<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
(Amendment No. 1)
(Mark One)
[ X ] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the fiscal year ended December 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 _______
Commission file number: 1-12001
Allegheny Teledyne Incorporated
(Exact name of registrant as specified in its charter)
Delaware 25-1792394
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
1000 Six PPG Place, Pittsburgh, Pennsylvania 15222-5479
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (412) 394-8400
Securities registered pursuant to Section 12(b) of the Act:
Title of each class: Name of each exchange on which registered:
- -------------------- ------------------------------------------
Common Stock, $0.10 par value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None.
Indicate by check mark whether the 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, and (2) has been subject to such filing
requirements for the past 90 days. Yes _X_ No ___
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. _X_
At March 20, 1998, the Registrant had outstanding 174,934,668 shares of
its Common Stock. The aggregate market value of the Registrant's voting stock
held by non-affiliates at this date was approximately $4.2 billion, based on the
closing price of $28.25 as reported on the New York Stock Exchange. Shares of
Common Stock known by the Registrant to be owned beneficially by directors of
the Registrant and officers of the Registrant subject to the reporting
requirements of Section 16 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), are not included in the computation. The Registrant,
however, has made no determination that such persons are "affiliates" within the
meaning of Rule 12b-2 under the Exchange Act.
1
<PAGE> 2
DOCUMENTS INCORPORATED BY REFERENCE
Selected portions of the 1997 Annual Report to Shareholders ("1997
Annual Report") - Part I, Part II and Part IV of this Report.
Selected portions of the 1998 Proxy Statement - Part III of this
Report.
2
<PAGE> 3
EXPLANATORY NOTE: Pursuant to this Form 10-K/A (Amendment No. 1)
("Amendment No. 1"), Allegheny Teledyne Incorporated (the "Company") amends and
restates in its entirety "Item 8. Financial Statements and Supplementary Data"
of Part II and "Item 14. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K" of Part IV of its Annual Report on Form 10-K for the year ended
December 31, 1997 ("1997 Form 10-K"), in order to file in accordance with Rule
15d-21 under the Exchange Act, financial statements required by Form 11-K for
the following plans: (1) Allegheny Ludlum Retirement Savings Plan; (2) 401(k)
Savings Account Plan for Employees of the Washington Plant; (3) Savings and
Security Plan of the Tubular Products/Plate Products Divisions of Allegheny
Ludlum Corporation; (4) Savings and Security Plan of the Lockport and Waterbury
Facilities of Allegheny Ludlum Corporation; (5) Allegheny Ludlum Corporation
Personal Retirement and 401(k) Savings Account Plan; (6) Teledyne, Inc. 401(k)
Plan; and (7) Oregon Metallurgical Corporation Savings Plan. As of January 1,
1998, the Savings and Security Plan of the Tubular Products/Plate Products
Divisions of Allegheny Ludlum Corporation was terminated as the remaining plan
assets were merged into the Allegheny Ludlum Retirement Savings Plan.
"Item 8. Financial Statements and Supplementary Data" of Part II of the
1997 Form 10-K is hereby amended and restated in its entirety to read as
follows:
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Consolidated Financial Statements and Notes to Consolidated
Financial Statements listed in Item 14(a)(1)(A) are incorporated by reference
from pages 30 to 53 of the 1997 Annual Report.
The following financial statements are filed by the Company with
respect to the following plans in accordance with Rule 15d-21 under the Exchange
Act:
Plan Page No.
---- --------
Allegheny Ludlum Retirement Savings Plan................................. 4
401(k) Savings Account Plan for Employees of the Washington Plant........ 24
Savings and Security Plan of the Tubular Products/Plate
Products Divisions of Allegheny Ludlum Corporation....................... 43
Savings and Security Plan of the Lockport and Waterbury
Facilities of Allegheny Ludlum Corporation............................... 65
Allegheny Ludlum Corporation Personal Retirement and
401(k) Savings Account Plan.............................................. 85
Teledyne, Inc. 401(k) Plan............................................... 105
Oregon Metallurgical Corporation Savings Plan............................ 117
3
<PAGE> 4
Audited Financial Statements
ALLEGHENY LUDLUM
RETIREMENT SAVINGS PLAN
Years ended December 31, 1997 and 1996
with Report of Independent Auditors
4
<PAGE> 5
Allegheny Ludlum Retirement Savings Plan
Audited Financial Statements
Years ended December 31, 1997 and 1996
CONTENTS
<TABLE>
<S> <C>
Report of Independent Auditors ................................................... 6
Audited Financial Statements
Statements of Net Assets Available for Benefits with Fund Information............. 7
Statements of Changes in Net Assets Available for Benefits with Fund Information.. 10
Notes to Financial Statements .................................................... 11
Schedules
Item 27a--Schedule of Assets Held for Investment Purposes ........................ 22
Item 27d--Schedule of Reportable Transactions..................................... 23
</TABLE>
5
<PAGE> 6
REPORT OF INDEPENDENT AUDITORS
Personnel and Compensation Committee
Allegheny Ludlum Corporation
We have audited the accompanying statements of net assets available for benefits
of the Allegheny Ludlum Retirement Savings Plan (the Plan) as of December 31,
1997 and 1996, 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 generally accepted auditing
standards. 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 Allegheny
Ludlum Retirement Savings Plan at December 31, 1997 and 1996, and the changes in
its net assets available for benefits for the years then ended, in conformity
with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedules of assets
held for investment purposes as of December 31, 1997 and reportable transactions
for the year then ended, are presented for purposes of complying with the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974, and are not a required part
of the financial statements. The Fund Information in the statement of net assets
available for benefits and the statement of changes in net assets available for
benefits is presented for purposes of additional analysis rather than to present
the net assets available for benefits and changes in net assets available for
benefits of each fund. The supplemental schedules and Fund Information have been
subjected to the auditing procedures applied in our audit of the financial
statements and, in our opinion, are fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ ERNST & YOUNG LLP
June 5, 1998
6
<PAGE> 7
Allegheny Ludlum Retirement Savings Plan
Statement of Net Assets Available for Benefits with Fund Information
December 31, 1997
<TABLE>
<CAPTION>
LIFESTYLE LIFESTYLE LIFESTYLE ALLIANCE FIXED DREYFUS
GROWTH AND GROWTH INCOME EQUITY INCOME DISCIPLINED
INCOME FUND FUND FUND FUND FUND STOCK FUND
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments:
Interest in Allegheny
Ludlum Corporation
Master Trusts $18,995,349 $4,156,514 $1,492,055 $49,094,068 $99,746,033 $ --
Interest in registered
investment company -- -- -- -- -- 27,858,603
Participant notes
receivable -- -- -- -- -- --
Other -- -- -- -- -- --
----------------------------------------------------------------------------------------------
Net assets available
for benefits $18,995,349 $4,156,514 $1,492,055 $49,094,068 $99,746,033 $27,858,603
==============================================================================================
</TABLE>
<TABLE>
<CAPTION>
DREYFUS
SMALL DREYFUS
COMPANY INTERNATIONAL COMPANY SELF-
VALUE VALUE STOCK DIRECTED PARTICIPANT
FUND FUND FUND FUND LOANS TOTAL
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments:
Interest in Allegheny
Ludlum Corporation
Master Trusts $ -- $ -- $27,656,220 $ -- $ -- $201,140,239
Interest in registered
investment company 15,446,354 2,964,614 -- 340,241 -- 46,609,812
Participant notes
receivable -- -- -- -- 4,367,721 4,367,721
Other -- -- -- (30,000) -- (30,000)
-------------------------------------------------------------------------------------------
Net assets available
for benefits $15,446,354 $2,964,614 $27,656,220 $310,241 $4,367,721 $252,087,772
===========================================================================================
</TABLE>
See accompanying notes.
7
<PAGE> 8
Allegheny Ludlum Retirement Savings Plan
Statement of Net Assets Available for Benefits with Fund Information
December 31, 1996
<TABLE>
<CAPTION>
LIFESTYLE LIFESTYLE LIFESTYLE ALLIANCE FIXED DREYFUS
GROWTH AND GROWTH INCOME EQUITY INCOME DISCIPLINED
INCOME FUND FUND FUND FUND FUND STOCK FUND
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments:
Interest in Allegheny
Ludlum Corporation
Master Trusts $14,879,939 $1,611,821 $439,188 $44,539,226 $104,124,226 $ --
Interest in registered
investment company -- -- -- -- -- 14,395,124
Participant notes
receivable -- -- -- -- -- --
-------------------------------------------------------------------------------------------
Net assets available
for benefits $14,879,939 $1,611,821 $439,188 $44,539,226 $104,124,226 $14,395,124
===========================================================================================
</TABLE>
<TABLE>
<CAPTION>
DREYFUS
SMALL DREYFUS
COMPANY INTERNATIONAL COMPANY
VALUE VALUE STOCK PARTICIPANT
FUND FUND FUND LOANS TOTAL
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments:
Interest in Allegheny
Ludlum Corporation
Master Trusts $ -- $ -- $27,817,471 $ -- $193,411,871
Interest in registered
investment company 3,896,312 797,458 -- -- 19,088,894
Participant notes
receivable -- -- -- 3,920,878 3,920,878
----------------------------------------------------------------------------
Net assets available
for benefits $3,896,312 $797,458 $27,817,471 $3,920,878 $216,421,643
============================================================================
</TABLE>
See accompanying notes.
8
<PAGE> 9
Allegheny Ludlum Retirement Savings Plan
Statement of Changes in Net Assets Available for Benefits with Fund Information
Year ended December 31, 1997
<TABLE>
<CAPTION>
LIFESTYLE LIFESTYLE LIFESTYLE ALLIANCE FIXED DREYFUS
GROWTH AND GROWTH INCOME EQUITY INCOME DISCIPLINED
INCOME FUND FUND FUND FUND FUND STOCK FUND
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS
Cash contributions:
Employer $ 702,727 $ 249,631 $ 62,837 $ 2,004,482 $ 3,677,232 $ 1,145,475
Employee 565,903 183,655 47,169 1,510,645 2,153,794 964,562
Investment income:
Allocation of net
earnings from
Allegheny Ludlum
Corporation
Master Trusts 3,216,461 728,854 122,079 11,149,275 6,587,944 --
Earnings from
registered
investment
companies -- -- -- -- -- 5,946,391
Interest income -- -- -- -- 1,396 --
Interfund transfers 243,216 1,525,897 907,445 (7,998,026) (7,564,050) 6,009,014
------------------------------------------------------------------------------------------------
4,728,307 2,688,037 1,139,530 6,666,376 4,856,316 14,065,442
Deductions:
Distributions to
participants 612,897 143,344 86,663 2,111,534 9,234,509 601,963
Administrative expenses -- -- -- -- -- --
------------------------------------------------------------------------------------------------
Net additions (deductions) 4,115,410 2,544,693 1,052,867 4,554,842 (4,378,193) 13,463,479
Net assets available
for benefits at
beginning of year 14,879,939 1,611,821 439,188 44,539,226 104,124,226 14,395,124
------------------------------------------------------------------------------------------------
Net assets available for
benefits at end of year $18,995,349 $4,156,514 $1,492,055 $49,094,068 $ 99,746,033 $27,858,603
================================================================================================
</TABLE>
<TABLE>
<CAPTION>
DREYFUS
SMALL DREYFUS
COMPANY INTERNATIONAL COMPANY SELF-
VALUE VALUE STOCK DIRECTED PARTICIPANT
FUND FUND FUND FUND LOANS TOTAL
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS
Cash contributions:
Employer $ 625,035 $ 160,574 $ 398,923 $ -- $ -- $ 9,026,916
Employee 566,507 134,766 311,109 -- -- 6,438,110
Investment income:
Allocation of net
earnings from
Allegheny Ludlum
Corporation
Master Trusts -- -- 3,977,292 -- -- 25,781,905
Earnings from
registered
investment
companies 2,345,108 89,494 -- 28,693 -- 8,409,686
Interest income -- -- -- -- 377,707 379,103
Interfund transfers 8,238,142 1,802,110 (3,514,614) 281,730 69,136 --
------------------------------------------------------------------------------------------
11,774,792 2,186,944 1,172,710 310,423 446,843 50,035,720
Deductions:
Distributions to
participants 224,750 19,788 1,333,961 -- -- 14,369,409
Administrative expenses -- -- -- 182 -- 182
------------------------------------------------------------------------------------------
Net additions (deductions) 11,550,042 2,167,156 (161,251) 310,241 446,843 35,666,129
Net assets available
for benefits at
beginning of year 3,896,312 797,458 27,817,471 -- 3,920,878 216,421,643
------------------------------------------------------------------------------------------
Net assets available for
benefits at end of year $15,446,354 $2,964,614 $27,656,220 $310,241 $4,367,721 $252,087,772
==========================================================================================
</TABLE>
See accompanying notes.
9
<PAGE> 10
Allegheny Ludlum Retirement Savings Plan
Statement of Changes in Net Assets Available for Benefits with Fund Information
Year ended December 31, 1996
<TABLE>
<CAPTION>
LIFESTYLE LIFESTYLE LIFESTYLE ALLIANCE FIXED DREYFUS
GROWTH AND GROWTH INCOME EQUITY INCOME DISCIPLINED
INCOME FUND FUND FUND FUND FUND STOCK FUND
==================================================================================================
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS
Cash contributions:
Employer $ 386,847 $ 57,089 $ 18,517 $ 1,848,054 $ 4,489,026 $ 416,100
Employee 270,372 39,757 15,274 1,739,640 2,657,007 311,427
Investment income:
Allocation of net
earnings from
Allegheny Ludlum
Corporation Master
Trusts 1,125,886 86,964 19,237 5,992,506 6,502,404 --
Net gain from
collective -- -- -- -- -- --
investment funds
Earnings from
registered
investment 319 1,263 579 -- -- 2,028,289
companies
Interest -- -- -- 437 4,216 --
Dividend income -- -- -- -- -- --
Net appreciation in
fair value of -- -- -- -- -- --
assets
Transfer (to) from other
ALC savings plans -- (9,380) -- 8,421 (15,060) 7,829
Interfund transfers 13,475,766 1,436,440 386,380 1,572,011 (8,122,082) 11,765,432
--------------------------------------------------------------------------------------------------
15,259,190 1,612,133 439,987 11,161,069 5,515,511 14,529,077
Deductions:
Distributions to
participants 379,251 312 799 1,426,689 10,537,442 133,953
Fees -- -- -- 741 3,426 --
--------------------------------------------------------------------------------------------------
379,251 312 799 1,427,430 10,540,868 133,953
--------------------------------------------------------------------------------------------------
Net additions 14,879,939 1,611,821 439,188 9,733,639 (5,025,357) 14,395,124
(deductions)
Net assets available
for benefits at
beginning
of year -- -- -- 34,805,587 109,149,583 --
--------------------------------------------------------------------------------------------------
Net assets available
for benefits at
end of year $14,879,939 $1,611,821 $439,188 $44,539,226 $104,124,226 $14,395,124
==================================================================================================
</TABLE>
<TABLE>
<CAPTION>
DREYFUS
SMALL DREYFUS
COMPANY INTERNATIONAL COMPANY STOCK
VALUE VALUE STOCK INDEX DIVERSIFIED PARTICIPANT
FUND FUND FUND FUND FUND LOANS TOTAL
======================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS
Cash contributions:
Employer $ 79,076 $ 28,971 $ 1,449,105 $ 150,926 $ 191,521 $ -- $ 9,115,232
Employee 63,784 22,649 381,914 193,218 287,014 -- 5,982,056
Investment income:
Allocation of net
earnings from
Allegheny Ludlum
Corporation Master
Trusts -- -- 4,553,778 56 520,330 -- 18,801,161
Net gain from
collective -- -- -- 308,832 -- -- 308,832
investment funds
Earnings from
registered
investment 255,400 30,519 99 38,837 -- -- 2,355,305
companies
Interest -- -- 1,438 1,457 104 304,416 312,068
Dividend income -- -- 184,751 -- -- -- 184,751
Net appreciation in
fair value of -- -- 2,102,392 -- -- -- 2,102,392
assets
Transfer (to) from other
ALC savings plans 10,443 -- (23,657) -- -- -- (21,404)
Interfund transfers 3,528,950 715,915 (5,732,031) (6,080,798) (12,852,269) (93,714) --
------------------------------------------------------------------------------------------------------
3,937,653 798,054 2,917,789 (5,387,472) (11,853,300) 210,702 39,140,393
Deductions:
Distributions to
participants 41,341 596 1,139,278 75,302 277,037 -- 14,012,000
Fees -- -- 2,646 4,716 482 -- 12,011
------------------------------------------------------------------------------------------------------
41,341 596 1,141,924 80,018 277,519 -- 14,024,011
------------------------------------------------------------------------------------------------------
Net additions 3,896,312 797,458 1,775,865 (5,467,490) (12,130,819) 210,702 25,116,382
(deductions)
Net assets available
for benefits at
beginning
of year -- -- 26,041,606 5,467,490 12,130,819 3,710,176 191,305,261
------------------------------------------------------------------------------------------------------
Net assets available
for benefits at
end of year $3,896,312 $ 797,458 $27,817,471 $ -- $ -- $3,920,878 $216,421,643
======================================================================================================
</TABLE>
See accompanying notes.
10
<PAGE> 11
Allegheny Ludlum Retirement Savings Plan
Notes to Financial Statements
December 31, 1997
1. SIGNIFICANT ACCOUNTING POLICIES
Investments are stated at fair value determined as follows:
Allegheny Teledyne Incorporated (Allegheny Teledyne) common stock in the
Company Stock Fund is stated at the quoted market price on the New York
Stock Exchange.
The Fixed Income Fund is stated at cost plus net earnings.
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 generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
Certain amounts in the 1996 financial statements have been reclassified to
conform to the 1997 presentation.
2. DESCRIPTION OF THE PLAN
The Allegheny Ludlum Retirement Savings Plan (the Plan) is a defined
contribution plan within the meaning of the Employee Retirement Income Security
Act of 1974 (ERISA). Allegheny Ludlum Corporation (ALC) is a wholly owned
subsidiary of Allegheny Teledyne.
Depending on participants' years of service, participants can defer between 1%
and 14%, subject to Internal Revenue Service limitations, of their eligible
wages, including profit sharing awards, and contribute them to the Plan. ALC
contributes 6.5% of participants monthly pensionable earnings, as described in
the Plan, and in addition contributes $43.34 per month per participant.
11
<PAGE> 12
2. DESCRIPTION OF THE PLAN (CONTINUED)
During 1996, the Plan was amended to allow for additional investment options and
to discontinue the Stock Index Fund and Diversified investment options. The
investment options provided by the Plan for the years ended December 31, 1997
and 1996 are as follows:
Lifestyle Growth and Income Fund--invests in equity and fixed income
securities and may invest up to 15% of its assets in international
securities.
Lifestyle Growth Fund--invests in equity and fixed income securities and
may invest up to 25% of its assets in international securities.
Lifestyle Income Fund--consists of common stock, fixed income securities
and short-term money market instruments.
Alliance Equity Fund--consists of common stocks.
Fixed Income Fund--consists of amounts invested in insurance companies or
other financial institutions under an agreement with repayment in full,
plus interest at a fixed rate.
Dreyfus Disciplined Stock Fund--invests in equity securities and may
invest up to 20% of its assets in high quality money market accounts.
Dreyfus Small Company Value Fund--invests primarily in small company
equities and to a limited degree in bonds and money market instruments.
Dreyfus International Value Fund--consists of equity securities of
foreign company equities, and to a limited degree, in bonds and money
market instruments.
Company Stock Fund--consists of Allegheny Teledyne common stock.
Stock Index Fund--invests in a collective trust that invests in common
stocks of companies comprising the S&P 500.
Diversified Fund--consists of a combination of common or preferred
capital stocks, bonds, notes, and debentures.
12
<PAGE> 13
2. DESCRIPTION OF THE PLAN (CONTINUED)
Effective April 1, 1997, participants can elect to participate in the
self-directed account if they have at least a $10,000 balance in the Plan. The
minimum initial investment amount in the self-directed fund, which is comprised
of various mutual funds, is $5,000.
Separate accounts are maintained by the Plan Sponsor for each participating
employee. Trustee fees and asset management fees charged 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.
Under certain provisions of the Plan, contributions by the Plan Sponsor, which
have been allocated to the accounts of the participants, may be subject to
forfeiture upon participants' termination of employment. Such forfeitures will
be used to reduce contributions by the employer and were $189,738 and $3,370
during 1997 and 1996, respectively. Employer contributions allocated to a
participant's account become fully vested after a participant completes five
full years of service. Employee contributions and the fixed dollar retirement
contributions are fully vested at all times.
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 up to
180 months. Payments are made by payroll deductions.
In the event that the Plan is partially or completely terminated, or the Plan
Sponsor permanently discontinues making contributions, all amounts credited to
the accounts of the affected participants become fully vested and
nonforfeitable.
Effective January 1, 1998, Plan assets of $880,000 were transferred in from
another plan sponsored by ALC.
13
<PAGE> 14
2. DESCRIPTION OF THE PLAN (CONTINUED)
Information about the Plan is contained in the Summary Plan Description. Copies
of this Summary Plan Description are available from the Allegheny Teledyne
Personnel and Compensation Committee (Committee).
3. INVESTMENTS
The Plan is a participant in the ALC Fixed Income Master Trust, the ALC Alliance
Equity Master Trust, the ALC ATI Common Stock Master Trust, ALC Lifestyle Growth
Fund Master Trust, the ALC Lifestyle Income Fund Master Trust, and the ALC
Lifestyle Growth and Income Fund Master Trust. The Plan's participating
interests in these master trusts as of December 31 were as follows:
1997 1996
---------------------------
ALC Fixed Income Master Trust 73.72% 73.50%
ALC Alliance Equity Master Trust 81.57% 83.15%
ALC ATI Common Stock Master Trust 77.65% 78.46%
ALC Lifestyle Growth Fund Master Trust 81.23% 82.69%
ALC Lifestyle Income Fund Master Trust 81.72% 74.41%
ALC Lifestyle Growth and Income Fund Master Trust 83.53% 82.44%
The composition of the net assets of the ALC Fixed Income Master Trust at
December 31, 1997 and 1996 was as follows:
1997 1996
-----------------------------------
Guaranteed investment contracts:
Confederation Life Insurance Company $ 29,118 $ 4,024,149
Continental Assurance Company 6,718,924 9,404,989
John Hancock Life Insurance Company 2,600,000 --
Life Insurance Company of Virginia 8,725,219 15,918,713
New York Life Insurance Company 15,169,828 14,124,589
Pacific Mutual Life Insurance Company 5,793,190 5,441,658
Peoples Security Life Insurance Company 11,038,629 10,403,430
Prudential Insurance Company 6,144,220 14,396,590
Southland Life Insurance Company 16,288,645 15,200,545
Security Life of Denver -- 5,000,000
Protective Life Insurance Company -- 3,751,970
Transamerica Occidental 10,936,663 10,597,526
-----------------------------------
83,444,436 108,264,159
14
<PAGE> 15
3. INVESTMENTS (CONTINUED)
1997 1996
--------------------------------
Synthetic contracts:
Caisse des Depots et Consignations 3,879,321 3,642,950
Peoples Security 2,948,698 --
Transamerica Occidental 13,865,850 --
Union Bank of Switzerland 5,937,712 5,920,612
Westdeutsche Landesbank 13,727,581 13,668,143
--------------------------------
40,359,162 23,231,705
Temporary short-term investments 10,765,309 9,512,226
Accrued interest receivable 733,753 655,473
Other payables (6,169) (4,306)
--------------------------------
Total net assets $135,296,491 $141,659,257
================================
In May 1997, the Allegheny Ludlum Corporation Fixed Income Master Trust received
approximately $4,500,000 related to the Confederation Life Insurance Company
Guaranteed Investment Contract in accordance with the liquidation plan.
Management is unable to determine additional amounts, if any, that will be
received by the Allegheny Ludlum Corporation Fixed Income Master Trust.
The composition of net assets of the ALC Alliance Equity Master Trust at
December 31, 1997 and 1996 was as follows:
1997 1996
--------------------------------
Investment in registered investment companies:
Alliance Equity Fund S.A. #4 (865.1940 and
994.6310 shares, respectively) $60,199,619 $53,579,310
Cash 90 --
Operating payables (10,341) (16,348)
--------------------------------
Total net assets $60,189,368 $53,562,962
================================
15
<PAGE> 16
3. INVESTMENTS (CONTINUED)
The composition of net assets of the ALC ATI Common Stock Master Trust at
December 31, 1997 and 1996 was as follows:
1997 1996
-----------------------------
Allegheny Teledyne Incorporated Common Stock
(1,347.732 and 1,537.708 shares, respectively) $34,872,566 $35,367,284
Receivables 4,527 58,750
Short Term Investment Fund 738,595 48,275
Operating payables (822) (564)
-----------------------------
Total net assets $35,614,866 $35,473,745
=============================
The composition of assets of the ALC Lifestyle Growth Fund Master Trust at
December 31, 1997 and 1996 was as follows:
1997 1996
-----------------------------
Dreyfus Lifestyle Growth Fund $5,117,053 $1,949,121
Operating payables (5) (1)
-----------------------------
$5,117,048 $1,949,120
=============================
The composition of assets of the ALC Lifestyle Income Fund Master Trust at
December 31, 1997 and 1996 was as follows:
1997 1996
-----------------------------
Dreyfus Lifestyle Income Fund $1,825,632 $590,191
Operating payables (2) --
-----------------------------
$1,825,630 $590,191
=============================
16
<PAGE> 17
3. INVESTMENTS (CONTINUED)
The composition of assets of the ALC Lifestyle Growth and Income Fund Master
Trust at December 31, 1997 and 1996 was as follows:
1997 1996
-------------------------------------
Dreyfus Lifestyle Growth and Income Fund $22,740,752 $18,049,004
Receivables 56 1
-------------------------------------
$22,740,808 $18,049,005
=====================================
Detail information regarding the composition of the various Lifestyle funds are
reported in the separate collective trust filings.
The composition of the changes in net assets of the various master trusts is as
follows:
<TABLE>
<CAPTION>
ALC FIXED INCOME MASTER ALC ALLIANCE EQUITY MASTER ALC ATI COMMON STOCK MASTER
TRUST TRUST TRUST
-----------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31
-----------------------------------------------------------------------------------------------------
1997 1996 1997 1996 1997 1996
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Interest income
(loss) $ 8,694,877 $ 8,225,640 $ -- $ 16,937 $ (1,554) $ 15,713
Realized gains on
sale of investments -- -- -- -- 1,835,342 1,588,011
Unrealized appreciation
in fair value
of investments -- -- -- -- 2,318,151 3,346,346
Dividends -- -- -- -- 837,662 537,617
Net gain, registered
registered
companies -- -- 13,819,313 7,335,440 -- --
Net gain, common
collective funds 468,281 743,008 -- -- 73,411 --
Other income 1,343 -- -- -- -- --
Administrative
expenses (189,938) (256,059) (211,873) (173,713) (27,286) (14,043)
Transfers (15,337,329) (10,804,451) (6,981,034) 5,469,649 (4,894,605) 30,000,101
---------------------------------------------------------------------------------------------------
Net increase (decrease) (6,362,766) (2,091,862) 6,626,406 12,648,313 141,121 35,473,745
Total net assets at
beginning of year 141,659,257 143,751,119 53,562,962 40,914,649 35,473,745 --
---------------------------------------------------------------------------------------------------
Total net assets at
end of year $135,296,491 $141,659,257 $60,189,368 $53,562,962 $35,614,866 $35,473,745
===================================================================================================
</TABLE>
17
<PAGE> 18
3. INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
ALC LIFESTYLE GROWTH FUND ALC LIFESTYLE INCOME FUND ALC LIFESTYLE GROWTH AND
MASTER TRUST MASTER TRUST INCOME FUND MASTER TRUST
-------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31
-------------------------------------------------------------------------------------------------------
1997 1996 1997 1996 1997 1996
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Interest income $ -- $ -- $ 105 $ -- $ 1 $ 110
Realized gains on
sale of -- -- -- -- -- 3,769,730
investments
Unrealized
depreciation in
fair value of -- -- -- -- -- (3,794,673)
investments
Net gain, common
collective funds 882,650 113,120 152,034 24,356 3,853,009 1,384,385
Transfers 2,285,394 1,836,065 1,083,338 565,870 838,793 762,689
Administrative
expenses (116) (65) (38) (35) -- (402)
-------------------------------------------------------------------------------------------------------
Net increase 3,167,928 1,949,120 1,235,439 590,191 4,691,803 2,121,839
Total net assets at
beginning of year 1,949,120 -- 590,191 -- 18,049,005 15,927,166
-------------------------------------------------------------------------------------------------------
Total net assets at
end of year $ 5,117,048 $ 1,949,120 $ 1,825,630 $ 590,191 $22,740,808 $ 18,049,005
=======================================================================================================
</TABLE>
The average yield for 1997 and 1996 for the ALC Fixed Income Master Trust was
6.57% and 6.43%, respectively. Credited interest rates on the contracts ranged
from 5.60% to 8.18% and 5.24% to 8.18% for 1997 and 1996, respectively, and are
determined at contract inception.
Interest, realized and unrealized gains and losses, and management fees from the
master trusts are included in the allocation of net earnings (losses) from
master trusts on the statement of changes in net assets available for benefits.
18
<PAGE> 19
3. INVESTMENTS (CONTINUED)
The changes in cumulative net unrealized gain (loss) for the years ended
December 31, 1997 and 1996 are as follows:
<TABLE>
<CAPTION>
LIFESTYLE
GROWTH DREYFUS
AND LIFESTYLE LIFESTYLE ALLIANCE DISCIPLINED
INCOME GROWTH INCOME EQUITY STOCK
FUND FUND FUND FUND FUND
--------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance at
December 31,
1995 $ 2,841,405 $ -- $ -- $12,961,877 $ --
Unrealized
gain (loss) (1,776,840) 81,197 8,777 5,733,121 169,246
--------------------------------------------------------------------------
Balance at
December 31,
1996 1,064,565 81,197 8,777 18,694,998 169,246
Unrealized
gain (loss) 2,588,204 463,784 52,212 (7,699,031) 2,133,690
--------------------------------------------------------------------------
Balance at
December 31,
1997 $ 3,652,769 $544,981 $60,989 $10,995,967 $2,302,936
==========================================================================
</TABLE>
<TABLE>
<CAPTION>
DREYFUS DREYFUS
SMALL INTER-
COMPANY NATIONAL COMPANY STOCK
VALUE VALUE STOCK INDEX
FUND FUND FUND FUND TOTAL
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance at
December 31,
1995 $ -- $ -- $ 5,516,526 $ 728,110 $22,047,918
Unrealized
gain (loss) (199,140) 14,680 2,102,392 (728,110) 5,405,323
-------------------------------------------------------------------------------
Balance at
December 31,
1996 (199,140) 14,680 7,618,918 -- 27,453,241
Unrealized
gain (loss) 1,529,186 (88,996) (4,166,023) -- (5,186,974)
-------------------------------------------------------------------------------
Balance at
December 31,
1997 $1,330,046 $(74,316) $ 3,452,895 $ -- $22,266,267
===============================================================================
</TABLE>
4. INCOME TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
dated July 23, 1996, stating that the Plan is qualified under Section 401(a) of
the Internal Revenue Code of 1986 (the Code) and that the trust, therefore, is
exempt from taxation. Once qualified, the Plan is required to operate in
conformity with the Code and ERISA to maintain its tax-exempt status. The
administrator is not aware of any course of action or series of events that have
occurred that might adversely affect the Plan's qualified status.
5. TRANSACTIONS WITH PARTIES-IN-INTEREST
Investment fees paid during the year for services rendered were based on
customary and reasonable rates for such services.
19
<PAGE> 20
6. YEAR 2000 (UNAUDITED)
Allegheny Teledyne has initiated formal communications with its significant
service providers (plan trustee and plan recordkeeper) to determine the extent
to which the Plan's systems or operations are vulnerable to those parties'
failure to remediate their own Year 2000 issues. In addition, Allegheny Teledyne
has been reviewing its own internal systems that impact the processing of
employee benefits. Allegheny Teledyne expects that all necessary modifications
to these internal systems will be completed prior to any significant impact on
these internal systems.
The Plan's service providers have indicated that they are presently taking steps
to ensure that the Plan's systems and operations will be Year 2000 compliant.
20
<PAGE> 21
SCHEDULES
21
<PAGE> 22
Allegheny Ludlum Retirement Savings Plan
Item 27a--Schedule of Assets Held for Investment Purposes
December 31, 1997
<TABLE>
<CAPTION>
MARKET
DESCRIPTION UNITS/SHARES COST VALUE VALUE
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Dreyfus Disciplined Stock Fund*:
Interest in Dreyfus Disciplined Stock Fund 895,199.333 shares $25,555,667 $27,858,603
Dreyfus Small Company Value Fund*:
Interest in Dreyfus Small Company Value Fund 733,097.031 shares 14,116,308 15,446,354
Dreyfus International Value Fund*:
Interest in Dreyfus International Value Fund 203,055.763 shares 3,038,930 2,964,614
Self-Directed Fund:
Dreyfus 100% U.S. Treasury Money Market Fund* 30,435.300 shares 30,435 30,435
Dreyfus Appreciation Fund, Inc.* 658.430 shares 20,209 21,320
Dreyfus/Laurel Funds, Inc. Premier Midcap Stock
Fund* 218.223 shares 3,643 3,341
Dreyfus Growth & Value Funds--Midcap Value* 1,817.114 shares 40,033 37,287
Dreyfus Growth & Income Small Co. Value Fund* 214.839 shares 4,527 4,527
Fidelity Puritan Tr. Puritan Fund 1,082.136 shares 19,940 20,972
Fidelity Low Priced Stock Fund 460.092 shares 10,808 11,562
Fidelity Secs. Fund Growth & Income Portfolio 299.125 shares 10,488 11,397
Fidelity Secs. Fund Dividend Growth Fund 491.449 shares 11,066 11,436
Janus Investment Fund Sh. Ben. Int. 705.607 shares 18,282 17,570
Janus Investment Fund Growth & Income Fund 713.463 shares 14,856 16,517
Janus Investment Fund Worldwide Fund 2,102.039 shares 75,000 79,415
Janus Investment Fund Overseas Fund 1,312.649 shares 22,035 22,827
T. Rowe Price Mid Cap Growth Fund 561.174 shares 15,010 16,050
T. Rowe Price Intl. Funds Inc. European Stock Fund 783.325 shares 15,000 15,165
Templeton Funds Inc. World Fund Class I 1,214.114 shares 20,758 20,420
------------------------------------
332,090 340,241
Participant Loans:
Interest in Participant Loans 9.25% to 9.50% - 4,367,721
------------------------------------
$43,042,995 $50,977,533
====================================
</TABLE>
*Party-in-interest
22
<PAGE> 23
Allegheny Ludlum Retirement Savings Plan
Item 27d--Schedule of Reportable Transactions
Year ended December 31, 1997
<TABLE>
<CAPTION>
PURCHASE PURCHASE SALE SELLING
DESCRIPTION OF ASSETS TRANSACTIONS PRICE TRANSACTIONS PRICE GAIN
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Type (iii) transactions:
Dreyfus Disciplined Stock
Fund 159 $16,707,971 -- $ -- $ --
Dreyfus Disciplined Stock
Fund -- -- 104 9,195,020 925,568
Dreyfus Small Company Value
Fund 166 15,781,953 -- -- --
Dreyfus Small Company Value
Fund -- -- 100 6,572,006 530,983
Dreyfus International Value
Fund 128 3,598,523 -- -- --
Dreyfus International Value
Fund -- -- 72 1,520,736 84,197
</TABLE>
There were no Type (i), (ii), or (iv) transactions during the year ended
December 31, 1997.
23
<PAGE> 24
Audited Financial Statements
401(k) SAVINGS ACCOUNT PLAN
FOR EMPLOYEES OF THE
WASHINGTON PLANT
Year ended December 31, 1997 and
period April 1, 1996 through December 31, 1996
with Report of Independent Auditors
24
<PAGE> 25
401(k) Savings Account Plan
for Employees of the Washington Plant
Audited Financial Statements
Year ended December 31, 1997 and
period April 1, 1996 through December 31, 1996
CONTENTS
<TABLE>
<S> <C>
Report of Independent Auditors .................................................... 26
Audited Financial Statements
Statements of Net Assets Available for Benefits with Fund Information.............. 27
Statements of Changes in Net Assets Available for Benefits with Fund Information... 29
Notes to Financial Statements ..................................................... 31
Schedules
Item 27a--Schedule of Assets Held for Investment Purposes.......................... 41
Item 27d--Schedule of Reportable Transactions...................................... 42
</TABLE>
25
<PAGE> 26
REPORT OF INDEPENDENT AUDITORS
The Plan Administrator
401(k) Savings Account Plan for Employees
of the Washington Plant
We have audited the accompanying statements of net assets available for benefits
of the 401(k) Savings Account Plan for Employees of the Washington Plant (the
Plan) as of December 31, 1997 and 1996, and the related statements of changes in
net assets available for benefits for the year ended December 31, 1997 and the
period April 1, 1996 (date of the Plan's inception) through December 31, 1996.
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 generally accepted auditing
standards. 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 as of
December 31, 1997 and 1996, and the changes in net assets available for benefits
for the year ended December 31, 1997 and the period April 1, 1996 through
December 31, 1996, in conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedules of assets
held for investment purposes as of December 31, 1997 and reportable transactions
for the year then ended, are presented for purposes of complying with the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974, and are not a required part
of the financial statements. The Fund Information in the statements of net
assets available for benefits and the statements of changes in net assets
available for benefits is presented for purposes of additional analysis rather
than to present the net assets available for benefits and changes in net assets
available for benefits of each fund. The supplemental schedules and Fund
Information have been subjected to the auditing procedures applied in our audits
of the financial statements and, in our opinion, are fairly stated in all
material respects in relation to the financial statements taken as a whole.
/s/ ERNST & YOUNG LLP
June 5, 1998
26
<PAGE> 27
401(k) Savings Account Plan
for Employees of the Washington Plant
Statement of Net Assets Available for Benefits with Fund Information
December 31, 1997
<TABLE>
<CAPTION>
LIFESTYLE LIFESTYLE LIFESTYLE ALLIANCE FIXED
GROWTH AND GROWTH INCOME EQUITY INCOME
INCOME FUND FUND FUND FUND FUND
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments:
Interest in Allegheny
Ludlum Corporation
Master Trusts $98,019 $4,596 $157 $263,569 $67,853
Interest in registered
investment companies -- -- -- -- --
-----------------------------------------------------------------------------
Net assets available for
benefits $98,019 $4,596 $157 $263,569 $67,853
=============================================================================
</TABLE>
<TABLE>
<CAPTION>
DREYFUS
SMALL DREYFUS
DREYFUS COMPANY INTERNATIONAL COMPANY
DISCIPLINED VALUE VALUE STOCK
STOCK FUND FUND FUND FUND TOTAL
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments:
Interest in Allegheny
Ludlum Corporation
Master Trusts $ -- $ -- $ -- $35,008 $469,202
Interest in registered
investment companies 223,415 49,231 9,328 -- 281,974
------------------------------------------------------------------------------
Net assets available for
benefits $223,415 $49,231 $9,328 $35,008 $751,176
==============================================================================
</TABLE>
See accompanying notes.
27
<PAGE> 28
401(k) Savings Account Plan
for Employees of the Washington Plant
Statement of Net Assets Available for Benefits with Fund Information
December 31, 1996
<TABLE>
<CAPTION>
LIFESTYLE LIFESTYLE ALLIANCE FIXED DREYFUS
GROWTH AND GROWTH EQUITY INCOME DISCIPLINED
INCOME FUND FUND FUND FUND STOCK FUND
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments:
Interest in Allegheny
Ludlum Corporation
Master Trusts $36,746 $127 $133,664 $20,871 $ --
Interest in registered
investment companies -- -- -- -- 83,181
----------------------------------------------------------------------------
Net assets available for
benefits $36,746 $127 $133,664 $20,871 $83,181
============================================================================
</TABLE>
<TABLE>
<CAPTION>
DREYFUS
SMALL DREYFUS
COMPANY INTERNATIONAL COMPANY
VALUE VALUE STOCK
FUND FUND FUND TOTAL
--------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS
Investments:
Interest in Allegheny
Ludlum Corporation
Master Trusts $ -- $ -- $13,752 $205,160
Interest in registered
investment companies 938 3,001 -- 87,120
--------------------------------------------------------------
Net assets available for
benefits $938 $3,001 $13,752 $292,280
==============================================================
</TABLE>
See accompanying notes.
28
<PAGE> 29
401(k) Savings Account Plan
for Employees of the Washington Plant
Statement of Changes in Net Assets Available for Benefits with Fund Information
Year ended December 31, 1997
<TABLE>
<CAPTION>
LIFESTYLE
GROWTH LIFESTYLE LIFESTYLE ALLIANCE FIXED
AND INCOME GROWTH INCOME EQUITY INCOME
FUND FUND FUND FUND FUND
------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ADDITIONS
Employee contributions $37,068 $3,085 $151 $108,583 $35,755
Investment income:
Allocation of net
earnings from Allegheny
Ludlum Corporation
Master Trusts 11,610 513 6 53,012 3,154
Earnings from registered
investment companies -- -- -- -- --
Interfund transfers 12,661 874 -- (31,297) 8,642
------------------------------------------------------------------
61,339 4,472 157 130,298 47,551
Deductions:
Distributions to
participants 66 3 -- 393 569
------------------------------------------------------------------
Net additions 61,273 4,469 157 129,905 46,982
Net assets available for
benefits at
beginning of year 36,746 127 -- 133,664 20,871
------------------------------------------------------------------
Net assets available for
benefits
at end of year $98,019 $4,596 $157 $263,569 $67,853
==================================================================
</TABLE>
<TABLE>
<CAPTION>
DREYFUS
DREYFUS SMALL DREYFUS
DISCIPLINED COMPANY INTERNATIONAL COMPANY
STOCK VALUE VALUE STOCK
FUND FUND FUND FUND TOTAL
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ADDITIONS
Employee contributions $ 95,405 $43,193 $6,849 $15,781 $345,870
Investment income:
Allocation of net
earnings from Allegheny
Ludlum Corporation
Master Trusts -- -- -- 1,773 70,068
Earnings from registered
investment companies 40,440 4,084 209 -- 44,733
Interfund transfers 5,016 1,016 (614) 3,702 --
-----------------------------------------------------------------------
140,861 48,293 6,444 21,256 460,671
Deductions:
Distributions to
participants 627 -- 117 -- 1,775
-----------------------------------------------------------------------
Net additions 140,234 48,293 6,327 21,256 458,896
Net assets available for
benefits at
beginning of year 83,181 938 3,001 13,752 292,280
-----------------------------------------------------------------------
Net assets available for
benefits at
end of year $223,415 $49,231 $9,328 $35,008 $751,176
=======================================================================
</TABLE>
See accompanying notes.
29
<PAGE> 30
401(k) Savings Account Plan
for Employees of the Washington Plant
Statement of Changes in Net Assets Available for Benefits with Fund Information
Period April 1, 1996 through December 31, 1996
<TABLE>
<CAPTION>
LIFESTYLE DREYFUS
GROWTH LIFESTYLE ALLIANCE FIXED DISCIPLINED
AND INCOME GROWTH EQUITY INCOME STOCK
FUND FUND FUND FUND FUND
-------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ADDITIONS
Employee contributions $36,271 $313 $123,206 $19,407 $74,617
Investment income:
Allocation of net
earnings from Allegheny
Ludlum Corporation
Master Trusts 2,183 48 8,671 576 --
Net gain from Collective
Investment Funds -- -- -- -- 5,130
Earnings from registered
investment companies -- -- -- -- 6,405
Dividend income -- -- -- -- --
Net appreciation in fair
value of investments -- -- -- -- --
Interfund transfers (1,708) (234) 1,787 888 (2,971)
-------------------------------------------------------------------
36,746 127 133,664 20,871 83,181
Deductions:
Distributions to
participants -- -- -- -- --
-------------------------------------------------------------------
-- -- -- -- --
-------------------------------------------------------------------
Net additions 36,746 127 133,664 20,871 83,181
Net assets available for
benefits at
beginning of period -- -- -- -- --
-------------------------------------------------------------------
Net assets available for
benefits at
end of period $36,746 $127 $133,664 $20,871 $83,181
===================================================================
</TABLE>
<TABLE>
<CAPTION>
DREYFUS
SMALL DREYFUS
COMPANY INTERNATIONAL COMPANY
VALUE VALUE STOCK
FUND FUND FUND TOTAL
-------------------------------------------------------
<S> <C> <C> <C> <C>
ADDITIONS
Employee contributions $887 $ 877 $11,269 $266,847
Investment income:
Allocation of net
earnings from Allegheny
Ludlum Corporation
Master Trusts -- -- 1,648 13,126
Net gain from Collective
Investment Funds 1 -- 7 5,138
Earnings from registered
investment companies 50 65 -- 6,520
Dividend income -- -- 39 39
Net appreciation in fair
value of investments -- -- 610 610
Interfund transfers -- 2,059 179 --
-------------------------------------------------------
938 3,001 13,752 292,280
Deductions:
Distributions to
participants -- -- -- --
-------------------------------------------------------
-- -- -- --
-------------------------------------------------------
Net additions 938 3,001 13,752 292,280
Net assets available for
benefits at
beginning of period -- -- -- --
-------------------------------------------------------
Net assets available for
benefits at
end of period $938 $3,001 $13,752 $292,280
=======================================================
</TABLE>
See accompanying notes.
30
<PAGE> 31
401(k) Savings Account Plan
for Employees of the Washington Plant
Notes to Financial Statements
December 31, 1997
1. SIGNIFICANT ACCOUNTING POLICIES
Investments are stated at fair value determined as follows:
Allegheny Teledyne Incorporated (Allegheny Teledyne) common stock in the
Company Stock Fund is stated at the quoted market price on the New York
Stock Exchange.
The Fixed Income Fund is stated at cost plus net earnings, which
approximates market value.
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 generally accepted
accounting principles requires management to make estimates and assumptions 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 Washington Plant (the Plan)
is a defined contribution plan within the meaning of the Employee Retirement
Income Security Act of 1974 (ERISA).
The purpose of the Plan is to encourage thrift and to assist union employees
accumulate a fund to supplement retirement income by allowing eligible employees
to make tax-deferred contributions to the Plan. Employee contributions to the
Plan can range between 1% and 18% of eligible wages subject to Internal Revenue
Service (IRS) limitations. In addition, the employee's annual pretax profit
sharing award and pretax Longevity Incentive Payment Plan award may be
contributed at the employee's discretion.
31
<PAGE> 32
2. DESCRIPTION OF THE PLAN (CONTINUED)
The investment options provided by the Plan are as follows:
Lifestyle Growth and Income Fund--invests in equity and fixed income
securities and may invest up to 15% of its assets in international
securities.
Lifestyle Growth Fund--invests in equity and fixed income securities and
may invest up to 25% of its assets in international securities.
Lifestyle Income Fund--consists of common stock, fixed income securities
and short-term money market instruments.
Alliance Equity Fund--consists of common stock.
Fixed Income Fund--consists of amounts invested in insurance companies or
other financial institutions under an agreement with repayment in full,
plus interest at a fixed rate.
Dreyfus Disciplined Stock Fund--invests in equity securities and may
invest up to 20% of its assets in high quality money market accounts.
Dreyfus Small Company Value Fund--invests primarily in small domestic and
foreign company equities and to a limited degree, in bonds and money
market instruments.
Dreyfus International Value Fund--consists of equity securities of
foreign company equities, and to a limited degree, in bonds and money
market instruments.
Company Stock Fund--consists of Allegheny Teledyne common stock.
Separate accounts are maintained by the plan sponsor for each participating
employee. Trustee fees and asset management fees charged 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.
32
<PAGE> 33
2. DESCRIPTION OF THE PLAN (CONTINUED)
In the event that the Plan is partially or completely terminated, all amounts
credited to the accounts of the affected participants become fully vested.
Information about the Plan is contained in the Summary Plan Description. Copies
of this Summary Plan Description are available from the Allegheny Teledyne
Personnel and Compensation Committee (the Committee).
3. INVESTMENTS
The Plan is a participant in the ALC Fixed Income Master Trust, the ALC Alliance
Equity Master Trust, ALC ATI Common Stock Master Trust, ALC Lifestyle Growth
Fund Master Trust, ALC Lifestyle Income Fund Master Trust and ALC Lifestyle
Growth and Income Fund Master Trust. The Plan's participating interests in these
master trusts as of December 31 were as follows:
1997 1996
-------------------------
ALC Fixed Income Master Trust 0.05% 0.01%
ALC Alliance Equity Master Trust 0.44% 0.25%
ALC ATI Common Stock Master Trust 0.10% 0.04%
ALC Lifestyle Growth Fund Master Trust .09% .01%
ALC Lifestyle Income Fund Master Trust -- --
ALC Lifestyle Growth and Income Fund Master Trust .43% .20%
The composition of the net assets of the ALC Fixed Income Master Trust at
December 31, 1997 and 1996 was as follows:
1997 1996
-----------------------------------
Guaranteed investment contracts:
Confederation Life Insurance Company $ 29,118 $ 4,024,149
Continental Assurance Company 6,718,924 9,404,989
John Hancock Life Insurance Company 2,600,000 --
Life Insurance Company of Virginia 8,725,219 15,918,713
New York Life Insurance Company 15,169,828 14,124,589
Pacific Mutual Life Insurance Company 5,793,190 5,441,658
Peoples Security Life Insurance Company 11,038,629 10,403,430
Prudential Insurance Company 6,144,220 14,396,590
Southland Life Insurance Company 16,288,645 15,200,545
Security Life of Denver -- 5,000,000
Protective Life Insurance Company -- 3,751,970
Transamerica Occidental 10,936,663 10,597,526
-----------------------------------
83,444,436 108,264,159
33
<PAGE> 34
3. INVESTMENTS (CONTINUED)
1997 1996
----------------------------------
Synthetic contracts:
Caisse des Depots et Consignations 3,879,321 3,642,950
Peoples Security 2,948,698 --
Transamerica Occidental 13,865,850 --
Union Bank of Switzerland 5,937,712 5,920,612
Westdeutsche Landesbank 13,727,581 13,668,143
----------------------------------
40,359,162 23,231,705
Temporary short-term investments 10,765,309 9,512,226
Accrued interest receivable 733,753 655,473
Other payables (6,169) (4,306)
----------------------------------
Total net assets $135,296,491 $141,659,257
==================================
In May 1997, the Allegheny Ludlum Corporation Fixed Income Master Trust received
approximately $4,500,000 related to the Confederation Life Insurance Company
Guaranteed Investment Contract in accordance with the liquidation plan.
Management is unable to determine additional amounts, if any, that will be
received by the Allegheny Ludlum Corporation Fixed Income Master Trust.
The composition of net assets of the ALC Alliance Equity Master Trust at
December 31, 1997 and 1996 was as follows:
1997 1996
----------------------------------
Investment in registered investment companies:
Alliance Equity Fund S.A. #4 (865.1940 and
994.6310 shares, respectively) $60,199,619 $53,579,310
Cash 90 --
Operating payables (10,341) (16,348)
----------------------------------
Total net assets $60,189,368 $53,562,962
==================================
34
<PAGE> 35
3. INVESTMENTS (CONTINUED)
The composition of net assets of the ALC ATI Common Stock Master Trust at
December 31, 1997 and 1996 was as follows:
1997 1996
-----------------------------
Allegheny Teledyne Incorporated Common Stock
(1,347.732 and 1,537.708 shares, respectively) $34,872,566 $35,367,284
Receivables 4,527 58,750
Short Term Investment Fund 738,595 48,275
Operating payables (822) (564)
-----------------------------
Total net assets $35,614,866 $35,473,745
=============================
The composition of assets of the ALC Lifestyle Growth Fund Master Trust at
December 31, 1997 and 1996 was as follows:
1997 1996
-----------------------------
Dreyfus Lifestyle Growth Fund $5,117,053 $1,949,121
Operating payables (5) (1)
-----------------------------
$5,117,048 $1,949,120
=============================
The composition of assets of the ALC Lifestyle Income Fund Master Trust at
December 31, 1997 and 1996 was as follows:
1997 1996
-----------------------------
Dreyfus Lifestyle Income Fund $1,825,632 $590,191
Operating payables (2) --
-----------------------------
$1,825,630 $590,191
=============================
The composition of assets of the ALC Lifestyle Growth and Income Fund Master
Trust at December 31, 1997 and 1996 was as follows:
1997 1996
-----------------------------
Dreyfus Lifestyle Growth & Income Fund $22,740,752 $18,049,004
Receivables 56 1
-----------------------------
$22,740,808 $18,049,005
=============================
Detail information regarding the composition of the various lifestyle funds are
reported in the separate collective trust filings.
35
<PAGE> 36
3. INVESTMENTS (CONTINUED)
The composition of the changes in net assets of the various master trusts is as
follows:
<TABLE>
<CAPTION>
ALC FIXED INCOME MASTER ALC ALLIANCE EQUITY MASTER ALC ATI COMMON STOCK MASTER
TRUST TRUST TRUST
----------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31
----------------------------------------------------------------------------------------------------------
1997 1996 1997 1996 1997 1996
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Interest income (loss) $ 8,694,877 $ 8,225,640 $ -- $ 16,937 $ (1,554) $ 15,713
Realized gains on
sale of investments -- -- -- -- 1,835,342 1,588,011
Unrealized appreciation
in fair value
of investments -- -- -- -- 2,318,151 3,346,346
Dividends -- -- -- -- 837,662 537,617
Net gain, registered
investment
companies -- -- 13,819,313 7,335,440 -- --
Net gain, common
collective funds 468,281 743,008 -- -- 73,411 --
Other income 1,343 -- -- -- -- --
Administrative expenses (189,938) (256,059) (211,873) (173,713) (27,286) (14,043)
Transfers (15,337,329) (10,804,451) (6,981,034) 5,469,649 (4,894,605) 30,000,101
----------------------------------------------------------------------------------------------------------
Net increase (decrease) (6,362,766) (2,091,862) 6,626,406 12,648,313 141,121 35,473,745
Total net assets at
beginning of year 141,659,257 143,751,119 53,562,962 40,914,649 35,473,745 --
----------------------------------------------------------------------------------------------------------
Total net assets at
end of year $135,296,491 $141,659,257 $60,189,368 $53,562,962 $35,614,866 $35,473,745
==========================================================================================================
</TABLE>
36
<PAGE> 37
3. INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
ALC LIFESTYLE GROWTH FUND ALC LIFESTYLE INCOME FUND ALC LIFESTYLE GROWTH AND
MASTER TRUST MASTER TRUST INCOME FUND MASTER TRUST
----------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31
----------------------------------------------------------------------------------------------
1997 1996 1997 1996 1997 1996
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Interest income $ -- $ -- $ 105 $ -- $ 1 $ 110
Realized gains on
sale of -- -- -- -- -- 3,769,730
investments
Unrealized
depreciation in
fair value of -- -- -- -- -- (3,794,673)
investments
Net gain, common
collective funds 882,650 113,120 152,034 24,356 3,853,009 1,384,385
Transfers 2,285,394 1,836,065 1,083,338 565,870 838,793 762,689
Administrative
expenses (116) (65) (38) (35) -- (402)
----------------------------------------------------------------------------------------------
Net increase 3,167,928 1,949,120 1,235,439 590,191 4,691,803 2,121,839
Total net assets at
beginning of year 1,949,120 -- 590,191 -- 18,049,005 15,927,166
----------------------------------------------------------------------------------------------
Total net assets at
end of year $5,117,048 $1,949,120 $1,825,630 $590,191 $22,740,808 $18,049,005
==============================================================================================
</TABLE>
The average yield for 1997 and 1996 for the ALC Fixed Income Master Trust was
6.57% and 6.43%, respectively. Credited interest rates on the contracts ranged
from 5.60% to 8.18% and 5.24% to 8.18% for 1997 and 1996, respectively, and are
determined at contract inception.
Interest, realized and unrealized gains and losses, and management fees from the
master trusts are included in the allocation of net earnings (losses) from
master trusts on the statement of changes in net assets available for benefits.
37
<PAGE> 38
3. INVESTMENTS (CONTINUED)
The changes in cumulative net unrealized gain (loss) for the period April 1,
1996 through December 31, 1997 are as follows:
<TABLE>
<CAPTION>
LIFESTYLE DREYFUS DREYFUS
GROWTH DREYFUS SMALL INTER-
AND LIFESTYLE LIFESTYLE ALLIANCE DISCIPLINED COMPANY NATIONAL COMPANY
INCOME GROWTH INCOME EQUITY STOCK VALUE VALUE STOCK
FUND FUND FUND FUND FUND FUND FUND FUND TOTAL
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at April 1,
1996 $ -- $ -- $-- $ -- $ -- $ -- $ -- $ -- $ --
Unrealized gain
(loss) 2,046 6 -- 6,084 884 (41) 17 1,647 10,643
----------------------------------------------------------------------------------------------------
Balance at
December 31, 1996 2,046 6 -- 6,084 884 (41) 17 1,647 10,643
Unrealized gain
(loss) 10,614 378 6 46,060 15,774 2,598 (89) (77) 75,264
----------------------------------------------------------------------------------------------------
Balance at
December 31, 1997 $12,660 $384 $ 6 $52,144 $16,658 $2,557 $(72) $1,570 $85,907
====================================================================================================
</TABLE>
4. INCOME TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
dated March 3, 1998, stating that the Plan is qualified under Section 401(a) of
the Internal Revenue Code of 1986 (the Code) and that the trust, therefore, is
exempt from taxation. Once qualified, the Plan is required to operate in
conformity with the Code and ERISA to maintain its tax-exempt status. The
administrator is not aware of any course of action or series of events that have
occurred that might adversely affect the Plan's qualified status.
5. TRANSACTIONS WITH PARTIES-IN-INTEREST
Investment fees paid during the period for services rendered were based on
customary and reasonable rates for such services.
6. YEAR 2000 (UNAUDITED)
Allegheny Teledyne has initiated formal communications with its significant
service providers (plan trustee and plan recordkeeper) to determine the extent
to which the Plan's systems or operations are vulnerable to those parties'
failure to remediate their own Year 2000 issues. In addition, Allegheny Teledyne
has been reviewing its own internal systems that impact the processing of
employee benefits. Allegheny Teledyne expects that all necessary modifications
to these internal systems will be completed prior to any significant impact on
these internal systems.
38
<PAGE> 39
6. YEAR 2000 (UNAUDITED) (CONTINUED)
The Plan's service providers have indicated that they are presently taking steps
to ensure that the Plan's systems and operations will be Year 2000 compliant.
39
<PAGE> 40
SCHEDULES
40
<PAGE> 41
401(k) Savings Account Plan
for Employees of the Washington Plant
Item 27a--Schedule of Assets Held for Investment Purposes
December 31, 1997
<TABLE>
<CAPTION>
DESCRIPTION UNITS/SHARES COST MARKET VALUE
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Dreyfus Disciplined Stock Fund*:
Interest in Dreyfus Disciplined Stock Fund 7,179.137 shares $206,757 $223,415
Dreyfus Small Company Value Fund*:
Interest in Dreyfus Small Company Value Fund 2,336.477 shares 46,673 49,231
Dreyfus International Value Fund*:
Interest in Dreyfus International Value Fund 638.833 shares 9,399 9,328
-----------------------------------
Total investments $262,829 $281,974
===================================
</TABLE>
*Represents party-in-interest.
41
<PAGE> 42
401(k) Savings Account Plan
for Employees of the Washington Plant
Item 27d--Schedule of Reportable Transactions
Year ended December 31, 1997
<TABLE>
<CAPTION>
PURCHASE PURCHASE SALE SELLING GAIN
DESCRIPTION OF ASSETS TRANSACTIONS PRICE TRANSACTIONS PRICE (LOSS)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Type (i) Transactions
Dreyfus Disciplined Stock Fund 1 $ 10,587 -- $ -- $ --
Dreyfus Disciplined Stock Fund -- -- 1 6,005 924
Dreyfus Small Co. Value Fund 1 5,331 -- -- --
Dreyfus Small Co. Value Fund 1 4,401 -- -- --
Dreyfus Disciplined Stock Fund 1 9,085 -- -- --
Type (iii) Transactions
Dreyfus Disciplined Stock Fund 40 113,621 -- -- --
Dreyfus Disciplined Stock Fund -- -- 6 13,827 1,939
Dreyfus Small Company Value Fund 29 49,670 -- -- --
Dreyfus Small Company Value Fund -- -- 2 5,462 659
Dreyfus International Value Fund 29 7,729 -- -- --
Dreyfus International Value Fund -- -- 3 1,611 7
</TABLE>
There were no Type (ii) or (iv) transactions during the year ended December 31,
1997.
42
<PAGE> 43
Audited Financial Statements
SAVINGS AND SECURITY PLAN
OF THE TUBULAR PRODUCTS/PLATE
PRODUCTS DIVISIONS OF ALLEGHENY
LUDLUM CORPORATION
One Month ended January 31, 1998 and the
years ended December 31, 1997 and 1996
with Report of Independent Auditors
43
<PAGE> 44
Savings and Security Plan of the
Tubular Products/Plate Products Divisions
of Allegheny Ludlum Corporation
Audited Financial Statements
One Month ended January 31, 1998 and the
years ended December 31, 1997 and 1996
CONTENTS
Report of Independent Auditors .......................................... 45
Audited Financial Statements
Statements of Net Assets Available for Benefits
with Fund Information ................................................ 46
Statements of Changes in Net Assets Available for Benefits
with Fund Information ................................................ 49
Notes to Financial Statements ........................................... 52
Schedules
Item 27a--Schedule of Assets Held for Investment Purposes ............... 63
Item 27d--Schedule of Reportable Transactions............................ 64
44
<PAGE> 45
REPORT OF INDEPENDENT AUDITORS
Personnel and Compensation Committee
Allegheny Ludlum Corporation
We have audited the accompanying statements of net assets available for benefits
of the Savings and Security Plan of the Tubular Products/Plate Products
Divisions of Allegheny Ludlum Corporation (the Plan) as of January 31, 1998 and
December 31, 1997 and 1996, and the related statements of changes in net assets
available for benefits for the one-month period and 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 generally accepted auditing
standards. 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 Savings and
Security Plan of the Tubular Products/Plate Products Division of Allegheny
Ludlum Corporation at January 31, 1998 and December 31, 1997 and 1996, and the
changes in its net assets available for benefits for the one-month period and
years then ended, in conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedules of assets
held for investment purposes as of December 31, 1997, and reportable
transactions for the year then ended, are presented for purposes of complying
with the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974, and are
not a required part of the financial statements. The Fund Information in the
statement of net assets available for benefits and the statement of changes in
net assets available for benefits is presented for purposes of additional
analysis rather than to present the net assets available for benefits and
changes in net assets available for benefits of each fund. The supplemental
schedules and Fund Information have been subjected to the auditing procedures
applied in our audits of the financial statements and, in our opinion, are
fairly stated in all material respects in relation to the financial statements
taken as a whole.
/s/ ERNST & YOUNG LLP
June 5, 1998
45
<PAGE> 46
Savings and Security Plan of the
Tubular Products/Plate Products Divisions
of Allegheny Ludlum Corporation
Statement of Net Assets Available for Benefits with Fund Information
January 31, 1998
<TABLE>
<CAPTION>
LIFESTYLE
GROWTH
AND LIFESTYLE LIFESTYLE ALLIANCE FIXED DREYFUS
INCOME GROWTH INCOME EQUITY INCOME DISCIPLINED
FUND FUND FUND FUND FUND STOCK FUND
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net assets available for
benefits $-- $-- $-- $-- $-- $--
===============================================================================
</TABLE>
<TABLE>
<CAPTION>
DREYFUS
SMALL DREYFUS
COMPANY INTERNATIONAL COMPANY
VALUE VALUE STOCK PARTICIPANT
FUND FUND FUND LOANS TOTAL
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net assets available for
benefits $-- $-- $-- $-- $--
========================================================================
</TABLE>
See accompanying notes.
46
<PAGE> 47
Savings and Security Plan of the
Tubular Products/Plate Products Divisions
of Allegheny Ludlum Corporation
Statement of Net Assets Available for Benefits with Fund Information
December 31, 1997
<TABLE>
<CAPTION>
LIFESTYLE
GROWTH
AND LIFESTYLE LIFESTYLE ALLIANCE FIXED DREYFUS
INCOME GROWTH INCOME EQUITY INCOME DISCIPLINED
FUND FUND FUND FUND FUND STOCK FUND
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments:
Interest in Allegheny
Ludlum Corporation
Master Trusts $73,012 $23,373 $9,801 $142,442 $297,806 $ --
Interest in registered
investment companies -- -- -- -- -- 122,220
Participant notes
receivable -- -- -- -- -- --
------------------------------------------------------------------------------
Net assets available for
benefits $73,012 $23,373 $9,801 $142,442 $297,806 $122,220
==============================================================================
</TABLE>
<TABLE>
<CAPTION>
DREYFUS
SMALL DREYFUS
COMPANY INTERNATIONAL COMPANY
VALUE VALUE STOCK PARTICIPANT
FUND FUND FUND LOANS TOTAL
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments:
Interest in Allegheny
Ludlum Corporation
Master Trusts $ -- $ -- $154,795 $ -- $701,229
Interest in registered
investment companies 15,106 10,413 -- -- 147,739
Participant notes
receivable -- -- -- 31,290 31,290
----------------------------------------------------------------------------
Net assets available for
benefits $15,106 $10,413 $154,795 $31,290 $880,258
============================================================================
</TABLE>
See accompanying notes.
47
<PAGE> 48
Savings and Security Plan of the
Tubular Products/Plate Products Divisions
of Allegheny Ludlum Corporation
Statement of Net Assets Available for Benefits with Fund Information
December 31, 1996
<TABLE>
<CAPTION>
LIFESTYLE
GROWTH
AND LIFESTYLE LIFESTYLE ALLIANCE FIXED DREYFUS
INCOME GROWTH INCOME EQUITY INCOME DISCIPLINED
FUND FUND FUND FUND FUND STOCK FUND
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments:
Interest in Allegheny
Ludlum Corporation
Master Trusts $254,640 $50,898 $29,770 $636,462 $3,554,103 $ --
Interest in registered
investment companies -- -- -- -- -- 233,970
Participant notes
receivable -- -- -- -- -- --
==============================================================================
Net assets available for
benefits $254,640 $50,898 $29,770 $636,462 $3,554,103 $233,970
==============================================================================
</TABLE>
<TABLE>
<CAPTION>
DREYFUS
SMALL DREYFUS
COMPANY INTERNATIONAL COMPANY
VALUE VALUE STOCK PARTICIPANT
FUND FUND FUND LOANS TOTAL
--------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments:
Interest in Allegheny
Ludlum Corporation
Master Trusts $ -- $ -- $817,568 $ -- $5,343,441
Interest in registered
investment companies 31,553 54,275 -- -- 319,798
Participant notes
receivable -- -- -- 369,623 369,623
==========================================================================
Net assets available for
benefits $31,553 $54,275 $817,568 $369,623 $6,032,862
==========================================================================
</TABLE>
See accompanying notes.
48
<PAGE> 49
Savings and Security Plan of the
Tubular Products/Plate Products Divisions
of Allegheny Ludlum Corporation
Statement of Changes in Net Assets Available for Benefits with Fund Information
One Month ended January 31, 1998
<TABLE>
<CAPTION>
LIFESTYLE
GROWTH
AND LIFESTYLE LIFESTYLE ALLIANCE FIXED DREYFUS
INCOME GROWTH INCOME EQUITY INCOME DISCIPLINED
FUND FUND FUND FUND FUND STOCK FUND
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Additions:
Cash contributions:
Employer $ -- $ -- $ -- $ -- $ -- $ --
Employee -- -- -- -- -- --
Investment income:
Allocation of net
earnings from
Allegheny Ludlum
Corporation Master
Trusts -- -- -- -- -- --
Earnings from registered
investment companies -- -- -- -- -- --
Interest income -- -- -- -- -- --
Transfer to other plans (73,012) (23,373) (9,801) (142,442) (297,806) (122,220)
Interfund transfers -- -- -- -- -- --
------------------------------------------------------------------------------
(73,012) (23,373) (9,801) (142,442) (297,806) (122,220)
Deductions:
Distributions to
participants -- -- -- -- -- --
Fees -- -- -- -- -- --
------------------------------------------------------------------------------
-- -- -- -- -- --
------------------------------------------------------------------------------
Net deductions (73,012) (23,373) (9,801) (142,442) (297,806) (122,220)
Net assets available for
benefits at beginning
of period 73,012 23,373 9,801 142,442 297,806 122,220
------------------------------------------------------------------------------
Net assets available for
benefits at end of
period $ -- $ -- $ -- $ -- $ -- $ --
==============================================================================
</TABLE>
<TABLE>
<CAPTION>
DREYFUS
SMALL DREYFUS
COMPANY INTERNATIONAL COMPANY
VALUE VALUE STOCK PARTICIPANT
FUND FUND FUND LOANS TOTAL
-------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Additions:
Cash contributions:
Employer $ -- $ -- $ -- $ -- $ --
Employee -- -- -- -- --
Investment income:
Allocation of net
earnings from
Allegheny Ludlum
Corporation Master
Trusts -- -- -- -- --
Earnings from registered
investment companies -- -- -- -- --
Interest income -- -- -- -- --
Transfer to other plans (15,106) (10,413) (154,795) (31,290) (880,258)
Interfund transfers -- -- -- -- --
-------------------------------------------------------------------------
(15,106) (10,413) (154,795) (31,290) (880,258)
Deductions:
Distributions to
participants -- -- -- -- --
Fees -- -- -- -- --
-------------------------------------------------------------------------
-- -- -- -- --
-------------------------------------------------------------------------
Net deductions (15,106) (10,413) (154,795) (31,290) (880,258)
Net assets available for
benefits at beginning
of period 15,106 10,413 154,795 31,290 880,258
-------------------------------------------------------------------------
Net assets available for
benefits at end of
period $ -- $ -- $ -- $ -- $ --
=========================================================================
</TABLE>
See accompanying notes.
49
<PAGE> 50
Savings and Security Plan of the
Tubular Products/Plate Products Divisions
of Allegheny Ludlum Corporation
Statement of Changes in Net Assets Available for Benefits with Fund Information
Year ended December 31, 1997
<TABLE>
<CAPTION>
LIFESTYLE
GROWTH
AND LIFESTYLE LIFESTYLE ALLIANCE FIXED DREYFUS
INCOME GROWTH INCOME EQUITY INCOME DISCIPLINED
FUND FUND FUND FUND FUND STOCK FUND
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Additions:
Cash contributions:
Employer $ 14,822 $ 2,558 $ 990 $ 25,084 $ 83,312 $ 17,563
Employee 6,822 1,754 389 14,009 42,698 8,791
Investment income:
Allocation of net
earnings from
Allegheny Ludlum
Corporation Master
Trusts 34,609 8,566 4,890 94,248 134,927 --
Earnings from
registered
investment
companies -- -- -- -- -- 63,976
Interest income -- -- -- -- -- --
Transfer to other plans (191,129) (28,205) (98,380) (592,687) (3,326,938) (275,985)
Interfund transfers (36,119) (7,908) 72,235 (17,285) 171,695 86,629
-------------------------------------------------------------------------------
(170,995) (23,235) (19,876) (476,631) (2,894,306) (99,026)
Deductions:
Distributions to
participants 10,633 4,290 93 17,389 360,591 12,724
Fees -- -- -- -- 1,400 --
-------------------------------------------------------------------------------
10,633 4,290 93 17,389 361,991 12,724
-------------------------------------------------------------------------------
Net deductions (181,628) (27,525) (19,969) (494,020) (3,256,297) (111,750)
Net assets available for
benefits at beginning
of year 254,640 50,898 29,770 636,462 3,554,103 233,970
-------------------------------------------------------------------------------
Net assets available for
benefits at end of year $ 73,012 $23,373 $ 9,801 $142,442 $ 297,806 $122,220
===============================================================================
</TABLE>
<TABLE>
<CAPTION>
DREYFUS
SMALL DREYFUS
COMPANY INTERNATIONAL COMPANY
VALUE VALUE STOCK PARTICIPANT
FUND FUND FUND LOANS TOTAL
-------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Additions:
Cash contributions:
Employer $ 3,023 $ 3,099 $ 23,801 $ -- $ 174,252
Employee 1,791 1,904 9,902 -- 88,060
Investment income:
Allocation of net
earnings from
Allegheny Ludlum
Corporation Master
Trusts -- -- 123,211 -- 400,451
Earnings from
registered
investment
companies 13,685 8,049 -- -- 85,710
Interest income -- -- -- 9,127 9,127
Transfer to other plans (106,003) (60,995) (476,390) (297,720) (5,454,432)
Interfund transfers 72,167 4,451 (296,125) (49,740) --
-------------------------------------------------------------------------
(15,337) (43,492) (615,601) (338,333) (4,696,832)
Deductions:
Distributions to
participants 1,110 370 47,144 -- 454,344
Fees -- -- 28 -- 1,428
-------------------------------------------------------------------------
1,110 370 47,172 -- 455,772
-------------------------------------------------------------------------
Net deductions (16,447) (43,862) (662,773) (338,333) (5,152,604)
Net assets available for
benefits at beginning
of year 31,553 54,275 817,568 369,623 6,032,862
-------------------------------------------------------------------------
Net assets available for
benefits at end of year $ 15,106 $ 10,413 $ 154,795 $ 31,290 $ 880,258
=========================================================================
</TABLE>
See accompanying notes.
50
<PAGE> 51
Savings and Security Plan of the
Tubular Products/Plate Products Divisions
of Allegheny Ludlum Corporation
Statement of Changes in Net Assets Available for Benefits with Fund Information
Year ended December 31, 1996
<TABLE>
<CAPTION>
DREYFUS
LIFESTYLE DREYFUS SMALL
GROWTH LIFESTYLE LIFESTYLE ALLIANCE FIXED DISCIPLINED COMPANY
AND INCOME GROWTH INCOME EQUITY INCOME STOCK VALUE
FUND FUND FUND FUND FUND FUND FUND
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Additions:
Cash contributions:
Employer $ 9,312 $ 898 $ 766 $ 31,745 $ 256,863 $ 14,857 $ 412
Employee 5,151 785 472 35,473 136,058 10,767 372
Investment income:
Allocation of net
earnings from
Allegheny Ludlum
Corporation
Master Trusts 16,317 5,386 1,436 83,357 221,715 -- --
Earnings from
registered
investment
companies -- -- -- -- -- 37,487 3,537
Interest income -- -- -- 4 37 -- --
Dividend income -- -- -- -- -- -- --
Net appreciation
in fair value of
investments -- -- -- -- -- -- --
Transfer (to) from
other plans (1,565) -- -- (7,395) (58,701) 11 (10,860)
Interfund transfers 251,085 43,859 27,096 144,953 (379,553) 189,389 38,092
------------------------------------------------------------------------------
280,300 50,928 29,770 288,137 176,419 252,511 31,553
Deductions:
Distributions to
participants 25,660 30 -- 42,763 330,808 18,541 --
Fees -- -- -- -- 1,241 -- --
------------------------------------------------------------------------------
25,660 30 -- 42,763 332,049 18,541 --
------------------------------------------------------------------------------
Net additions 254,640 50,898 29,770 245,374 (155,630) 233,970 31,553
(deductions)
Net assets available
for benefits at
beginning of year -- -- -- 391,088 3,709,733 -- --
------------------------------------------------------------------------------
Net assets available for
benefits at end of
year $254,640 $50,898 $29,770 $636,462 $3,554,103 $233,970 $31,553
==============================================================================
</TABLE>
<TABLE>
<CAPTION>
DREYFUS
INTERNATIONAL COMPANY STOCK
VALUE STOCK INDEX DIVERSIFIED PARTICIPANT
FUND FUND FUND FUND LOANS TOTAL
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Additions:
Cash contributions:
Employer $ 1,747 $ 71,220 $ 11,300 $ 5,294 $ -- $ 404,414
Employee 1,241 31,537 9,747 8,621 -- 240,224
Investment income:
Allocation of net
earnings from
Allegheny Ludlum
Corporation
Master Trusts -- 122,236 -- 8,224 -- 458,671
Earnings from
registered
investment
companies 2,932 -- 6,685 -- -- 50,641
Interest income -- 32 120 2 24,409 24,604
Dividend income -- 5,119 -- -- -- 5,119
Net appreciation
in fair value of
investments -- 62,690 -- -- -- 62,690
Transfer (to) from
other plans -- 6,304 (9,861) 862 -- (81,205)
Interfund transfers 48,355 (111,806) (107,732) (202,192) 58,454 --
----------------------------------------------------------------------
54,275 187,332 (89,741) (179,189) 82,863 1,165,158
Deductions:
Distributions to
participants -- 123,415 11,868 3,913 -- 556,998
Fees -- 1,100 -- -- -- 2,341
----------------------------------------------------------------------
-- 124,515 11,868 3,913 -- 559,339
----------------------------------------------------------------------
Net additions 54,275 62,817 (101,609) (183,102) 82,863 605,819
(deductions)
Net assets available
for benefits at
beginning of year -- 754,751 101,609 183,102 286,760 5,427,043
----------------------------------------------------------------------
Net assets available
for benefits at
end of year $54,275 $817,568 $ -- $ -- $369,623 $6,032,862
======================================================================
</TABLE>
See accompanying notes.
51
<PAGE> 52
Savings and Security Plan of the
Tubular Products/Plate Products Divisions
of Allegheny Ludlum Corporation
Notes to Financial Statements
January 31, 1998 and December 31, 1997
1. SIGNIFICANT ACCOUNTING POLICIES
Investments are stated at fair value determined as follows:
Allegheny Teledyne Incorporated (Allegheny Teledyne) common stock in the
Company Stock Fund is stated at the quoted market price on the New York
Stock Exchange.
The Fixed Income Fund is stated at cost plus net earnings, which
approximates market value.
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 generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
Certain amounts in the 1996 financial statements have been reclassified to
conform to the 1997 presentation.
2. DESCRIPTION OF THE PLAN
The purpose of the Savings and Security Plan of the Tubular Products/Plate
Products Division of Allegheny Ludlum Corporation (the Plan) is to provide a
savings and retirement plan to eligible employees of the Tubular Products/Plate
Products Divisions of Allegheny Ludlum Corporation (ALC) by allowing a portion
of their salary to be set aside each month through payroll deductions. The Plan
is subject to the provisions of the Employee Retirement Income Security Act of
1974. ALC is a wholly owned subsidiary of Allegheny Teledyne.
Depending on participant's years of service, participants can defer between 1%
and 16%, subject to Internal Revenue Service limitations, of their eligible
wages and contribute them to the Plan. Union represented participants can elect
to defer up to 18% effective July 1, 1997. ALC will match 50% of participant
deferrals up to 8% of each participant's deferral based on years of continuous
service as described in the Plan. In addition, ALC will contribute 6.5% of
nonrepresented participant's monthly eligible wages regardless if they elect to
contribute to the savings part of the Plan and 5% for represented participants.
Effective July 1, 1997, the security contribution for represented participants
increased to 6.5%. Participants at the Tubular Products Division also receive a
Company contribution of $43.34 per month.
52
<PAGE> 53
2. DESCRIPTION OF THE PLAN (CONTINUED)
During 1996, the Plan was amended to allow for additional investment options and
to discontinue the Stock Index Fund and Diversified Fund investment options. The
investment options provided by the Plan are as follows:
Lifestyle Growth and Income Fund--invests in equity and fixed income
securities and may invest up to 15% of its assets in international
securities.
Lifestyle Growth Fund--invests in equity and fixed income securities and
may invest up to 25% of its assets in international securities.
Lifestyle Income Fund--consists of common stock, fixed income securities
and short-term money market instruments.
Alliance Equity Fund--consists of common stocks.
Fixed Income Fund--consists of amounts invested in insurance companies or
other financial institutions under an agreement with repayment in full,
plus interest at a fixed rate.
Dreyfus Disciplined Stock Fund--invests in equity securities and may
invest up to 20% of its assets in high quality money market accounts.
Dreyfus Small Company Value Fund--invests primarily in small company
equities and to a limited degree in bonds and money market instruments.
Dreyfus International Value Fund--consists of equity securities of
foreign company equities, and to a limited degree, in bonds and money
market instruments.
Company Stock Fund--consists of Allegheny Teledyne common stock.
Stock Index Fund--invests in a collective trust that invests in common
stocks of companies comprising the S&P 500.
Diversified Fund--consists of a combination of common or preferred
capital stocks, bonds, notes, and debentures.
53
<PAGE> 54
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 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.
Active employees can borrow up to 50% of their vested account balances. 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 6 to 60
months, and primary residence loans are repaid up to 180 months. Payments are
made by payroll deductions.
In the event that the Plan is partially or completely terminated, or ALC
permanently discontinues making contributions, all amounts credited to the
accounts of affected participants become fully vested and nonforfeitable.
In March 1997, the Tubular Products Division of Allegheny Ludlum Corporation was
sold to International Tubular Products Corporation (ITPC). As a result, ITPC has
assumed all net assets and administrative responsibilities for the active
employees of the Tubular Products Division. The net assets related to the
employees of the Plate Products Division and the terminated employees of the
Tubular Products Division have remained in the Plan.
Effective January 1, 1998, the remaining Plan assets were merged into another
plan, the Allegheny Ludlum Corporation Retirement Savings Plan (RSP Plan),
sponsored by ALC. The investment options in the RSP Plan are consistent with the
Plan with the availability of an additional self-directed investment option.
Participants' contributions will be limited to 14% versus 16% of compensation
and participants at the Plate Products Division are not eligible to receive the
fixed dollar contribution. All other provisions are generally consistent with
that of the Plan.
Information about the Plan is contained in the Summary Plan Description. Copies
of the Summary Plan Description are available from the Allegheny Teledyne
Personnel and Compensation Committee (the Committee).
54
<PAGE> 55
3. INVESTMENTS
The Plan is a participant in the ALC Fixed Income Master Trust, the ALC Alliance
Equity Master Trust, ALC ATI Common Stock Master Trust, ALC Lifestyle Growth
Fund Master Trust, ALC Lifestyle Income Fund Master Trust and ALC Lifestyle
Growth and Income Fund Master Trust. The Plan's participating interests in these
master trusts as of December 31 were as follows:
<TABLE>
<CAPTION>
1997 1996
--------------------------------------------
<S> <C> <C>
ALC Fixed Income Master Trust 0.22% 2.51%
ALC Alliance Equity Master Trust 0.24% 1.19%
ALC ATI Common Stock Master Trust 0.43% 2.30%
ALC Lifestyle Growth Fund Master Trust 0.45% 2.61%
ALC Lifestyle Income Fund Master Trust 0.54% 5.04%
ALC Lifestyle Growth and Income Fund Master Trust 0.32% 1.41%
</TABLE>
The composition of the net assets of the ALC Fixed Income Master Trust at
December 31, 1997 and 1996 was as follows:
1997 1996
--------------------------------
Guaranteed investment contracts:
Confederation Life Insurance Company $ 29,118 $ 4,024,149
Continental Assurance Company 6,718,924 9,404,989
John Hancock Life Insurance Company 2,600,000 --
Life Insurance Company of Virginia 8,725,219 15,918,713
New York Life Insurance Company 15,169,828 14,124,589
Pacific Mutual Life Insurance Company 5,793,190 5,441,658
Peoples Security Life Insurance Company 11,038,629 10,403,430
Prudential Insurance Company 6,144,220 14,396,590
Southland Life Insurance Company 16,288,645 15,200,545
Security Life of Denver -- 5,000,000
Protective Life Insurance Company -- 3,751,970
Transamerica Occidental 10,936,663 10,597,526
--------------------------------
83,444,436 108,264,159
55
<PAGE> 56
3. INVESTMENTS (CONTINUED)
1997 1996
------------------------------------
Synthetic contracts:
Caisse des Depots et Consignations $ 3,879,321 $ 3,642,950
Peoples Security 2,948,698 --
Transamerica Occidental 13,865,850 --
Union Bank of Switzerland 5,937,712 5,920,612
Westdeutsche Landesbank 13,727,581 13,668,143
------------------------------------
40,359,162 23,231,705
Temporary short-term investments 10,765,309 9,512,226
Accrued interest receivable 733,753 655,473
Other payables (6,169) (4,306)
------------------------------------
Total net assets $135,296,491 $141,659,257
====================================
In May 1997, the Allegheny Ludlum Corporation Fixed Income Master Trust received
approximately $4,500,000 related to the Confederation Life Insurance Company
Guaranteed Investment Contract in accordance with the liquidation plan.
Management is unable to determine additional amounts, if any, that will be
received by the Allegheny Ludlum Corporation Fixed Income Master Trust.
The composition of net assets of the ALC Alliance Equity Master Trust at
December 31, 1997 and 1996 was as follows:
1997 1996
------------------------------------
Investment in registered investment companies:
Alliance Equity Fund S.A. #4 (865.1940 and
994.6310 shares, respectively) $60,199,619 $53,579,310
Cash 90 --
Operating payables (10,341) (16,348)
------------------------------------
Total net assets $60,189,368 $53,562,962
====================================
56
<PAGE> 57
3. INVESTMENTS (CONTINUED)
The composition of net assets of the ALC ATI Common Stock Master Trust at
December 31, 1997 and 1996 was as follows:
<TABLE>
<CAPTION>
1997 1996
--------------------------------
<S> <C> <C>
Allegheny Teledyne Incorporated Common Stock
(1,347.732 and 1,537.708 shares, respectively) $34,872,566 $35,367,284
Receivables 4,527 58,750
Short Term Investment Fund 738,595 48,275
Operating payables (822) (564)
--------------------------------
Total net assets $35,614,866 $35,473,745
================================
</TABLE>
The composition of assets of the ALC Lifestyle Growth Fund Master Trust at
December 31, 1997 and 1996 was as follows:
<TABLE>
<CAPTION>
1997 1996
--------------------------------
<S> <C> <C>
Dreyfus Lifestyle Growth Fund $5,117,053 $1,949,121
Operating payables (5) (1)
--------------------------------
$5,117,048 $1,949,120
================================
</TABLE>
The composition of assets of the ALC Lifestyle Income Fund Master Trust at
December 31, 1997 and 1996 was as follows:
<TABLE>
<CAPTION>
1997 1996
--------------------------------
<S> <C> <C>
Dreyfus Lifestyle Income Fund $1,825,632 $590,191
Operating payables (2) --
--------------------------------
$1,825,630 $590,191
================================
</TABLE>
57
<PAGE> 58
3. INVESTMENTS (CONTINUED)
The composition of assets of the ALC Lifestyle Growth and Income Fund Master
Trust at December 31, 1997 and 1996 was as follows:
1997 1996
-----------------------------------
Dreyfus Lifestyle Growth and Income Fund $22,740,752 $18,049,004
Receivables 56 1
-----------------------------------
$22,740,808 $18,049,005
===================================
Detail information regarding the composition of the various Lifestyle Funds are
reported in the separate collective trust filings.
The composition of the changes in net assets of the various Master Trusts is as
follows:
<TABLE>
<CAPTION>
ALC FIXED INCOME MASTER ALC ALLIANCE EQUITY MASTER ALC ATI COMMON STOCK MASTER
TRUST TRUST TRUST
----------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31
----------------------------------------------------------------------------------------------
1997 1996 1997 1996 1997 1996
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Interest income
(loss) $ 8,694,877 $ 8,225,640 $ -- $ 16,937 $ (1,554) $ 15,713
Realized gains on
sale of investments -- -- -- -- 1,835,342 1,588,011
Unrealized appreciation
in fair value of
investments -- -- -- -- 2,318,151 3,346,346
Dividends -- -- -- -- 837,662 537,617
Net gain,
registered
investment
companies -- -- 13,819,313 7,335,440 -- --
Net gain, common
collective funds 468,281 743,008 -- -- 73,411 --
Other income 1,343 -- -- -- -- --
Administrative expenses (189,938) (256,059) (211,873) (173,713) (27,286) (14,043)
Transfers (15,337,329) (10,804,451) (6,981,034) 5,469,649 (4,894,605) 30,000,101
----------------------------------------------------------------------------------------------
Net increase (decrease) (6,362,766) (2,091,862) 6,626,406 12,648,313 141,121 35,473,745
Total net assets at
beginning of year 141,659,257 143,751,119 53,562,962 40,914,649 35,473,745 --
----------------------------------------------------------------------------------------------
Total net assets at
end of year $135,296,491 $141,659,257 $60,189,368 $53,562,962 $35,614,866 $35,473,745
==============================================================================================
</TABLE>
58
<PAGE> 59
3. INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
ALC LIFESTYLE GROWTH FUND ALC LIFESTYLE INCOME FUND ALC LIFESTYLE GROWTH AND
MASTER TRUST MASTER TRUST INCOME FUND MASTER TRUST
----------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31
----------------------------------------------------------------------------------------------
1997 1996 1997 1996 1997 1996
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Interest income $ -- $ -- $ 105 $ -- $ 1 $ 110
Realized gains on
sale of -- -- -- -- -- 3,769,730
investments
Unrealized
depreciation in
fair value of -- -- -- -- -- (3,794,673)
investments
Net gain, common
collective funds 882,650 113,120 152,034 24,356 3,853,009 1,384,385
Transfers 2,285,394 1,836,065 1,083,338 565,870 838,793 762,689
Administrative expenses (116) (65) (38) (35) -- (402)
----------------------------------------------------------------------------------------------
Net increase 3,167,928 1,949,120 1,235,439 590,191 4,691,803 2,121,839
Total net assets at
beginning of year 1,949,120 -- 590,191 -- 18,049,005 15,927,166
----------------------------------------------------------------------------------------------
Total net assets at
end of year $5,117,048 $1,949,120 $1,825,630 $590,191 $22,740,808 $18,049,005
==============================================================================================
</TABLE>
The average yield for 1997 and 1996 for the ALC Fixed Income Master Trust was
6.57% and 6.43%, respectively. Credited interest rates on the contracts ranged
from 5.60% to 8.18% and 5.24% to 8.18% for 1997 and 1996, respectively, and are
determined at contract inception.
Interest, realized and unrealized gains and losses, and management fees from the
master trusts are included in the allocation of net earnings (losses) from
master trusts on the statement of changes in net assets available for benefits.
59
<PAGE> 60
3. INVESTMENTS (CONTINUED)
The changes in cumulative net unrealized gain (loss) for the years ended
December 31, 1997 and 1996 are as follows:
<TABLE>
<CAPTION>
DREYFUS DREYFUS
LIFESTYLE DREYFUS SMALL INTER-
GROWTH LIFESTYLE LIFESTYLE ALLIANCE DISCIPLINED COMPANY NATIONAL COMPANY STOCK
AND INCOME GROWTH INCOME EQUITY STOCK VALUE VALUE STOCK INDEX DIVERSIFIED
FUND FUND FUND FUND FUND FUND FUND FUND FUND FUND TOTAL
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at
December
31, 1995 $ -- $ -- $ -- $ 144,868 $ -- $ -- $ -- $146,177 $ 18,002 $ 42,776 $ 351,823
Unrealized
gain
(loss) 15,499 4,503 1,293 (112,208) 4,313 (1,168) 1,569 (33,310) (18,002) (42,776) (180,287)
---------------------------------------------------------------------------------------------------------------------
Balance at
December
31, 1996 15,499 4,503 1,293 32,660 4,313 (1,168) 1,569 112,867 -- -- 171,536
Unrealized
gain (loss) (1,553) 420 (1,037) 63 8,319 2,966 (1,039) (81,643) -- -- (73,504)
---------------------------------------------------------------------------------------------------------------------
Balance at
December
31, 1997 $13,946 $4,923 $ 256 $ 32,723 $12,632 $ 1,798 $ 530 $ 31,224 $ -- $ -- $ 98,032
=====================================================================================================================
</TABLE>
4. INCOME TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
dated January 1, 1996, stating that the Plan is qualified under Section 401(a)
of the Internal Revenue Code of 1986 (the "Code") and that the trust, therefore,
is exempt from taxation. Once qualified, the Plan is required to operate in
conformity with the Code and ERISA to maintain its tax-exempt status. The
administrator is not aware of any course of action or series of events that have
occurred that might adversely affect the Plan's qualified status.
5. TRANSACTIONS WITH PARTIES-IN-INTEREST
Investment fees paid during the year for services rendered were based on
customary and reasonable rates for such services.
60
<PAGE> 61
6. YEAR 2000 (UNAUDITED)
Allegheny Teledyne has initiated formal communications with its significant
service providers (plan trustee and plan recordkeeper) to determine the extent
to which the Plan's systems or operations are vulnerable to those parties'
failure to remediate their own Year 2000 issues. In addition, Allegheny Teledyne
has been reviewing its own internal systems that impact the processing of
employee benefits. Allegheny Teledyne expects that all necessary modifications
to these internal systems will be completed prior to any significant impact on
these internal systems.
The Plan's service providers have indicated that they are presently taking steps
to ensure that the Plan's systems and operations will be Year 2000 compliant.
61
<PAGE> 62
SCHEDULES
62
<PAGE> 63
Savings and Security Plan of the
Tubular Products/Plate Products Divisions
of Allegheny Ludlum Corporation
Item 27a--Schedule of Assets Held for Investment Purposes
December 31, 1997
<TABLE>
<CAPTION>
DESCRIPTION UNITS/SHARES COST VALUE MARKET VALUE
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Dreyfus Disciplined Stock Fund*:
Interest in Dreyfus Disciplined Stock Fund 3,927.389 shares $109,588 $122,220
Dreyfus Small Company Value Fund*:
Interest in Dreyfus Small Company Value Fund 716.929 shares 13,308 15,106
Dreyfus International Value Fund*:
Interest in Dreyfus International Value Fund 713.190 shares 9,883 10,413
Participant loans 9.25% to 9.50% -- 31,290
--------------------------------------------
$132,779 $179,029
============================================
</TABLE>
*Represents party-in-interest.
63
<PAGE> 64
Savings and Security Plan of the
Tubular Products/Plate Products Divisions
of Allegheny Ludlum Corporation
Item 27d--Schedule of Reportable Transactions
Year ended December 31, 1997
<TABLE>
<CAPTION>
PURCHASE PURCHASE SALE SELLING GAIN
DESCRIPTION OF ASSETS TRANSACTIONS PRICE TRANSACTIONS PRICE (LOSS)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Type (i) Transactions
Dreyfus Disciplined Stock Fund 1 $ 76,945 -- $ -- $ --
Dreyfus Disciplined Stock Fund -- -- 1 275,985 38,743
Dreyfus Small Company Value Fund 1 42,973 -- -- --
Dreyfus Small Company Value Fund -- -- 1 106,004 10,116
Dreyfus International Value Fund -- -- 1 60,995 8,406
Type (iii) Transactions
Dreyfus Disciplined Stock Fund 37 156,730 -- -- --
Dreyfus Disciplined Stock Fund -- -- 32 332,455 42,538
Dreyfus Small Company Value Fund 36 117,112 -- -- --
Dreyfus Small Company Value Fund -- -- 9 147,244 10,446
Dreyfus International Value Fund 30 12,812 -- -- --
Dreyfus International Value Fund -- -- 4 64,724 8,766
</TABLE>
There were no Type (ii) or (iv) transactions during the year ended December 31,
1997.
64
<PAGE> 65
Audited Financial Statements
SAVINGS AND SECURITY PLAN
OF THE LOCKPORT AND WATERBURY
FACILITIES OF ALLEGHENY
LUDLUM CORPORATION
Years ended December 31, 1997 and 1996
with Report of Independent Auditors
65
<PAGE> 66
Savings and Security Plan of the
Lockport and Waterbury Facilities
of Allegheny Ludlum Corporation
Audited Financial Statements
Years ended December 31, 1997 and 1996
CONTENTS
<TABLE>
<S> <C>
Report of Independent Auditors ...................................................... 67
Audited Financial Statements
Statements of Net Assets Available for Benefits with Fund Information................ 68
Statements of Changes in Net Assets Available for Benefits with Fund Information..... 70
Notes to Financial Statements ....................................................... 72
Schedules
Item 27a--Schedule of Assets Held for Investment Purposes ........................... 83
Item 27d--Schedule of Reportable Transactions........................................ 84
</TABLE>
66
<PAGE> 67
REPORT OF INDEPENDENT AUDITORS
Personnel and Compensation Committee
Allegheny Ludlum Corporation
We have audited the accompanying statements of net assets available for benefits
of the Savings and Security Plan of the Lockport and Waterbury Facilities of
Allegheny Ludlum Corporation (the Plan) as of December 31, 1997 and 1996, 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 generally accepted auditing
standards. 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 Savings and
Security Plan of the Lockport and Waterbury Facilities of Allegheny Ludlum
Corporation at December 31, 1997 and 1996, and the changes in its net assets
available for benefits for the years then ended, in conformity with generally
accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedules of assets
held for investment purposes as of December 31, 1997, and reportable
transactions for the year ended December 31, 1997, are presented for purposes of
complying with the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974, and are
not a required part of the financial statements. The Fund Information in the
statement of net assets available for benefits and the statement of changes in
net assets available for benefits is presented for purposes of additional
analysis rather than to present the net assets available for benefits and
changes in net assets available for benefits of each fund. The supplemental
schedules and Fund Information have been subjected to the auditing procedures
applied in our audits of the financial statements and, in our opinion, are
fairly stated in all material respects in relation to the financial statements
taken as a whole.
/s/ ERNST & YOUNG LLP
June 5, 1998
67
<PAGE> 68
Savings and Security Plan of the
Lockport and Waterbury Facilities
of Allegheny Ludlum Corporation
Statement of Net Assets Available for Benefits with Fund Information
December 31, 1997
<TABLE>
<CAPTION>
LIFESTYLE
GROWTH
AND LIFESTYLE LIFESTYLE ALLIANCE FIXED DREYFUS
INCOME GROWTH INCOME EQUITY INCOME DISCIPLINED
FUND FUND FUND FUND FUND STOCK FUND
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments:
Interest in Allegheny
Ludlum Corporation
Master Trusts $179,113 $42,269 $23,644 $241,674 $2,876,809 $ --
Interest in registered
investment companies -- -- -- -- -- 548,495
Participant notes
receivable -- -- -- -- -- --
------------------------------------------------------------------------------
Net assets available for
benefits $179,113 $42,269 $23,644 $241,674 $2,876,809 $548,495
==============================================================================
</TABLE>
<TABLE>
<CAPTION>
DREYFUS
SMALL DREYFUS
COMPANY INTERNATIONAL COMPANY
VALUE VALUE STOCK PARTICIPANT
FUND FUND FUND LOANS TOTAL
-------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments:
Interest in Allegheny
Ludlum Corporation
Master Trusts $ -- $ -- $511,952 $ -- $3,875,461
Interest in registered
investment companies 612,903 17,654 -- -- 1,179,052
Participant notes
receivable -- -- -- 152,629 152,629
-------------------------------------------------------------------------
Net assets available for
benefits $612,903 $17,654 $511,952 $152,629 $5,207,142
=========================================================================
</TABLE>
See accompanying notes.
68
<PAGE> 69
Savings and Security Plan of the
Lockport and Waterbury Facilities
of Allegheny Ludlum Corporation
Statement of Net Assets Available for Benefits with Fund Information
December 31, 1996
<TABLE>
<CAPTION>
LIFESTYLE
GROWTH
AND LIFESTYLE LIFESTYLE ALLIANCE FIXED DREYFUS
INCOME GROWTH INCOME EQUITY INCOME DISCIPLINED
FUND FUND FUND FUND FUND STOCK FUND
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments:
Interest in Allegheny
Ludlum Corporation
Master Trusts $184,475 $30,780 $12,023 $323,553 $2,664,327 $ --
Interest in registered
investment companies -- -- -- -- -- 150,006
Participant notes
receivable -- -- -- -- -- --
------------------------------------------------------------------------------
Net assets available for
benefits $184,475 $30,780 $12,023 $323,553 $2,664,327 $150,006
==============================================================================
</TABLE>
<TABLE>
<CAPTION>
DREYFUS
SMALL DREYFUS
COMPANY INTERNATIONAL COMPANY
VALUE VALUE STOCK PARTICIPANT
FUND FUND FUND LOANS TOTAL
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments:
Interest in Allegheny
Ludlum Corporation
Master Trusts $ -- $ -- $636,089 $ -- $3,851,247
Interest in registered
investment companies 24,817 17,917 -- -- 192,740
Participant notes
receivable -- -- -- 117,137 117,137
------------------------------------------------------------------------
Net assets available for
benefits $24,817 $17,917 $636,089 $117,137 $4,161,124
========================================================================
</TABLE>
See accompanying notes.
69
<PAGE> 70
Savings and Security Plan of the
Lockport and Waterbury Facilities
of Allegheny Ludlum Corporation
Statement of Changes in Net Assets Available for Benefits with Fund Information
Year ended December 31, 1997
<TABLE>
<CAPTION>
LIFESTYLE
GROWTH DREYFUS
AND LIFESTYLE LIFESTYLE ALLIANCE FIXED DISCIPLINED
INCOME GROWTH INCOME EQUITY INCOME STOCK
FUND FUND FUND FUND FUND FUND
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS
Cash contributions:
Employer $ 12,129 $ 3,640 $ 1,630 $ 16,223 $ 270,256 $ 19,079
Employee 10,826 2,555 1,582 14,258 145,270 17,420
Investment income:
Allocation of net
earnings from
Allegheny Ludlum
Corporation Master
Trusts 36,335 10,847 1,453 80,992 180,421 --
Earnings from
registered investment
companies -- -- -- -- -- 90,547
Interest income -- -- -- -- -- --
Interfund transfers (62,902) (2,136) 6,956 (183,386) (349,504) 272,994
--------------------------------------------------------------------------------
(3,612) 14,906 11,621 (71,913) 246,443 400,040
Deductions:
Distributions to
participants 1,750 3,417 -- 9,966 33,961 1,551
--------------------------------------------------------------------------------
Net additions
(deductions) (5,362) 11,489 11,621 (81,879) 212,482 398,489
Net assets available
for benefits at
beginning of year 184,475 30,780 12,023 323,553 2,664,327 150,006
--------------------------------------------------------------------------------
Net assets available
for benefits at
end of year $179,113 $42,269 $23,644 $241,674 $2,876,809 $548,495
================================================================================
</TABLE>
<TABLE>
<CAPTION>
DREYFUS
SMALL DREYFUS
COMPANY INTERNATIONAL COMPANY
VALUE VALUE STOCK PARTICIPANT
FUND FUND FUND LOANS TOTAL
--------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ADDITIONS
Cash contributions:
Employer $ 13,963 $ 646 $ 15,303 $ -- $ 352,869
Employee 11,256 269 9,991 -- 213,427
Investment income:
Allocation of net
earnings from
Allegheny Ludlum
Corporation Master
Trusts -- -- 88,729 -- 398,777
Earnings from
registered investment
companies 64,370 264 -- -- 155,181
Interest income -- -- -- 12,137 12,137
Interfund transfers 504,045 (890) (208,532) 23,355 -
--------------------------------------------------------------------------
593,634 289 (94,509) 35,492 1,132,391
Deductions:
Distributions to
participants 5,548 552 29,628 -- 86,373
--------------------------------------------------------------------------
Net additions
(deductions) 588,086 (263) (124,137) 35,492 1,046,018
Net assets available
for benefits at
beginning of year 24,817 17,917 636,089 117,137 4,161,124
--------------------------------------------------------------------------
Net assets available
for benefits at
end of year $612,903 $17,654 $ 511,952 $152,629 $5,207,142
==========================================================================
</TABLE>
See accompanying notes.
70
<PAGE> 71
Savings and Security Plan of the
Lockport and Waterbury Facilities
of Allegheny Ludlum Corporation
Statement of Changes in Net Assets Available for Benefits with Fund Information
Year ended December 31, 1996
<TABLE>
<CAPTION>
LIFESTYLE DREYFUS
GROWTH DREYFUS SMALL
AND LIFESTYLE LIFESTYLE ALLIANCE FIXED DISCIPLINED COMPANY
INCOME GROWTH INCOME EQUITY INCOME STOCK VALUE
FUND FUND FUND FUND FUND FUND FUND
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS
Cash contributions:
Employer $ 7,798 $ 2,490 $ 100 $ 19,325 $ 327,408 $ 11,367 $ 1,994
Employee 6,939 2,134 132 29,848 159,431 12,076 2,109
Investment income:
Allocation of net
earnings from
Allegheny Ludlum
Corporation Master
Trusts 11,857 2,293 181 43,018 141,856 -- --
Net gain from
collective
investment funds -- -- -- -- -- -- --
Earnings from
registered
investment companies -- -- -- -- -- 22,728 1,917
Interest income -- -- -- 3 36 -- --
Dividend income -- -- -- -- -- -- --
Net appreciation in fair
value of investments -- -- -- -- -- -- --
Interfund transfers 158,660 23,863 11,610 14,108 (124,394) 104,133 18,797
Transfers from other
plans -- -- -- -- -- -- --
-------------------------------------------------------------------------------
185,254 30,780 12,023 106,302 504,337 150,304 24,817
Deductions:
Distributions to
participants 779 -- -- 2,339 33,596 298 --
Other -- -- -- -- 953 -- --
-------------------------------------------------------------------------------
779 -- -- 2,339 34,549 298 --
-------------------------------------------------------------------------------
Net additions
(deductions) 184,475 30,780 12,023 103,963 469,788 150,006 24,817
Net assets available
for benefits at
beginning of year -- -- -- 219,590 2,194,539 -- --
-------------------------------------------------------------------------------
Net assets available
for benefits at
end of year $184,475 $30,780 $12,023 $323,553 $2,664,327 $150,006 $24,817
===============================================================================
</TABLE>
<TABLE>
<CAPTION>
DREYFUS
INTERNATIONAL COMPANY STOCK
VALUE STOCK INDEX DIVERSIFIED PARTICIPANT
FUND FUND FUND FUND LOANS TOTAL
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS
Cash contributions:
Employer $ 703 $ 45,600 $ 3,012 $ 1,968 $ -- $ 421,765
Employee 840 30,785 7,007 11,667 -- 262,968
Investment income:
Allocation of net
earnings from
Allegheny Ludlum
Corporation Master
Trusts -- 99,569 -- 4,946 -- 303,720
Net gain from
collective
investment funds -- -- 1,969 -- -- 1,969
Earnings from
registered
investment companies 982 -- -- -- -- 25,627
Interest income -- 43 32 2 7,805 7,921
Dividend income -- 3,756 -- -- -- 3,756
Net appreciation in fair
value of investments -- 43,671 -- -- -- 43,671
Interfund transfers 15,392 (86,743) (48,676) (126,872) 40,122 -
Transfers from other
plans -- 141 -- -- -- 141
----------------------------------------------------------------------------------
17,917 136,822 (36,656) (108,289) 47,927 1,071,538
Deductions:
Distributions to
participants -- 17,029 -- 267 -- 54,308
Other -- 1,192 -- -- -- 2,145
----------------------------------------------------------------------------------
-- 18,221 -- 267 -- 56,453
----------------------------------------------------------------------------------
Net additions
(deductions) 17,917 118,601 (36,656) (108,556) 47,927 1,015,085
Net assets available
for benefits at
beginning of year -- 517,488 36,656 108,556 69,210 3,146,039
----------------------------------------------------------------------------------
Net assets available
for benefits at
end of year $17,917 $636,089 $ -- $ -- $117,137 $4,161,124
==================================================================================
</TABLE>
See accompanying notes.
71
<PAGE> 72
Savings and Security Plan of the
Lockport and Waterbury Facilities
of Allegheny Ludlum Corporation
Notes to Financial Statements
December 31, 1997
1. SIGNIFICANT ACCOUNTING POLICIES
Investments are stated at fair value determined as follows:
Allegheny Teledyne Incorporated (Allegheny Teledyne) common stock in the
Company Stock Fund is stated at the quoted market price on the New York
Stock Exchange.
The Fixed Income Fund is stated at cost plus net earnings, which
approximates market value.
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 generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
Certain amounts in the 1996 financial statements have been reclassified to
conform to the 1997 presentation.
2. DESCRIPTION OF THE PLAN
The purpose of the Savings and Security Plan of the Lockport and Waterbury
Facilities of Allegheny Ludlum Corporation (the Plan) is to provide a savings
and retirement plan to eligible employees of the Lockport and Waterbury
Facilities of Allegheny Ludlum Corporation (ALC) by allowing a portion of their
salary to be set aside each month through payroll deductions. The Plan is
subjected to the provisions of the Employee Retirement Income Security Act of
1974. ALC is a wholly owned subsidiary of Allegheny Teledyne.
Depending on participants' years of service, participants can defer between 1%
and 16%, subject to Internal Revenue Service limitations, of their eligible
wages and contribute them to the Plan. ALC will match 50% of participant
deferrals up to 8% of each participant's deferral based on years of service as
described in the Plan. In addition, ALC will contribute 5% of monthly eligible
wages regardless if participants elect to contribute to the savings portion of
the Plan. Effective July 1, 1996, the security contribution increased to 6.5%.
ALC also contributes $.50 for each hour participants work.
72
<PAGE> 73
2. DESCRIPTION OF THE PLAN (CONTINUED)
An employee can elect to contribute an additional amount up to a maximum of 16%
of the employee's salary. Additional contributions over the basic amount are not
matched by the Plan Sponsor. In addition, the Plan Sponsor contributes 5% of all
eligible employees' salaries to the Security part of the Plan regardless of
whether or not the employee elects to participate in the Savings part.
During 1996, the Plan was amended to allow for additional investment options and
to discontinue the Stock Index Fund and Diversified Fund investment options. The
investment options provided by the Plan are as follows:
Lifestyle Growth and Income Fund--invests in equity and fixed income
securities and may invest up to 15% of its assets in international
securities.
Lifestyle Growth Fund--invests in equity and fixed income securities and
may invest up to 25% of its assets in international securities.
Lifestyle Income Fund--consists of common stock, fixed income securities
and short-term money market instruments.
Alliance Equity Fund--consists of common stocks.
Fixed Income Fund--consists of amounts invested in insurance companies or
other financial institutions under an agreement with repayment in full,
plus interest at a fixed rate.
Dreyfus Disciplined Stock Fund--invests in equity securities and may
invest up to 20% of its assets in high quality money market accounts.
Dreyfus Small Company Value Fund--invests primarily in small company
equities and to a limited degree in bonds and money market instruments.
Dreyfus International Value Fund--consists of equity securities of
foreign company equities, and to a limited degree, in bonds and money
market instruments.
Company Stock Fund--consists of Allegheny Teledyne common stock.
73
<PAGE> 74
2. DESCRIPTION OF THE PLAN (CONTINUED)
Stock Index Fund--invests in a collective trust that invests in common
stocks of companies comprising the S&P 500.
Diversified Fund--consists of a combination of common or preferred
capital stocks, bonds, notes, and debentures.
Separate accounts are maintained by the Plan Sponsor for each participating
employee. Trustee fees and asset management fees charged 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.
Active employees can borrow up to 50% of their vested account balances. 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 6 to 60
months, and primary residence loans are repaid up to 180 months. Payments are
made by payroll deductions and cannot exceed 15% of the participant's monthly
base salary.
In the event that the Plan is partially or completely terminated, or the Plan
Sponsor permanently discontinues making contributions, all amounts credited to
the accounts of affected participants become fully vested and nonforfeitable.
Information about the Plan is contained in the Summary Plan Description. Copies
of the Summary Plan Description are available from the Allegheny Teledyne
Personnel and Compensation Committee (the Committee).
74
<PAGE> 75
3. INVESTMENTS
The Plan is a participant in the ALC Fixed Income Master Trust, the ALC Alliance
Equity Master Trust, the ALC ATI Common Stock Master Trust, the ALC Lifestyle
Growth Fund Master Trust, the ALC Lifestyle Income Fund Master Trust, and the
ALC Lifestyle Growth and Income Fund Master Trust. The Plan's participating
interests in these master trusts as of December 31 were as follows:
1997 1996
-------------------------
ALC Fixed Income Master Trust 2.13% 1.88%
ALC Alliance Equity Master Trust .39% 0.60%
ALC ATI Common Stock Master Trust 1.44% 1.79%
ALC Lifestyle Growth Fund Master Trust .83% 1.58%
ALC Lifestyle Income Fund Master Trust 1.31% 2.04%
ALC Lifestyle Growth and Income Fund Master Trust .79% 1.02%
The composition of the net assets of the ALC Fixed Income Master Trust at
December 31, 1997 and 1996 was as follows:
1997 1996
------------------------------------
Guaranteed investment contracts:
Confederation Life Insurance Company $ 29,118 $ 4,024,149
Continental Assurance Company 6,718,924 9,404,989
John Hancock Life Insurance Company 2,600,000 -
Life Insurance Company of Virginia 8,725,219 15,918,713
New York Life Insurance Company 15,169,828 14,124,589
Pacific Mutual Life Insurance Company 5,793,190 5,441,658
Peoples Security Life Insurance Company 11,038,629 10,403,430
Prudential Insurance Company 6,144,220 14,396,590
Southland Life Insurance Company 16,288,645 15,200,545
Security Life of Denver - 5,000,000
Protective Life Insurance Company - 3,751,970
Transamerica Occidental 10,936,663 10,597,526
------------------------------------
83,444,436 108,264,159
75
<PAGE> 76
3. INVESTMENTS (CONTINUED)
1997 1996
--------------------------------
Synthetic contracts:
Caisse des Depots et Consignations 3,879,321 3,642,950
Peoples Security 2,948,698 --
Transamerica Occidental 13,865,850 --
Union Bank of Switzerland 5,937,712 5,920,612
Westdeutsche Landesbank 13,727,581 13,668,143
--------------------------------
40,359,162 23,231,705
Temporary short-term investments 10,765,309 9,512,226
Accrued interest receivable 733,753 655,473
Other payables (6,169) (4,306)
--------------------------------
Total net assets $135,296,491 $141,659,257
================================
In May 1997, the Allegheny Ludlum Corporation Fixed Income Master Trust received
approximately $4,500,000 related to the Confederation Life Insurance Company
Guaranteed Investment Contract in accordance with the liquidation plan.
Management is unable to determine additional amounts, if any, that will be
received by the Allegheny Ludlum Corporation Fixed Income Master Trust.
The composition of net assets of the ALC Alliance Equity Master Trust at
December 31, 1997 and 1996 was as follows:
1997 1996
--------------------------------
Investment in registered investment companies:
Alliance Equity Fund S.A. #4 (865.1940 and
994.6310 shares, respectively) $60,199,619 $53,579,310
Cash 90 --
Operating payables (10,341) (16,348)
--------------------------------
Total net assets $60,189,368 $53,562,962
================================
76
<PAGE> 77
3. INVESTMENTS (CONTINUED)
The composition of net assets of the ALC ATI Common Stock Master Trust at
December 31, 1997 and 1996 was as follows:
<TABLE>
<CAPTION>
1997 1996
-------------------------------------
<S> <C> <C>
Allegheny Teledyne Incorporated Common Stock
(1,347.732 and 1,537.708 shares, respectively) $34,872,566 $35,367,284
Receivables 4,527 58,750
Short Term Investment Fund 738,595 48,275
Operating payables (822) (564)
-------------------------------------
Total net assets $35,614,866 $35,473,745
=====================================
</TABLE>
The composition of assets of the ALC Lifestyle Growth Fund Master Trust at
December 31, 1997 and 1996 was as follows:
<TABLE>
<CAPTION>
1997 1996
-------------------------------------
<S> <C> <C>
Dreyfus Lifestyle Growth Fund $5,117,053 $1,949,121
Operating payables (5) (1)
-------------------------------------
$5,117,048 $1,949,120
=====================================
</TABLE>
The composition of assets of the ALC Lifestyle Income Fund Master Trust at
December 31, 1997 and 1996 was as follows:
<TABLE>
<CAPTION>
1997 1996
-------------------------------------
<S> <C> <C>
Dreyfus Lifestyle Income Fund $1,825,632 $590,191
Operating payables (2) --
-------------------------------------
$1,825,630 $590,191
=====================================
</TABLE>
77
<PAGE> 78
3. INVESTMENTS (CONTINUED)
The composition of assets of the ALC Lifestyle Growth and Income Fund Master
Trust at December 31, 1997 and 1996 was as follows:
1997 1996
---------------------------------
Dreyfus Lifestyle Growth and Income Fund $22,740,752 $18,049,004
Receivables 56 1
---------------------------------
$22,740,808 $18,049,005
=================================
Detail information regarding the composition of the various Lifestyle funds are
reported in the separate collective trust filings.
The composition of the changes in net assets of the various master trusts is as
follows:
<TABLE>
<CAPTION>
ALC FIXED INCOME MASTER ALC ALLIANCE EQUITY MASTER ALC ATI COMMON STOCK MASTER
TRUST TRUST TRUST
----------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31
----------------------------------------------------------------------------------------------
1997 1996 1997 1996 1997 1996
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Interest income
(loss) $ 8,694,877 $ 8,225,640 $ -- $ 16,937 $ (1,554) $ 15,713
Realized gains on
sale of -- -- -- -- 1,835,342 1,588,011
investments
Unrealized
appreciation in
fair value of -- -- -- -- 2,318,151 3,346,346
investments
Dividends -- -- -- -- 837,662 537,617
Net gain,
registered
investment -- -- 13,819,313 7,335,440 -- --
companies
Net gain, common
collective funds 468,281 743,008 -- -- 73,411 --
Other income 1,343 -- -- -- -- --
Administrative (189,938) (256,059) (211,873) (173,713) (27,286) (14,043)
expenses
Transfers (15,337,329) (10,804,451) (6,981,034) 5,469,649 (4,894,605) 30,000,101
----------------------------------------------------------------------------------------------
Net increase (6,362,766) (2,091,862) 6,626,406 12,648,313 141,121 35,473,745
(decrease)
Total net assets at
beginning of year 141,659,257 143,751,119 53,562,962 40,914,649 35,473,745 --
----------------------------------------------------------------------------------------------
Total net assets at
end of year $135,296,491 $141,659,257 $60,189,368 $53,562,962 $35,614,866 $35,473,745
==============================================================================================
</TABLE>
78
<PAGE> 79
3. INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
ALC LIFESTYLE GROWTH FUND ALC LIFESTYLE INCOME FUND ALC LIFESTYLE GROWTH AND
MASTER TRUST MASTER TRUST INCOME FUND MASTER TRUST
----------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31
----------------------------------------------------------------------------------------------
1997 1996 1997 1996 1997 1996
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Interest income $ -- $ -- $ 105 $ -- $ 1 $ 110
Realized gains on
sale of investments -- -- -- -- -- 3,769,730
Unrealized depreciation
in fair value of
investments -- -- -- -- -- (3,794,673)
Net gain, common
collective funds 882,650 113,120 152,034 24,356 3,853,009 1,384,385
Transfers 2,285,394 1,836,065 1,083,338 565,870 838,793 762,689
Administrative expenses (116) (65) (38) (35) -- (402)
----------------------------------------------------------------------------------------------
Net increase 3,167,928 1,949,120 1,235,439 590,191 4,691,803 2,121,839
Total net assets at
beginning of year 1,949,120 -- 590,191 -- 18,049,005 15,927,166
----------------------------------------------------------------------------------------------
Total net assets at
end of year $5,117,048 $1,949,120 $1,825,630 $590,191 $22,740,808 $18,049,005
==============================================================================================
</TABLE>
The average yield for 1997 and 1996 for the ALC Fixed Income Master Trust was
6.57% and 6.43%, respectively. Credited interest rates on the contracts ranged
from 5.60% to 8.18% and 5.24% to 8.18% for 1997 and 1996, respectively, and are
determined at contract inception.
Interest, realized and unrealized gains and losses, and management fees from the
master trusts are included in the allocation of net earnings (losses) from
master trusts on the statement of changes in net assets available for benefits.
79
<PAGE> 80
3. INVESTMENTS (CONTINUED)
The changes in cumulative net unrealized gain (loss) for the years ended
December 31, 1997 and 1996 are as follows:
<TABLE>
<CAPTION>
LIFESTYLE DREYFUS DREYFUS
GROWTH DREYFUS SMALL INTER-
AND LIFESTYLE LIFESTYLE ALLIANCE DISCIPLINED COMPANY NATIONAL COMPANY STOCK
INCOME GROWTH INCOME EQUITY STOCK VALUE VALUE STOCK DIVERSIFIED INDEX
FUND FUND FUND FUND FUND FUND FUND FUND FUND FUND TOTAL
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at
December
31, 1995 $ -- $ -- $ -- $82,346 $ -- $ -- $ -- $67,259 $ 25,598 $19,498 $194,701
Unrealized
gain (loss) 11,461 1,931 181 (67,296) 1,348 (1,010) 503 21,594 (25,598) (19,498) (76,384)
-----------------------------------------------------------------------------------------------------------------
Balance at
December
31, 1996 11,461 1,931 181 15,050 1,348 (1,010) 503 88,853 -- -- 118,317
Unrealized
gain (loss) 22,418 5,681 (55) 41,900 (15,234) 35,252 (1,215) 9,417 -- -- 98,164
-----------------------------------------------------------------------------------------------------------------
Balance at
December
31, 1997 $33,879 $7,612 $126 $56,950 $(13,886) $34,242 $ (712) $98,270 $ -- $ -- $216,481
=================================================================================================================
</TABLE>
4. INCOME TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
dated February 1, 1996, stating that the Plan is qualified under Section 401(a)
of the Internal Revenue Code of 1986 (the Code) and that the trust, therefore,
is exempt from taxation. Once qualified, the Plan is required to operate in
conformity with the Code and ERISA to maintain its tax-exempt status. The
administrator is not aware of any course of action or series of events that have
occurred that might adversely affect the Plan's qualified status.
5. TRANSACTIONS WITH PARTIES-IN-INTEREST
Investment fees paid during the year for services rendered were based on
customary and reasonable rates for such services.
80
<PAGE> 81
6. YEAR 2000 (UNAUDITED)
Allegheny Teledyne has initiated formal communications with its significant
service providers (plan trustee and plan recordkeeper) to determine the extent
to which the Plan's systems or operations are vulnerable to those parties'
failure to remediate their own Year 2000 issues. In addition, Allegheny Teledyne
has been reviewing its own internal systems that impact the processing of
employee benefits. Allegheny Teledyne expects that all necessary modifications
to these internal systems will be completed prior to any significant impact on
these internal systems.
The Plan's service providers have indicated that they are presently taking steps
to ensure that the Plan's systems and operations will be Year 2000 compliant.
81
<PAGE> 82
SCHEDULES
82
<PAGE> 83
Savings and Security Plan of the
Lockport and Waterbury Facilities
of Allegheny Ludlum Corporation
Item 27a--Schedule of Assets Held for Investment Purposes
December 31, 1997
<TABLE>
<CAPTION>
DESCRIPTION UNITS/SHARES COST MARKET VALUE
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Dreyfus Disciplined Stock Fund*:
Interest in Dreyfus Disciplined Stock Fund 17,625.152 shares $ 562,381 $ 548,495
Dreyfus Small Company Value Fund*:
Interest in Dreyfus Small Company Value Fund 29,088.890 shares 578,661 612,903
Dreyfus International Value Fund*:
Interest in Dreyfus International Value Fund 1,209.206 shares 18,366 17,654
Participant loans 9.25% to 9.50% -- 152,629
--------------------------------------------
$1,159,408 $1,331,681
============================================
</TABLE>
* Party-in-interest
83
<PAGE> 84
Savings and Security Plan of the
Lockport and Waterbury Facilities
of Allegheny Ludlum Corporation
Item 27d--Schedule of Reportable Transactions
Year ended December 31, 1997
<TABLE>
<CAPTION>
PURCHASE PURCHASE SALE SELLING GAIN
DESCRIPTION OF ASSETS TRANSACTIONS PRICE TRANSACTIONS PRICE (LOSS)
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Type (i) Transactions
Dreyfus Small Company Value Fund 1 $ 28,338 -- $ -- $ --
Dreyfus Small Company Value Fund 1 40,616 -- -- --
Dreyfus Small Company Value Fund 1 45,271 -- -- --
Dreyfus Small Company Value Fund 1 36,319 -- -- --
Dreyfus Small Company Value Fund 1 84,830 -- -- --
Dreyfus Small Company Value Fund 1 58,913 -- -- --
Dreyfus Small Company Value Fund 1 26,943 -- -- --
Dreyfus Small Company Value Fund 1 31,491 -- -- --
Dreyfus Small Company Value Fund -- -- 1 85,237 13,608
Dreyfus Small Company Value Fund 1 57,883 -- -- --
Dreyfus Small Company Value Fund -- -- 1 58,889 5,965
Dreyfus Small Company Value Fund 1 49,683 -- -- --
Dreyfus Small Company Value Fund 1 16,954 -- -- --
Dreyfus Small Company Value Fund 1 21,961 -- -- --
Dreyfus Small Company Value Fund 1 24,676 -- -- --
Dreyfus Small Company Value Fund 1 16,700 -- -- --
Dreyfus Small Company Value Fund 1 19,022 -- -- --
Dreyfus Disciplined Stock Fund 1 16,209 -- -- --
Dreyfus Disciplined Stock Fund -- 18,455 -- -- --
Dreyfus Disciplined Stock Fund 1 16,994 -- -- --
Dreyfus Disciplined Stock Fund 1 36,319 -- -- --
Dreyfus Disciplined Stock Fund -- -- 1 60,738 10,690
Dreyfus Disciplined Stock Fund 1 86,825 -- -- --
Dreyfus Disciplined Stock Fund -- -- 1 90,908 14,093
Dreyfus Disciplined Stock Fund 1 149,768 -- -- --
Dreyfus Disciplined Stock Fund -- -- 1 152,809 18,796
Dreyfus Disciplined Stock Fund 1 152,625 -- -- --
Dreyfus Disciplined Stock Fund 1 49,683 -- -- --
Type (iii) Transactions
Dreyfus Disciplined Stock Fund 73 664,005 -- -- --
Dreyfus Disciplined Stock Fund -- -- 14 355,400 47,797
Dreyfus Small Company Value Fund 77 697,812 -- -- --
Dreyfus Small Company Value Fund -- -- 12 174,096 18,710
Dreyfus International Value Fund 29 19,007 -- -- --
Dreyfus International Value Fund -- -- 6 18,941 290
</TABLE>
There were no Type (ii) or (iv) transactions during the year ended December 31,
1997.
84
<PAGE> 85
Audited Financial Statements
ALLEGHENY LUDLUM
CORPORATION PERSONAL
RETIREMENT AND 401(k)
SAVINGS ACCOUNT PLAN
Years ended December 31, 1997 and 1996
with Report of Independent Auditors
85
<PAGE> 86
Allegheny Ludlum Corporation
Personal Retirement and 401(k) Savings Account Plan
Audited Financial Statements
Years ended December 31, 1997 and 1996
CONTENTS
<TABLE>
<S> <C>
Report of Independent Auditors ................................................................................. 87
Audited Financial Statements
Statements of Net Assets Available for Benefits with Fund Information........................................... 88
Statements of Changes in Net Assets Available for Benefits with Fund Information................................ 90
Notes to Financial Statements .................................................................................. 92
Schedules
Item 27a--Schedule of Assets Held for Investment Purposes........................................................ 103
Item 27d--Schedule of Reportable Transactions.................................................................... 104
</TABLE>
86
<PAGE> 87
REPORT OF INDEPENDENT AUDITORS
Personnel and Compensation Committee
Allegheny Ludlum Corporation
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 (the Plan) as of December 31, 1997 and 1996, 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 generally accepted auditing
standards. 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 Allegheny
Ludlum Corporation Personal Retirement and 401(k) Savings Account Plan as of
December 31, 1997 and 1996, and the changes in its net assets available for
benefits for the years then ended, in conformity with generally accepted
accounting principles.
Our audits were made for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedules of assets
held for investment purposes as of December 31, 1997 and reportable transactions
for the year ended December 31, 1997, are presented for purposes of complying
with the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974, and are
not a required part of the financial statements. The Fund Information in the
statement of net assets available for benefits and the statement of changes in
net assets available for benefits is presented for purposes of additional
analysis rather than to present the net assets available for benefits and
changes in net assets available for benefits of each fund. The supplemental
schedules and Fund Information have been subjected to the auditing procedures
applied in our audits of the financial statements and, in our opinion, are
fairly stated in all material respects in relation to the financial statements
taken as a whole.
/s/Ernst & Young LLP
June 5, 1998
87
<PAGE> 88
Allegheny Ludlum Corporation
Personal Retirement and 401(k) Savings Account Plan
Statement of Net Assets Available for Benefits with Fund Information
December 31, 1997
<TABLE>
<CAPTION>
LIFESTYLE LIFESTYLE LIFESTYLE ALLIANCE FIXED
GROWTH AND GROWTH INCOME EQUITY INCOME
INCOME FUND FUND FUND FUND FUND
--------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments:
Interest in
Allegheny Ludlum
Corporation
Master Trusts $3,395,294 $890,297 $299,973 $10,447,614 $32,302,520
Interest in
registered - - - - -
investment
companies
Participant loans - - - - -
====================================================================
Net assets available
for benefits $3,395,294 $890,297 $299,973 $10,447,614 $32,302,520
====================================================================
</TABLE>
<TABLE>
<CAPTION>
DREYFUS
SMALL DREYFUS
DREYFUS COMPANY INTERNATIONAL COMPANY
DISCIPLINED VALUE VALUE STOCK PARTICIPANT
STOCK FUND FUND FUND FUND LOANS TOTAL
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments:
Interest in
Allegheny Ludlum
Corporation
Master Trusts $ - $ - $ - $7,256,888 $ - $54,592,586
Interest in
registered 5,119,259 2,939,535 586,660 - - 8,645,454
investment
companies
Participant loans - - - - 2,607,131 2,607,131
====================================================================================
Net assets available
for benefits $5,119,259 $2,939,535 $586,660 $7,256,888 $2,607,131 $65,845,171
====================================================================================
</TABLE>
See accompanying notes.
88
<PAGE> 89
Allegheny Ludlum Corporation
Personal Retirement and 401(k) Savings Account Plan
Statement of Net Assets Available for Benefits with Fund Information
December 31, 1996
<TABLE>
<CAPTION>
LIFESTYLE LIFESTYLE LIFESTYLE ALLIANCE FIXED
GROWTH AND GROWTH INCOME EQUITY INCOME
INCOME FUND FUND FUND FUND FUND
--------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments:
Interest in
Allegheny Ludlum
Corporation
Master Trusts $2,692,942 $255,493 $109,210 $7,928,265 $31,266,989
Interest in
registered
investment - - - - -
companies
Participant loans - - - - -
====================================================================
Net assets available
for benefits $2,692,942 $255,493 $109,210 $7,928,265 $31,266,989
====================================================================
</TABLE>
<TABLE>
<CAPTION>
DREYFUS
SMALL DREYFUS
DREYFUS COMPANY INTERNATIONAL COMPANY
DISCIPLINED VALUE VALUE STOCK PARTICIPANT
STOCK FUND FUND FUND FUND LOANS TOTAL
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments:
Interest in
Allegheny Ludlum
Corporation
Master Trusts $ - $ - $ - $6,173,124 $ - $48,426,023
Interest in
registered
investment 2,338,361 498,316 208,387 - - 3,045,064
companies
Participant loans - - - - 1,964,483 1,964,483
=======================================================================================
Net assets available
for benefits $2,338,361 $498,316 $208,387 $6,173,124 $1,964,483 $53,435,570
=======================================================================================
</TABLE>
See accompanying notes.
89
<PAGE> 90
Allegheny Ludlum Corporation
Personal Retirement and 401(k) Savings Account Plan
Statement of Changes in Net Assets Available for Benefits with Fund Information
Year ended December 31, 1997
<TABLE>
<CAPTION>
LIFESTYLE
GROWTH LIFESTYLE LIFESTYLE ALLIANCE FIXED
AND INCOME GROWTH INCOME EQUITY INCOME
FUND FUND FUND FUND FUND
----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ADDITIONS
Cash contributions:
Employer $ 68,380 $ 28,734 $ 8,998 $ $ 1,975,995
201,521
Employee 241,851 114,142 37,916 751,807 2,098,166
Investment income:
Allocation of net
earnings from
Allegheny Ludlum
Corporation
Master
Trusts 570,237 134,743 25,255 2,223,395 2,075,054
Earnings from
registered
investment
companies - - - - -
Interest income - - - - -
Interfund transfers (95,907) 362,740 119,771 (511,598) (3,241,130)
----------------------------------------------------------------
784,561 640,359 191,940 2,665,125 2,908,085
Deductions:
Distributions to
participants 82,209 5,555 1,177 145,776 1,872,554
----------------------------------------------------------------
82,209 5,555 1,177 145,776 1,872,554
----------------------------------------------------------------
Net additions 702,352 634,804 190,763 2,519,349 1,035,531
Net assets available
for benefits at
beginning
of year 2,692,942 255,493 109,210 7,928,265 31,266,989
----------------------------------------------------------------
Net assets available
for benefits at
end of year $3,395,294 $890,297 $299,973 $10,447,614 $32,302,520
================================================================
</TABLE>
<TABLE>
<CAPTION>
DREYFUS
DREYFUS SMALL DREYFUS
DISCIPLINED COMPANY INTERNATIONAL COMPANY
STOCK VALUE VALUE STOCK PARTICIPANT
FUND FUND FUND FUND LOANS TOTAL
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS
Cash contributions:
Employer $ 152,920 $ 91,965 $ 27,724 $ 229,621 $ $ 2,785,858
-
Employee 509,756 316,135 110,902 503,062 - 4,683,737
Investment income:
Allocation of net
earnings from
Allegheny Ludlum
Corporation
Master
Trusts - - - 847,855 - 5,876,539
Earnings from
registered
investment
companies 979,736 393,809 27,398 - - 1,400,943
Interest income - - - - 197,613 197,613
Interfund transfers 1,203,696 1,668,466 231,424 (182,497) 445,035 -
-------------------------------------------------------------------------------------------
2,846,108 2,470,375 397,448 1,398,041 642,648 14,944,690
Deductions:
Distributions to
participants 65,210 29,156 19,175 314,277 - 2,535,089
-------------------------------------------------------------------------------------------
65,210 29,156 19,175 314,277 - 2,535,089
-------------------------------------------------------------------------------------------
Net additions 2,780,898 2,441,219 378,273 1,083,764 642,648 12,409,601
Net assets available
for benefits at
beginning
of year 2,338,361 498,316 208,387 6,173,124 1,964,483 53,435,570
-------------------------------------------------------------------------------------------
Net assets available
for benefits at
end of year $5,119,259 $2,939,535 $586,660 $7,256,888 $2,607,131 $65,845,171
===========================================================================================
</TABLE>
See accompanying notes.
90
<PAGE> 91
Allegheny Ludlum Corporation
Personal Retirement and 401(k) Savings Account Plan
Statement of Changes in Net Assets Available for Benefits with Fund Information
Year ended December 31, 1996
<TABLE>
<CAPTION>
LIFESTYLE DREYFUS
GROWTH LIFESTYLE LIFESTYLE ALLIANCE FIXED DISCIPLINED
AND INCOME GROWTH INCOME EQUITY INCOME STOCK DIVERSIFIED
FUND FUND FUND FUND FUND FUND FUND
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS
Cash contributions:
Employer $ 24,772 $ 5,491 $ 2,339 $ 141,489 $ 2,327,020 $ 46,719 $ 9,854
Employee 77,598 21,486 7,778 1,028,715 2,121,949 140,656 260,122
Investment income:
Allocation of net
earnings from
Allegheny Ludlum
Corporation Master
Trusts 202,963 18,207 3,466 1,051,113 1,848,325 - 89,867
Earnings from
registered
investment
companies - 274 134 (126) (2) 187,323 42
Net gain from
collective - - - - 1,792 120,163 -
investment fund
Interest income - - - 143 469 - -
Dividend income - - - - - - -
Net appreciation in
fair value of
investments - - - - - - -
Transfer (to) from other
ALC savings plans (8,810) (771) (770) 124,441 (230,235) (9,680) 82,921
Interfund transfers 2,424,263 211,059 96,505 219,643 (2,776,394) 1,863,139 (2,384,841)
----------------------------------------------------------------------------------------
2,720,786 255,746 109,452 2,565,418 3,292,924 2,348,320 (1,942,035)
Deductions:
Distributions to
participants 27,844 253 242 164,352 1,628,885 9,959 15,882
Other - - - 702 2,417 - 430
----------------------------------------------------------------------------------------
27,844 253 242 165,054 1,631,302 9,959 16,312
----------------------------------------------------------------------------------------
Net additions
(deductions) 2,692,942 255,493 109,210 2,400,364 1,661,622 2,338,361 (1,958,347)
Net assets available
for benefits at
beginning of year - - - 5,527,901 29,605,367 - 1,958,347
----------------------------------------------------------------------------------------
Net assets available
for benefits at
end of year $2,692,942 $255,493 $109,210 $7,928,265 $31,266,989 $2,338,361 $ -
========================================================================================
</TABLE>
<TABLE>
<CAPTION>
DREYFUS
SMALL DREYFUS
COMPANY INTERNATIONAL COMPANY STOCK
VALUE VALUE STOCK INDEX PARTICIPANT
FUND FUND FUND FUND LOANS TOTAL
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS
Cash contributions:
Employer $ 6,717 $ 4,300 $ 306,033 $ 20,707 $ - $ 2,895,441
Employee 20,616 15,846 513,926 134,178 - 4,342,870
Investment income:
Allocation of net
earnings from
Allegheny Ludlum
Corporation Master
Trusts - - 977,001 - - 4,190,942
Earnings from
registered
investment
companies 35,615 7,195 74 348 - 230,877
Net gain from
collective 5,279 490 - 34,058 - 161,782
investment fund
Interest income - - 217 - 122,462 123,291
Dividend income - - 30,865 - - 30,865
Net appreciation in
fair value of
investments - - 298,987 - - 298,987
Transfer (to) from other
ALC savings plans (15,879) (14,462) 162,340 22,757 - 111,852
Interfund transfers 453,224 195,156 (227,541) (790,143) 715,930 -
------------------------------------------------------------------------------
505,572 208,525 2,061,902 (578,095) 838,392 12,386,907
Deductions:
Distributions to
participants 7,256 138 204,121 12,735 - 2,071,667
Other - - 3,397 899 - 7,845
------------------------------------------------------------------------------
7,256 138 207,518 13,634 - 2,079,512
------------------------------------------------------------------------------
Net additions
(deductions) 498,316 208,387 1,854,384 (591,729) 838,392 10,307,395
Net assets available
for benefits at
beginning of year - - 4,318,740 591,729 1,126,091 43,128,175
------------------------------------------------------------------------------
Net assets available
for benefits at
end of year $498,316 $208,387 $6,173,124 $ - $1,964,483 $53,435,570
==============================================================================
</TABLE>
See accompanying notes.
91
<PAGE> 92
Allegheny Ludlum Corporation
Personal Retirement and 401(k) Savings Account Plan
Notes to Financial Statements
December 31, 1997
1. SIGNIFICANT ACCOUNTING POLICIES
Investments are stated at fair value determined as follows:
Allegheny Teledyne Incorporated (Allegheny Teledyne) common stock in the
Company Stock Fund is stated at the quoted market price on the New York
Stock Exchange.
The Fixed Income Fund is stated at cost plus net earnings, which
approximates market value.
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 generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
Certain amounts in the 1996 financial statements have been reclassified to
conform to the 1997 presentation.
2. DESCRIPTION OF THE PLAN
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. The Plan is subject
to the provisions of the Employee Retirement Income Security Act of 1974. ALC is
a wholly owned subsidiary of Allegheny Teledyne.
92
<PAGE> 93
2. DESCRIPTION OF THE PLAN (CONTINUED)
The Plan Sponsor contributes to the Plan fifty cents per hour worked per
eligible 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 set aside up to 18%
of eligible wages each pay period through payroll deductions subject to Internal
Revenue Service (IRS) limitations.
During 1996, the Plan was amended to allow for additional investment options and
to discontinue the Stock Index Fund and Diversified Fund investment options. The
investment options provided by the Plan for the years ended December 31, 1997
and 1996 are as follows:
Lifestyle Growth and Income Fund--invests in equity and fixed income
securities and may invest up to 15% of its assets in international
securities.
Lifestyle Growth Fund--invests in equity and fixed income securities and
may invest up to 25% of its assets in international securities.
Lifestyle Income Fund--consists of common stock, fixed income securities
and short-term money market instruments.
Alliance Equity Fund--consists of common stocks.
Fixed Income Fund--consists of amounts invested in insurance companies or
other financial institutions under an agreement with repayment in full,
plus interest at a fixed rate.
Dreyfus Disciplined Stock Fund--invests in equity securities and may
invest up to 20% of its assets in high quality money market accounts.
Diversified Fund--consists of a combination of common or preferred
capital stocks, bonds, notes, and debentures.
93
<PAGE> 94
2. DESCRIPTION OF THE PLAN (CONTINUED)
Dreyfus Small Company Value Fund--invests primarily in small company
equities and to a limited degree in bonds and money market instruments.
Dreyfus International Value Fund--consists of equity securities of
foreign company equities, and to a limited degree, in bonds and money
market instruments.
Company Stock Fund--consists of Allegheny Teledyne common stock.
Stock Index Fund--invests in a collective trust that invests in common
stocks of companies comprising the S&P 500.
Separate accounts are maintained by the Plan Sponsor for each participating
employee. Trustee fees and asset management fees charged 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.
A participant may make an "in-service" withdrawal of all or part of the value of
his account attributable to employer contributions and earnings on such
contributions. Contributions made to an employee's 401(k) account may be
withdrawn at age 59-1/2, or in the event of financial hardship prior to age
59-1/2. Upon termination of employment or retirement, a participant is fully
entitled to his account balance.
In the event that the Plan is completely or partially terminated or ALC
completely discontinues contributions, all amounts then credited to the accounts
of the affected participants shall immediately become fully vested and
nonforfeitable.
Information about the Plan is contained in the Summary Plan Description. Copies
of this Summary Plan Description are available from the Allegheny Teledyne
Personnel and Compensation Committee (Committee).
94
<PAGE> 95
3. INVESTMENTS
The Plan is a participant in the ALC Fixed Income Master Trust, the ALC Alliance
Equity Master Trust, the ALC ATI Common Stock Master Trust, the ALC Lifestyle
Growth Fund Master Trust, the ALC Lifestyle Income Fund Master Trust, and the
ALC Lifestyle Growth and Income Fund Master Trust. The Plan's participating
interests in these master trusts as of December 31 were as follows:
<TABLE>
<CAPTION>
1997 1996
--------------------------------------------
<S> <C> <C>
ALC Fixed Income Master Trust 23.88% 22.07%
ALC Alliance Equity Master Trust 17.36% 14.80%
ALC ATI Common Stock Master Trust 20.38% 17.40%
ALC Lifestyle Growth Fund Master Trust 17.40% 13.11%
ALC Lifestyle Income Fund Master Trust 16.43% 18.50%
ALC Lifestyle Growth and Income Fund Master Trust 14.93% 14.92%
The composition of the net assets of the ALC Fixed Income Master Trust at
December 31, 1997 and 1996 was as follows:
</TABLE>
<TABLE>
<CAPTION>
1997 1996
--------------------------------------------
<S> <C> <C>
Guaranteed investment contracts:
Confederation Life Insurance Company $ 29,118 $ 4,024,149
Continental Assurance Company 6,718,924 9,404,989
John Hancock Life Insurance Company 2,600,000 -
Life Insurance Company of Virginia 8,725,219 15,918,713
New York Life Insurance Company 15,169,828 14,124,589
Pacific Mutual Life Insurance Company 5,793,190 5,441,658
Peoples Security Life Insurance Company 11,038,629 10,403,430
Prudential Insurance Company 6,144,220 14,396,590
Southland Life Insurance Company 16,288,645 15,200,545
Security Life of Denver - 5,000,000
Protective Life Insurance Company - 3,751,970
Transamerica Occidental 10,936,663 10,597,526
--------------------------------------------
83,444,436 108,264,159
</TABLE>
95
<PAGE> 96
3. INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
1997 1996
--------------------------------------------
<S> <C> <C>
Synthetic contracts:
Caisse des Depots et Consignations 3,879,321 3,642,950
Peoples Security 2,948,698 -
Transamerica Occidental 13,865,850 -
Union Bank of Switzerland 5,937,712 5,920,612
Westdeutsche Landesbank 13,727,581 13,668,143
--------------------------------------------
40,359,162 23,231,705
Temporary short-term investments 10,765,309 9,512,226
Accrued interest receivable 733,753 655,473
Other payables (6,169) (4,306)
============================================
Total net assets $135,296,491 $141,659,257
============================================
</TABLE>
In May 1997, the Allegheny Ludlum Corporation Fixed Income Master Trust received
approximately $4,500,000 related to the Confederation Life Insurance Company
Guaranteed Investment Contract in accordance with the liquidation plan.
Management is unable to determine additional amounts, if any, that will be
received by the Allegheny Ludlum Corporation Fixed Income Master Trust.
The composition of net assets of the ALC Alliance Equity Master Trust at
December 31, 1997 and 1996 was as follows:
<TABLE>
<CAPTION>
1997 1996
--------------------------------------------
<S> <C> <C>
Investment in registered investment companies:
Alliance Equity Fund S.A. #4 (865.1940 and 994.6310 shares,
respectively) $60,199,619 $53,579,310
Cash 90 -
Operating payables (10,341) (16,348)
============================================
Total net assets $60,189,368 $53,562,962
============================================
</TABLE>
96
<PAGE> 97
3. INVESTMENTS (CONTINUED)
The composition of net assets of the ALC ATI Common Stock Master Trust at
December 31, 1997 and 1996 was as follows:
<TABLE>
<CAPTION>
1997 1996
--------------------------------------------
<S> <C> <C>
Allegheny Teledyne Incorporated Common Stock (1,347.732 and
1,537.708 shares, respectively) $34,872,566 $35,367,284
Receivables 4,527 58,750
Short Term Investment Fund 738,595 48,275
Operating payables (822) (564)
============================================
Total net assets $35,614,866 $35,473,745
============================================
</TABLE>
The composition of assets of the ALC Lifestyle Growth Fund Master Trust at
December 31, 1997 and 1996 was as follows:
<TABLE>
<CAPTION>
1997 1996
--------------------------------------------
<S> <C> <C>
Dreyfus Lifestyle Growth Fund $5,117,053 $1,949,121
Operating payables (5) (1)
============================================
$5,117,048 $1,949,120
============================================
</TABLE>
The composition of assets of the ALC Lifestyle Income Fund Master Trust at
December 31, 1997 and 1996 was as follows:
<TABLE>
<CAPTION>
1997 1996
--------------------------------------------
<S> <C> <C>
Dreyfus Lifestyle Income Fund $1,825,632 $590,191
Operating payables (2) -
============================================
$1,825,630 $590,191
============================================
</TABLE>
97
<PAGE> 98
3. INVESTMENTS (CONTINUED)
The composition of assets of the ALC Lifestyle Growth and Income Fund Master
Trust at December 31, 1997 and 1996 was as follows:
<TABLE>
<CAPTION>
1997 1996
--------------------------------------------
<S> <C> <C>
Dreyfus Lifestyle Growth and Income Fund $22,740,752 $18,049,004
Receivables 58 1
============================================
$22,740,808 $18,049,005
============================================
</TABLE>
Detail information regarding the composition of the various Lifestyle funds are
reported in the separate collective trust filings.
The composition of the changes in net assets of the various master trusts is as
follows:
<TABLE>
<CAPTION>
ALC FIXED INCOME MASTER TRUST ALC ALLIANCE EQUITY MASTER ALC ATI COMMON STOCK MASTER
TRUST TRUST
------------------------------ ------------------------------- ------------------------------
YEAR ENDED DECEMBER 31
---------------------------------------------------------------------------------------------
1997 1996 1997 1996 1997 1996
--------------- -------------- ---------------- -------------- --------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Interest income
(loss) $ 8,694,877 $ 8,255,640 $ - $ 16,937 $ (1,554) $ 15,713
Realized gains on
sale of
investments - - - - 1,835,342 1,588,011
Unrealized
appreciation in
fair value of
investments - - - - 2,318,151 3,346,346
Dividends - - - - 837,662 537,617
Net gain,
registered
investment
companies - - 13,819,313 7,335,440 - -
Net gain, common
collective funds 468,281 743,008 - - 73,411 -
Other income 1,343 - - - - -
Administrative
expenses (189,938) (256,059) (211,873) (173,713) (27,286) (14,043)
Transfers (15,337,329) (10,804,451) (6,981,034) 5,469,649 (4,894,605) 30,000,101
--------------------------------------------------------------------------------------------
Net increase
(decrease) (6,362,766) (2,091,862) 6,626,406 12,648,313 141,121 35,473,745
Total net assets at
beginning of year 141,659,257 143,751,119 53,562,962 40,914,649 35,473,745 -
============================================================================================
Total net assets at
end of year $135,296,491 $141,659,257 $60,189,368 $53,562,962 $35,614,866 $35,473,745
============================================================================================
</TABLE>
98
<PAGE> 99
3. INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
ALC LIFESTYLE GROWTH FUND ALC LIFESTYLE INCOME FUND ALC LIFESTYLE GROWTH AND
MASTER TRUST MASTER TRUST INCOME FUND MASTER TRUST
------------------------------ ------------------------------- ------------------------------
YEAR ENDED DECEMBER 31
---------------------------------------------------------------------------------------------
1997 1996 1997 1996 1997 1996
--------------- -------------- ---------------- -------------- --------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Interest income $ - $ - $ 105 $ - $ - $ 110
Realized gains on
sale of - - - - - 3,769,730
investments
Unrealized
depreciation in
fair value of - - - - - (3,794,673)
investments
Net gain, common
collective funds 882,650 113,120 152,034 24,356 3,853,009 1,384,385
Transfers 2,285,394 1,836,065 1,083,338 565,870 838,793 762,689
Administrative (116) (65) (38) (35) - (402)
expenses
-------------------------------------------------------------------------------------------
Net increase 3,167,928 1,949,120 1,235,439 590,191 4,691,803 2,121,839
Total net assets at
beginning of year 1,949,120 - 590,191 - 18,049,005 15,927,166
===========================================================================================
Total net assets at
end of year $5,117,048 $1,949,120 $1,825,630 $590,191 $22,740,808 $18,049,005
===========================================================================================
</TABLE>
The average yield for 1997 and 1996 for the ALC Fixed Income Master Trust was
6.57% and 6.43%, respectively. Credited interest rates on the contracts ranged
from 5.60% to 8.18% and 5.24% to 8.18% for 1997 and 1996, respectively, and are
determined at contract inception.
Interest, realized and unrealized gains and losses, and management fees from the
master trusts are included in the allocation of net earnings (losses) from
master trusts on the statement of changes in net assets available for benefits.
99
<PAGE> 100
3. INVESTMENTS (CONTINUED)
The changes in cumulative net unrealized gain (loss) for the years ended
December 31, 1997 and 1996 are as follows:
<TABLE>
<CAPTION>
DREYFUS DREYFUS
LIFESTYLE DREYFUS SMALL INTER-
GROWTH LIFESTYLE LIFESTYLE ALLIANCE DISCIPLINED COMPANY NATIONAL
AND INCOME GROWTH INCOME EQUITY STOCK VALUE VALUE
FUND FUND FUND FUND FUND FUND FUND
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1995 $ - $ - $ - $ 2,060,176 $ - $ - $ -
Unrealized gain (loss) 196,606 16,304 3,120 (1,711,785) 16,419 (16,463) 3,608
---------------------------------------------------------------------------------------------
Balance at December 31, 1996 196,606 16,304 3,120 348,391 16,419 (16,463) 3,608
Unrealized gain (loss) 487,633 112,824 12,082 1,981,168 267,954 262,658 (20,924)
---------------------------------------------------------------------------------------------
Balance at December 31, 1997 $684,239 $129,128 $15,202 $ 2,329,559 $284,373 $246,195 $(17,316)
=============================================================================================
</TABLE>
<TABLE>
<CAPTION>
COMPANY STOCK
STOCK INDEX DIVERSIFIED
FUND FUND FUND TOTAL
--------------------------------------------------------
<S> <C> <C> <C> <C>
Balance at December 31, 1995 $284,448 $ 65,352 $ 458,411 $ 2,868,387
Unrealized gain (loss) 556,710 (65,352) (458,411) (1,459,244)
--------------------------------------------------------
Balance at December 31, 1996 841,158 - - 1,409,143
Unrealized gain (loss) 113,745 - - 3,217,140
--------------------------------------------------------
Balance at December 31, 1997 $954,903 $ - $ - $ 4,626,283
========================================================
</TABLE>
100
<PAGE> 101
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 of 1986 (the Code) and that the trust, therefore,
is exempt from taxation. Once qualified, the Plan is required to operate in
conformity with the Code and ERISA to maintain its tax-exempt status. The
administrator is not aware of any course of action or series of events that have
occurred that might adversely affect the Plan's qualified status.
5. TRANSACTIONS WITH PARTIES-IN-INTEREST
Investment fees paid during the year for services rendered were based on
customary and reasonable rates for such services.
6. YEAR 2000 (UNAUDITED)
Allegheny Teledyne has initiated formal communications with its significant
service providers (plan trustee and plan recordkeeper) to determine the extent
to which the Plan's systems or operations are vulnerable to those parties'
failure to remediate their own Year 2000 issues. In addition, Allegheny Teledyne
has been reviewing its own internal systems that impact the processing of
employee benefits. Allegheny Teledyne expects that all necessary modifications
to these internal systems will be completed prior to any significant impact on
these internal systems.
The Plan's service providers have indicated that they are presently taking steps
to ensure that the Plan's systems and operations will be Year 2000 compliant.
101
<PAGE> 102
SCHEDULES
102
<PAGE> 103
Allegheny Ludlum Corporation
Personal Retirement and 401(k) Savings Account Plan
Item 27a--Schedule of Assets Held for Investment Purposes
December 31, 1997
<TABLE>
<CAPTION>
DESCRIPTION UNIT/SHARE COST VALUE MARKET VALUE
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Dreyfus Disciplined Stock Fund*:
Interest in Dreyfus Disciplined Stock Fund 164,500.6140 shares $4,834,886 $ 5,119,259
Dreyfus Small Company Value Fund*:
Interest in Dreyfus Small Company Value Fund 139,512.8390 shares 2,693,340 2,939,535
Dreyfus International Value Fund*:
Interest in Dreyfus International Value Fund 40,182.1880 shares 603,977 586,660
Participant loans 9.25% to 9.50% - 2,607,131
--------------------------------------------
$8,132,203 $11,252,585
============================================
</TABLE>
*Represents party-in-interest.
103
<PAGE> 104
Allegheny Ludlum Corporation
Personal Retirement and 401(k) Savings Account Plan
Item 27d--Schedule of Reportable Transactions
Year ended December 31, 1997
<TABLE>
<CAPTION>
PURCHASE PURCHASE SALE SELLING GAIN
DESCRIPTION OF ASSETS TRANSACTIONS PRICE TRANSACTIONS PRICE (LOSS)
- -----------------------------------------------------------------------------------------------------------------------
Type (iii) Transactions
- -----------------------
<S> <C> <C> <C> <C> <C>
Dreyfus Disciplined Stock Fund 152 $3,692,460 - $ - $ -
Dreyfus Disciplined Stock Fund - - 100 1,704,653 186,113
Dreyfus Small Company Value Fund 164 3,014,427 - - -
Dreyfus Small Company Value Fund - - 77 892,776 73,891
Dreyfus International Value Fund 127 871,352 - - -
Dreyfus International Value Fund - - 70 490,446 29,922
</TABLE>
There were no Type (i), (ii) or (iv) transactions during the year ended
December 31, 1997.
104
<PAGE> 105
Audited Financial Statements
TELEDYNE
401(k) PLAN
Years ended December 31, 1997 and 1996
with Report of Independent Auditors
105
<PAGE> 106
Teledyne
401(k) Plan
Audited Financial Statements
Years ended December 31, 1997 and 1996
CONTENTS
<TABLE>
<S> <C>
Report of Independent Auditors ................................................................................. 107
Audited Financial Statements
Statements of Net Assets Available for Benefits ................................................................ 108
Statements of Changes in Net Assets Available for Benefits
with Fund Information ....................................................................................... 109
Notes to Financial Statements .................................................................................. 111
Schedules
Item 27a--Schedule of Assets Held for Investment Purposes........................................................ 115
Item 27d--Schedule of Reportable Transactions.................................................................... 116
</TABLE>
106
<PAGE> 107
REPORT OF INDEPENDENT AUDITORS
Personnel and Compensation Committee
Allegheny Teledyne Incorporated
We have audited the accompanying statements of net assets available for benefits
of the Teledyne 401(k) Plan ("the Plan") as of December 31, 1997 and 1996, 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 generally accepted auditing
standards. 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, information regarding the Plan's net assets available for
benefits at December 31, 1997 and 1996, and the changes therein for the years
then ended, in conformity with generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes as of December 31, 1997, and reportable transactions for
the year then ended, are presented for the purpose of additional analysis and
are not a required part of the basic 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 fund information in the statement of net assets available for benefits
and the statement of changes in net assets available for benefits is presented
for purposes of additional analysis rather than to present the net assets
available for benefits and changes in net assets available for benefits of each
fund. The supplemental schedules and Fund information have been subjected to the
auditing procedures applied in our audits of the basic financial statements and,
in our opinion, are fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
/s/Ernst & Young LLP
June 5, 1998
107
<PAGE> 108
Teledyne
401(k) Plan
Statements of Net Assets Available for Benefits
(000s Omitted)
<TABLE>
<CAPTION>
DECEMBER 31
1997 1996
-----------------------------------
<S> <C> <C>
Investments at fair value:
Income Accumulation Fund $ 14,695 $ 12,097
Growth Stock Fund 21,453 18,457
Bond Index Fund 5,475 4,126
Country Selector Fund 4,450 4,121
Allegheny Teledyne Stock Fund 18,329 14,626
S&P 500 Stock Fund 78,949 51,413
LifePath 2000 Fund 2,067 1,691
LifePath 2010 Fund 5,904 4,228
LifePath 2020 Fund 24,741 19,969
LifePath 2030 Fund 4,967 3,187
LifePath 2040 Fund 4,298 2,191
Loans receivable from participants 5,385 3,483
===================================
Net assets available for benefits $190,713 $139,589
===================================
</TABLE>
See accompanying notes.
108
<PAGE> 109
Teledyne
401(k) Plan
Notes to Financial Statements
December 31, 1997
1. ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accompanying financial statements of the Teledyne 401(k) Plan ("the Plan")
have been prepared on an accrual basis.
VALUATION OF INVESTMENTS
Funds managed by the Plan Trustee are valued at market. Allegheny Teledyne
Incorporated ("Allegheny Teledyne") stock is publicly traded and valued at
market.
ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
2. DESCRIPTION
The Plan is a defined contribution plan available to employees of eligible
Allegheny Teledyne Incorporated subsidiaries (primarily Teledyne Industries,
Inc.) and divisions ("companies"). Qualifying employee contributions are
partially matched by Allegheny Teledyne up to a maximum of $300 annually for
each participant. Effective January 1, 1998, the match was increased to $1,000
annually per participant. A more detailed description of plan provisions is
found in the formal plan documents and in summary materials distributed to
participants.
3. CHANGE IN TRUSTEE
Effective January 1, 1996, BZW Barclays Global Investors, N.A. ("Barclays")
became the Trustee of the Plan. In 1997, the retirement services division of
Barclays was sold to Merrill Lynch, Pierce, Fenner & Smith, Inc. ("Merrill
Lynch"). Accordingly, Merrill Lynch became the plan trustee and recordkeeper.
111
<PAGE> 110
4. INVESTMENT PROGRAMS
Plan participants can invest their contributions in any or all of the eleven
investment programs managed by the plan trustee listed below:
Income Accumulation Fund: This fund invests in U.S. Government and
agency securities, investment contracts, and other short-term,
fixed-income securities. The objective of this fund is to provide a
stable level of income without significant principle fluctuations.
Growth Stock Fund: This fund invests in stocks expected to have
above-average rates in revenues and earnings. Approximately 60% of the
holdings are of well-known established companies with stable long-term
growth prospects. The remaining 40% includes newly issued stocks as
well as smaller, more aggressive companies. This fund seeks to
outperform the S&P 500 Index over a period of three to five years and
limit the level of risk through diversification.
Bond Index Fund: This fund invests in a diversified portfolio of
high-quality U.S. Government and investment-grade corporate bonds. The
objective of this fund is to earn moderate returns with a moderate
level of risk.
Country Selector Fund: This fund invests in international stocks from
20 countries, after first determining the appropriate allocation among
the countries. The fund seeks high returns by selecting the mix of
foreign equities believed to offer the best reward given the overall
fund risk.
Allegheny Teledyne Stock Fund: This fund invests in Allegheny Teledyne
stock. The rate of return is based on the performance of Allegheny
Teledyne stock and dividends received, and may increase or decrease in
value.
S&P 500 Stock Fund: This fund invests in a large portfolio of stocks,
represented in the Standard and Poor's 500 Composite Index, and
emphasizes long-term performance. There is no fixed rate of return; the
fund is designed to conform as closely as possible to the performance
of the Standard and Poor's 500 Composite Index, and may increase or
decrease in value.
112
<PAGE> 111
4. INVESTMENT PROGRAMS (CONTINUED)
LifePath Funds: There are five LifePath Funds: LifePath 2000, LifePath
2010, LifePath 2020, LifePath 2030, and LifePath 2040. The numbers in
the names refer to the target date of the fund. These funds invest in a
mix of U.S. and international stocks, bonds, and money market
instruments. Each fund adjusts its mix of investments based on the
expected risk and return of the different asset classes in which they
invest. The objective of each fund is to maximize returns while
maintaining a level of risk appropriate to its target date. The nearer
the target date, the more conservatively the fund invests.
5. FEDERAL INCOME TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
dated December 2, 1997, stating that the Plan is qualified under section 401(a)
of the Internal Revenue Code of 1986 (the "Code") and that the trust, therefore,
is exempt from taxation. Once qualified, the Plan is required to operate in
conformity with the Code and ERISA to maintain its tax-exempt status. The
administrator is not aware of any course of action or series of events that have
occurred that might adversely affect the Plan's qualified status.
6. YEAR 2000 (UNAUDITED)
Allegheny Teledyne has initiated formal communications with its significant
service providers (plan trustee and plan recordkeeper) to determine the extent
to which the Plan's systems or operations are vulnerable to those parties'
failure to remediate their own Year 2000 issues. In addition, Allegheny Teledyne
has been reviewing its own internal systems that impact the processing of
employee benefits. Allegheny Teledyne expects that all necessary modifications
to these internal systems will be completed prior to any significant impact on
these internal systems.
The Plan's service providers have indicated that they are presently taking steps
to ensure that the Plan's systems and operations will be Year 2000 compliant.
113
<PAGE> 112
SCHEDULES
114
<PAGE> 113
Teledyne
401(k) Plan
Item 27a--Schedule of Assets Held for Investment Purposes
December 31, 1997
(000s Omitted)
Except for share/unit information
<TABLE>
<CAPTION>
ISSUE, INVESTMENT DESCRIPTION, SHARES/ MARKET VALUE
RATE OF INTEREST, MATURITY DATE UNITS COST
- -------------------------------------------------------- ---------------------- ----------------- ----------------
Collective/Common Trust funds
- -----------------------------
<S> <C> <C> <C>
Income Accumulation Fund 1,053,084.849 $ 14,695 $ 14,695
Growth Stock Fund 1,043,426.987 19,955 21,453
Bond Index Fund 481,493.555 4,919 5,475
Country Selector Fund 445,439.210 4,602 4,450
Allegheny Teledyne Stock Fund* 885,900.624 12,725 18,329
S&P 500 Stock Fund 4,837,566.418 52,785 78,949
LifePath 2000 Fund 177,424.209 1,856 2,067
LifePath 2010 Fund 473,807.864 4,979 5,904
LifePath 2020 Fund 1,828,633.782 18,969 24,741
LifePath 2030 Fund 364,961.643 3,922 4,967
LifePath 2040 Fund 307,459.216 3,533 4,298
Participant loans 5.85% to 9% - 5,385
----------------------------------
$142,940 $190,713
==================================
</TABLE>
* Party-in-interest
115
<PAGE> 114
Teledyne
401(k) Plan
Item 27d--Schedule of Reportable Transactions
Year ended December 31, 1997
(000s Omitted)
Except for purchase and sale transactions
<TABLE>
<CAPTION>
PURCHASE PURCHASE SALE
DESCRIPTION OF ASSETS TRANSACTIONS PRICE TRANSACTIONS SELLING PRICE GAIN (LOSS)
- ---------------------------------------- ---------------- ----------------- ---------------- ----------------- ----------------
Type (iii) transactions:
- ------------------------
<S> <C> <C> <C> <C> <C>
Income Accumulation Fund 138 $7,528 - $ - $ -
Income Accumulation Fund - - 115 5,773 -
Growth Stock Fund 140 6,117 - - -
Growth Stock Fund - - 113 3,941 138
Allegheny Teledyne Stock Fund 144 6,954 - - -
Allegheny Teledyne Stock Fund - - 109 5,329 2,233
S&P 500 Stock Fund 164 12,925 - - -
S&P 500 Stock Fund - - 89 3,925 1,095
</TABLE>
There were no Type (i), (ii) or (iv) transactions during the year ended
December 31, 1997.
116
<PAGE> 115
Teledyne
401(k) Plan
Statement of Changes in Net Assets Available for Benefits with Fund Information
Year ended December 31, 1997
(000s Omitted)
<TABLE>
<CAPTION>
INCOME GROWTH BOND COUNTRY ALLEGHENY S&P 500 LIFEPATH LIFEPATH
ACCUMULATION STOCK INDEX SELECTOR TELEDYNE STOCK 2000 2010
FUND FUND FUND FUND STOCK FUND FUND FUND FUND
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net investments
income:
Interest $ 841 $ - $ - $ - $ - $ - $ - $ -
income
Net realized/
unrealized
appreciation
(depreciation)
in fair value
of investments - 821 452 (163) 2,079 18,536 178 732
Expenses (11) (8) (1) (1) (10) (29) (1) -
--------------------------------------------------------------------------------------------------
830 813 451 (164) 2,069 18,507 177 732
Contributions
from participants 2,408 5,409 1,268 1,391 2,434 10,475 387 1,170
Contributions
from employer 346 555 147 144 280 1,050 41 113
Rollover
contributions 495 417 117 84 130 713 5 68
Other, net 289 82 - (2) 10 (5) (2) (7)
--------------------------------------------------------------------------------------------------
4,368 7,276 1,983 1,453 4,923 30,740 608 2,076
Distributions
to participant
or their
beneficiaries (2,505) (1,161) (432) (378) (1,726) (4,381) (175) (320)
Interfund
transfers 784 (3,027) (197) (738) 589 1,280 (48) (75)
Transfers
of plan
assets (49) (92) (5) (8) (83) (103) (9) (5)
--------------------------------------------------------------------------------------------------
Increase in net
assets
available
for benefits 2,598 2,996 1,349 329 3,703 27,536 376 1,676
Net assets
available
for benefits
at beginning
of year 12,097 18,457 4,126 4,121 14,626 51,413 1,691 4,228
--------------------------------------------------------------------------------------------------
Net assets
available
for benefits
at end of year $14,695 $21,453 $5,475 $4,450 $18,329 $78,949 $2,067 $5,904
==================================================================================================
</TABLE>
<TABLE>
<CAPTION>
LIFEPATH LIFEPATH LIFEPATH
2020 2030 2040 LOAN SWEEP
FUND FUND FUND FUND ACCOUNT TOTAL
-------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net investments
income:
Interest $ - $ - $ - $ 372 $ 1 $ 1,214
income
Net realized/
unrealized
appreciation
(depreciation)
in fair value
of investments 3,898 812 668 - - 28,013
Expenses (10) (2) (3) - (10) (86)
-------------------------------------------------------------
3,888 810 665 372 (9) 29,141
Contributions
from participants 3,089 1,048 948 - - 30,027
Contributions
from employer 343 120 111 - - 3,250
Rollover
contributions 150 69 69 - - 2,317
Other, net 50 (1) (1) - (8) 405
-------------------------------------------------------------
7,520 2,046 1,792 372 (17) 65,140
Distributions
to participant
or their
beneficiaries (1,563) (256)
Interfund
transfers (1,105) (10) 473 2,054 20 -
Transfers
of plan
assets (80) - - - - (434)
-------------------------------------------------------------
Increase in net
assets
available
for benefits 4,772 1,780 2,107 1,902 - 51,124
Net assets
available
for benefits
at beginning
of year 19,969 3,187 2,191 3,483 - 139,589
-------------------------------------------------------------
Net assets
available
for benefits
at end of year $24,741 $4,967 $4,298 $5,385 $ - $190,713
=============================================================
</TABLE>
See accompanying notes.
109
<PAGE> 116
Teledyne
401(k) Plan
Statement of Changes in Net Assets Available for Benefits with Fund Information
Year ended December 31, 1996
(000s Omitted)
<TABLE>
<CAPTION>
INCOME GROWTH BOND COUNTRY ALLEGHENY S&P 500 LIFEPATH LIFEPATH
ACCUMULATION STOCK INDEX SELECTOR TELEDYNE STOCK 2000 2010
FUND FUND FUND FUND STOCK FUND FUND FUND FUND
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net investments
income:
Interest
income $ 633 $ $ - $ - $ - $ - $ - $ -
Net realized/
unrealized
appreciation
in fair value
of investments - 846 189 35 6,426 9,409 90 304
Expenses (6) (3) (1) (1) (5) (15) - -
--------------------------------------------------------------------------------------------------
627 843 188 34 6,421 9,394 90 304
Contributions
from participants 2,904 4,466 1,019 1,180 1,972 9,684 328 871
Contributions
from employer 654 309 91 90 290 1,150 24 61
Rollover
contributions 118 223 48 25 29 358 26 38
Other, net 282 7 9 6 24 45 8 1
--------------------------------------------------------------------------------------------------
4,585 5,848 1,355 1,335 8,736 20,631 476 1,275
Distributions to
participant or
their
beneficiaries (1,845) (450) (169) (92) (1,100) (3,617) (80) (36)
Interfund transfers (4,673) 13,059 2,944 2,880 (1,666) (10,076) 1,299 2,989
Transfers of plan
assets (34) - (4) (2) (68) (124) (4) -
--------------------------------------------------------------------------------------------------
Increase
(decrease) in
net assets
available
for benefits (1,967) 18,457 4,126 4,121 5,902 6,814 1,691 4,228
Net assets
available
for benefits
at beginning
of year 14,064 - - - 8,724 44,599 - -
==================================================================================================
Net assets
available
for benefits
at end of year $12,097 $18,457 $4,126 $4,121 $14,626 $51,413 $1,691 $4,228
==================================================================================================
</TABLE>
<TABLE>
<CAPTION>
LIFEPATH LIFEPATH LIFEPATH
2020 2030 2040 LOAN SWEEP
FUND FUND FUND FUND ACCOUNT TOTAL
------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net investments
income:
Interest
income $ $ - $ - $ 179 $ 4 $ 816
Net realized/
unrealized
appreciation
in fair value
of investments 2,600 307 209 - - 20,415
Expenses (7) (1) (1) - (4) (44)
------------------------------------------------------------
2,593 306 208 179 - 21,187
Contributions
from participants 3,873 726 569 - - 27,592
Contributions
from employer 557 72 67 - - 3,365
Rollover
contributions 175 28 38 - - 1,106
Other, net 2 2 2 - (19) 369
------------------------------------------------------------
7,200 1,134 884 179 (19) 53,619
Distributions to
participant or
their
beneficiaries (1,895) (51) (59) (272) (3) (9,669)
Interfund transfers (12,640) 2,104 1,366 2,392 22 -
Transfers of plan
assets (60) - - - - (296)
------------------------------------------------------------
Increase
(decrease) in
net assets
available
for benefits (7,395) 3,187 2,191 2,299 - 43,654
Net assets
available
for benefits
at beginning
of year 27,364 - - 1,184 - 95,935
============================================================
Net assets
available
for benefits
at end of year $19,969 $3,187 $2,191 $3,483 $ - $139,589
============================================================
</TABLE>
See accompanying notes.
110
<PAGE> 117
Audited Financial Statements
OREGON METALLURGICAL
CORPORATION SAVINGS PLAN
Employer Identification Number 93-0448167
Plan Number 004
Years ended December 31, 1997 and 1996
with Report of Independent Auditors
117
<PAGE> 118
Audited Financial Statements
Oregon Metallurgical Corporation Savings Plan
Employer Identification Number 93-0448167
Plan Number 004
Years ended December 31, 1997 and 1996
with Report of Independent Auditors
118
<PAGE> 119
Oregon Metallurgical Corporation Savings Plan
Employer Identification Number 93-0448167
Plan Number 004
Audited Financial Statements
Years ended December 31, 1997 and 1996
CONTENTS
<TABLE>
<S> <C>
Report of Independent Auditors ................................................................................. 120
Audited Financial Statements
Statement of Net Assets Available for Benefits with Fund Information--
December 31, 1997 ........................................................................................... 121
Statement of Net Assets Available for Benefits with Fund Information--
December 31, 1996 ........................................................................................... 122
Statement of Changes in Net Assets Available for Benefits with Fund Information--
Year ended December 31, 1997 ................................................................................ 123
Statement of Changes in Net Assets Available for Benefits with Fund Information--
Year ended December 31, 1996 ................................................................................ 124
Notes to Financial Statements .................................................................................. 125
Schedules
Item 27a--Schedule of Assets Held for Investment Purposes ....................................................... 132
Item 27d--Schedule of Reportable Transactions.................................................................... 133
</TABLE>
119
<PAGE> 120
Report of Independent Auditors
To the Plan Administrator and Plan Participants
Oregon Metallurgical Corporation Savings Plan
We have audited the accompanying statement of net assets available for benefits
of Oregon Metallurgical Corporation Savings Plan (the Plan) as of December 31,
1997, and the related statement of changes in net assets available for benefits
for the year 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 audit. The financial statements of the Plan as
of December 31, 1996, and for the year then ended, were audited by other
auditors whose report dated June 10, 1997 expressed an unqualified opinion on
those statements.
We conducted our audit in accordance with generally accepted auditing standards.
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 audit provides 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 at December 31,
1997, and the changes in net assets available for benefits for the year then
ended in conformity with generally accepted accounting principles.
Our audit was performed for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental schedules of assets held for
investment purposes as of December 31, 1997 and reportable transactions for the
year ended December 31, 1997 are presented for the purpose of additional
analysis and are not a required part of the basic financial statements, but are
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 Fund Information in the statement of net assets
available for benefits and the statement of changes in net assets available for
benefits is presented for purposes of additional analysis rather than to present
the net assets available for benefits and changes in net assets available for
benefits of each fund. The supplemental schedules and Fund Information have been
subjected to the auditing procedures applied in the audit of the 1997 financial
statements and, in our opinion, are fairly stated in all material respects in
relation to the 1997 financial statements taken as a whole.
The schedule of assets held for investment purposes that accompanies the Plan's
financial statements does not disclose the historical cost of certain plan
assets held by the plan trustee because this information is not available.
Disclosure of this information is required by the Department of Labor's Rules
and Regulations for Reporting and Disclosure under the Employee Retirement
Income Security Act of 1974.
/s/Ernst & Young LLP
June 15, 1998
120
<PAGE> 121
Oregon Metallurgical Corporation Savings Plan
Statement of Net Assets Available for Benefits with Fund Information
December 31, 1997
<TABLE>
<CAPTION>
FUND INFORMATION
-----------------------------------------------------------------------------------------
PARTICIPANT DIRECTED FUNDS
-----------------------------------------------------------------------------------------
U.S. FIXED COMMON INTERNATIONAL REAL
GOVERNMENT BALANCED INCOME STOCK STOCK SPECIAL ESTATE
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value $208,315 $1,162,980 $315,615 $1,199,560 $598,492 $1,499,511 $222,199
Receivables:
Participants' contribution 2,248 13,861 4,225 12,955 10,799 19,945 1,531
Employer's matching contribution - - - - - - -
Employer's share-per-day
contribution - - - - - - -
Interfund transfers (1,680) 11,879 (949) 7,326 3,556 2,822 (22,954)
-----------------------------------------------------------------------------------------
Total assets 208,883 1,188,720 318,891 1,219,841 612,847 1,522,278 200,776
LIABILITIES
Payable to participants 13,656 86,008 15,097 114,863 45,376 122,192 10,901
=========================================================================================
Net assets available for benefits $195,227 $1,102,712 $303,794 $1,104,978 $567,471 $1,400,086 $189,875
=========================================================================================
</TABLE>
<TABLE>
<CAPTION>
FUND INFORMATION
------------------------------
NONPARTICIPANT
DIRECTED
----------------
OREGON
METALLURGICAL
CORPORATION PARTICIPANT
STOCK LOANS TOTAL
-----------------------------------------------
<S> <C> <C> <C>
ASSETS
Investments, at fair value $ 9,336,361 $263,943 $14,806,976
Receivables:
Participants' contribution - - 65,564
Employer's matching contribution 912,105 - 912,105
Employer's share-per-day
contribution 3,062,606 - 3,062,606
Interfund transfers - - -
-----------------------------------------------
Total assets 13,311,072 263,943 18,847,251
LIABILITIES
Payable to participants - - 408,093
===============================================
Net assets available for benefits $13,311,072 $263,943 $18,439,158
===============================================
</TABLE>
See accompanying notes.
121
<PAGE> 122
Oregon Metallurgical Corporation Savings Plan
Statement of Net Assets Available for Benefits with Fund Information
December 31, 1996
<TABLE>
<CAPTION>
FUND INFORMATION
--------------------------------------------------------------------------------------------
PARTICIPANT DIRECTED FUNDS
--------------------------------------------------------------------------------------------
U.S. FIXED COMMON INTERNATIONAL
GOVERNMENT BALANCED INCOME STOCK STOCK SPECIAL
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value $100,053 $503,709 $178,513 $430,309 $285,029 $752,236
Receivables:
Participants' contribution 2,171 10,194 2,496 9,116 5,300 15,898
Employer's matching contribution - - - - - -
Employer's share-per-day - - - - - -
contribution
Interfund transfers (4,343) (3,122) (1,106) 9,289 (1,665) 947
--------------------------------------------------------------------------------------------
Total assets 97,881 510,781 179,903 448,714 288,664 769,081
LIABILITIES
Payable to participants 7,556 47,478 10,444 44,560 23,521 72,761
============================================================================================
Net assets available for benefits $ 90,325 $463,303 $169,459 $404,154 $265,143 $696,320
============================================================================================
</TABLE>
<TABLE>
<CAPTION>
FUND INFORMATION
--------------------------------
NONPARTICIPANT
DIRECTED
-----------------
OREGON
METALLURGICAL
CORPORATION PARTICIPANT
STOCK LOANS TOTAL
-----------------------------------------------
<S> <C> <C> <C>
ASSETS
Investments, at fair value $5,207,245 $28,745 $ 7,485,839
Receivables:
Participants' contribution - - 45,175
Employer's matching contribution 291,895 - 291,895
Employer's share-per-day 2,209,480 - 2,209,480
contribution
Interfund transfers - - -
-----------------------------------------------
Total assets 7,708,620 28,745 10,032,389
LIABILITIES
Payable to participants - - 206,320
===============================================
Net assets available for benefits $7,708,620 $28,745 $ 9,826,069
===============================================
</TABLE>
See accompanying notes.
122
<PAGE> 123
Oregon Metallurgical Corporation Savings Plan
Statement of Changes in Net Assets Available for Benefits with Fund Information
Year ended December 31, 1997
<TABLE>
<CAPTION>
FUND INFORMATION
------------------------------------------------------------------------------------------
PARTICIPANT DIRECTED FUNDS
------------------------------------------------------------------------------------------
U.S. FIXED COMMON INTERNATIONAL REAL
GOVERNMENT BALANCED INCOME STOCK STOCK SPECIAL ESTATE
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Additions:
Additions to net assets attributed
to:
Contributions:
Participants' pretax wage
reductions $ 71,499 $ 322,180 $ 73,143 $ 305,135 $173,582 $ 490,465 $ 13,303
Participants' after-tax wage
reductions 560 6,015 - 5,112 4,832 4,692 945
Employer's matching
contribution - - - - - - -
Employer's share-per-day - - - - - - -
Participants' rollovers 15,510 70,471 27,362 75,135 15,648 54,220 -
------------------------------------------------------------------------------------------
Total contributions 87,569 398,666 100,505 385,382 194,062 549,377 14,248
Investment income:
Dividend and interest income 8,153 126,210 16,729 103,496 67,748 140,425 10,199
Net appreciation (depreciation)
in fair value of investments 1,343 18,774 7,648 73,008 (24,988) 7,977 3,267
------------------------------------------------------------------------------------------
Total investment income 9,496 144,984 24,377 176,504 42,760 148,402 13,466
------------------------------------------------------------------------------------------
Total additions 97,065 543,650 124,882 561,886 236,822 697,779 27,714
Deductions:
Benefits paid to participants (44) (18,987) (594) (7,671) (8,447) (39,895) (6,664)
------------------------------------------------------------------------------------------
Increase prior to interfund transfers 97,021 524,663 124,288 554,215 228,375 657,884 21,050
Participant directed transfers 7,881 114,746 10,047 146,609 73,953 45,882 168,825
------------------------------------------------------------------------------------------
Net increase 104,902 639,409 134,335 700,824 302,328 703,766 189,875
Net assets available for benefits:
Beginning of year 90,325 463,303 169,459 404,154 265,143 696,320 -
==========================================================================================
End of year $195,227 $1,102,712 $303,794 $1,104,978 $567,471 $1,400,086 $189,875
==========================================================================================
</TABLE>
<TABLE>
<CAPTION>
FUND INFORMATION
------------------------------
NONPARTICIPANT
DIRECTED
----------------
OREGON
METALLURGICAL
CORPORATION PARTICIPANT
STOCK LOANS TOTAL
---------------------------------------------
<S> <C> <C> <C>
Additions:
Additions to net assets attributed
to:
Contributions:
Participants' pretax wage
reductions $ - $ - $ 1,449,307
Participants' after-tax wage
reductions - - 22,156
Employer's matching
contribution 912,105 - 912,105
Employer's share-per-day 4,489,154 - 4,489,154
Participants' rollovers - - 258,346
---------------------------------------------
Total contributions 5,401,259 - 7,131,068
Investment income:
Dividend and interest income - 6,650 479,610
Net appreciation (depreciation)
in fair value of investments 1,139,533 - 1,226,562
---------------------------------------------
Total investment income 1,139,533 6,650 1,706,172
---------------------------------------------
Total additions 6,540,792 6,650 8,837,240
Deductions:
Benefits paid to participants (139,079) (2,770) (224,151)
---------------------------------------------
Increase prior to interfund transfers 6,401,713 3,880 8,613,089
Participant directed transfers (799,261) 231,318 -
---------------------------------------------
Net increase 5,602,452 235,198 8,613,089
Net assets available for benefits:
Beginning of year 7,708,620 28,745 9,826,069
=============================================
End of year $13,311,072 $263,943 $18,439,158
=============================================
</TABLE>
See accompanying notes.
123
<PAGE> 124
Oregon Metallurgical Corporation Savings Plan
Statement of Changes in Net Assets Available for Benefits with Fund Information
Year ended December 31, 1996
<TABLE>
<CAPTION>
FUND INFORMATION
--------------------------------------------------------------------------------------------
PARTICIPANT DIRECTED FUNDS
--------------------------------------------------------------------------------------------
U.S. FIXED COMMON INTERNATIONAL
GOVERNMENT BALANCED INCOME STOCK STOCK SPECIAL
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Additions:
Additions to net assets attributed
to:
Contributions:
Participants' pretax wage
reductions $53,883 $232,714 $ 54,585 $194,864 $120,675 $361,795
Participants' after-tax wage
reductions 2,070 7,027 1,510 7,866 8,014 9,578
Employer's matching contribution - - - - - -
Employer's share-per-day - - - - - -
Participants' rollovers 4,769 40,755 67,578 8,243 1,045 5,555
--------------------------------------------------------------------------------------------
Total contributions 60,722 280,496 123,673 210,973 129,734 376,928
Investment income:
Dividend and interest income 3,241 14,522 7,637 3,530 4,307 -
Net appreciation (depreciation)
in fair value of investments (216) 30,897 (379) 51,070 26,456 62,100
--------------------------------------------------------------------------------------------
Total investment income 3,025 45,419 7,258 54,600 30,763 62,100
--------------------------------------------------------------------------------------------
Total additions 63,747 325,915 130,931 265,573 160,497 439,028
Deductions:
Benefits paid to participants (3,194) (53,892) (1,033) (26,634) (14,236) (48,241)
--------------------------------------------------------------------------------------------
Increase prior to interfund transfers 60,553 272,023 129,898 238,939 146,261 390,787
Participant directed transfers (7,410) (12,885) (6,016) 11,782 (4,158) (9,939)
--------------------------------------------------------------------------------------------
Net increase 53,143 259,138 123,882 250,721 142,103 380,848
Net assets available for benefits:
Beginning of year 37,182 204,165 45,577 153,433 123,040 315,472
============================================================================================
End of year $90,325 $463,303 $169,459 $404,154 $265,143 $696,320
============================================================================================
</TABLE>
<TABLE>
<CAPTION>
FUND INFORMATION
----------------------------------
NONPARTICIPANT
DIRECTED
-----------------
OREGON
METALLURGICAL
CORPORATION PARTICIPANT
STOCK LOANS TOTAL
-------------------------------------------------
<S> <C> <C> <C>
Additions:
Additions to net assets attributed
to:
Contributions:
Participants' pretax wage
reductions $ - $ - $1,018,516
Participants' after-tax wage
reductions - - 36,065
Employer's matching contribution 764,648 - 764,648
Employer's share-per-day 3,265,688 - 3,265,688
Participants' rollovers - - 127,945
-------------------------------------------------
Total contributions 4,030,336 - 5,212,862
Investment income:
Dividend and interest income - 119 33,356
Net appreciation (depreciation)
in fair value of investments 2,864,795 - 3,034,723
-------------------------------------------------
Total investment income 2,864,795 119 3,068,079
-------------------------------------------------
Total additions 6,895,131 119 8,280,941
Deductions:
Benefits paid to participants (436,601) - (583,831)
-------------------------------------------------
Increase prior to interfund transfers 6,458,530 119 7,697,110
Participant directed transfers - 28,626 -
-------------------------------------------------
Net increase 6,458,530 28,745 7,697,110
Net assets available for benefits:
Beginning of year 1,250,090 - 2,128,959
=================================================
End of year $7,708,620 $28,745 $9,826,069
=================================================
</TABLE>
See accompanying notes.
124
<PAGE> 125
Oregon Metallurgical Corporation Savings Plan
Notes to Financial Statements
December 31, 1997
1. PLAN DESCRIPTION
The following description of the Oregon Metallurgical Corporation (Company)
Savings Plan (the Plan) provides only general information. Participants should
refer to the plan agreement for a more complete description of the Plan's
provisions.
GENERAL
The Plan is a profit sharing plan covering all employees of the Company who have
completed 120 calendar days of employment with the Company. The Plan is subject
to the provisions of the Employee Retirement Income Security Act of 1974
(ERISA).
CONTRIBUTIONS
Salary Reduction and Matching Contributions--Each year, participants
may contribute up to 15%, subject to Internal Revenue Service
limitations, of pretax annual compensation, as defined in the Plan.
Participants may also contribute amounts representing distributions
from other qualified defined benefit or defined contribution plans. The
Company contributes, based on its return on equity, matching
contributions of up to 3% of participant's salary reduction
contributions.
Equity Contributions--Each year the Company will contribute 1 share of
Company common stock for each day worked by a salaried employee, and
.125 shares of Company common stock for each hour worked up to 12 hours
by hourly employees subject to collective bargaining agreements.
Company Voluntary Contributions--Each year the Company may contribute a
supplemental company contribution in an amount to be determined by the
discretion of the Board of Directors. These contributions are subject
to certain provisions of the Plan. There were no Company Voluntary
Contributions in 1997 and 1996.
PARTICIPANT ACCOUNTS
The Company maintains separate accounts for each participant including a Company
Discretionary Contribution Account, a Salary Reduction Contribution Account, a
Matching Contribution Account, an Equity Contribution Account, and an ESOP (or
other) rollover account. Each participant's account is credited with the
participant's contributions and allocations of (a) the Company's matching,
equity and discretionary contributions and (b) plan earnings. A participant is
entitled to the total benefit which can be provided from the account, subject to
the Plan's vesting provisions.
125
<PAGE> 126
1. PLAN DESCRIPTION (CONTINUED)
VESTING
Participants are immediately vested in their salary reduction and equity
contributions plus actual earnings thereon. Vesting in the Company matching and
discretionary contribution portion of their accounts plus actual earnings
thereon is based on years of continuous service. A participant is 100% vested
after five years of credited service.
INVESTMENT OPTIONS
Upon enrollment in the Plan, a participant may direct employee and employer
contributions in any of seven Columbia Common Trust Fund investment options
offered by the Plan:
U.S. Government Securities Fund--This fund invests substantially all
assets in direct obligations of the U.S. Government. These include
treasury bills, notes and bonds, all having a maturity of three years
or less.
Balanced Fund--This fund invests in common stocks and fixed income
securities. Generally, the fund may allocate 35% to 65% of fund assets
between common stock and fixed income securities and allocate up to 10%
to cash.
Fixed Income Securities Fund--This fund invests in a broad range of
intermediate to long-term fixed income securities. Generally, at least
95% of the fund's assets will be invested in investment-grade
securities.
Common Stock Fund--This fund invests in a diversified portfolio of
common stock. The fund typically invests in larger companies that are
well established. One-third of its portfolio may be in common stocks
issued by companies located in developed foreign countries, principally
those companies located in North America, Western Europe or Asia.
International Stock Fund--This fund invests primarily in equity
securities of companies based outside the United States. The fund
invests at least 75% of the portfolio in stocks of established
companies with market valuations over $500 million.
Special Fund--This fund invests in small to mid-size companies. In
special situations investments may be made in new issues; companies
that may benefit from technological or product development or new
management; or companies involved in tender offers, leveraged buyouts
or mergers. The fund may invest up to 33% of the fund assets in foreign
securities.
126
<PAGE> 127
1. PLAN DESCRIPTION (CONTINUED)
INVESTMENT OPTIONS (CONTINUED)
Real Estate Fund--This fund is an open-ended fund whose investment
objective seeks capital appreciation and above-average current income,
with equal emphasis. The fund seeks to achieve its objective by
investing primarily in equity securities of companies that are
principally engaged in the real estate industry.
Participants may change their investment options quarterly.
LOANS TO PARTICIPANTS
Active participants may borrow from their salary reduction contribution,
voluntary contribution and rollover accounts a minimum of $1,000 up to a maximum
of $50,000 or 50% of their account balance. Loan transactions are treated as a
transfer from (to) the investment fund to (from) the loan fund. Loan terms range
from 1 to 5 years or up to 10 years for the purchase of a primary residence. The
loans are secured by the balance in the participant's account and bear interest
at a rate commensurate with local prevailing rates as determined quarterly by
the plan administrator. Principal and interest are paid ratably through monthly
payroll deductions.
PAYMENT OF BENEFITS
On termination of service, a participant may receive a lump-sum amount equal to
the vested value of his or her account, or upon death, disability or retirement,
elect to receive annual installments over a ten-year period.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements of the Plan are prepared under the accrual method of
accounting.
INVESTMENT VALUATION AND INCOME RECOGNITION
The Plan's investments are stated at fair value. The shares of registered
investment companies are valued at quoted market prices which represent the net
asset values of shares held by the Plan at year-end. Company common stock is
stated at the quoted market price on the New York Stock Exchange. The
participant notes receivable are valued at their outstanding balances, which
approximate fair value.
127
<PAGE> 128
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INVESTMENT VALUATION AND INCOME RECOGNITION (CONTINUED)
Purchases and sales of securities are recorded on a trade-date basis. Interest
income is recorded on the accrual basis. Dividends are recorded on the
ex-dividend date.
USE OF ESTIMATES
The preparation of financial statements in conformity with 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.
RISKS AND UNCERTAINTIES
The Plan provides for various investment options in several mutual funds and the
Company's common stock. Investment options are exposed to certain risks, such as
interest rate, market and credit. Due to the level of risk associated with these
investment options and the level of uncertainty related to changes in the value
of these investments, it is at least reasonably possible that changes in risks
in the near term would materially affect participants' account balances and the
amounts reported in the statements of net assets available for benefits and the
statements of changes in net assets available for benefits.
3. CONTRIBUTIONS RECEIVABLE
The Plan has receivables from the Company for matching and share-per-day
contributions of $912,105 and $3,062,606, respectively, at December 31, 1997
($291,895 and $2,209,480, respectively, in 1996). The receivable for the
employer share-per-day contribution is determined based upon the number of
shares to be contributed and the value of the per-share price of the Company
common stock at year-end. Employer share-per-day contributions are valued based
upon the share price of the Company's common stock on the dates earned. Changes
in stock price between the date shares are earned and the date delivered to the
trustee are reflected as net appreciation (depreciation) in fair value of
investments.
4. TRANSACTIONS WITH RELATED PARTIES
Certain legal and accounting fees, and certain administrative expense relating
to the maintenance of participant eligibility records are paid by the Company.
128
<PAGE> 129
5. INCOME TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
dated February 4, 1997, stating that the Plan is qualified under Section 401(a)
of the Internal Revenue Code of 1986 (the Code) and that the trust, therefore,
is exempt from taxation. Once qualified, the Plan is required to operate in
conformity with the Code and ERISA to maintain its tax-exempt status. The
administrator is not aware of any course of action or series of events that have
occurred that might adversely affect the Plan's qualified status.
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. In the event of plan termination,
participants will become 100% vested in their accounts.
7. SUBSEQUENT EVENT
Effective March 24, 1998, the Company was acquired via merger by Allegheny
Teledyne Inc. (ATI). As a result of the merger, each share of the Company stock
was converted into 1.296 shares of ATI stock. The terms of the Plan other than
the conversion of stock have not changed at the current time.
8. YEAR 2000 (UNAUDITED)
ATI has initiated communications with its significant service providers (plan
trustee and plan recordkeeper) to determine the extent to which the Plan's
systems or operations are vulnerable to those parties' failure to remediate
their own Year 2000 issues. In addition, ATI has been reviewing its own internal
systems that impact the processing of employee benefits. ATI expects that all
necessary modifications to these internal systems will be completed prior to any
significant impact on these internal systems.
The Plan's service providers have indicated that they are presently taking steps
to ensure that the Plan's systems and operations will be Year 2000 compliant.
9. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for benefits per the
financial statements to the Form 5500:
<TABLE>
<CAPTION>
DECEMBER 31
1997
<S> <C>
Net assets available for benefits per the financial statements $18,439,158
Amounts allocated to withdrawing participants (142,574)
-----------
Net assets available for benefits per the Form 5500 $18,296,584
</TABLE>
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500:
129
<PAGE> 130
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31
1997
<S> <C>
Benefits paid to participants per the financial statements $224,151
Add: Amounts allocated to withdrawing participants at
December 31, 1997 142,574
--------
Benefits paid to participants per the Form 5500 $366,725
</TABLE>
Amounts allocated to withdrawing participants are recorded on the Form 5500 for
benefit claims that have been processed and approved for payment prior to
December 31 but not yet paid as of that date.
130
<PAGE> 131
SCHEDULES
131
<PAGE> 132
Oregon Metallurgical Corporation Savings Plan
Item 27a--Schedule of Assets Held for Investment Purposes
December 31, 1997
<TABLE>
<CAPTION>
CURRENT
IDENTITY OF ISSUE NUMBER OF SHARES COST VALUE
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Columbia Funds*:
U.S. Government 25,065 N/A $ 208,315
Balanced 54,209 N/A 1,162,980
Fixed Income 23,516 N/A 315,615
Common Stock 54,421 N/A 1,199,560
International 43,639 N/A 598,492
Special 73,804 N/A 1,499,511
Real Estate 11,801 N/A 222,199
Oregon Metallurgical
Corporation Stock* 278,652 N/A 9,336,361
Participant loans - 263,943
-----------------------------------
- $14,806,976
===================================
</TABLE>
* Party-in-interest
N/A--Not Available
132
<PAGE> 133
Oregon Metallurgical Corporation Savings Plan
Item 27d--Schedule of Reportable Transactions
Year ended December 31, 1997
Transactions which, when aggregated, involved more than 5% of the current values
of beginning plan assets for the year ended December 31, 1997 were as follows:
<TABLE>
<CAPTION>
PURCHASE PURCHASE SALES SELLING
DESCRIPTION OF ASSETS TRANSACTIONS PRICE TRANSACTIONS PRICE GAIN
- --------------------------------- ----------------- -------------- ---------------- -------------- -----------------
Type (iii) Transactions:
- ------------------------
<S> <C> <C> <C> <C> <C>
Columbia Common Stock Fund 98 $ 806,731 26 $107,938 $13,067
Columbia Special Fund 93 1,015,936 33 282,726 4,220
Columbia Balanced Fund 95 768,234 23 129,723 11,158
Oregon Metallurgical
Corporation Stock 1 7,864 26 846,999 84,923
Victory Institutional Money
Market Fund 42 846,362 29 854,118 -
</TABLE>
There were no Type (i), (ii) or (iv) transactions during the year ended
December 31, 1997.
133
<PAGE> 134
"Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K" of
Part IV of the 1997 Form 10-K is hereby amended and restated in its entirety to
read as follows:
ITEM 14. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES:
(a) EXHIBITS AND FINANCIAL STATEMENT SCHEDULES:
(1) FINANCIAL STATEMENTS
(A) The following consolidated financial statements included on pages 30 to
53 of the 1997 Annual Report are incorporated herein by reference:
Consolidated Statements of Income - Years Ended December 31, 1997, 1996 and
1995
Consolidated Balance Sheets at December 31, 1997 and 1996
Consolidated Statements of Cash Flows - Years Ended December 31, 1997, 1996
and 1995
Consolidated Statements of Stockholders' Equity - Years Ended December 31,
1997, 1996 and 1995
Report of Ernst & Young LLP, Independent Auditors
Notes to Consolidated Financial Statements
The report of Arthur Anderson LLP relating to the consolidated
statements of operations, shareholders' equity, and cash flows of Teledyne, Inc.
for the year ended December 31, 1995 is filed as Exhibit 99.1 to the 1997 Form
10-K.
(B) The following financial statements for the plans listed below are
filed with this Amendment No. 1 under Item 8 of Part II:
(i) Allegheny Ludlum Retirement Savings Plan
Report of Independent Auditors
Statement of Net Assets Available for Benefits with Fund
Information - December 31, 1997
Statement of Net Assets Available for Benefits with Fund
Information - December 31, 1997
Statement of Changes in Net Assets Available for Benefits with Fund
Information - Year Ended December 31, 1997
Statement of Changes in Net Assets Available for Benefits with Fund
Information - Year Ended December 31, 1996
Notes to Financial Statements
(ii) 401(k) Savings Account Plan for Employees of the Washington Plant
Report of Independent Auditors
Statement of Net Assets Available for Benefits with Fund
Information - December 31, 1997
Statement of Net Assets Available for Benefits with Fund
Information
134
<PAGE> 135
- December 31, 1996
Statement of Changes in Net Assets Available for Benefits with Fund
Information - Year Ended December 31, 1997
Statement of Changes in Net Assets Available for Benefits with Fund
Information - Period April 1, 1996 through December 31, 1996
Notes to Financial Statements
(iii) Savings and Security Plan of the Tubular Products/Plate Products
Divisions of Allegheny Ludlum Corporation
Report of Independent Auditors
Statement of Net Assets Available for Benefits with Fund
Information - January 31, 1996
Statement of Net Assets Available for Benefits with Fund
Information - December 31, 1997
Statement of Net Assets Available for Benefits with Fund
Information -December 31, 1996
Statement of Changes in Net Assets Available for Benefits with Fund
Information - One Month Ended January 31, 1998
Statement of Changes in Net Assets Available for Benefits with Fund
Information - Year Ended December 31, 1997
Statement of Changes in Net Assets Available for Benefits with Fund
Information Year Ended December 31, 1996
Notes to Financial Statements
(iv) Savings and Security Plan of the Lockport and Waterbury Facilities
of Allegheny Ludlum Corporation
Report of Independent Auditors
Statement of Net Assets Available for Benefits with Fund
Information - December 31, 1997
Statement of Net Assets Available for Benefits with Fund
Information - December 31, 1996
Statement of Changes in Net Assets Available for Benefits with Fund
Information - Year Ended December 31, 1997
Statement of Changes in Net Assets Available for Benefits with Fund
Information - Year Ended December 31, 1996
Notes to Financial Statements
(v) Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings
Account Plan
Report of Independent Auditors
Statement of Net Assets Available for Benefits with Fund
Information - December 31, 1997
Statement of Net Assets Available for Benefits with Fund
Information - December 31, 1996
135
<PAGE> 136
Statement of Changes in Net Assets Available for Benefits with Fund
Information - Year Ended December 31, 1997
Statement of Changes in Net Assets Available for Benefits with Fund
Information - Year Ended December 31, 1996
Notes to Financial Statements
(vi) Teledyne, Inc. 401(k) Plan
Report of Independent Auditors
Statement of Net Assets Available for Benefits - December 31, 1997
and December 31, 1996
Statement of Changes in Net Assets Available for Benefits with Fund
Information - Year Ended December 31, 1997
Statement of Changes in Net Assets Available for Benefits with Fund
Information - Year Ended December 31, 1996
Notes to Financial Statements
(vii) Oregon Metallurgical Corporation Savings Plan
Report of Independent Auditors
Statement of Net Assets Available for Benefits with Fund
Information --December 31, 1997
Statement of Net Assets Available for Benefits with Fund
Information -- December 31, 1996
Statement of Changes in net Assets Available for Benefits with Fund
Information -- Year Ended December 31, 1997
Statement of Changes in Net Assets Available for Benefits with Fund
Information -- Year Ended December 31, 1996
Notes to Financial Statements
(2) FINANCIAL STATEMENT SCHEDULES
The following financial statement schedules with respect to the plans listed
below are filed with this Amendment No. 1 under Item 8 of Part II:
(i) Allegheny Ludlum Retirement Savings Plan
Item 27a - Schedule of Assets Held for Investment Purposes
- December 31, 1997
Item 27d - Schedule of Reportable Transactions - Year Ended
December 31, 1997
(ii) 401(k) Savings Account Plan for Employees of the Washington Plant
Item 27a - Schedule of Assets Held for Investment Purposes
- December 31, 1997
136
<PAGE> 137
Item 27d - Schedule of Reportable Transactions - Year Ended
December 31, 1997
(iii) Savings and Security Plan of the Tubular Products/Plate Products
Divisions of Allegheny Ludlum Corporation
Item 27a - Schedule of Assets Held for Investment Purposes
- December 31, 1997
Item 27d - Schedule of Reportable Transactions - Year Ended
December 31, 1997
(iv) Savings and Security Plan of the Lockport and Waterbury Facilities
of Allegheny Ludlum Corporation
Item 27a - Schedule of Assets Held for Investment Purposes
- December 31, 1997
Item 27d - Schedule of Reportable Transactions - Year Ended
December 31, 1997
(v) Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings
Account Plan
Item 27a - Schedule of Assets Held for Investment Purposes
- December 31, 1997
Item 27d - Schedule of Reportable Transactions - Year Ended
December 31, 1997
(vi) Teledyne, Inc. 401(k) Plan
Item 27a - Schedule of Assets Held for Investment Purposes
- December 31, 1997
Item 27d - Schedule of Reportable Transactions - Year Ended
December 31, 1997
(vii) Oregon Metallurgical Corporation Savings Plan
Item 27a - Schedule of Assets Held for Investment
Purposes-December 31, 1997
Item 27d - Schedule of Reportable Transactions-Year Ended
December 31, 1997
(3) EXHIBITS
A list of exhibits included in the 1997 Form 10-K or incorporated
therein by reference is found in the Exhibit Index beginning on page
29 of the 1997 Form 10-K and incorporated herein by reference. In addition,
by virtue of Amendment No. 1, the following two exhibits are added to such
Exhibit Index, after Exhibit 23.2, and filed with Amendment No. 1:
137
<PAGE> 138
Exhibit No. Description
----------- -----------
23.3 Consent of Ernst & Young LLP
23.4 Consent of Coopers & Lybrand L.L.P.
(b) REPORTS ON FORM 8-K FILED IN THE FOURTH QUARTER OF 1997:
Current Reports on Form 8-K were filed by the Company on November 3, 1997
(with respect to a press release concerning Registrant's agreement to acquire
Oregon Metallurgical Corporation) and December 23, 1997 (with respect to a press
release concerning Registrant's proposal to acquire Lukens Inc.).
138
<PAGE> 139
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this Form 10-K/A (Amendment No. 1)
to be signed on its behalf by the undersigned duly authorized.
Allegheny Teledyne Incorporated
Date: June 26, 1998 By: /s/ JUDD R. COOL
----------------
Judd R. Cool
Senior Vice President, Human Resources
139
<PAGE> 140
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description Method of Filing
----------- ----------- ----------------
<S> <C> <C>
23.3 Consent of Ernst & Young LLP Filed herewith
23.4 Consent of Coopers & Lybrand L.L.P. Filed herewith
</TABLE>
140
<PAGE> 1
Exhibit 23.3
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 333-10225) pertaining to the Savings and Security Plan of the Lockport
and Waterbury Facilities of Allegheny Ludlum Corporation, Savings and Security
Plan of the Tubular Products/Plate Products Divisions of Allegheny Ludlum
Corporation, Allegheny Ludlum Corporation Personal Retirement and 401(k) Savings
Account Plan, 401(k) Savings Account Plan for Employees of the Washington Plant
and Allegheny Ludlum Retirement Savings Plan of our report dated June 5, 1998
with respect to the financial statements and schedules of the Savings and
Security Plan of the Lockport and Waterbury Facilities of Allegheny Ludlum
Corporation, Savings and Security Plan of the Tubular Products/Plate Products
Divisions of Allegheny Ludlum Corporation, Allegheny Ludlum Corporation Personal
Retirement and 401(k) Savings Account Plan, 401(k) Savings Account Plan for
Employees of the Washington Plant and Allegheny Ludlum Retirement Savings Plan
Teledyne 401(k) Plan and in the Registration Statement (Form S-8 No. 333-10227)
pertaining to the Teledyne 401(k) Plan of our report dated June 5, 1998 with
respect to the financial statements and schedules of the Teledyne 401(k) Plan
and in the Registration Statement, as amended (Form S-8 No. 333-48649)
pertaining to the Oregon Metallurgical Corporation Savings Plan of our report
dated June 15, 1998 with respect to the financial statements and schedules of
the Oregon Metallurgical Corporation Savings Plan, all of which are included in
the Annual Report on Form 10-K/A (Amendment No. 1) for the year ended December
31, 1997.
/s/ ERNST & YOUNG LLP
Pittsburgh, Pennsylvania
June 26, 1998
141
<PAGE> 2
Exhibit 23.4
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
Allegheny Teledyne Incorporated on Form S-8 (File No. 333-48649) of
our report, dated June 10, 1997, on our audit of the financial statements of
Oregon Metallurgical Corporation Savings Plan as of December 31, 1996, and for
the year then ended, which report is incorporated by reference in this Annual
Report on Form 10-K, as amended.
/s/ COOPERS & LYBRAND L.L.P.
----------------------------
Coopers & Lybrand L.L.P.
Portland, Oregon
June 19, 1998
142
<PAGE> 1
Exhibit 23.4
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
Allegheny Teledyne Incorporated on Form S-8 (File No. 333-48649) of
our report, dated June 10, 1997, on our audit of the financial statements of
Oregon Metallurgical Corporation Savings Plan as of December 31, 1996, and for
the year then ended, which report is incorporated by reference in this Annual
Report on Form 10-K, as amended.
/s/ COOPERS & LYBRAND L.L.P.
----------------------------
Coopers & Lybrand L.L.P.
Portland, Oregon
June 19, 1998
142
