The Company contributes on behalf of its union employees at its Oremet facility to a pension plan which is administered by the USWA and funded pursuant to a collective bargaining agreement. Pension expense and contributions to this plan were $0.6 million in 2003 and in 2002, and $1.1 million in 2001. The annual assumed rate of increase in the per capita cost of covered benefits (the health care cost trend rate) for health care plans was 10.4% in 2004 and is assumed to gradually decrease to 5.0% in the year 2014 and remain at that level thereafter. Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. A one percentage point change in assumed health care cost trend rates would have the following effects: The annual measurement date for the Company’s retirement benefits is November 30. At November 30, 2003, the value of the accumulated pension benefit obligation (ABO) exceeded the value of pension assets by approximately $195 million. A minimum pension liability was recognized in 2002 as a result of a severe decline in the equity markets from 2000 through 2002, higher benefit liabilities from long-term labor contracts negotiated in 2001, and a lower assumed discount rate for valuing liabilities. Accounting standards require a minimum pension liability be recorded and the pension asset recorded on the balance sheet be written off if the value of pension assets is less than the ABO at the annual measurement date. Accordingly, in the 2002 fourth quarter, the Company recorded a charge against stockholders’ equity of $406 million, net of deferred taxes, to write off the prepaid pension cost representing the overfunded position of the pension plan, and to record a deferred pension asset of $165 million for unamortized prior service cost relating to prior benefit enhancements. In the fourth quarter of 2003, the Company’s adjustment of the minimum pension liability resulted in a $47 million increase to stockholders’ equity, presented as other comprehensive income (loss). These charges and adjustments did not affect the Company’s reported net loss and do not have a cash impact. In addition, they do not affect compliance with debt covenants in the Company’s bank credit agreement. In accordance with accounting standards, the full charge against stockholders’ equity would be reversed in subsequent years if the value of pension plan investments returns to a level that exceeds the ABO as of a future annual measurement date. In 2001 and prior years the Company’s defined benefit pension plan was fully funded with assets significantly in excess of the projected benefit obligation. Under Internal Revenue Code (Section 420) provisions, certain amounts that the Company paid for retiree health care benefits could be reimbursed annually from the excess pension plan assets. During the 2001 second quarter, the Company recovered $35.0 million under these provisions. While not affecting reported operating profit, cash flow from operations increased by the recovered amount. The Company’s ability to be reimbursed for retiree medical costs in future years is dependent upon the level of pension surplus, if any, as computed under regulations of the Internal Revenue Service, as of the beginning of each year. The level of pension surplus (the value of pension assets less pension obligations) changes constantly due to the volatility of pension asset investments. Due to the decline in the U.S. equities market in 2000 through 2002, the pension funded status at the beginning of 2004 is substantially below the threshold required for reimbursement of retiree medical costs in 2004. The ability to resume reimbursement from pension assets for retiree health care costs beyond 2004 will depend upon the performance of the pension investments, and any changes in the Internal Revenue Code and regulations pertaining to reimbursement of retiree health care costs from pension surplus.  During 2003, the Company announced the formation of Uniti LLC (“Uniti”), a 50% owned joint venture with Russian-based VSMPO AVISMA to produce and market a range of industrial commercially pure titanium products on a worldwide basis. This investment is accounted for under the equity method. Uniti operating results for 2003 were not material. During the 2001 fourth quarter, the Company divested its North American operations of its titanium distribution company, Titanium Industries Inc. Results of operations for this business for 2001 and proceeds from the disposition of this business were not material to the Company. ATI Annual Report 2003 51 Note 9.Acquisitions and Divestitures — One Percentage One Percentage (In millions) Point Increase Point Decrease Effect on total of service and interest cost components for the year  Ended December 31, 2003 $006.8 $00(5.6) Effect on other postretirement benefit obligation  at December 31, 2003 $109.1 $0(87.0)