Allegheny Technologies Makes Voluntary Contribution to Pension Plan
07/10/2009 - Allegheny Technologies makes voluntary $350-million cash contribution to the company’s U.S. defined benefit pension plan, significantly improving the plan’s funded position.
Allegheny Technologies Inc. has made a voluntary $350-million cash contribution to the company’s U.S. defined benefit pension plan. The payment, which was made in June 2009, significantly improves the plan’s funded position.
The company used a portion of the proceeds from its June 2009 $402.5-million issuance of 4.25% five-year convertible to make the voluntary contribution.
For income tax reporting purposes, the $350-million voluntary contribution was made as a 2008 plan year contribution. As a result of the voluntary contribution, 2009 pension expense is expected to be reduced by $27.5 million to $98.7 million. This reduction will be reflected ratably over the last seven months of 2009.
Also in June 2009, ATI issued $350 million of new 9.375% senior notes due in June 2019 and completed a tender offer for the retirement of $183.3 million of the company’s 8.375% notes due in December 2011, which leaves $116.7 million of the 2011 notes outstanding.
As a result of the impact of the pension trust contribution on prior years’ tax provisions and the costs associated with the retirement of $183.3 million of the 2011 notes, ATI expects to recognize non-recurring after-tax charges of $17.0 million ($0.17 per share) in the second quarter of 2009.
Excluding these non-recurring charges, ATI said that it expects second-quarter 2009 earnings per share to be approximately $0.03.
Excluding these non-recurring charges, ATI said that it expects second-quarter 2009 earnings per share to be approximately $0.03.
Allegheny Technologies Inc. is one of the largest and most diversified specialty metals producers in the world with revenues of $5.3 billion during 2008. The company’s products include titanium and titanium alloys, nickel-based alloys and superalloys, grain-oriented electrical steel, stainless and specialty steels, zirconium, hafnium, and niobium, tungsten materials, and forgings and castings.
