ALLEGHENY TECHNOLOGIES INCORPORATED 11-K
Table of Contents

 
 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 11-K

ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

þ   ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2004

o   TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

FOR THE TRANSITION PERIOD FROM                      TO                     

COMMISSION FILE NUMBER 1-12001

401(K) SAVINGS ACCOUNT PLAN FOR EMPLOYEES
OF THE WASHINGTON PLATE PLANT
(Title of Plan)

ALLEGHENY TECHNOLOGIES INCORPORATED

(Name of Issuer of securities held pursuant to the Plan)

1000 Six PPG Place, Pittsburgh, Pennsylvania 15222-5479

(Address of Plan and principal executive offices of Issuer)
 
 


Table of Contents

Audited Financial Statements and Supplemental Schedule
401(k) Savings Account Plan for Employees of the Washington Plate Plant
Years Ended December 31, 2004 and 2003
With Report of Independent Registered Public Accounting Firm

 


401(k) Savings Account Plan for Employees
of the Washington Plate Plant

Audited Financial Statements
and Supplemental Schedule

Years Ended December 31, 2004 and 2003

Contents

         
    1  
 
       
Audited Financial Statements
       
 
       
    2  
 
       
    3  
    4  
Supplemental Schedule
       
 
       
    11  
 EX-23.1

 


Table of Contents

Report of Independent Registered Public Accounting Firm

Allegheny Technologies Incorporated

We have audited the accompanying statements of net assets available for benefits of the 401(k) Savings Account Plan for Employees of the Washington Plate Plant as of December 31, 2004 and 2003, 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 the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Plan’s internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 2004 and 2003, and the changes in its net assets available for benefits for the years then ended, in conformity with U.S. generally accepted accounting principles.

Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedule of assets (held at end of year) as of December 31, 2004 is presented for purposes of additional analysis and is not a required part of the financial statements but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan’s management. The supplemental schedule has been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.

/s/ Ernst & Young LLP

June 23, 2005
Pittsburgh, Pennsylvania

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401(k) Savings Account Plan for Employees
of the Washington Plate Plant

Statements of Net Assets Available for Benefits

                 
    December 31  
    2004     2003  
     
Investments:
               
Interest in Allegheny Master Trust
  $ 2,935,838     $ 2,253,965  
Interest in registered investment companies
    1,188,595       1,212,309  
Corporate common stocks
    120,377       116,614  
Participant loans
    114,167       66,450  
Interest in common collective trusts
    153       67  
     
Total investments
    4,359,130       3,649,405  
 
               
Employer contribution receivable
    10,476        
Employee contributions receivable
    14,256        
     
Net assets available for benefits
  $ 4,383,862     $ 3,649,405  
     

See accompanying notes.

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401(k) Savings Account Plan for Employees
of the Washington Plate Plant

Statements of Changes in Net Assets Available for Benefits

                 
    Years Ended December 31  
    2004     2003  
     
Contributions:
               
Employer
  $ 266,915     $ 258,854  
Employee
    537,312       329,736  
     
Total contributions
    804,227       588,590  
 
               
Investment income:
               
Net gain from interest in Allegheny Master Trust
    173,221       275,962  
Net gain from interest in registered investment companies
    146,948       189,152  
Net realized/unrealized gain on corporate common stocks
    43,766       85,151  
Interest income
    3,913       3,257  
Dividend income
    1,262       2,288  
Net gain from interest in common collective trusts
    5       42,396  
     
Total investment income
    369,115       598,206  
     
 
    1,173,342       1,186,796  
 
               
Distributions to participants
    (438,885 )     (92,009 )
     
 
               
Net increase in assets available for benefits
    734,457       1,094,787  
Net assets available for benefits at beginning of year
    3,649,405       2,554,618  
     
Net assets available for benefits at end of year
  $ 4,383,862     $ 3,649,405  
     

See accompanying notes.

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401(k) Savings Account Plan for Employees
of the Washington Plate Plant

Notes to Financial Statements

December 31, 2004

1. Significant Accounting Policies

Investments are valued as follows:

Bank and insurance investment contracts with varying contract rates and maturity dates are stated at contract value.

Although it is management’s intention to hold the investment contracts in the Standish Fixed Income Fund until maturity, certain investment contracts provide for adjustments to contract value for withdrawals made prior to maturity.

All other investments are stated at their net asset value, based on the quoted market prices of the securities held in such funds on applicable exchanges.

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

The financial statements are prepared under the accrual basis of accounting.

2. Description of the Plan

The 401(k) Savings Account Plan for Employees of the Washington Plate Plant (the Plan) is a defined contribution plan and is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA).

The purpose of the Plan is to encourage thrift and to assist represented employees of the Washington Plate facility of Allegheny Ludlum Corporation (the Company) in accumulating a fund to supplement retirement income by allowing eligible employees to make tax-deferred contributions to the Plan. Allegheny Ludlum Corporation is a wholly owned subsidiary of Allegheny Technologies Incorporated (ATI, the Plan Sponsor). The Plan allows employees to contribute a portion of eligible wages each pay period through payroll deductions subject to Internal Revenue Code limitations. 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. The Company contributes $0.50 for each hour worked per eligible represented employee. Unless otherwise specified by the participant, employer contributions are made to the Standish Fixed Income Fund. Such contributions are made only from current income or accumulated earnings of the Company. The Plan allows participants to direct their contributions, and contributions made on their behalf, to any of the investment alternatives.

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401(k) Savings Account Plan for Employees
of the Washington Plate Plant

Notes to Financial Statements (Continued)

2. Description of the Plan (continued)

Separate accounts are maintained by the Plan Sponsor for each participating employee. Trustee fees and asset management fees charged by the Plan’s trustee, Mellon Bank, N.A., for the administration of all funds are charged against net assets available for benefits of the respective fund. Certain other expenses of administering the Plan are paid by the Plan Sponsor.

Participants may make “in-service” and hardship withdrawals as outlined in the plan document. Participants are fully vested in their entire participant account.

Active employees can borrow up to 50% of their vested account balances minus any outstanding loans. The loan amounts are further limited to a minimum of $500 and a maximum of $50,000, and an employee can obtain no more than three loans at one time. Interest rates are determined based on commercially accepted criteria, and payment schedules vary based on the type of the loan. General purpose loans are repaid over 6 to 60 months, and primary residence loans are repaid over periods up to 180 months. Payments are made by payroll deductions.

Further information about the Plan, including eligibility, vesting, contributions, and withdrawals, is contained in the plan documents, summary plan description, and related contracts. These documents are available from the Plan Sponsor.

3. Investments

The following presents investments that represent 5% or more of the Plan’s net assets:

                 
    December 31  
    2004     2003  
     
Standish Fixed Income Fund
  $ 1,961,544     $ 1,245,256  
ATI Disciplined Stock Fund
    550,810       589,439  
Alliance Capital Growth Pool
    423,484       419,271  
Oakmark Balanced Fund
    385,103       391,899  
Dreyfus Emerging Leaders Fund
    339,800       349,536  

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401(k) Savings Account Plan for Employees
of the Washington Plate Plant

Notes to Financial Statements (Continued)

3. Investments (continued)

Certain of the Plan’s investments are in the Allegheny Master Trust, which has three separately managed institutional investment accounts in the ATI Disciplined Stock Fund, the Alliance Capital Growth Pool, and the Standish Fixed Income Fund, which are valued on a unitized basis (collectively, the “Allegheny Master Trust”). The Allegheny Master Trust was established for the investment of assets of the Plan, and several other ATI sponsored retirement plans. Each participating retirement plan has an undivided interest in the Allegheny Master Trust. At December 31, 2004 and 2003, the Plan’s interest in the net assets of the Alliance Capital Growth Pool, the Standish Fixed Income Fund, and the ATI Disciplined Stock Fund was as follows:

                 
    2004     2003  
     
Alliance Capital Growth Pool
    1.11 %     1.18 %
Standish Fixed Income Fund
    0.99       0.65  
ATI Disciplined Stock Fund
    0.74       0.76  
           

Investment income and expenses are allocated to the Plan based upon its pro rata share in the net assets of the Allegheny Master Trust.

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401(k) Savings Account Plan for Employees
of the Washington Plate Plant

Notes to Financial Statements (Continued)

3. Investments (continued)

The composition of the net assets of the Standish Fixed Income Fund at December 31, 2004 and 2003, was as follows:

                 
    2004     2003  
     
Guaranteed investment contracts:
               
Canada Life
  $ 1,371,538     $ 2,757,412  
GE Life and Annuity
    8,735,242       9,583,804  
Hartford Life Insurance Company
    8,250,446       10,939,222  
John Hancock Life Insurance Company
    4,670,166       8,848,178  
Monumental Life Insurance Company
    1,017,190       2,353,862  
New York Life Insurance Company
    6,769,166       6,814,589  
Ohio National Life
    2,687,551       4,652,712  
Pacific Mutual Life Insurance Company
    5,061,507       6,075,054  
Principal Life
    1,243,795       1,187,962  
Protective Life Insurance Company
          1,006,456  
Pruco Pace Credit Enhanced
    7,132,148       8,947,069  
Security Life of Denver
    5,972,064       6,737,205  
United of Omaha
    2,929,738       7,226,335  
     
 
    55,840,551       77,129,860  
 
               
Synthetic guaranteed investment contracts:
               
Caisse des Depots et Consignations
          1,999,995  
MDA Monumental BGI Wrap
    36,520,489       33,990,199  
Bank of America
    33,366,628       17,803,044  
Rabobank
    37,879,291       36,635,330  
Union Bank of Switzerland
    25,166,696       14,768,321  
     
 
    132,933,104       105,196,889  
 
               
Interest in common collective trusts
    9,386,961       8,515,369  
Other
    670,702       764,537  
     
Total net assets
  $ 198,831,318     $ 191,606,655  
     

The Standish Fixed Income Fund (the Fund) invests in guaranteed investment contracts (GICs) and actively managed structured or synthetic investment contracts (SICs). The GICs are promises by a bank or insurance company to repay principal plus a fixed rate of return through contract maturity. SICs differ from GICs in that there are specific assets supporting the SICs, and these assets are owned by the Allegheny Master Trust. The bank or insurance company issues a wrapper contract that allows participant-directed transactions to be made at contract value. The assets supporting the SICs are comprised of government agency bonds, corporate bonds, asset-backed securities (ABOs), and collateralized mortgage obligations (CMOs) with fair values of $134,332,201 and $107,926,162 at December 31, 2004 and 2003, respectively.

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401(k) Savings Account Plan for Employees
of the Washington Plate Plant

Notes to Financial Statements (continued)

3. Investments (continued)

Interest crediting rates on the GICs in the Fund are determined at the time of purchase. Interest crediting rates on the SICs are either: (1) set at the time of purchase for a fixed term and crediting rate, (2) set at the time of purchase for a fixed term and variable crediting rate, or (3) set at the time of purchase and reset monthly within a “constant duration.” A constant duration contract may specify a duration of 2.5 years and the crediting rate is adjusted monthly based upon quarterly rebalancing of eligible 2.5 year duration investment instruments at the time of each resetting; in effect the contract never matures. At December 31, 2004 and 2003, the interest crediting rates for GICs and Fixed Maturity SICs ranged from 3.87% to 8.05% and 3.58% to 8.02%, respectively.

For the years ended December 31, 2004 and 2003, the average annual yield for the investment contracts in the Fund was 4.89% and 5.31%, respectively. Fair value of the GICs was estimated by discounting the weighted average of the Fund’s cash flows at the then-current, interest-crediting rate for a comparable maturity investment contract. Fair value for the SICs was estimated based on the fair value of each contract’s supporting assets at December 31, 2004 and 2003.

The composition of net assets of the Alliance Capital Growth Pool at December 31, 2004 and 2003 was as follows:

                 
    2004     2003  
Investment in pooled separate accounts:
               
Alliance Equity Fund S.A. #4
  $ 38,135,320     $ 35,666,427  
Operating payables
    (11,230 )     (10,616 )
     
Total net assets
  $ 38,124,090     $ 35,655,811  
     

The composition of net assets of the ATI Disciplined Stock Fund at December 31, 2004 and 2003 was as follows:

                 
    2004     2003  
Corporate common stocks
  $ 72,955,300     $ 77,259,404  
Interest in common collective trusts
    71,478       337,451  
Receivables
    1,085,015       283,072  
Payables
    (97,126 )     (42,301 )
     
Total net assets
  $ 74,014,667     $ 77,837,626  
     

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401(k) Savings Account Plan for Employees
of the Washington Plate Plant

Notes to Financial Statements (continued)

3. Investments (continued)

The composition of the changes in net assets of the Allegheny Master Trust is as follows:

                                                 
    Standish Fixed Income Fund Trust     Alliance Capital Growth Pool     ATI Disciplined Stock Fund  
    Years Ended December 31  
    2004     2003     2004     2003     2004     2003  
Investment income (loss):
                                               
Interest income
  $ 9,236,594     $ 9,953,790     $     $     $     $ 214,654  
Net realized/unrealized gain (loss) on corporate common stocks
    (1,358 )                       4,352,382       13,699,382  
Dividends
                            1,368,881       1,073,159  
Net gain, registered investment companies
          45,315                          
Net gain, pooled separate accounts
                5,432,718       9,614,660              
Net gain, common collective trusts
    122,717       111,616                   8,488       10,183  
Administrative expenses
    (240,688 )     (201,917 )     (128,988 )     (72,409 )     (551,752 )     (660,982 )
Transfers
    (1,892,602 )     888,462       (2,835,451 )     (440,184 )     (9,000,958 )     8,571,888  
     
Net increase (decrease)
    7,224,663       10,797,266       2,468,279       9,102,067       (3,822,959 )     22,908,284  
Total net assets at beginning of year
    191,606,655       180,809,389       35,655,811       26,553,744       77,837,626       54,929,342  
     
Total net assets at end of year
  $ 198,831,318     $ 191,606,655     $ 38,124,090     $ 35,655,811     $ 74,014,667     $ 77,837,626  
     

Interest, realized and unrealized gains and losses, and management fees from the Allegheny Master Trust are included in the net gain from interest in Allegheny Master Trust on the statements of changes in net assets available for benefits.

4. Income Tax Status

The Plan has received a determination letter from the Internal Revenue Service dated July 12, 2003, stating that the Plan is qualified under Section 401(a) of the Internal Revenue Code (the Code) and, therefore, the related trust is exempt from taxation. Subsequent to this issuance of the determination letter, the Plan was amended. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The plan administrator believes the Plan is being operated in compliance with the applicable requirements of the Code and, therefore, believes the Plan, as amended, is qualified and the related trust is tax-exempt.

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401(k) Savings Account Plan for Employees
of the Washington Plate Plant

Notes to Financial Statements (continued)

5. Parties-in-Interest

Dreyfus Corporation is the manager of the Dreyfus Mutual Funds that are offered as investment options under this Plan. Dreyfus Service Corporation is the funds’ distributor. Dreyfus Corporation and Dreyfus Service Corporation are both wholly owned subsidiaries of Mellon Financial Corporation. Mellon Financial Corporation also owns Mellon Bank, N.A., the trustee for this Plan. Therefore, transactions with these entities qualify as party-in-interest transactions.

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. However, no such action may deprive any participant or beneficiary under the Plan of any vested right.

7. Risks and Uncertainties

The Plan invests in various investment securities. Investment securities are exposed to various risk such as interest rate, market and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants’ account balances and the amounts reported in the statements of net assets available for benefits.

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401(k) Savings Account Plan for Employees
of the Washington Plate Plant

EIN: 25-1792394      Plan Number: 020

Schedule H, Line 4i—Schedule of Assets
(Held at End of Year)

December 31, 2004

                 
Description   Units/Shares     Current Value  
Registered Investment Companies:
               
Dreyfus Emerging Leaders Fund*
    7,682.5580     $ 339,800  
Dreyfus International Value Fund*
    4,027.3840       79,017  
Dreyfus Bond Market Index*
    5,587.5580       57,608  
Dreyfus Appreciation Fund*
    285.2950       11,038  
Oakmark Balanced Fund
    16,387.3770       385,103  
Hartford Midcap Funds
    1,767.9400       50,581  
MFS Value Fund
    1,097.5410       25,397  
Morgan Stanley Small Growth Fund
    4,321.0290       54,013  
PIMCO Funds—NFJ
    1,224.4140       35,349  
PIMCO Funds—Total
    1,541.7670       16,451  
Lord, Abbett Midcap Funds
    2,853.1130       64,566  
Artisan Funds
    1,868.6090       55,236  
Jennison Growth Fund
    1,015.9920       14,436  
 
             
Total registered investment companies
          $ 1,188,595  
 
             
 
               
Corporate Common Stocks
               
Allegheny Technologies Incorporated*
    5,555.0000     $ 120,377  
 
             
 
               
Participant loans* (5.0% to 9.0%, with maturities through 2010)
          $ 114,167  
 
             
 
               
Common Collective Trusts
               
Dreyfus Short-Term Investment Fund*
    152.5600     $ 153  
 
             
 
* Party-in-interest

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the administrators of the Plan have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.

         
  ALLEGHENY TECHNOLOGIES INCORPORATED 401(K) SAVINGS ACCOUNT FOR EMPLOYEES OF THE WASHINGTON PLATE PLANT
 
 
  By:   /s/ Richard J. Harshman    
Date: June 27, 2005    Richard J. Harshman   
    Executive Vice President-Finance and Chief Financial Officer
(Principal Financial Officer and Duly Authorized Officer)