Backlog of confirmed orders for the segment was approximately $300 million at December 31, 2002 and approximately $350 million at December 31, 2001. While the backlog for our exotic materials remained strong, we expected demand for products used in commercial aerospace, which historically has been the segment’s largest end- use market, to remain depressed in 2003. As a result, in the 2002 third and fourth quarters we announced further workforce reductions, which affected approximately 285 employees at the Allvac and Allvac Ltd operations. In connection with these reductions, we recorded charges of $3.3 million for the related severance costs. These expenses are presented as restructuring costs on the statement of operations and are not included in the results for the segment. Our Engineered Products segment’s principal business consists of the production of tungsten powder, tungsten carbide materials and carbide cutting tools. The segment also produces carbon alloy steel impression die forgings, large grey and ductile iron castings, and provides conversion services for titanium and other specialty metals. The companies in this segment are Metalworking Products, Portland Forge, Casting Service and Rome Metals. In the 2003 fourth quarter, as a result of organization changes, Rome Metals became part of this segment, which was formerly the Industrial Products segment. Sales for the Engineered Products segment increased 6.2%, to $252.2 million in 2003, compared to 2002, and operating profit increased 65.5%, to $7.8 million. Demand for our tungsten products from the oil and gas, medical and automotive markets improved during 2003. Demand also improved for forgings and castings. Segment operating profit improved primarily due to higher sales and the impact of cost reductions, which totaled $9 million in 2003.  In the second half of 2003, we announced an additional restructuring of the European operations of Metalworking Products. Restructuring charges of approximately $3 million associated with this consolidation are presented as restructuring costs on the 2003 statement of operations and are not included in segment results. These cost reductions are expected to result in $2 million in annual pretax cost savings.  Sales and operating profit for the Engineered Products segment decreased 13.9% and 61.7%, respectively, in 2002, compared to 2001 results. Continued weak demand from most U.S. industrial markets negatively impacted operating results for all businesses in the segment. The decline in operating results was partially offset by ongoing efforts to reduce costs, which totaled approximately $12 million in 2002. During the second half of 2002, we announced workforce reductions of approximately 150 employees primarily at the European operations of Metalworking Products. These workforce reductions resulted in a severance charge of $1.1 million in the 2002 fourth quarter. These expenses are presented as restructuring costs on the statement of operations and are not included in the results for the segment.  Corporate expenses were $20.5 million in 2003 compared to $20.6 million in 2002 and $25.5 million in 2001. Cost controls and reductions in the number of corporate employees that were implemented over this period were offset in 2003 by increased compensation expense associated with our long-term, stock-based compensation plan due to the significant increase in our stock price in the 2003 fourth quarter. Interest expense, net of interest income, was $27.7 million for 2003, compared to $34.3 million for 2002 and $29.3 million for 2001. The effect of “receive fixed, pay floating” interest rate swap contracts of $150 million, related to our $300 million of 8.375% 10-year Notes issued in December 2001, decreased interest expense by $6.7 million in 2003 and $4.9 million in 2002, compared to the fixed interest expense of the Notes. Interest expense in 2003 was reduced by $2.1 million from interest capitalization on capital projects. Interest expense is presented net of interest income of $6.2 million for 2003, $3.0 million for 2002 and $1.4 million for 2001. The increases in interest income for 2003 and 2002 primarily relate to interest on settlements of prior years’ tax liabilities. Interest Expense, net Corporate Expenses 2002 Compared to 2001 2003 Compared to 2002 Engineered Products (In millions) 2003 % Change 2002 % Change) 2001 Sales to external customers $252.2 6.2% $237.5 (13.9%) $275.8 Operating profit 7.8 65.5% 4.7 (61.7%) 12.3 Operating profit as a percentage of sales 3.1% 2.0% 4.5% International sales as a percentage of sales 31.0% 29.5% 33.4% 14 Annual Report 2003 ATI