Since 1990, TDY has been operating under a Corrective Action Order from the EPA for a facility that TDY owns and formerly operated in Hartville, Ohio. TDY operates an interim remediation system at the facility and is preparing a plan for EPA approval to carry out additional remediation activities. At December 31, 2003, the Company had adequate reserves for the continued operation of the interim system and for additional remediation costs it expects to incur for the additional remediation activities. A number of other lawsuits, claims and proceedings have been or may be asserted against the Company relating to the conduct of its business, including those pertaining to product liability, patent infringement, commercial, employment, employee benefits, environmental and stockholder matters. While the outcome of litigation cannot be predicted with certainty, and some of these lawsuits, claims or proceedings may be determined adversely to the Company, management does not believe that the disposition of any such pending matters is likely to have a material adverse effect on the Company’s financial condition or liquidity, although the resolution in any reporting period of one or more of these matters could have a material adverse effect on the Company’s results of operations for that period. Note 15. Selected Quarterly Financial Data (Unaudited) — Quarter Ended (In millions except share and per share amounts) March 31) June 30) September 30) December 31) 2003 - Sales $0480.5) $0489.9) $0482.6) $0484.4) Gross profit 14.6) 20.8) 18.2) 10.2) Net loss before cumulative effect of change in accounting principle (25.8) (26.0) (28.8) (232.7) Net loss (27.1) (26.0) (28.8) (232.7) Basic and diluted net loss per common share before cumulative effect of change in accounting principle $0,(0.32) $0,(0.32) $0,(0.36) $0,(2.89) Basic and diluted net loss per common share $0,(0.34) $0,(0.32) $0,(0.36) $0,(2.89) Average shares outstanding 80,708,060) 80,961,069) 81,077,966) 80,642,124) 2002 - Sales $0493.1) $0491.2) $0469.3) $0454.2) Gross profit 40.4) 47.1) 49.6) 26.2) Net loss (11.1) (7.5) (7.5) (39.7) Basic and diluted net loss per common share $0,(0.14) $0,(0.09) $0,(0.09) $0,(0.49) Average shares outstanding 80,445,647) 80,575,657) 80,623,077) 80,634,920) The 2003 fourth quarter includes the effect of a $138.5 million non-cash special charge to establish a valuation allowance for a majority of the Company’s net deferred tax assets, as prescribed by Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes.”  The 2003 fourth quarter also includes charges of $47.5 million for impairment of long-lived assets in the Company’s Flat-Rolled Products segment; $9.9 million for workforce reductions across all business segments and the corporate office; $3.8 million for facility closure charges including present-valued lease termination costs at the corporate office; and $34.7 million for closed company charges and other charges, including $22.5 million for litigation expense.  The 2003 third quarter includes a charge of $8.6 million, including $7.4 million for management transition and $1.2 million for workforce reductions. Also included is $4.0 million in interest income related to a Federal income tax settlement associated with prior years.  The 2002 fourth quarter includes a charge of $34.4 million, primarily non-cash, related to asset impairments and cost reduction actions, including the indefinite idling of the Massillon, Ohio stainless steel plate facility, charges for settlement of a labor issue, write-off of the Company’s investment in New Piper Aircraft, Inc., and other workforce reductions. The 2002 third quarter includes a charge of $7.2 million, including $5.5 million for workforce reductions and $1.7 million related to the Company’s approximately 30% equity in net losses of New Piper Aircraft, Inc. 64 Annual Report 2003 ATI