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
TDY INDUSTRIES, INC. PROFIT SHARING PLAN
FOR CERTAIN EMPLOYEES OF METALWORKING PRODUCTS
----------------------------------------------
(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
TDY Industries, Inc. Profit Sharing Plan for
Certain Employees of Metalworking Products
Year ended December 31, 2003
(Unaudited)
TDY Industries, Inc. Profit Sharing Plan for
Certain Employees of Metalworking Products
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
TDY Industries, Inc. Profit Sharing Plan for
Certain Employees of Metalworking Products
Statements of Net Assets Available for Benefits
(Unaudited)
DECEMBER 31
2003 2002
---------- ----------
Investments:
Interest in Allegheny Technologies Incorporated Savings
Plan Trust $1,478,444 $1,197,399
Interest in registered investment companies 1,154,730 584,977
Interest in common collective trusts 106 320,045
Participant loans 275,518 248,161
Corporate common stocks 272,795 2,611
Receivables 28 --
---------- ----------
Net assets available for benefits $3,181,621 $2,353,193
========== ==========
See accompanying notes.
-1-
TDY Industries, Inc. Profit Sharing Plan for
Certain Employees of Metalworking Products
Statement of Changes in Net Assets Available for Benefits
(Unaudited)
Year ended December 31, 2003
Contributions:
Employer $ 288,245
Employee 346,614
-----------
634,859
Investment income:
Net gain from interest in registered investment companies 250,555
Net gain from interest in Allegheny Technologies Incorporated Savings Plan Trust 187,519
Net gain from interest in common collective trusts 32,222
Interest income 16,849
Net unrealized/realized gain on corporate common stocks 87,883
Dividend income 3,519
-----------
Total investment gain 578,547
-----------
1,213,406
Distributions to participants (384,612)
Transfers (366)
-----------
(384,978)
Net increase in net assets available for benefits 828,428
Net assets available for benefits at beginning of year 2,353,193
-----------
Net assets available for benefits at end of year $ 3,181,621
===========
See accompanying notes.
-2-
TDY Industries, Inc. Profit Sharing Plan for
Certain Employees of Metalworking Products
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 TDY Industries, Inc. Profit Sharing Plan for Certain Employees of
Metalworking Products (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 provide retirement benefits to eligible employees
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. The Plan allows employees to contribute a portion of
eligible wages each pay period through payroll deductions subject to Internal
Revenue Code limitations. The respective employing companies, which are
affiliates of Allegheny Technologies Incorporated (ATI, the Plan Sponsor), will
match 100% up to the first 3% of employee contributions and 50% of the next 2%
of employee contributions. In addition, profit sharing contributions can be made
to participant accounts at the employing company's discretion. These
contributions follow an age-weighted formula, based on the following schedule:
-3-
TDY Industries, Inc. Profit Sharing Plan for
Certain Employees of Metalworking Products
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE PLAN (CONTINUED)
CURRENT AGE COMPANY CONTRIBUTION
Less than age 35 2.0%
35 - 39 2.5%
40 - 44 3.0%
45 - 49 3.5%
50 - 54 4.0%
55 - 59 4.5%
Age 60 or above 5.0%
The Plan allows participants to direct their contributions, and contributions
made on their behalf, 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" 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 $1,000
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 12 to 60 months, and primary residence loans are repaid over 12
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.
-4-
TDY Industries, Inc. Profit Sharing Plan for
Certain Employees of Metalworking Products
Notes to Financial Statements (continued)
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 $770,160
Dreyfus Emerging Leaders Fund 713,104
Alliance Capital Fund 411,043
Harris Assoc - Oakmark Balanced Fund 180,873
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 Alliance Equity Master Trust, the Fixed Income
Master Trust and the Allegheny Technologies Disciplined Stock Fund Master Trust
were as follows:
2003
-----------
(Unaudited)
Alliance Equity Master Trust 1.15%
Fixed Income Master Trust 0.40
Allegheny Technologies Disciplined Stock Fund Master Trust 0.38
Investment income and expenses are allocated to the Plan based upon its pro rata
share in the net assets of the Master Trust.
-5-
TDY Industries, Inc. Profit Sharing Plan for
Certain Employees of Metalworking Products
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
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.
-6-
TDY Industries, Inc. Profit Sharing Plan for
Certain Employees of Metalworking Products
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
============
-7-
TDY Industries, Inc. Profit Sharing Plan for
Certain Employees of Metalworking Products
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 July 25, 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.
-8-
TDY Industries, Inc. Profit Sharing Plan for
Certain Employees of Metalworking Products
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 employing companies have
the right under the Plan to discontinue their contributions at any time and to
terminate their respective participation in 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.
-9-
TDY Industries, Inc. Profit Sharing Plan for
Certain Employees of Metalworking Products
EIN 25-1792394 Plan 040
Schedule H, Line 4i -- Schedule of Assets (Held at End of Year)
December 31, 2003
INVESTMENT DESCRIPTION UNITS/SHARES CURRENT VALUE
---------------------- ------------ -------------
Registered investment companies:
Dreyfus Bond Market Index Fund* 780.642 $ 8,087
Dreyfus Emerging Leaders Fund* 18,416.929 713,104
Artisan Funds - Midcap Fund 1,733.600 44,692
Dreyfus Premiere International Fund* 6,510.700 107,622
Harris Associates - Oakmark Balanced Fund 8,214.050 180,873
Hartford HLS - Midcap HLS 252.622 6,222
Lord Abbett Mid Cap Value Fund 377.971 7,117
Morgan Stanley - Small Co Growth Fund 4,115.335 44,487
PIMCO Funds - Total Ret Funds 117.738 1,261
Dreyfus Appreciation Fund* 507.201 18,838
Prudential Jennison Growth Fund, Class A Shares 1,717.232 22,427
----------
$1,154,730
==========
Common collective investment funds:
Dreyfus Short Term Investment Fund* 105.800 $ 106
==========
Participant loans (5.00% to 10.5%)* $ 275,518
==========
Corporate common stocks:
Allegheny Technologies Incorporated common stock* $ 272,795
==========
* Party-in-interest
-10-
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
TDY INDUSTRIES, INC. PROFIT SHARING PLAN
FOR CERTAIN EMPLOYEES OF
METALWORKING PRODUCTS
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)