/2H7    d 1$&%*$'PART I. FINANCIAL INFORMATION$'Item 1. Financial Statements7'ALLEGHENY TELEDYNE INCORPORATED AND SUBSIDIARIES"'CONSOLIDATED BALANCE SHEETS7'(In millions except share and per share amounts)"(Unaudited)"(Audited)"June 30,"December 31,  "1999  "1998 'ASSETS 'Cash and cash equivalents "$ 60.0 "$ 74.8 'Accounts receivable  "549.5  "534.7'Inventories "653.4 "659.9'Deferred income taxes "58.7 "59.3'Tax refund "3.5 "5.90'Prepaid expenses and other current assets "27.8 "29.9'Total Current Assets"1,352.9"1,364.5$'Property, plant and equipment"1,023.1"1,003.6'Prepaid pension cost "474.2 "418.6,'Cost in excess of net assets acquired "250.1 "256.0'Other assets "105.8 "132.8'Total Assets"$ 3,206.1"$ 3,175.5+'LIABILITIES AND STOCKHOLDERS' EQUITY'Accounts payable"$ 238.5"$ 227.0'Accrued liabilities "297.0 "327.1*'Short-term debt and current portion 'of long-term debt  "128.1  "68.2 "'Total Current Liabilities ""663.6 ""622.3#'Long-term debt #"439.1 #"446.8&$'Accrued postretirement benefits $"582.0 $"582.6 %'Other %"216.8 %"183.9''Total Liabilities'"1,901.5'"1,835.6*'Stockholders' Equity:4+'Preferred stock, par value $0.10: authorized-%,'50,000,000 shares; issued-none ,"-- ,"--<-'Common stock, par value $0.10: authorized-600,000,0009.'shares; issued-197,937,664 shares at June 30, 19995/'and December 31, 1998; outstanding-190,706,07750'shares at June 30, 1999 and 194,873,151 shares1'at December 31, 1998 1"19.8 1"19.8!2'Additional paid-in capital 2"469.0 2"467.33'Retained earnings 3"974.6 3"923.984'Treasury stock: 7,231,587 shares at June 30, 199905'and 3,064,513 shares at December 31, 19985"(154.8) 5"(67.6)*6'Foreign currency translation losses 6"(11.0) 6"(5.9)%7'Unrealized gains on securities 7"7.0 7"2.4!9'Total Stockholders' Equity9"1,304.69"1,339.91;'Total Liabilities and Stockholders' Equity;"$ 3,206.1;"$ 3,175.5G>'The accompanying notes are an integral part of these statements.7@'ALLEGHENY TELEDYNE INCORPORATED AND SUBSIDIARIES(A'CONSOLIDATED STATEMENTS OF INCOME-B'(In millions except per share amounts)C'(Unaudited)D"Three MonthsD"Three MonthsD"Six MonthsD"Six Months E" Ended E" Ended E"Ended E"EndedF"June 30,F"June 30,F"June 30,F"June 30, G"1999 G"1998 G"1999 G"1998 I'SalesI"$ 917.9I"$ 1,019.1I"$ 1,852.5I"$ 2,021.3K'Costs and expenses:L'Cost of sales L"701.9 L"767.7L"1,418.8L"1,541.0*M'Selling and administrative expenses M"116.1 M"122.5 M"231.0 M"244.0!N'Transformation, merger andO'restructuring costs O"3.4 O"7.2 O"4.3 O"67.8P'Interest expense, net P"8.4 P"4.8 P"17.3 P"8.7 R"829.8 R"902.2R"1,671.4R"1,861.5#T'Earnings before other income T"88.1 T"116.9 T"181.1 T"159.8U'Other income U"2.9 U"1.9 U"3.1 U"4.7!X'Income before income taxes X"91.0 X"118.8 X"184.2 X"164.5!Z'Provision for income taxes Z"33.7 Z"43.3 Z"66.3 Z"62.1]'Net income]"$ 57.3]"$ 75.5]"$ 117.9]"$ 102.4(`'Basic net income per common share`"$ 0.30`"$ 0.38`"$ 0.61`"$ 0.52*c'Diluted net income per common sharec"$ 0.30c"$ 0.38c"$ 0.61c"$ 0.52*f'Dividends declared per common sharef"$ 0.16f"$ 0.16f"$ 0.32f"$ 0.32Gj'The accompanying notes are an integral part of these statements.7l'ALLEGHENY TELEDYNE INCORPORATED AND SUBSIDIARIES,m'CONSOLIDATED STATEMENTS OF CASH FLOWSn'(In millions)o'(Unaudited)p"Six Months p"Six Months  q"Ended q"Endedr"June 30,r"June 30, s"1999 s"1998u'Operating Activities:v'Net incomev"$ 117.9v"$ 102.46w'Adjustments to reconcile net income to net cash(x'provided by operating activities:$y'Depreciation and amortization y"62.3 y"55.2z'Deferred income taxes z"3.8 z"5.2#{'Non-cash restructuring costs {"-- {"51.73|'Gains on sales of businesses and investments |"-- |"(0.2)2}'Change in operating assets and liabilities:~'Prepaid pension cost ~"(55.1) ~"(45.0)'Accrued liabilities "(13.9) "(9.3)'Accrued income taxes "11.8 "(38.7)'Accounts payable "11.4 "(38.3)'Accounts receivable "(9.0) "16.9'Inventories "7.5 "6.6 'Other "9.3 "14.1,'Cash provided by operating activities "146.0 "120.6'Investing Activities:1'Purchases of property, plant and equipment "(52.8) "(76.9)1'Disposals of property, plant and equipment "7.6 "3.1;'Proceeds from the sale of businesses and investments "6.0 "16.49'Purchases of businesses and investment in ventures "(1.7)"(118.3)%'Sale of short-term investments "-- "34.4 'Other "-- "(4.5)('Cash used by investing activities "(40.9)"(145.8)'Financing Activities:-'Net borrowings under credit agreements "48.2 "119.64'Payments on long-term debt and capital leases "(1.2) "(4.4)'Net increase in debt "47.0 "115.2"'Purchases of treasury stock"(108.6) "--'Cash dividends "(61.8) "(59.4)!'Exercises of stock options "3.5 "5.53'Cash provided (used) by financing activities"(119.9) "61.37'Increase (decrease) in cash and cash equivalents "(14.8) "36.19'Cash and cash equivalents at beginning of the year "74.8 "53.71'Cash and cash equivalents at end of period"$ 60.0"$ 89.8'Non-cash transactions:('Assets sold under promissory note"$ 1.3"$ --G'The accompanying notes are an integral part of these statements.