4!%'TOTAL STOCKHOLDERS' EQUITY%"1,200.2%"1,339.91&'TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY&"$2,750.6&"$2,943.5G('The accompanying notes are an integral part of these statements.;*'ALLEGHENY TECHNOLOGIES INCORPORATED AND SUBSIDIARIES,+'CONSOLIDATED STATEMENTS OF CASH FLOWS,'(In millions)'.'For the Years Ended December 31, .^1999 .^1998 .^1997/'OPERATING ACTIVITIES:0'Net income0"$ 300.20"$ 241.20"$ 328.8-1'Adjustments to reconcile net income to12'net cash provided by operating activities:=3'Extraordinary gains on sales of operations, net of tax3"(129.6) 3"-- 3"--$4'Depreciation and amortization 4"95.3 4"82.1 4"84.365'Income from discontinued operations, net of tax 5"(59.6) 5"(86.2) 5"(98.4)6'Deferred income taxes 6"(11.3) 6"(6.7) 6"(4.9)#7'Non-cash restructuring costs 7"-- 7"50.9 7"--38'Gains on sales of investments and businesses 8"-- 8"-- 8"(68.5)29'Change in operating assets and liabilities::'Accrued income taxes :"(69.4) :"(0.3) :"38.6;'Prepaid pension cost ;"(66.9) ;"(47.4) ;"(25.0)<'Accounts payable <"31.9 <"(54.7) <"(16.0)='Accrued liabilities ="28.0 ="1.2 ="(42.4)>'Accounts receivable >"(26.5) >"59.2 >"(24.5)?'Tax refund ?"2.4 ?"6.1 ?"37.7@'Inventories @"(0.5) @"49.6 @"(52.3) A'Other A"8.9 A"(2.7) A"(0.9),B'CASH PROVIDED BY OPERATING ACTIVITIES B"102.9 B"292.3 B"156.5C'INVESTING ACTIVITIES:8D'Proceeds from sales of businesses and investments D"370.4 D"-- D"112.18E'Proceeds from spin-offs of Teledyne and Water Pik E"134.0 E"-- E"--1F'Purchases of property, plant and equipment F"(74.1)F"(138.9) F"(91.4)1G'Disposals of property, plant and equipment G"28.5 G"19.6 G"30.49H'Purchases of businesses and investment in ventures H"(23.9)H"(218.9) H"(37.8)%I'Short-term investments - sales I"-- I"34.4 I"28.9 J'Other J"(5.2) J"(3.4) J"(3.7)6K'CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES K"429.7K"(307.2) K"38.5L'FINANCING ACTIVITIES: M'Purchases of common stockM"(257.6) M"(49.4)M"(107.7)N'Dividends paidN"(122.1)N"(122.3)N"(112.2):O'Net borrowings (repayments) under credit agreements O"(82.2) O"121.5 O"(90.9)"P'Payments on short-term debt P"(70.0) P"-- P"--!Q'Exercises of stock options Q"8.2 Q"8.3 Q"35.54R'Payments on long-term debt and capital leases R"(1.7) R"(6.9) R"(24.7)(S'CASH USED IN FINANCING ACTIVITIESS"(525.4) S"(48.8)S"(300.0)=T'NET CASH PROVIDED BY (USED IN) DISCONTINUED OPERATIONS T"(30.7) T"84.6 T"95.67U'INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS U"(23.5) U"20.9 U"(9.4)5V'Cash and cash equivalents at beginning of year V"74.2 V"53.3 V"62.7/W'CASH AND CASH EQUIVALENTS AT END OF YEARW"$ 50.7W"$ 74.2W"$ 53.3X'NON-CASH TRANSACTIONS:,Y'Assets acquired under promissory noteY"$ --Y"$ 65.9Y"$ --E['Amounts presented on the Consolidated Statements of Cash FlowsB\'may not agree to the corresponding changes in balance sheetH]'items due to the accounting for purchases and sales of businessesH^'and the effects of foreign currency translation. Cash provided byH_'operating activities in 1999 is net of payments of taxes on gainsM`'on sales of operations of $79.9 million. Excluding these tax payments,@a'cash provided by operating activities was $182.8 million.Gc'The accompanying notes are an integral part of these statements.;e'ALLEGHENY TECHNOLOGIES INCORPORATED AND SUBSIDIARIES6f'CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY-g'(In millions except per share amounts)j^Accumulatedk^Additional k^Other l^Commonl^Paid-Inl^Retainedl^Treasuryl^Comprehensivel^Stockholders' m^Stockm^Capitalm^Earnings m^Stock m^Income m^Equity!n'BALANCE, DECEMBER 31, 1996 n"$9.8 n"$418.9 n"$635.5 n"$-- n"$11.2n"$1,075.4p'Net income p"-- p"-- p"328.8 p"-- p"-- p"328.8.q'Other comprehensive income, net of tax:*r'Foreign currency translation losses r"-- r"-- r"-- r"-- r"(5.0) r"(5.0)'s'Unrealized losses on securities:'t'Unrealized holding gains arisingu'during period u"-- u"-- u"-- u"-- u"9.7 u"9.7#v'Less: realized gain includedw'in net income w"-- w"-- w"-- w"-- w"17.0 w"17.0x'Comprehensive income x"-- x"-- x"328.8 x"-- x"(12.3) x"316.5%z'Cash dividends on common stock{'($1.28 per share) {"-- {"--{"(112.2) {"-- {"--{"(112.2)|'Purchase of common stock |"-- |"-- |"--|"(107.7) |"--|"(107.7)}'Employee stock plans }"0.1 }"54.5 }"(29.5) }"47.5 }"-- }"72.6!~'BALANCE, DECEMBER 31, 1997 ~"9.9 ~"473.4 ~"822.6 ~"(60.2) ~"(1.1)~"1,244.6'Net income "-- "-- "241.2 "-- "-- "241.2.'Other comprehensive income, net of tax:*'Foreign currency translation losses "-- "-- "-- "-- "(3.5) "(3.5)&'Unrealized gains on securities:''Unrealized holding gains arising'during period "-- "-- "-- "-- "2.2 "2.2#'Less: realized gain included'in net income "-- "-- "-- "-- "1.1 "1.1'Comprehensive income "-- "-- "241.2 "-- "(2.4) "238.8%'Cash dividends on common stock'($1.28 per share) "-- "--"(122.3) "-- "--"(122.3)'Purchase of common stock "-- "-- "-- "(49.4) "-- "(49.4)'Employee stock plans "-- "3.8 "(17.6) "42.0 "-- "28.2!'BALANCE, DECEMBER 31, 1998 "9.9 "477.2 "923.9 "(67.6) "(3.5)"1,339.9'Net income "-- "-- "300.2 "-- "-- "300.2.'Other comprehensive income, net of tax:3'Foreign currency translation gains (losses):#'Foreign currency translation#'losses arising during period "-- "-- "-- "-- "(2.5) "(2.5))'Less: foreign currency translation-'losses due to sale of foreign entities "-- "-- "-- "-- "(5.2) "(5.2)&'Unrealized gains on securities:''Unrealized holding gains arising'during period "-- "-- "-- "-- "5.8 "5.8#'Less: realized gain included'in net income "-- "-- "-- "-- "1.0 "1.0'Comprehensive income "-- "-- "300.2 "-- "7.5 "307.7'Purchase of common stock "-- "-- "--"(257.6) "--"(257.6)%'Cash dividends on common stock'($1.28 per share) "-- "--"(122.1) "-- "--"(122.1)/'Spin-off of Water Pik Technologies, Inc. "-- "-- "(54.6) "-- "0.3 "(54.3)('Spin-off of Teledyne Technologies'Incorporated "-- "-- "(41.6) "-- "(0.8) "(42.4)'Employee stock plans "-- "3.8 "(11.3) "36.5 "-- "29.0!'BALANCE, DECEMBER 31, 1999 "$9.9 "$481.0 "$994.5"$(288.7) "$3.5"$1,200.2' G'The accompanying notes are an integral part of these statements.