UNITED STATES
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, 2003
OR
[ ] 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
401(K) SAVINGS ACCOUNT PLAN FOR EMPLOYEES
OF THE EXTON FACILITY
---------------------
(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 principal executive offices of Issuer)
Financial Statements
And Supplemental Schedule
401(k) Savings Account Plan for Employees of the Exton Facility
Year ended December 31, 2003
(Unaudited)
401(k) Savings Account Plan for Employees of the Exton Facility
Financial Statements
and Supplemental Schedule
Year ended December 31, 2003
(Unaudited)
CONTENTS
Financial Statements (Unaudited)
Statements of Net Assets Available for Benefits ......................... 1
Statement of Changes in Net Assets Available for Benefits................ 2
Notes to Financial Statements ........................................... 3
Supplemental Schedule
Schedule H, Line 4i -- Schedule of Assets (Held at End of Year)......... 11
401(k) Savings Account Plan for Employees of the Exton Facility
Statements of Net Assets Available for Benefits
(Unaudited)
DECEMBER 31
2003 2002
-------- --------
Investments:
Interest in Allegheny Technologies Incorporated Savings Plan Trust $669,522 $630,207
Interest in registered investment companies 162,565 140,731
Participant loans 129,757 81,853
Interest in common collective trusts - 31,853
-------- --------
Net assets available for benefits $961,844 $884,644
======== ========
See accompanying notes.
-1-
401(k) Savings Account Plan for Employees of the Exton Facility
Statement of Changes in Net Assets Available for Benefits
(Unaudited)
Year ended December 31, 2003
Employee contributions $ 1,984
Investment income:
Net gain from interest in Allegheny Technologies Incorporated
Savings Plan Trust 75,976
Net gain from interest in registered investment companies 10,295
Net gain from interest in common collective trusts 1,755
Net realized/unrealized gains 7
Interest income 5,688
---------
Total investment gain 93,721
---------
95,705
Distributions to participants (18,505)
---------
Net increase in net assets available for benefits 77,200
Net assets available for benefits at beginning of year 884,644
---------
Net assets available for benefits at end of year $ 961,844
=========
See accompanying notes.
-2-
401(k) Savings Account Plan for Employees of the Exton Facility
Notes to Financial Statements
December 31, 2003
1. SIGNIFICANT ACCOUNTING POLICIES
Investments are valued as follows:
Bank and insurance investment contracts ("investment 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 Master Trust until maturity, certain investment contracts
provide for adjustments to contract value for withdrawals made prior to
maturity.
All other investments 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 U.S. generally
accepted accounting principles 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 401(k) Savings Account Plan for Employees of the Exton Facility, formerly
known as the Allegheny Rodney (ALstrip) Profit Sharing Plan (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 employee thrift by permitting eligible
employees of the Exton facility of Allegheny Ludlum Corporation (the Company) to
defer a part of their compensation and contribute such deferral to the Plan. The
Company is a wholly-owned subsidiary of Allegheny Technologies Incorporated
(ATI, the Plan Sponsor). The Plan allows employees to contribute a portion of
eligible wages each pay period through payroll deductions subject to Internal
Revenue Code limitations. The Plan allows participants to direct their
contributions to any of the investment alternatives. Unless otherwise specified
by the participant, contributions are made to the Fixed Income Master Trust.
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" (age 59-1/2 only) and hardship withdrawals as
outlined in the plan document.
-3-
401(k) Savings Account Plan for Employees of the Exton Facility
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE PLAN (CONTINUED)
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
from 6 months up to 180 months. Payments are made by payroll deductions.
Further information about the Plan, including eligibility, vesting,
contributions, and withdrawals, is contained in the plan documents. Copies of
these documents are available from the Plan Sponsor.
3. INVESTMENTS
The following presents investments that represent 5% or more of the Plan's net
assets as of December 31, 2003.
2003
-----------
(Unaudited)
Fixed Income Master Trust $381,705
Allegheny Technologies Disciplined Stock Fund Master Trust 283,151
Dreyfus Bond Market Index 128,495
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, 2003, the Plan's
interest in the net assets of the Allegheny Technologies Disciplined Stock Fund
Master Trust, the Fixed Income Master Trust and the Alliance Equity Master Trust
were as follows:
2003
-----------
(Unaudited)
Allegheny Technologies Disciplined Stock Fund Master Trust 0.36%
Fixed Income Master Trust 0.20
Alliance Equity Master Trust 0.01
-4-
401(k) Savings Account Plan for Employees of the Exton Facility
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
Investment income and expenses are allocated to the Plan based upon its pro rata
share in the net assets of the Master Trust.
The composition of the net assets of the Fixed Income Master Trust at December
31, 2003 was as follows:
2003
------------
Guaranteed investment contracts:
Canada Life $ 2,757,412
GE Life and Annuity 9,583,804
Hartford Life Insurance Company 10,939,222
John Hancock Life Insurance Company 8,848,178
Monumental Life Insurance Company 2,353,862
New York Life Insurance Company 6,814,589
Ohio National Life 4,652,712
Pacific Mutual Life Insurance Company 6,075,054
Principal Life 1,187,962
Protective Life Insurance Company 1,006,456
Pruco Pace Credit Enhanced 8,947,069
Security Life of Denver 6,737,205
United of Omaha 7,226,335
------------
77,129,860
Synthetic guaranteed investment contracts:
Caisse des Depots et Consignations 1,999,995
MDA Monumental BGI Wrap 33,990,199
Bank of America 17,803,044
Rabobank 36,635,330
Union Bank of Switzerland 14,768,321
------------
105,196,889
Interest in common/collective trusts 8,515,369
Other 764,537
------------
Total net assets $191,606,655
============
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 $107,926,162 at December 31, 2003. The contract value
minus the market value of the wrapper contracts at December 31, 2003 was
$2,356,779.
-5-
401(k) Savings Account Plan for Employees of the Exton Facility
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
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, 2003, the interest crediting rates for GICs and Fixed Maturity SICs ranged
from 3.58% to 8.02%.
For the year ended December 31, 2003, the average annual yield for the
investment contracts in the Fund was 5.31%. 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, 2003.
The composition of net assets of the Alliance Equity Master Trust at December
31, 2003 was as follows:
2003
-----------
(Unaudited)
Investment in registered investment companies:
Alliance Equity Fund S.A. #4 $35,666,427
Operating payables (10,616)
-----------
Total net assets $35,655,811
===========
The composition of net assets of the Allegheny Technologies Disciplined Stock
Fund Master Trust at December 31, 2003 was as follows:
2003
-----------
(Unaudited)
Corporate common stocks $77,259,404
Investment in common collective trusts 337,451
Receivables 283,072
Operating Payables (42,301)
-----------
Total net assets $77,837,626
===========
-6-
401(k) Savings Account Plan for Employees of the Exton Facility
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
ALLIANCE TECHNOLOGIES
EQUITY DISCIPLINED
FIXED INCOME MASTER STOCK FUND
MASTER TRUST TRUST MASTER TRUST
------------- ------------- -------------
YEAR ENDED DECEMBER 31, 2003
-----------------------------------------------
(Unaudited)
Investment income:
Interest income $ 9,953,790 $ - $ 214,654
Net realized/unrealized gain on
Corporate common stocks - - 13,699,382
Dividends - - 1,073,159
Net gain, registered
investment companies 45,315 9,614,660 -
Net gain, common collective trusts 111,616 - 10,183
Administrative expenses (201,917) (72,409) (660,982)
Transfers 888,462 (440,184) 8,571,888
------------- ------------- -------------
Net increase 10,797,266 9,102,067 22,908,284
Total net assets at beginning of year 180,809,389 26,553,744 54,929,342
------------- ------------- -------------
Total net assets at end of year $ 191,606,655 $ 35,655,811 $ 77,837,626
============= ============= =============
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 statement of changes in net
assets available for benefits.
4. INCOME TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
dated August 4, 2003, 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.
-7-
401(k) Savings Account Plan for Employees of the Exton Facility
Notes to Financial Statements (continued)
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 transactions. Trustee and
investment fees paid during 2003 were based upon customary and reasonable rates
for such services.
6. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA.
7. RISKS AND UNCERTAINTIES
The Plan invests in various investment securities. Investment securities are
exposed to various risk such as interest rate, market and credit risks. Due to
the level of risk associated with certain investment securities, it is at least
reasonably possible that changes in the values of investment securities will
occur in the near term and that such changes could materially affect
participants' account balances and the amounts reported in the statements of net
assets available for benefits.
-8-
401(k) Savings Account Plan for Employees of the Exton Facility
EIN 25-1792394 Plan 002
Schedule H, Line 4i -- Schedule of Assets (Held at End of Year)
December 31, 2003
CURRENT
INVESTMENT DESCRIPTION UNITS/SHARES VALUE
---------------------- ------------ -------
Registered investment companies:
Dreyfus Bond Market Index Fund* 12,403.010 $128,495
Dreyfus Emerging Leaders Fund* 144.931 5,612
Harris Associates - Oakmark Balanced Fund 1,048.671 23,092
Artisan Funds 35.776 922
Dreyfus Growth & Value International Fund* 188.386 3,114
Prudential Jennison Growth Fund, Class A Shares 101.811 1,330
--------
$162,565
========
Participant loans (5.00% to 10.5%)* $129,757
========
* Party-in-interest
-9-
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
401(K) SAVINGS ACCOUNT PLAN FOR
EMPLOYEES OF THE EXTON FACILITY
By: /s/ Richard J. Harshman
Date: June 22, 2004 ---------------------------------
Richard J. Harshman
Executive Vice President-Finance and
Chief Financial Officer
(Principal Financial Officer and Duly
Authorized Officer)