SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 11-K ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002 [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] FOR THE TRANSITION PERIOD FROM TO --------------- --------------- COMMISSION FILE NUMBER 1-12001 ALLEGHENY LUDLUM CORPORATION PERSONAL RETIREMENT AND 401(K) SAVINGS ACCOUNT PLAN ------------------------------------------ (Title of Plan) ALLEGHENY TECHNOLOGIES INCORPORATED (Name of Issuer of securities held pursuant to the Plan) 1000 Six PPG Place, Pittsburgh, Pennsylvania 15222-5479 (Address of Plan and of principal executive office of Issuer) AUDITED FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan Years ended December 31, 2002 and 2001 with Report of Independent Auditors Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan Audited Financial Statements and Supplemental Schedule Years ended December 31, 2002 and 2001 CONTENTS Report of Independent Auditors ................................................................................ 1 Audited Financial Statements Statements of Net Assets Available for Benefits................................................................ 2 Statements of Changes in Net Assets Available for Benefits..................................................... 3 Notes to Financial Statements ................................................................................. 4 Supplemental Schedule Schedule H, Line 4(i)--Schedule of Assets (Held at End of Year)................................................ 12 EXHIBITS 23 Consent of Independent Auditors 99 Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Report of Independent Auditors Allegheny Technologies Incorporated We have audited the accompanying statements of net assets available for benefits of the Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan as of December 31, 2002 and 2001, 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, 2002 and 2001, 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 performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedule of assets (held at end of year) as of December 31, 2002 is presented for purposes of additional analysis and is not a required part of the financial statements but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedule is the responsibility of the Plan's management. 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 11, 2003 1 Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan Statements of Net Assets Available for Benefits DECEMBER 31 2002 2001 ---------------- --------------- Investments: Interest-bearing cash $ - $ 351 Interest in Allegheny Technologies Incorporated Savings Plan Trust 68,562,589 67,085,891 Interest in registered investment companies 10,334,374 12,684,948 Interest in common collective trusts 8,616,603 9,801,563 Participant loans 6,072,273 6,219,132 Corporate common stocks 3,976,412 9,862,875 -------------------------------- Total investments 97,562,251 105,654,760 Other (payables) receivables, net (679,148) 88 -------------------------------- Net assets available for benefits $ 96,883,103 $105,654,848 ================================ See accompanying notes. 2 Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan Statements of Changes in Net Assets Available for Benefits YEAR ENDED DECEMBER 31 2002 2001 -------------------------------- Contributions: Employer $ 2,732,088 $ 2,377,780 Employee 5,187,714 5,046,862 -------------------------------- Total contributions 7,919,802 7,424,642 Investment income (loss): Net loss from interest in Allegheny Technologies Incorporated Savings Plan Trust (1,152,894) (26,871) Net loss from interest in registered investment Companies (2,544,431) (723,000) Net loss from interest in common collective trusts (1,309,517) (569,870) Interest income 393,001 341,696 Dividend income 347,604 260,396 Net realized/unrealized loss on corporate common stocks (5,668,370) (1,835,120) -------------------------------- Total investment loss (9,934,607) (2,552,769) Plan transfers - 17,023,296 -------------------------------- (2,014,805) 21,895,169 Distributions to participants (6,709,034) (4,080,646) Plan transfers (47,906) (174,980) -------------------------------- (6,756,940) (4,255,626) -------------------------------- Net (decrease) increase in net assets available for benefits (8,771,745) 17,639,543 Net assets available for benefits at beginning of year 105,654,848 88,015,305 -------------------------------- Net assets available for benefits at end of year $ 96,883,103 $105,654,848 ================================ See accompanying notes. 3 Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan Notes to Financial Statements December 31, 2002 1. SIGNIFICANT ACCOUNTING POLICIES Investments are valued as follows: Bank and insurance contracts with varying contract rates and maturity dates are stated at contract value. Although it is management's intention to hold the investment contracts in the Fixed Income Fund until maturity, certain investment contracts provide for adjustments to contract value for withdrawals made prior to maturity. 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 accounting principles generally accepted in the United States requires management to make estimates 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 Corporation Personal Retirement and 401(k) Savings Account Plan (the Plan) is a defined contribution plan and subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). The purpose of the Plan is to provide retirement benefits to eligible employees of Allegheny Ludlum Corporation (ALC) through company contributions and to encourage employee thrift by permitting eligible employees to defer a part of their compensation and contribute such deferral to the Plan. ALC is a wholly owned subsidiary of Allegheny Technologies Incorporated (ATI, the Plan Sponsor). ALC contributes to the Plan $0.50 per hour worked per eligible union employee. Unless otherwise specified by the participant, all contributions are made to the Fixed Income Fund. Such contributions are made only from current income or accumulated earnings of the Plan Sponsor. The Plan allows participants to direct contributions made on their behalf to any of the investment alternatives. The Plan allows employees to contribute a portion of eligible wages each pay period through payroll deductions subject to Internal Revenue Code limitations. In addition, the employees' annual pretax profit sharing award and pretax Longevity Incentive Payment Plan award may be contributed at the employees' discretion as their deferral. 4 Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account 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, Mellon Bank, N.A., 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. Participants may make "in-service" and hardship withdrawals as outlined in the plan document. 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 $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 Incorporated's name was changed to Allegheny Technologies Incorporated. Also, the Aerospace and Electronics and Consumer segments of Allegheny Teledyne were spun off 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 continued to hold interests in the two new companies until December 31, 2002, at which time these two holdings were terminated and the assets were transferred to one of the other plan investment options. Effective November 1, 2001, Oremet employees belonging to the bargaining unit Local 7150 became eligible to participate in the Plan. Accordingly, plan investments related to these participants were transferred into the Plan. Further information about the Plan, including eligibility, vesting, contributions and withdrawals, is contained in the Plan Document, summary plan description and related contracts. Copies of these documents are available from the Plan Sponsor. 5 Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan Notes to Financial Statements (continued) 3. INVESTMENTS The following presents investments that represent 5% or more of the Plan's net assets: DECEMBER 31 2002 2001 -------------------------------------------- Fixed Income Fund $56,605,733 $50,203,227 Allegheny Technologies Disciplined Stock Fund 6,082,791 8,447,657 Alliance Equity Fund 5,874,064 8,435,007 Dreyfus Lifestyle Growth and Income Fund 5,243,372 6,547,450 Allegheny Technologies Incorporated common stock 3,976,412* 8,450,736 Dreyfus Emerging Leaders 4,632,483* 6,113,187 *Shown for comparative purpose Certain of the Plan's investments are in the Allegheny Technologies Incorporated Savings Plan Trust, which has three subsidiary Master Trusts: the Allegheny Technologies Disciplined Stock Fund Master Trust, the Alliance Equity Master Trust and the Fixed Income Master Trust, which are institutional separate accounts valued on a unitized trust basis (collectively, the "Master Trust"). The Master Trust was established for the investment of assets of the Plan, and several other ATI sponsored retirement plans. Each participating retirement plan has an undivided interest in the Master Trust. At December 31, 2002 and 2001, the Plan's interest in the net assets of the Allegheny Technologies Disciplined Stock Fund Master Trust, the Alliance Equity Master Trust and the Fixed Income Master Trust were as follows: 2002 2001 ------------------- ------------------ Fixed Income Master Trust 31.31% 30.31% Alliance Equity Master Trust 22.12 21.11 Allegheny Technologies Disciplined Stock Fund Master Trust 11.07 10.90 Investment income and expenses are allocated to the Plan based upon its pro rata share in the net assets of the Master Trust. 6 Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) The composition of the net assets of the Fixed Income Master Trust at December 31, 2002 and 2001 was as follows: 2002 2001 -------------------------------------------- Guaranteed investment contracts: Business Men's Assurance Company of America $ - $ 1,246,890 Canada Life 2,757,412 2,743,536 Combined Life Insurance Company - 3,097,946 GE Life and Annuity 10,420,327 11,812,375 Hartford Life Insurance Company 10,460,185 10,025,160 John Hancock Life Insurance Company 9,854,982 14,218,029 Monumental Life Insurance Company 2,363,422 3,331,280 New York Life Insurance Company 7,808,955 7,729,985 Ohio National Life 5,976,900 7,936,620 Pacific Mutual Life Insurance Company 6,074,436 6,036,924 Principal Life 1,134,634 3,000,000 Protective Life Insurance Company 1,006,463 1,002,333 Pruco Pace Credit Enhanced 8,689,223 9,950,359 Safeco Life Insurance 1,973,290 3,000,505 Security Life of Denver 6,465,137 6,181,488 Sun America, Inc. 2,988,024 2,992,868 United of Omaha 7,226,335 7,188,790 -------------------------------------------- 85,199,725 101,495,088 Synthetic guaranteed investment contracts: Caisse des Depots et Consignations 4,953,210 7,800,826 CIT Equipment 996,925 992,755 Common Wealth Edison 2,999,980 1,976,061 Commit to purchase FNMA 02-74 LC 3,071,979 - Conn RRB Spec Trust 2,948,436 2,987,164 Detroit Edison 2,027,941 2,018,460 FHLMC 5,977,227 2,466,660 Illinois Power Sp Trust 1,971,078 1,957,161 MBNA Master CC Trust 1,993,490 1,983,492 MDA Monumental BGI Wrap 41,868,727 - Peco Energy Company 1,970,899 1,982,788 Peoples Security Life Insurance Company 2,491,608 6,602,162 Public Service 2,036,624 1,998,629 Transamerica Occidental 6,568,303 9,559,425 Union Bank of Switzerland 174,682 2,737,675 Westdeutsche Landesbank Girozentrale 3,556,463 9,387,186 -------------------------------------------- 85,607,572 54,450,444 Interest in common collective trust 7,972,257 7,680,629 Receivables - 381,024 Interest-bearing cash 212,167 - Other 1,817,668 1,635,070 -------------------------------------------- Total net assets $180,809,389 $165,642,255 ============================================ 7 Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) The Fixed Income Fund (the Fund) invests in guaranteed investment contracts (GICs) and actively managed structured or synthetic investment contracts (SICs). The GICs are promises by a bank or insurance company to repay principal plus a fixed rate of return through contract maturity. SICs differ from GICs in that there are specific assets supporting the SICs, and these assets are owned by the Master Trust. The bank or insurance company issues a wrapper contract that allows participant-directed transactions to be made at contract value. The assets supporting the SICs are comprised of government agency bonds, corporate bonds, asset-backed securities (ABOs) and collateralized mortgage obligations (CMOs) with fair values of $88,750,762 and $55,854,607 at December 31, 2002 and 2001, respectively. The contract value minus the market value of the wrapper contracts at December 31, 2002 and 2001 is $(2,667,261) and $(1,397,030), respectively. Interest crediting rates on the GICs in the Fund are determined at the time of purchase. Interest crediting rates on the SICs are either: (1) set at the time of purchase for a fixed term and crediting rate; (2) set at the time of purchase for a fixed term and variable crediting rate or (3) set at the time of purchase and reset monthly within a "constant duration." A constant duration contract may specify a duration of 2.5 years and the crediting rate is adjusted monthly based upon quarterly rebalancing of eligible 2.5 year duration investment instruments at the time of each resetting; in effect the contract never matures. At December 31, 2002 and 2001, the interest crediting rates for GICs and Fixed Maturity SICs ranged from 3.27% to 8.05% and 3.49% to 8.05%, respectively. For the years ended December 31, 2002 and 2001, the average annual yield for the investment contracts in the Fund was 5.74% and 6.25%, respectively. Fair value of the GICs was estimated by discounting the weighted average of the Fund's cash flows at the then-current interest-crediting rate for a comparable maturity investment contract. Fair value for the SICs was estimated based on the fair value of each contract's supporting assets at December 31, 2002 and 2001. 8 Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan Notes to Financial Statements (continued) 3. INVESTMENTS (CONTINUED) The composition of net assets of the Alliance Equity Master Trust at December 31, 2002 and 2001 was as follows: 2002 2001 -------------------------------------------- Investment in registered investment companies: Alliance Equity Fund S.A. #4 $26,603,639 $40,024,274 Operating payables (49,895) (64,365) -------------------------------------------- Total net assets $26,553,744 $39,959,909 ============================================ The composition of net assets of the Allegheny Technologies Disciplined Stock Fund Master Trust at December 31, 2002 and 2001 was as follows: 2002 2001 -------------------------------------------- Corporate common stocks $53,256,475 $76,016,770 Interest in common collective trusts 1,630,752 1,410,015 Receivables 67,848 103,913 Payables (25,733) - ---------------------- -------------------- Total net assets $54,929,342 $77,530,698 ====================== ==================== 9 Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account 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: ALLEGHENY TECHNOLOGIES ALLIANCE EQUITY MASTER DISCIPLINED STOCK FUND MASTER FIXED INCOME MASTER TRUST TRUST TRUST --------------------------------- ---------------------------- ------------------------------- YEAR ENDED DECEMBER 31 ---------------------------------------------------------------------------------------------- 2002 2001 2002 2001 2002 2001 ---------------------------------------------------------------------------------------------- Investment income (loss): Interest income $ 9,786,577 $ 9,147,492 $ - $ - $ - $ - Net realized/unrealized gain (loss) on corporate common stocks 1,528 - - - (17,406,255) (12,375,289) Dividends - - - - 948,623 941,613 Net gain (loss), registered invest- ment companies - 32,606 (10,652,634) (9,248,179) - - Net gain, common collective trusts 172,081 401,062 - - 13,761 53,202 Other income 69,815 - - - - - Administrative expenses (236,944) (208,589) (118,618) (170,195) (424,085) (520,128) Transfers 5,374,077 11,804,280 (2,634,913) (1,786,437) (5,733,400) (1,810,556) ------------ ----------- ---------- ------------ ------------ ------------ Net increase (decrease) 15,167,134 21,176,851 (13,406,165) (11,204,811) (22,601,356) (13,711,158) Total net assets at beginning of year 165,642,255 144,465,404 39,959,909 51,164,720 77,530,698 91,241,856 ------------ ----------- ---------- ------------ ------------ ------------ Total net assets at end of year $180,809,389 $165,642,255 $ 26,553,744 $ 39,959,909 $ 54,929,342 $ 77,530,698 ============ ============ ============ ============ ============ ============ Interest, realized and unrealized gains and losses, and management fees from the master trusts are included in the net loss from interest in Allegheny Technologies Incorporated Savings Plan Trust on the statements of changes in net assets available for benefits. 10 Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan Notes to Financial Statements (continued) 4. INCOME TAX STATUS The Plan has received a determination letter from the Internal Revenue Service dated November 30, 1995, 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. Subsequent to this issuance of the determination letter, the Plan was amended. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The plan administrator believes the Plan is being operated in compliance with the applicable requirements of the Code and, therefore, believes that the Plan, as amended, is qualified and the related trust is tax-exempt. 5. PARTIES-IN-INTEREST Dreyfus Corporation is the manager of the Dreyfus Mutual Funds that are offered as investment options under this Plan. Dreyfus Service Corporation is the funds' distributor. Dreyfus Corporation and Dreyfus Service Corporation are both wholly owned subsidiaries of Mellon Financial Corporation. Mellon Financial Corporation also owns Mellon Bank, N.A., the Trustee for this Plan. Therefore, transactions with these entities qualify as party-in-interest. 6. PLAN TERMINATION Although it has not expressed any intent to do so, the Plan Sponsor has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. 11 Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan EIN 25-1792394 Plan 005 Schedule H, Line 4(i)--Schedule of Assets (Held at End of Year) December 31, 2002 DESCRIPTION UNITS/SHARES CURRENT VALUE ---------------------------------------------------------------------------------------------------------------------- Registered Investment Companies Dreyfus Emerging Leaders Fund* 166,876.191 $ 4,632,483 Dreyfus International Value Fund* 147,955.476 1,781,384 Dreyfus Bond Market Index* 141,519.873 1,484,543 MAS Midcap Growth Fund 148,134.235 1,789,462 Jennison Growth Fund 64,264.600 646,502 ------------------------ Total registered investment companies $10,334,374 ======================== Common Collective Trusts Dreyfus Lifestyle Growth and Income Fund* 363,915.185 $ 5,243,372 Dreyfus Short-Term Investment Fund* 709,848.570 709,849 Dreyfus Lifestyle Growth Fund* 145,351.251 1,953,562 Dreyfus Lifestyle Income Fund* 47,020.437 709,820 ------------------------ Total common collective trusts $ 8,616,603 ======================== Participant loans* (5.25% to 10.50% with maturities through 2017) $ 6,072,273 ======================== Corporate Common Stocks Allegheny Technologies Incorporated* 638,268.361 $3,976,412 ======================== *Party-in-interest 12 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the administrators of the Plan have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. ALLEGHENY TECHNOLOGIES INCORPORATED ALLEGHENY LUDLUM CORPORATION PERSONAL RETIREMENT AND 401(K) SAVINGS ACCOUNT PLAN By: /s/ Richard J. Harshman ------------------------------------ Date: June 27, 2003 Richard J. Harshman Senior Vice President-Finance and Chief Financial Officer (Principal Financial Officer and Duly Authorized Officer) 13