UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 1997
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Transition Period From to
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Commission File Number 1-12001
ALLEGHENY TELEDYNE INCORPORATED
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(Exact Name of Registrant as Specified in its Charter)
Delaware 25-1792394
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(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
1000 Six PPG Place
Pittsburgh, Pennsylvania 15222-5479
- ---------------------------------------- ----------
(Address of Principal Executive Offices) (Zip Code)
(412) 394-2800
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(Registrant's Telephone Number, Including Area Code)
Indicate by check mark whether Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
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At May 5, 1997, Registrant had outstanding 175,917,125 shares of its Common
Stock.
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ALLEGHENY TELEDYNE INCORPORATED
SEC FORM 10-Q
QUARTER ENDED MARCH 31, 1997
INDEX
Page No.
PART I. - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets 3
Consolidated Statements of Income 4
Consolidated Statements of Cash Flows 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 10
PART II. - OTHER INFORMATION
Item 1. Legal Proceedings 14
Item 6. Exhibits and Reports on Form 8-K 15
Signatures 16
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
ALLEGHENY TELEDYNE INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In millions except share and per share amounts)
March 31, December 31,
1997 1996
--------- -----------
ASSETS (Unaudited)
Cash and cash equivalents $ 84.4 $ 62.5
Accounts receivables 561.9 525.3
Inventories 478.0 518.4
Deferred income taxes 57.2 70.1
Prepaid expenses and other current assets 18.7 23.5
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Total Current Assets 1,200.2 1,199.8
Property, plant and equipment 714.8 731.4
Prepaid pension cost 370.8 352.5
Cost in excess of net assets acquired 176.0 177.1
Other assets 147.2 145.6
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Total Assets $2,609.0 $2,606.4
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 201.6 $ 241.7
Accrued liabilities 333.8 339.6
Current portion of long-term debt 5.7 4.5
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Total Current Liabilities 541.1 585.8
Long-term debt 431.4 443.4
Accrued postretirement benefits 569.8 567.5
Other 133.0 138.2
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Total Liabilities 1,675.3 1,734.9
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Stockholders' Equity:
Preferred value, par value $0.10: authorized- - -
50,000,000-shares; issued-None
Common stock, par value $0.10, authorized-600,000,000
shares; issued and outstanding-176,083,011
shares at March 31, 1997 and 174,389,377
shares at December 31, 1996 17.6 17.4
Additional paid-in capital 275.2 246.6
Retained earnings 632.1 596.7
Other 8.8 10.8
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Total Stockholders' Equity 933.7 871.5
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Total Liabilities and Stockholders' Equity $2,609.0 $2,606.4
======== ========
The accompanying notes are an integral part of these statements.
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ALLEGHENY TELEDYNE INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In millions except per share amounts)
(Unaudited)
Three Months Ended
March 31,
1997 1996
---- ----
Sales $ 957.9 $1,017.9
Costs and expenses:
Cost of sales 731.8 795.6
Selling and administrative expenses 120.2 123.0
Merger and restructuring costs 7.2 -
Interest expense, net 5.7 10.0
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864.9 928.6
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Earnings Before Other Income 93.0 89.3
Other Income 10.8 44.1
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Income before Income Taxes 103.8 133.4
Provision for Income Taxes 40.4 51.8
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Net Income 63.4 81.6
Dividends on Preferred Stock - 0.7
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Net Income Available to Common Stockholders 63.4 $ 80.9
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Net Income Per Common Share $ 0.36 $ 0.46
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Cash Dividends Per Equivalent Common Share $ 0.16 $ 0.12
======= ======
Average common shares outstanding 175,163,476 174,122,080
The accompanying notes are an integral part of these statements.
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ALLEGHENY TELEDYNE INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
Three Months Ended
March 31,
1997 1996
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Operating Activities:
Net income $ 63.4 $ 81.6
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 24.9 29.5
Gains on sales of businesses (14.6) (41.0)
Deferred income taxes 10.8 15.0
Change in operating assets and liabilities:
Accounts payable (40.1) (17.6)
Accounts receivables (39.9) (30.8)
Inventories 39.1 (0.2)
Prepaid pension cost (15.8) (17.1)
Accrued postretirement benefits 2.3 3.3
Accrued liabilities (2.4) 2.5
Other 7.7 14.2
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Cash provided by operating activities 35.4 39.4
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Investing Activities:
Proceeds from the sales of businesses 25.5 84.5
Purchases of property, plant and equipment (20.5) (16.6)
Purchases of businesses (2.5) -
Disposals of property, plant and equipment 2.3 1.6
Other (2.5) (6.2)
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Cash provided by investing activities 2.3 63.3
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Financing Activities:
Payments on long-term debt (3.0) (2.9)
Increase in long-term debt 1.7 0.8
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Net decrease in long-term debt (1.3) (2.1)
Cash dividends (28.0) (14.0)
Exercises of stock options 15.1 2.8
Purchase of treasury stock (0.9) (23.7)
Other (0.7) 0.3
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Cash used in financing activities (15.8) (36.7)
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Increase in cash and cash equivalents 21.9 66.0
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Cash and cash equivalents at beginning of the year 62.5 112.6
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Cash and cash equivalents at end of period $84.4 $178.6
===== ======
The accompanying notes are an integral part of these statements.
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ALLEGHENY TELEDYNE INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1. Accounting Policies -
Basis of Presentation
The interim consolidated financial statements include the accounts of
Allegheny Teledyne Incorporated and its subsidiaries.
These unaudited statements have been prepared in accordance with
generally accepted accounting principles for interim financial information and
with the instructions for Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and note disclosures
required by generally accepted accounting principles for complete financial
statements. In the opinion of the Company, all adjustments (which include
only recurring normal adjustments) considered necessary for a fair
presentation have been included. These consolidated financial statements
should be read in conjunction with the consolidated financial statements and
notes thereto included in the Company's 1996 Annual Report. The results of
operations for these interim periods are not necessarily indicative of the
operating results for a full year.
Note 2. Inventories -
Inventories were as follows (in millions):
March 31, December 31,
1997 1996
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Raw materials and supplies $138.0 $153.8
Work-in-process 483.4 515.1
Finished goods 105.1 104.8
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Total inventories at current cost 726.5 773.7
Less allowances to reduce current cost
values to LIFO basis (228.4) (229.6)
Progress payments (20.1) (25.7)
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Total Inventories $478.0 $518.4
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Note 3. Business Segments -
Information on the Company's business segments for the three months ended
March 31, 1997 and 1996 was as follows (in millions):
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Three Months Ended
March 31,
------------------
1997 1996
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Sales:
Specialty metals $ 543.5 $ 537.4
Aerospace and electronics 236.3 259.4
Industrial 109.4 118.0
Consumer 68.7 66.0
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Total continuing operations 957.9 980.8
Operations sold or held for sale - 37.1
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Total Sales $957.9 $1,017.9
====== ========
Operating Profit:
Specialty metals $ 72.3 $ 67.9
Aerospace and electronics 24.5 24.4
Industrial 13.0 12.3
Consumer 3.4 3.4
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Total operating profit 113.2 108.0
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Merger and restructuring costs (7.2) -
Corporate expenses (8.7) (10.4)
Interest expense, net (5.7) (10.0)
Operations sold or held for sale 8.2 42.7
Excess pension income 4.0 3.1
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Income before income taxes $103.8 $133.4
====== ======
Operations sold or held for sale for 1997 included a pretax gain of $15.3
million on the sale of the Company's investment in Nitinol Development
Corporation and a pretax charge of $5.3 million to write-off a research and
development venture.
In 1996, operations sold or held for sale included a pretax gain of $41.0
million on the sale of the company's defense vehicle business.
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Pension income in excess of amounts allocated to business segments to
offset pension and other postretirement benefit expenses is presented
separately.
Note 4. Net Income Per Share -
The weighted average number of shares of common stock used in the
computation of net income per share for the three months ended March 31, 1997,
was 175,163,476 and 174,122,080 for the same period in 1996.
In February 1997, the Financial Accounting Standards Board issued
Statement No. 128, Earnings per Share, which is required to be adopted on
December 31, 1997. At that time, the Company will be required to change the
method currently used to compute earnings per share and to restate all prior
periods. Under the new requirements for calculating primary earnings per
share, the dilutive effect of stock options will be excluded. The impact of
this change on earnings per share for the quarters ended March 31, 1997 and
1996 is not expected to be material.
Note 5. Commitments and Contingencies -
The Company is subject to federal, state and local environmental laws and
regulations which require that it investigate and remediate the effects of the
release or disposal of materials at sites associated with past and present
operations, including sites at which the Company has been identified as a
potentially responsible party under the federal Superfund laws and comparable
state laws. The Company is currently involved in the investigation and
remediation of a number of sites under these laws.
Environmental liabilities are recorded when the Company's liability is
probable and the costs are reasonably estimable. In many cases, however,
investigations are not yet at a stage where the Company has been able to
determine whether it is liable or, if liability is probable, to reasonably
estimate the loss or range of loss, or certain components thereof. Estimates
of the Company's liability are further subject to uncertainties regarding the
nature and extent of site contamination, the range of remediation alternatives
available, evolving remediation standards, imprecise engineering evaluations
and estimates of appropriate cleanup technology, methodology and cost, the
extent of corrective actions that may be required, and the number and
financial condition of other potentially responsible parties, as well as the
extent of their responsibility for the remediation. Accordingly, as
investigation and remediation of these sites proceed, it is likely that
adjustments in the Company's accruals will be necessary to reflect new
information. The amounts of any such adjustments could have a material
adverse effect on the Company's results of operations in a given period, but
are not reasonably estimable. Based on currently available information,
however, management does not believe future environmental costs in excess of
those accrued with respect to sites with which the Company has been identified
are likely to have a material adverse effect on the Company's financial
condition or liquidity. However, there can be no assurance that additional
future developments, administrative actions or liabilities relating to
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environmental matters will not have a material adverse effect on the Company's
financial condition or results of operations.
At March 31, 1997, the Company's reserves for environmental remediation
obligations totaled approximately $41 million, of which approximately $10
million was included in other current liabilities. The reserve includes
estimated probable future costs of $17 million for federal Superfund and
comparable state-managed sites; $4 million for formerly owned or operated
sites for which the Company has remediation or indemnification obligations; $9
million for owned or controlled sites at which Company operations have been
discontinued; and $11 million for sites utilized by the Company in its ongoing
operations. The Company is evaluating whether it may be able to recover a
portion of future costs for environmental liabilities from its insurance
carriers and from third parties other than participating potentially
responsible parties.
The timing of expenditures depends on a number of factors that vary by
site, including the nature and extent of contamination, the number of
potentially responsible parties, the timing of regulatory approvals, the
complexity of the investigation and remediation, and the standards for
remediation. The Company expects that it will expend present accruals over
many years, and will complete remediation of all sites with which it has been
identified in up to thirty years.
In 1996, Statement of Position 96-1, Environmental Remediation
Liabilities, which was issued by the American Institute of Certified Public
Accountants, establishes accounting standards for recognition of environmental
costs. This statement, which became effective in 1997, did not have a
meterial effect on the consolidated financial statements.
Various claims (whether based on U.S. Government or Company audits and
investigations or otherwise) have been or may be asserted against the Company
related to its U.S. Government contract work, including claims based on
business practices and cost classifications and actions under the False Claims
Act. Although such claims are generally resolved by detailed fact-finding and
negotiation, on those occasions when they are not so resolved, civil or
criminal legal or administrative proceedings may ensue. Depending on the
circumstances and the outcome, such proceedings could result in fines,
penalties, compensatory and treble damages or the cancellation or suspension
of payments under one or more U.S. Government contracts. Under government
regulations, a company, or one or more of its operating divisions or units,
can also be suspended or debarred from government contracts based on the
results of investigations. However, although the outcome of these matters
cannot be predicted with certainty, management does not believe there is any
audit, review or investigation currently pending against the Company of which
management is aware that is likely to result in suspension or debarment of the
Company, or that is otherwise likely to have a material adverse effect on the
Company's financial condition or liquidity, although the resolution in any
reporting period of one or more of these matters could have a material adverse
effect on the Company's results of operations for that period.
The Company learns from time to time that it has been named as a
defendant in civil actions filed under seal pursuant to the False Claims Act.
Generally, since such cases are under seal, the Company does not in all cases
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possess sufficient information to determine whether the Company will sustain a
material loss in connection with such cases, or to reasonably estimate the
amount of any loss attributable to such cases.
A number of other lawsuits, claims and proceedings have been or may be
asserted against the Company relating to the conduct of its business,
including those pertaining to product liability, patent infringement,
commercial, employment, employee benefits, and stockholder matters. While the
outcome of litigation cannot be predicted with certainty, and some of these
lawsuits, claims or proceedings may be determined adversely to the Company,
management does not believe that the disposition of any such pending matters
is likely to have a material adverse effect on the Company's financial
condition or liquidity, although the resolution in any reporting period of one
or more of these matters could have a material adverse effect on the Company's
results of operations for that period.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Allegheny Teledyne Incorporated is a group of technology-based
manufacturing businesses with significant concentration in specialty metals,
complemented by aerospace and electronics, industrial, and consumer products.
This discussion should be read in conjunction with the information in the
Consolidated Financial Statements and Notes to the Consolidated Financial
Statements.
Sales and operating profit for the Company's four business segments are
discussed below.
Specialty Metals
First quarter 1997 operating profit improved 6 percent to $72.3 million
compared to the same period in 1996 while sales rose 1 percent to $543.5
million. Operating profit from businesses other than flat-rolled products
doubled compared with the same period in 1996 with sales increasing 24
percent. These results reflected strong commercial demand and increased
pricing for specialized metals, such as nickel-based superalloys, titanium,
and zirconium and its byproducts. Tight operating cost controls remained in
effect throughout the specialty metals segment.
Operating profits from Allegheny Ludlum and Rodney Metals declined 20
percent from the strong 1996 first quarter. Sales dropped 8 percent,
reflecting continued weakness in U.S. commodity stainless steel prices. The
price increase previously announced by Allegheny Ludlum on stainless steel
sheet, strip, and plate which was to become effective May 5, 1997 has been
delayed.
Tons of flat-rolled specialty metals shipped in the first quarter 1997
were 147,000 compared to 140,000 for the same period in 1996. The average
price per ton shipped in the first quarter 1997 was $2,420 compared to $2,750
in the 1996 first quarter. The product mix at Allegheny Ludlum and Rodney
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Metals has consistently realized a higher average price per ton than the
industry.
Aerospace and Electronics Segment
Operating profit was up slightly to $24.5 million compared to the same
period in 1996 while sales declined 9 percent to $236.3 million. Operating
profit increased at Teledyne Ryan Aeronautical with completion of a Department
of Defense contract to supply medium range unmanned aerial vehicles. Also,
Teledyne Electronic Technologies showed improvements in its electronic devices
and electromechanical relays businesses. These gains were largely offset by
declines in operating profit at Teledyne Brown Engineering and Teledyne
Continental Motors. The drop in segment sales was primarily due to the
scheduled wind-down of the current phases of the Global Hawk unmanned aerial
vehicle and the United States Apache helicopter programs.
Industrial Segment
First quarter 1997 operating profit improved 6 percent to $13.0 million
compared to the first quarter 1996. Sales declined 7 percent to $109.4
million. Margin improvements for cutting tools and tungsten products along
with mining and construction equipment overcame the effect of reductions in
shipments of metal stamping dies and plastic compression molds to the
automotive industry.
Consumer Segment
First quarter 1997 operating profit was virtually unchanged at $3.4
million compared to the same period in 1996 while sales increased 4 percent to
$68.7 million. The sales increase reflected results of the first quarter 1996
acquisition of a swimming pool products manufacturer. However, operating
profit did not show a comparable increase primarily due to one-time costs
associated with the consolidation of manufacturing facilities.
Unusual Items
After-tax gains from unusual items were $1.3 million, or $0.01 per share
in the 1997 first quarter. These unusual items included the previously
announced gain of $9.2 million on the sale of the Company's investment in
Nitinol Development Corporation. This gain was largely offset by $7.9 million
from merger and restructuring costs and the write-off of a research and
development venture.
First quarter 1996 net income included an after-tax gain of $24.8 million
or $0.14 per share, on the sale of the Company's defense vehicle business.
Earnings per Share
In February 1997, the Financial Accounting Standards Board issued
Statement No. 128, Earnings per Share, which is required to be adopted on
December 31, 1997. At that time, the Company will be required to change the
method currently used to compute earnings per share and to restate all prior
periods. Under the new requirements for calculating primary earnings per
share, the dilutive effect of stock options will be excluded. The impact of
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this change on earnings per share for the quarters ended March 31, 1997 and
1996 is not expected to be material.
FINANCIAL CONDITION AND LIQUIDITY
Working capital increased to $659.1 million at March 31, 1997, compared
to $614.0 million for the same period of 1996. The current ratio increased to
2.2 from 2.0 in the same periods. The increase in working capital was
primarily due to higher balances of cash and accounts receivables.
In the first three months of 1997, cash generated from operations of
$35.4 million, proceeds from the sales of businesses of $25.5 million and
proceeds from the exercise of stock options of $15.1 million were used to pay
dividends of $28.0 million, and invest $23.0 million in capital equipment and
business expansion. These transactions plus cash on hand at the beginning of
the year resulted in a cash position of $84.4 million at March 31, 1997.
Capital expenditures for 1997 are expected to approximate $130 million.
In mid-March 1997, the Company's board of directors authorized a 12
million share repurchase program. Share repurchases on the open market began
shortly thereafter.
The Company has begun the process of divesting eight businesses which did
not meet long-term criteria for critical mass, strategic fit and opportunities
for growth. Taken together, these businesses account for about $200 million
in annual revenue and approximately $15 million in annual operating profit.
The Company believes that internally generated funds, current cash on
hand and borrowing from existing credit lines will be adequate to meet
foreseeable needs.
OTHER MATTERS
Environmental
The Company is subject to federal, state and local environmental laws and
regulations which require that it investigate and remediate the effects of the
release or disposal of materials at sites associated with past and present
operations, including sites at which the Company has been identified as a
potentially responsible party under the Comprehensive Environmental Response,
Compensation and Liability Act, commonly known as Superfund, and comparable
state laws. The Company is currently involved in the investigation and
remediation of a number of sites under these laws. The Company's reserves for
environmental investigations and remediation totaled approximately $41 million
at March 31, 1997. Based on currently available information, management does
not believe future environmental costs at sites with which the Company has
been identified in excess of those accrued are likely to have a material
adverse effect on the Company's financial condition or liquidity, although the
resolution in any reporting period of one or more of these matters could have
a material adverse effect on the Company's results of operations for that
period.
With respect to proceedings brought under the federal Superfund laws, or
similar state statutes, the Company has been identified as a potentially
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responsible party at approximately 60 of such sites, excluding those at which
it believes it has no future liability. The Company's involvement is very
limited or de minimis at approximately 50 of these sites, and the potential
loss exposure with respect to any individual site is not considered to be
material.
In 1996, Statement of Position 96-1, Environmental Remediation
Liabilities, which was issued by the American Institute of Certified Public
Accountants, establishes accounting standards for recognition of environmental
costs. This statement, which became effective in 1997, did not have a
meterial effect on the consolidated financial statements.
For additional discussion of environmental matters, see Note 5 of the
Notes to Consolidated Financial Statements.
Government Contracts
A number of Company's subsidiaries perform work on contracts with the
U.S. Government. Many of these contracts include price redetermination
clauses, and most are terminable at the convenience of the government.
Certain of these contracts are fixed-price or fixed-price inventive
development contracts which involve a risk that costs may exceed those
expected when the contracts were negotiated. Absent modification of these
contracts, any costs incurred in excess of the fixed or ceiling prices must be
borne by the Company. In addition, virtually all defense programs are subject
to curtailment or cancellation due to the year-to-year nature of the
government appropriations and allocations process. A material reduction in
U.S. Government appropriations may have an adverse effect on the Company's
business, depending upon the specific programs affected by any such reduction.
Since certain contracts extend over a long period of time, all revisions in
cost and funding estimates during the progress of work have the effect of
adjusting the current period earnings on a cumulative catch-up basis. When
the current contract estimate indicates a loss, provision is made for the
total anticipated loss. The Company obtains many U.S. Government contracts
through the process of competitive bidding. There can be no assurance that
the Company will continue to be successful in having its bids accepted.
Various claims (whether based on U.S. Government or Company audits and
investigations or otherwise) have been or may be asserted against the Company
related to its U.S. Government contract work, including claims based on
business practices and cost classifications and actions under the False Claims
Act. The False Claims Act permits a person to assert the rights of the U.S.
Government by initiating a suit under seal against a contractor if such person
purports to have information that the contractor falsely submitted a claim to
the U.S. Government for payment. If it chooses, the U.S. Government may
intervene and assume control of the case.
Although government contracting claims may be resolved by detailed fact-
finding and negotiation, on those occasions when they are not so resolved,
civil or criminal legal or administrative proceedings may ensue. Depending on
the circumstances and the outcome, such proceedings could result in fines,
penalties, compensatory and treble damages or the cancellation or suspension
of payments under one or more U.S. Government contracts. Under government
regulations, a company, or one or more of its operating divisions or units,
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can also be suspended or debarred from government contracts based on the
results of investigations. Given the extent of the Company's business with
the U.S. Government, a suspension or debarment of the Company could have a
material adverse effect on the future operating results and consolidated
financial condition of the Company. However, although the outcome of these
matters cannot be predicted with certainty, management does not believe there
is any audit, review or investigation currently pending against the Company of
which management is aware that is likely to result in suspension or debarment
of the Company, or that is otherwise likely to have a material adverse effect
on the Company's financial condition or liquidity, although the resolution in
any reporting period of one or more of these matters could have a material
adverse effect on the Company's results of operations for that period.
For additional discussion of government contract matters see Note 5 of
the Notes to Consolidated Financial Statements.
FORWARD-LOOKING STATEMENTS
Certain forward-looking statements are contained in "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
Note 5 to the consolidated financial statements of the Company, including
statements concerning the expected adequacy of available funds to meet
foreseeable needs, proposed divestitures, the outcome of any government
inquiries, litigation or other future proceedings related to government
contract or other matters, and environmental costs. These statements are
based on current expectations that involve a number of risks and
uncertainties, including those described above under the captions "Other
Matters - Environmental" and "Other Matters - Government Contracts." In
addition, realization of the anticipated benefits of the combination of
Allegheny Ludlum and Teledyne could take longer than expected and
implementation difficulties and market factors could alter the anticipated
benefits. Actual results may differ materially from the results anticipated
in the forward-looking statements. Additional risk factors are described from
time to time in the Company's filings with the Securities and Exchange
Commission, including its Report on Form 10-K for the year ended December 31,
1996.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The Company becomes involved from time to time in various lawsuits,
claims and proceedings relating to the conduct of its business, including
those pertaining to environmental, government contracting, product liability,
patent infringement, commercial, employment, employee benefits, and
stockholder matters.
As previously reported in the Company Form 10-K for the fiscal year ended
December 31, 1996, in June 1995 the U. S. Department of Justice commenced an
action against Allegheny Ludlum in the United States District Court for the
Western District of Pennsylvania, alleging multiple violations of the federal
Clean Water Act. The complaint seeks injunctive relief and assessment of
penalties of up to $25,000 per day of violation. In April 1997 the Department
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of Justice filed an amended complaint which essentially extended the
government's claims to include similar alleged violations through April 1997.
While the outcome of litigation, including the matter specified above,
cannot be predicted with certainty, and some of these lawsuits, claims or
proceedings may be determined adversely to the Company, management does not
believe that the disposition of any such pending matter is likely to have a
material adverse effect on the Company's financial condition or liquidity,
although the resolution in any reporting period of one or more of these
matters could have a material adverse effect on the Company's results of
operations for that period.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits -
27 Financial data schedule
(b) Registrant filed the following reports on Form 8-K relating to
Item 5: February 12, 1997 relating to the resignation of
William P. Rutledge and election of Richard P. Simmons as President
and Chief Executive Officer; February 20, 1997 relating to
statements of sales and operating profit by business segment; and
March 7, 1997 relating to the resignation of Mr. Rutledge from the
Company's Board of Directors and the resignation of Douglas J. Grant
as Vice President-Finance and Deputy Chief Financial Officer.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ALLEGHENY TELEDYNE INCORPORATED
(Registrant)
Date: May 13, 1997 By /s/ James L. Murdy
--------------------------------
James L. Murdy
Executive Vice President,
Finance and Administration and
Chief Financial officer
(Duly Authorized Officer)
Date: May 13, 1997 By /s/ Dale G. Reid
--------------------------------
Dale G. Reid
Vice President-Controller
(Principal Accounting Officer)
16
<PAGE>
EXHIBIT INDEX
Exhibit Number Sequential Page Number
- -------------- ----------------------
27 Financial Data Schedule 18
17
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from the
registrant's consolidated statement of income for the fiscal three months ended
March 31, 1997 and consolidated balance sheet as of March 31, 1997 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 84
<SECURITIES> 0
<RECEIVABLES> 574
<ALLOWANCES> (12)
<INVENTORY> 478
<CURRENT-ASSETS> 1200
<PP&E> 1571
<DEPRECIATION> 856
<TOTAL-ASSETS> 2609
<CURRENT-LIABILITIES> 541
<BONDS> 431
0
0
<COMMON> 18
<OTHER-SE> 916
<TOTAL-LIABILITY-AND-EQUITY> 2609
<SALES> 958
<TOTAL-REVENUES> 958
<CGS> 732
<TOTAL-COSTS> 732
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6
<INCOME-PRETAX> 104
<INCOME-TAX> 41
<INCOME-CONTINUING> 63
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 63
<EPS-PRIMARY> 0.36
<EPS-DILUTED> 0.36
</TABLE>
