What changed in this filing

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Item 1. Financial Statements

2023-08-02 compared with 2023-05-04 · 301 added, 153 removed, 546 unchanged (45% of the section changed)

33 unchanged sentences

authorized- 500,000,000 shares;

issued- 132,228,508 shares at March 31, 2023 and 131,392,262 shares at December 31, 2022;

outstanding- 128,546,610 shares at March 31, 2023 and 128,273,042 shares at December 31, 2022

issued- 132,268,866 shares at June 30, 2023 and 131,392,262 shares at December 31, 2022;

outstanding- 128,584,727 shares at June 30, 2023 and 128,273,042 shares at December 31, 2022

Additional paid-in capital 1,682.0 1,668.1

1 unchanged sentence

Treasury stock:

3,681,898 shares at March 31, 2023 and 3,119,220 shares at December 31, 2022

3,684,139 shares at June 30, 2023 and 3,119,220 shares at December 31, 2022

( 107.9 ) ( 87.0 )

8 unchanged sentences

(In millions, except per share amounts)

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

2023 2022 2023 2022

Sales $ 1,046.0 $ 959.5 $ 2,084.1 $ 1,793.6

2 unchanged sentences

Selling and administrative expenses 85.4 72.3 166.0 147.5

Restructuring credits — ( 1.1 )

Restructuring charges (credits) 2.7 ( 1.3 ) 2.7 ( 2.4 )

Loss on asset sales and sales of businesses, net 0.7 115.9 0.7 134.2

Operating income 112.6 77.0

Operating income (loss) 120.3 ( 11.6 ) 232.9 65.4

Nonoperating retirement benefit expense ( 16.9 ) ( 6.6 ) ( 33.7 ) ( 12.4 )

Interest expense, net ( 21.3 ) ( 23.4 ) ( 41.2 ) ( 47.0 )

Other income (expense), net 0.6 ( 7.5 )

Income before income taxes 76.5 40.1

Other income, net 0.7 10.7 1.3 3.2

Income (loss) before income taxes 82.8 ( 30.9 ) 159.3 9.2

Income tax provision 3.7 3.4 8.0 8.3

Net income 72.2 35.2

Net income (loss) 79.1 ( 34.3 ) 151.3 0.9

Net income attributable to noncontrolling interests 3.1 3.7 5.2 8.0

Net income attributable to ATI $ 70.1 $ 30.9

Basic net income attributable to ATI per common share $ 0.55 $ 0.24

Diluted net income attributable to ATI per common share $ 0.48 $ 0.23

Net income (loss) attributable to ATI $ 76.0 $ ( 38.0 ) $ 146.1 $ ( 7.1 )

Basic net income (loss) attributable to ATI per common share $ 0.59 $ ( 0.31 ) $ 1.14 $ ( 0.06 )

Diluted net income (loss) attributable to ATI per common share $ 0.52 $ ( 0.31 ) $ 1.01 $ ( 0.06 )

The accompanying notes are an integral part of these statements.

2 unchanged sentences

(In millions)

Three months ended March 31,

Net income $ 72.2 $ 35.2

Three months ended June 30, Six months ended June 30,

2023 2022 2023 2022

Net income (loss) $ 79.1 $ ( 34.3 ) $ 151.3 $ 0.9

Currency translation adjustment

Unrealized net change arising during the period ( 8.1 ) ( 22.4 ) ( 4.8 ) ( 29.2 )

Reclassification adjustment included in net income (loss) — 20.0 — 20.0

Total ( 8.1 ) ( 2.4 ) ( 4.8 ) ( 9.2 )

Net derivatives gain (loss) on hedge transactions ( 2.4 ) 16.1 ( 17.4 ) 40.7

Reclassification to net income of net realized gain ( 5.5 ) ( 5.0 )

Reclassification to net income (loss) of net realized loss (gain) 3.8 ( 20.4 ) ( 1.7 ) ( 25.4 )

Income taxes on derivative transactions — — — —

4 unchanged sentences

Prior service cost

Amortization to net income of net prior service credits ( 0.1 ) ( 0.2 )

Amortization to net income (loss) of net prior service credits ( 0.2 ) ( 0.1 ) ( 0.3 ) ( 0.3 )

Settlement loss included in net income (loss) — 29.5 — 29.5

Income taxes on postretirement benefit plans — — — —

Total 15.7 48.6 31.5 67.7

Other comprehensive income (loss), net of tax ( 1.4 ) 31.9

Other comprehensive income, net of tax 9.0 41.9 7.6 73.8

Comprehensive income 88.1 7.6 158.9 74.7

Comprehensive income attributable to noncontrolling interests 6.5 5.0

Comprehensive income (loss) attributable to noncontrolling interests ( 2.6 ) ( 6.0 ) 3.9 ( 1.0 )

Comprehensive income attributable to ATI $ 90.7 $ 13.6 $ 155.0 $ 75.7

3 unchanged sentences

(In millions)

Three months ended March 31,

Six months ended June 30,

Operating Activities:

16 unchanged sentences

Proceeds from disposal of property, plant and equipment 1.6 1.0

Transaction costs from sales of businesses, net of proceeds ( 0.3 ) ( 2.8 )

Other 1.2 0.9

2 unchanged sentences

Payments on long-term debt and finance leases ( 11.3 ) ( 11.6 )

Net payments under credit facilities ( 16.8 ) ( 14.6 )

Net borrowings (payments) under credit facilities 33.2 ( 13.4 )

Purchase of treasury stock ( 10.1 ) ( 89.9 )

2 unchanged sentences

Shares repurchased for income tax withholding on share-based compensation and other ( 10.8 ) ( 5.6 )

Cash used in financing activities ( 43.3 ) ( 129.6 )

Cash provided by (used in) financing activities 1.0 ( 135.6 )

Decrease in cash and cash equivalents ( 316.9 ) ( 413.7 )

13 unchanged sentences

Interests Total

Balance, December 31, 2021 $ 12.7 $ 1,596.7 $ 72.7 $ ( 4.8 ) $ ( 991.7 ) $ 147.1 $ 832.7

Balance, March 31, 2022 $ 12.8 $ 1,602.5 $ 103.6 $ ( 99.7 ) $ ( 960.5 ) $ 137.0 $ 795.7

Net income (loss) — — ( 38.0 ) — — 3.7 ( 34.3 )

Other comprehensive income (loss) — — — — 51.6 ( 9.7 ) 41.9

Conversion of convertible notes 0.3 45.4 ( 26.7 ) 63.5 — — 82.5

Employee stock plans — 8.7 — ( 0.6 ) — — 8.1

Balance, June 30, 2022 $ 13.1 $ 1,656.6 $ 38.9 $ ( 36.8 ) $ ( 908.9 ) $ 131.0 $ 893.9

Balance, March 31, 2023 $ 13.2 $ 1,675.1 $ 247.0 $ ( 107.8 ) $ ( 731.0 ) $ 117.8 $ 1,214.3

Net income — — 76.0 — — 3.1 79.1

Other comprehensive income — — — 31.2 0.7 31.9

Other comprehensive income (loss) — — — — 14.7 ( 5.7 ) 9.0

Employee stock plans — 6.9 — ( 0.1 ) — — 6.8

Balance, June 30, 2023 $ 13.2 $ 1,682.0 $ 323.0 $ ( 107.9 ) $ ( 716.3 ) $ 115.2 $ 1,309.2

ATI Stockholders

Stock Additional

Capital Retained

Earnings Treasury

Stock Accumulated

Comprehensive

Income (Loss) Non-

Interests Total

Balance, December 31, 2021 $ 12.7 $ 1,596.7 $ 72.7 $ ( 4.8 ) $ ( 991.7 ) $ 147.1 $ 832.7

Net income (loss) — — ( 7.1 ) — — 8.0 0.9

Other comprehensive income (loss) — — — 82.8 ( 9.0 ) 73.8

Purchase of treasury stock — — — ( 89.9 ) — — ( 89.9 )

Conversion of convertible notes 0.3 45.4 ( 26.7 ) 63.5 — — 82.5

Dividends paid to noncontrolling interest — — — — — ( 16.0 ) ( 16.0 )

1 unchanged sentence

Employee stock plans 0.1 14.5 — ( 5.6 ) — — 9.0

Balance, March 31, 2022 $ 12.8 $ 1,602.5 $ 103.6 $ ( 99.7 ) $ ( 960.5 ) $ 137.0 $ 795.7

Balance, June 30, 2022 $ 13.1 $ 1,656.6 $ 38.9 $ ( 36.8 ) $ ( 908.9 ) $ 131.0 $ 893.9

Balance, December 31, 2022 $ 13.1 $ 1,668.1 $ 176.9 $ ( 87.0 ) $ ( 725.2 ) $ 111.3 $ 1,157.2

3 unchanged sentences

Employee stock plans 0.1 13.9 — ( 10.8 ) — — 3.2

Balance, March 31, 2023 $ 13.2 $ 1,675.1 $ 247.0 $ ( 107.8 ) $ ( 731.0 ) $ 117.8 $ 1,214.3

Balance, June 30, 2023 $ 13.2 $ 1,682.0 $ 323.0 $ ( 107.9 ) $ ( 716.3 ) $ 115.2 $ 1,309.2

The accompanying notes are an integral part of these statements.

27 unchanged sentences

Revenue is disaggregated within these two business segments by diversified global markets, primary geographical markets and diversified products.

Comparative information regarding the Company’s overall revenues (in millions) by global and geographical markets for the first quarters ended March 31, 2023 and 2022 is included in the following tables.

(in millions) First quarter ended

March 31, 2023 March 31, 2022

Comparative information regarding the Company’s overall revenues (in millions) by global and geographical markets for the second quarters and six months ended June 30, 2023 and 2022 is included in the following tables.

(in millions) Second quarter ended

June 30, 2023 June 30, 2022

HPMC AA&S Total HPMC AA&S Total

15 unchanged sentences

Total $ 527.1 $ 518.9 $ 1,046.0 $ 396.1 $ 563.4 $ 959.5

(in millions) First quarter ended

March 31, 2023 March 31, 2022

(in millions) Six months ended

June 30, 2023 June 30, 2022

HPMC AA&S Total HPMC AA&S Total

Diversified Global Markets:

Aerospace & Defense:

Jet Engines- Commercial $ 601.7 $ 50.1 $ 651.8 $ 410.4 $ 34.9 $ 445.3

Airframes- Commercial 138.0 196.1 334.1 81.1 118.7 199.8

Defense 91.9 104.7 196.6 82.1 76.0 158.1

Total Aerospace & Defense 831.6 350.9 1,182.5 573.6 229.6 803.2

Oil & Gas 6.1 232.7 238.8 25.2 203.1 228.3

Specialty Energy 54.8 96.1 150.9 61.6 70.1 131.7

Total Energy 60.9 328.8 389.7 86.8 273.2 360.0

Automotive 12.3 99.9 112.2 5.2 161.3 166.5

Construction/Mining 19.2 69.6 88.8 16.3 75.6 91.9

Medical 41.8 35.1 76.9 30.0 45.7 75.7

Electronics 1.2 69.2 70.4 1.2 99.8 101.0

Food Equipment & Appliances — 42.4 42.4 — 96.7 96.7

Other 31.2 90.0 121.2 24.6 74.0 98.6

Total $ 998.2 $ 1,085.9 $ 2,084.1 $ 737.7 $ 1,055.9 $ 1,793.6

(in millions) Second quarter ended

June 30, 2023 June 30, 2022

HPMC AA&S Total HPMC AA&S Total

Primary Geographical Market:

5 unchanged sentences

Total $ 527.1 $ 518.9 $ 1,046.0 $ 396.1 $ 563.4 $ 959.5

(in millions) Six months ended

June 30, 2023 June 30, 2022

HPMC AA&S Total HPMC AA&S Total

Primary Geographical Market:

United States $ 418.5 $ 738.1 $ 1,156.6 $ 336.2 $ 710.1 $ 1,046.3

Europe 402.0 88.0 490.0 256.3 87.4 343.7

Asia 95.0 213.0 308.0 94.7 219.5 314.2

Canada 28.6 24.5 53.1 23.0 20.4 43.4

South America, Middle East and other 54.1 22.3 76.4 27.5 18.5 46.0

Total $ 998.2 $ 1,085.9 $ 2,084.1 $ 737.7 $ 1,055.9 $ 1,793.6

Comparative information regarding the Company’s major products based on their percentages of sales is included in the following table.

Hot-Rolling and Processing Facility (HRPF) conversion service sales in the AA&S segment are excluded from this presentation.

First quarter ended

March 31, 2023 March 31, 2022

Second quarter ended

June 30, 2023 June 30, 2022

HPMC AA&S Total HPMC AA&S Total

2 unchanged sentences

Precision forgings, castings and components 33 % — % 17 % 35 % — % 15 %

Titanium and titanium-based alloys 17 % 11 % 14 % 17 % 6 % 11 %

Precision rolled strip products 1 % 18 % 9 % — % 24 % 14 %

Zirconium and related alloys — % 16 % 8 % — % 15 % 8 %

Total 100 % 100 % 100 % 100 % 100 % 100 %

Six months ended

June 30, 2023 June 30, 2022

HPMC AA&S Total HPMC AA&S Total

Diversified Products and Services:

Nickel-based alloys and specialty alloys 47 % 57 % 52 % 48 % 54 % 51 %

Precision forgings, castings and components 33 % — % 16 % 35 % — % 15 %

Titanium and titanium-based alloys 19 % 10 % 14 % 17 % 6 % 10 %

Precision rolled strip products 1 % 18 % 10 % — % 26 % 15 %

Zirconium and related alloys — % 15 % 8 % — % 14 % 9 %

Total 100 % 100 % 100 % 100 % 100 % 100 %

The Company maintained a backlog of confirmed orders totaling $ 3.3 billion and $ 2.4 billion at March 31, 2023 and 2022, respectively.

Due to the structure of the Company’s long-term agreements, approximately 80 % of this backlog at March 31, 2023 represented booked orders with performance obligations that will be satisfied within the next 12 months.

The Company maintained a backlog of confirmed orders totaling $ 3.5 billion and $ 2.6 billion at June 30, 2023 and 2022, respectively.

Due to the structure of the Company’s long-term agreements, approximately 70 % of this backlog at June 30, 2023 represented booked orders with performance obligations that will be satisfied within the next 12 months.

The backlog does not reflect any elements of variable consideration.

Contract balances

As of March 31, 2023 and December 31, 2022, accounts receivable with customers were $ 733.0 million and $ 586.9 million, respectively.

The following represents the rollforward of accounts receivable - reserve for doubtful accounts and contract assets and liabilities for the three months ended March 31, 2023 and 2022:

As of June 30, 2023 and December 31, 2022, accounts receivable with customers were $ 717.2 million and $ 586.9 million, respectively.

The following represents the rollforward of accounts receivable - reserve for doubtful accounts and contract assets and liabilities for the six months ended June 30, 2023 and 2022:

(in millions)

Accounts Receivable - Reserve for Doubtful Accounts March 31,

2023 March 31,

Accounts Receivable - Reserve for Doubtful Accounts June 30,

2023 June 30,

Balance as of beginning of fiscal year $ 7.7 $ 3.8

4 unchanged sentences

Contract Assets

Short-term March 31,

2023 March 31,

Short-term June 30,

2023 June 30,

Balance as of beginning of fiscal year $ 64.1 $ 53.9

4 unchanged sentences

Contract Liabilities

Short-term March 31,

2023 March 31,

Short-term June 30,

2023 June 30,

Balance as of beginning of fiscal year $ 149.1 $ 116.2

2 unchanged sentences

Current year amounts reclassified to revenue ( 22.9 ) ( 13.4 )

Other ( 0.1 ) 1.5

Reclassification to/from long-term and contract asset 22.3 16.7

Balance as of period end $ 137.8 $ 125.7

Long-term (a) March 31,

2023 March 31,

Long-term (a) June 30,

2023 June 30,

Balance as of beginning of fiscal year $ 66.8 $ 84.4

3 unchanged sentences

(a) Long-term contract liabilities are included in Other long-term liabilities on the consolidated balance sheets.

Contract costs for obtaining and fulfilling a contract were $ 7.6 million and $ 7.3 million as of March 31, 2023 and December 31, 2022, respectively, and are reported in other long-term assets on the consolidated balance sheet.

Contract cost amortization expense for the three months ended March 31, 2023 and 2022 was $ 0.3 million and $ 0.2 million, respectively.

Inventories at March 31, 2023 and December 31, 2022 were as follows (in millions):

Contract costs for obtaining and fulfilling a contract were $ 7.4 million and $ 7.3 million as of June 30, 2023 and December 31, 2022, respectively, and are reported in other long-term assets on the consolidated balance sheet.

Contract cost amortization expense for the three and six months ended June 30, 2023 was $ 0.4 million and $ 0.7 million, respectively.

Contract cost amortization expense for the three and six months ended June 30, 2022 was $ 0.3 million and $ 0.5 million, respectively.

Inventories at June 30, 2023 and December 31, 2022 were as follows (in millions):

2023 December 31,

7 unchanged sentences

Property, Plant and Equipment

Property, plant and equipment at March 31, 2023 and December 31, 2022 was as follows (in millions):

Property, plant and equipment at June 30, 2023 and December 31, 2022 was as follows (in millions):

2023 December 31,

5 unchanged sentences

Total property, plant and equipment, net $ 1,568.1 $ 1,549.1

The construction in progress portion of property, plant and equipment at March 31, 2023 was $ 270.9 million.

Capital expenditures on the consolidated statement of cash flows for the three months ended March 31, 2023 exclude $ 11.6 million of incurred but unpaid capital expenditures that were included in property, plant and equipment and accrued at March 31, 2023.

The construction in progress portion of property, plant and equipment at June 30, 2023 was $ 298.8 million.

Capital expenditures on the consolidated statement of cash flows for the six months ended June 30, 2023 exclude $ 19.3 million of incurred but unpaid capital expenditures that were included in property, plant and equipment and accrued at June 30, 2023.

Joint Ventures

5 unchanged sentences

STAL is part of ATI’s AA&S segment and manufactures Precision Rolled Strip stainless products mainly for the electronics and automotive markets located in Asia.

Cash and cash equivalents held by STAL as of March 31, 2023 were $ 52.9 million.

Cash and cash equivalents held by STAL as of June 30, 2023 were $ 70.5 million.

Next Gen Alloys LLC:

1 unchanged sentence

Next Gen Alloys LLC funds its development activities through the sale of shares to the two joint venture partners, and in the first quarter of 2022 the Company received $ 0.9 million from sales of noncontrolling interests to its joint venture partner, which is reported as a financing activity on the consolidated statements of cash flows.

Cash and cash equivalents held by this joint venture as of March 31, 2023 were $ 1.1 million.

Cash and cash equivalents held by this joint venture as of June 30, 2023 were $ 1.1 million.

Equity Method Joint Ventures

8 unchanged sentences

ATI filed new requests on behalf of A&T Stainless for exclusion from the Section 232 tariffs in October 2019.

These requests were denied by the United States Department of Commerce in the second quarter of 2020, and the 25% tariff remains in place.

These requests were denied by the United States Department of Commerce in the second quarter of 2020, and the 25% tariff remained in place.

Due to repeated tariff exclusion denials, the DRAP facility was idled in an orderly shut down process that was completed in the third quarter of 2020.

ATI’s share of A&T Stainless results was losses of $ 0.5 million and $ 0.3 million for the three months ended March 31, 2023 and 2022, respectively, which is included within other income/expense, net, on the consolidated statements of operations and in the AA&S segment’s operating results.

As of March 31, 2023 and December 31, 2022, ATI had net receivables for working capital advances and administrative services from A&T Stainless of $ 2.9 million and $ 3.2 million, respectively.

For the March 31, 2023 balance of net receivables, $ 0.5 million was reported in prepaid expenses and other current assets and $ 2.4 million in other long-term assets on the consolidated balance sheet, while for December 31, 2022, $ 0.4 million was reported in prepaid expenses and other current assets and $ 2.8 million in other long-term assets.

ATI’s share of A&T Stainless results were losses of $ 0.3 million and $ 0.8 million for the three and six months ended June 30, 2023, respectively and income of $ 9.5 million and $ 9.2 million for the three and six months ended June 30, 2022, respectively, which is included within other income/expense, net, on the consolidated statements of operations and in the AA&S segment’s operating results.

ATI’s share of A&T Stainless results for the both the three and six months ended June 30, 2022 include $ 9.9 million for ATI’s share of the $ 19.7 million tariff refund and accrued interest recognized as income by the joint venture in the second quarter of 2022 resulting from a settlement agreement with the U.S.

pursuant to which the U.S., without admitting liability, agreed to refund a substantial portion of the Section 232 tariffs previously paid by A&T Stainless.

As of June 30, 2023 and December 31, 2022, ATI had net receivables for working capital advances and administrative services from A&T Stainless of $ 2.4 million and $ 3.2 million, respectively.

For the June 30, 2023 balance of net receivables, $ 0.5 million was reported in prepaid expenses and other current assets and $ 1.9 million in other long-term assets on the consolidated balance sheet, while for December 31, 2022, $ 0.4 million was reported in prepaid expenses and other current assets and $ 2.8 million in other long-term assets.

ATI has a 50 % interest in the industrial titanium joint venture known as Uniti, with the remaining 50 % interest held by VSMPO, a Russian producer of titanium, aluminum, and specialty steel products.

Uniti is accounted for under the equity method of accounting.

ATI’s share of Uniti’s income was $ 0.2 million and $ 0.7 million for the three months ended March 31, 2023 and 2022, respectively, which is included in the AA&S segment’s operating results, and within other income/expense, net on the consolidated statements of operations.

ATI’s share of Uniti’s income was $ 0.3 million and $ 0.5 million for the three and six months ended June 30, 2023, respectively, and $ 0.5 million and $ 1.2 million for the three and six months ended June 30, 2022, respectively, which is included in the AA&S segment’s operating results, and within other income/expense, net on the consolidated statements of operations.

On March 9, 2022, the Company announced the termination of Uniti, LLC.

The joint venture is expected to be dissolved in the second quarter of 2023.

The joint venture is expected to be dissolved in the third quarter of 2023.

No impairments were recorded as a result of the decision to terminate the Uniti joint venture.

Supplemental Financial Statement Information

Other income (expense), net for the three months ended March 31, 2023 and 2022 was as follows:

(in millions) Three months ended March 31,

Other income, net for the three and six months ended June 30, 2023 and 2022 was as follows:

(in millions) Three months ended June 30, Six months ended June 30,

2023 2022 2023 2022

Rent and royalty income $ 0.7 $ 0.5 $ 1.3 $ 1.2

2 unchanged sentences

Litigation reserve — — — ( 8.6 )

Total other income (expense), net $ 0.6 $ ( 7.5 )

Total other income, net $ 0.7 $ 10.7 $ 1.3 $ 3.2

Restructuring

Restructuring charges for the first quarter ended March 31, 2022 were a net credit of $ 1.1 million for a reduction in severance-related reserves related to approximately 20 employees based on changes in planned operating rates and revised workforce reduction estimates.

This amount was presented as a restructuring credit in the consolidated statements of operations and is excluded from segment EBITDA.

Restructuring charges for both the second quarter and six months ended June 30, 2023 were $ 2.7 million and represent severance for the involuntary reduction of approximately 40 employees across ATI’s domestic operations in conjunction with our continued transformation.

Restructuring charges for the second quarter and six months ended June 30, 2022 were a net credit of $ 1.3 million and $ 2.4 million, respectively, for a reduction in severance-related reserves related to approximately 30 and 50 employees, respectively, based on changes in planned operating rates and revised workforce reduction estimates.

These amounts were presented as a restructuring credit in the consolidated statements of operations and are excluded from segment EBITDA.

Restructuring reserves for severance cost activity is as follows:

2 unchanged sentences

Balance at December 31, 2022 $ 9.8

Additions 2.7

Payments ( 0.8 )

Balance at March 31, 2023 $ 9.6

The $ 9.6 million restructuring reserve balance at March 31, 2023 includes $ 5.2 million recorded in other current liabilities and $ 4.4 million recorded in other long-term liabilities on the consolidated balance sheet.

Balance at June 30, 2023 $ 11.7

The $ 11.7 million restructuring reserve balance at June 30, 2023 includes $ 7.2 million recorded in other current liabilities and $ 4.5 million recorded in other long-term liabilities on the consolidated balance sheet.

Supplier Financing

The Company participates in supplier financing programs with two financial institutions to offer its suppliers the option for access to payment in advance of an invoice due date.

Under such programs, the two financial institutions provide early payment to suppliers at their request for invoices that ATI has confirmed as valid at a pre-determined discount rate commensurate with the creditworthiness of ATI.

As of March 31, 2023 and December 31, 2022, the Company had $ 20.5 million and $ 23.7 million, respectively, reported in accounts payable on the consolidated balance sheets under such programs.

Debt at March 31, 2023 and December 31, 2022 was as follows (in millions):

Under such programs, these financial institutions provide early payment to suppliers at their request for invoices that ATI has confirmed as valid at a pre-determined discount rate commensurate with the creditworthiness of ATI.

As of June 30, 2023 and December 31, 2022, the Company had $ 15.7 million and $ 23.7 million, respectively, reported in accounts payable on the consolidated balance sheets under such programs.

Debt at June 30, 2023 and December 31, 2022 was as follows (in millions):

2023 December 31,

15 unchanged sentences

The Company has an Asset Based Lending (ABL) Credit Facility, which is collateralized by the accounts receivable and inventory of the Company’s operations.

The ABL facility also provides the Company with the option of including certain machinery and equipment as additional collateral for purposes of determining availability under the facility.

The ABL facility also provides the Company with the option of including certain

machinery and equipment as additional collateral for purposes of determining availability under the facility.

The ABL facility, which matures in September 2027, includes a $ 600 million revolving credit facility, a letter of credit sub-facility of up to $ 200 million, a $ 200 million term loan (Term Loan), and a swing loan facility of up to $ 60 million.

6 unchanged sentences

1.00 after an event of default has occurred and is continuing or if the undrawn availability under the ABL revolving credit portion of the facility is less than the greater of (i) 10 % of the then applicable maximum loan amount under the revolving credit portion of the ABL and the outstanding Term Loan balance, or (ii) $ 60.0 million.

The Company was in compliance with the fixed charge coverage ratio as of March 31, 2023.

The Company was in compliance with the fixed charge coverage ratio as of June 30, 2023.

Additionally, the Company must demonstrate minimum liquidity specified by the facility during the 90 -day period immediately preceding the stated maturity date of its 3.5 % Convertible Senior Notes due 2025 and the 6.95 % Debentures due 2025 issued by the Company’s wholly owned subsidiary, Allegheny Ludlum LLC.

1 unchanged sentence

1.00 and its undrawn availability under the revolving portion of the ABL is less than the greater of (a) $ 120 million or (b) 20 % of the sum of the maximum loan amount under the revolving credit portion of the ABL and the outstanding Term Loan balance.

As of March 31, 2023, there were no outstanding borrowings under the revolving portion of the ABL facility, and $ 39.8 million was utilized to support the issuance of letters of credit.

There were no revolving credit borrowings under the ABL facility during the first three months of 2023 or 2022.

The Company also has foreign credit facilities, primarily in China, that total $ 61 million based on March 31, 2023 foreign exchange rates, under which $ 2.9 million and $ 19.4 million was drawn as of March 31, 2023 and December 31, 2022, respectively.

As of June 30, 2023, there were $ 50 million of outstanding borrowings under the revolving portion of the ABL facility, and $ 39.4 million was utilized to support the issuance of letters of credit.

There were average revolving credit borrowings of $ 11 million bearing an average annual interest rate of 6.4 % under the ABL facility for the first six months of 2023.

There were no revolving credit borrowings under the ABL facility during the first six months of 2022.

The Company also has foreign credit facilities, primarily in China, that total $ 58 million based on June 30, 2023 foreign exchange rates, under which $ 2.0 million and $ 19.4 million was drawn as of June 30, 2023 and December 31, 2022, respectively.

2025 Convertible Notes

As of March 31, 2023, the Company had $ 291.4 million aggregate principal amount of 3.5 % Convertible Notes due 2025 (2025 Convertible Notes) outstanding, which mature on June 15, 2025.

As of March 31, 2023 and December 31, 2022, the fair value of the 2025 Convertible Notes was $ 753 million and $ 590 million, respectively, based on the quoted market price, which is classified in Level 1 of the fair value hierarchy.

As of June 30, 2023, the Company had $ 291.4 million aggregate principal amount of 3.5 % Convertible Notes due 2025 (2025 Convertible Notes) outstanding, which mature on June 15, 2025.

As of June 30, 2023 and December 31, 2022, the fair value of the 2025 Convertible Notes was $ 844 million and $ 590 million, respectively, based on the quoted market price, which is classified in Level 1 of the fair value hierarchy.

The 2025 Convertible Notes have a 3.5 % cash coupon rate that is payable semi-annually in arrears on each June 15 and December 15.

Including amortization of deferred issuance costs, the effective interest rate is 4.2 % for the first quarters ended March 31, 2023 and 2022.

Remaining deferred issuance costs were $ 4.3 million and $ 4.8 million at March 31, 2023 and December 31, 2022, respectively.

Including amortization of deferred issuance costs, the effective interest rate is 4.2 % for the second quarters and six months ended June 30, 2023 and 2022.

Remaining deferred issuance costs were $ 3.8 million and $ 4.8 million at June 30, 2023 and December 31, 2022, respectively.

Interest expense on the 2025 Convertible Notes was as follows:

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

(in millions) 2023 2022 2023 2022

2 unchanged sentences

Total interest expense $ 3.0 $ 3.1 $ 6.0 $ 6.0

The Company does not have the right to redeem the 2025 Convertible Notes prior to June 15, 2023.

The Company did not have the right to redeem the 2025 Convertible Notes prior to June 15, 2023.

On or after June 15, 2023 and prior to the 41st scheduled trading day immediately preceding the maturity date, the Company may redeem all or any portion of the 2025 Convertible Notes, at its option, at a redemption price equal to 100 % of the principal amount thereof, plus any accrued and unpaid interest, if the last reported sale price of ATI’s common stock has been at least 130 % of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on the trading day immediately preceding the date on which ATI provides written notice of redemption.

12 unchanged sentences

The majority of ATI’s products are sold utilizing raw material surcharges and index mechanisms.

However, as of March 31, 2023, the Company had entered into financial hedging arrangements, primarily at the request of its customers related to firm orders, for an aggregate notional amount of approximately 3 million pounds of nickel with hedge dates through 2024.

However, as of June 30, 2023, the Company had entered into financial hedging arrangements, primarily at the request of its customers related to firm orders, for an aggregate notional amount of approximately 8 million pounds of nickel with hedge dates through 2024.

The aggregate notional amount hedged is approximately 10 % of a single year’s estimated nickel raw material purchase requirements.

These derivative instruments are used to hedge the variability of a selling price that is based on the London Metal Exchange

(LME) index for nickel, as well as to hedge the variability of the purchase cost of nickel based on this LME index.

These derivative instruments are used to hedge the variability of a selling price that is based on the London Metal Exchange (LME) index for nickel, as well as to hedge the variability of the purchase cost of nickel based on this LME index.

Any gain or loss associated with these hedging arrangements is included in sales or cost of sales, depending on whether the underlying risk being hedged was the variable selling price or the variable raw material cost, respectively.

At March 31, 2023, the outstanding financial derivatives used to hedge the Company’s exposure to energy cost volatility included natural gas cost hedges.

At March 31, 2023, the Company hedged approximately 75 % of its forecasted domestic requirements for natural gas for the remainder of 2023, approximately 50 % for 2024 and approximately 10 % for 2025.

At June 30, 2023, the outstanding financial derivatives used to hedge the Company’s exposure to energy cost volatility included natural gas cost hedges.

At June 30, 2023, the Company hedged approximately 80 % of its forecasted domestic requirements for natural gas for the remainder of 2023, approximately 50 % for 2024 and approximately 15 % for 2025.

While the majority of the Company’s direct export sales are transacted in U.S.

5 unchanged sentences

In addition, the Company may also hedge forecasted capital expenditures and designate cash balances held in foreign currencies as hedges of forecasted foreign currency transactions.

At March 31, 2023, the Company had no significant outstanding foreign currency forward contracts.

At June 30, 2023, the Company had no significant outstanding foreign currency forward contracts.

The Company may enter into derivative interest rate contracts to maintain a reasonable balance between fixed- and floating-rate debt.

4 unchanged sentences

There are no credit risk-related contingent features in the Company’s derivative contracts, and the contracts contain no provisions under which the Company has posted, or would be required to post, collateral.

The counterparties to the Company’s derivative contracts are substantial and creditworthy commercial banks that are recognized market makers.

The counterparties to the Company’s

derivative contracts are substantial and creditworthy commercial banks that are recognized market makers.

The Company controls its credit exposure by diversifying across multiple counterparties and by monitoring credit ratings and credit default swap spreads of its counterparties.

4 unchanged sentences

Asset derivatives

Balance sheet location March 31,

Balance sheet location June 30,

2023 December 31,

13 unchanged sentences

Natural gas contracts Other long-term liabilities 0.9 0.5

Nickel and other raw material contracts Other long-term liabilities $ 0.5 $ —

Total derivatives designated as hedging instruments $ 7.1 $ 4.6

1 unchanged sentence

For derivative financial instruments that are designated as fair value hedges, changes in the fair value of these derivatives are recognized in current period results and are reported as changes within accrued liabilities and other on the consolidated statements of cash flows.

There were no outstanding fair value hedges as of March 31, 2023.

There were no outstanding fair value hedges as of June 30, 2023.

The Company did not use net investment hedges for the periods presented.

The effects of derivative instruments in the tables below are presented net of related income taxes, excluding any impacts of changes to income tax valuation allowances affecting results of operations or other comprehensive income, when applicable (see Note 14 for further explanation).

Assuming market prices remain constant with those at March 31, 2023, a pre-tax loss of $ 2.3 million is expected to be recognized over the next 12 months.

Activity with regard to derivatives designated as cash flow hedges for the three month periods ended March 31, 2023 and 2022 was as follows (in millions):

Assuming market prices remain constant with those at June 30, 2023, a pre-tax loss of $ 2.1 million is expected to be recognized over the next 12 months.

Activity with regard to derivatives designated as cash flow hedges for the three and six month periods ended June 30, 2023 and 2022 was as follows (in millions):

Amount of Gain (Loss)

4 unchanged sentences

into Income (a)

Three months ended March 31, Three months ended March 31,

Three months ended June 30, Three months ended June 30,

Derivatives in Cash Flow Hedging Relationships 2023 2022 2023 2022

4 unchanged sentences

Total $ ( 1.9 ) $ 12.3 $ ( 2.9 ) $ 15.5

Amount of Gain (Loss)

Recognized in OCI on

Derivatives Amount of Gain (Loss)

Reclassified from

Accumulated OCI

into Income (a)

Six months ended June 30, Six months ended June 30,

Derivatives in Cash Flow Hedging Relationships 2023 2022 2023 2022

Nickel and other raw material contracts $ ( 6.9 ) $ 17.3 $ 3.9 $ 14.5

Natural gas contracts ( 6.8 ) 11.8 ( 3.2 ) 5.0

Foreign exchange contracts 0.2 0.4 0.1 0.1

Interest rate swap 0.2 1.5 0.5 ( 0.3 )

Total $ ( 13.3 ) $ 31.0 $ 1.3 $ 19.3

(a) The gains (losses) reclassified from accumulated OCI into income related to the derivatives, with the exception of the interest rate swap, are presented in sales and cost of sales in the same period or periods in which the hedged item affects earnings.

3 unchanged sentences

Fair Value of Financial Instruments

The estimated fair value of financial instruments at March 31, 2023 was as follows:

The estimated fair value of financial instruments at June 30, 2023 was as follows:

Fair Value Measurements at Reporting Date Using

49 unchanged sentences

Following is certain financial information with respect to the Company’s business segments for the periods indicated (in millions):

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

2023 2022 2023 2022

High Performance Materials & Components $ 562.8 $ 439.8 $ 1,092.4 $ 820.6

4 unchanged sentences

Advanced Alloys & Solutions 94.5 59.7 153.3 102.8

130.2 103.4 247.5 185.7

Sales to external customers:

2 unchanged sentences

$ 1,046.0 $ 959.5 $ 2,084.1 $ 1,793.6

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

2023 2022 2023 2022

High Performance Materials & Components $ 108.1 $ 60.3 $ 188.2 $ 128.4

5 unchanged sentences

Interest expense, net ( 21.3 ) ( 23.4 ) ( 41.2 ) ( 47.0 )

Restructuring and other charges ( 1.2 ) ( 7.5 )

Restructuring and other credits (charges) ( 9.2 ) 1.3 ( 10.4 ) ( 6.2 )

Loss on asset sales and sales of businesses, net ( 0.6 ) ( 115.9 ) ( 0.6 ) ( 134.2 )

Income before income taxes $ 76.5 $ 40.1

Income (loss) before income taxes $ 82.8 $ ( 30.9 ) $ 159.3 $ 9.2

a) The following is depreciation & amortization by each business segment:

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

2023 2022 2023 2022

High Performance Materials & Components $ 17.9 $ 16.9 $ 35.3 $ 34.8

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government enacted various relief packages in response to the COVID-19 pandemic.

First quarter 2022 results include $ 29 million related to this government sponsored COVID relief in segment EBITDA.

HPMC segment results for the first quarter of 2022 include $ 22 million of benefits from the Aviation Manufacturing Jobs Protection Program and employee retention credits, and AA&S segment results for the first quarter of 2022 include $ 7 million in employee retention credits.

Restructuring and other charges of $ 1.2 million for the first quarter of 2023 related to costs to restart the Company’s titanium operations in Albany, OR, which are included within cost of sales on the consolidated statements of operations.

Restructuring and other charges for the first quarter of 2022 relate to an $ 8.6 million charge for a litigation reserve, which is reported in other nonoperating income (expense) on the consolidated statement of operations, partially offset by a $ 1.1 million restructuring credit for a reduction in severance-related reserves.

Loss on asset sales and sales of businesses, net, for the first quarter of 2022 relate to a $ 25.1 million loss on the sale of the Company’s Sheffield, UK operations, partially offset by a $ 6.8 million gain from the sale of assets from the Pico Rivera, CA operations.

Results for the second quarter and six months ended June 30, 2022 include $ 5.6 million and $ 34.3 million, respectively, related to this government sponsored COVID relief in segment EBITDA.

HPMC segment second quarter and six month 2022 results include $ 5.6 million and $ 27.5 million, respectively, for the Aviation Manufacturing Jobs Protection Program and employee retention credits, and AA&S segment six month 2022 results include $ 6.8 million in employee retention credits.

Restructuring and other charges of $ 9.2 million for the second quarter ended June 30, 2023 include $ 2.7 million of severance-related restructuring charges as well as $ 4.5 million of start up costs and $ 2.0 million primarily for asset write-offs for the closure of our Robinson, PA operations, both of which are included within cost of sales on the consolidated statements of operations.

Restructuring and other charges of $ 10.4 million for the six months ended June 30, 2023 also include $ 1.2 million of additional start-up costs related to the Company’s titanium operations in Albany, OR, which are included within cost of sales on the consolidated statements of operations.

Restructuring and other charges for the second quarter and six months ended June 30, 2022 relate to $ 1.3 million and $ 2.4 million, respectively, of restructuring credits for a reduction in severance-related reserves (see Note 6).

The six months ended June 30, 2022 also includes an $ 8.6 million charge for a litigation reserve, which is reported in other nonoperating income (expense) on the consolidated statement of operations.

Depreciation expense in the second quarter and six months ended June 30, 2023 includes $ 0.8 million of accelerated depreciation on fixed assets for the closure of our Robinson, PA operations.

Loss on asset sales and sales of businesses, net, for the second quarter and six months ended June 30, 2023 is related to a $ 0.6 million loss on the sale of the Company’s Northbrook, IL operations, for which no proceeds were received but $0.3 million of transaction costs were paid and reported as an investing activity on the consolidated statement of cash flows.

Loss on asset sales and sales of businesses, net, for the six months ended June 30, 2022 relate to a $ 141.0 million loss on the sale of the Company’s Sheffield, UK operations, partially offset by a $ 6.8 million gain from the sale of assets from the Pico Rivera, CA operations.

Loss on asset sales and sales of businesses, net, for the second quarter ended June 30, 2022 relates to the loss on the sale of the Company’s Sheffield, UK operations for the completion of the sale.

Retirement Benefits

8 unchanged sentences

All defined benefit pension and retiree health care plans are closed to new entrants.

For the three month periods ended March 31, 2023 and 2022, the components of pension and other postretirement benefit expense for the Company’s defined benefit plans included the following (in millions):

For the three month periods ended June 30, 2023 and 2022, the components of pension and other postretirement benefit expense for the Company’s defined benefit plans included the following (in millions):

Pension Benefits Other Postretirement Benefits

Three months ended March 31, Three months ended March 31,

Three months ended June 30, Three months ended June 30,

2023 2022 2023 2022

4 unchanged sentences

Amortization of net actuarial loss 14.4 15.9 1.5 3.3

Settlement loss — 29.5 — —

Total retirement benefit expense $ 14.5 $ 33.9 $ 4.1 $ 5.3

The provision for income taxes for the first quarters ended March 31, 2023 and 2022 was $ 4.3 million and $ 4.9 million, respectively.

For the six month periods ended June 30, 2023 and 2022, the components of pension and other postretirement benefit expense for the Company’s defined benefit plans included the following (in millions):

Pension Benefits Other Postretirement Benefits

Six months ended June 30, Six months ended June 30,

2023 2022 2023 2022

Service cost - benefits earned during the year $ 3.2 $ 6.0 $ 0.3 $ 0.5

Interest cost on benefits earned in prior years 48.0 35.3 5.5 3.9

Expected return on plan assets ( 51.3 ) ( 65.0 ) — —

Amortization of prior service cost (credit) 0.2 0.2 ( 0.5 ) ( 0.5 )

Amortization of net actuarial loss 28.8 31.9 3.0 6.6

Settlement loss — 29.5 — —

Total retirement benefit expense $ 28.9 $ 37.9 $ 8.3 $ 10.5

On May 12, 2022, the Company completed the sale of its Sheffield, UK operations.

As a result of this sale, ATI recognized a $ 29.5 million settlement loss in the second quarter of 2022, which is recorded in loss on asset sales and sales of businesses, net, on the consolidated statement of operations, related to the amount in accumulated other comprehensive loss for the UK defined benefit pension plan that transferred as part of the sale.

The provision for income taxes for the second quarter and six months ended June 30, 2023 was $ 3.7 million and $ 8.0 million, respectively.

The provision for income taxes for the second quarter and six months ended June 30, 2022 was $ 3.4 million and $ 8.3 million, respectively.

Tax expense in both periods is mainly attributable to the Company’s foreign operations and was based on an estimated annual effective tax rate calculation which included foreign, non-valuation allowance operations combined with the U.S.

jurisdiction.

The first quarter of 2022 calculation excluded the results related to the Company’s Sheffield, UK operations, which was sold in the second quarter of 2022.

The 2022 calculation excluded the results related to the Company’s Sheffield, UK operations, which was sold in the second quarter of 2022.

In the second quarter 2020, the Company entered into a three-year cumulative loss within the United States, limiting the Company’s ability to utilize future projections when analyzing the need for a deferred tax asset valuation allowance, therefore limiting sources of income as part of the analysis.

2 unchanged sentences

Per Share Information

The following table sets forth the computation of basic and diluted income per common share:

(In millions, except per share amounts) Three months ended March 31,

Numerator for basic income per common share –

Net income attributable to ATI $ 70.1 $ 30.9

The following table sets forth the computation of basic and diluted income (loss) per common share:

(In millions, except per share amounts) Three months ended June 30, Six months ended June 30,

2023 2022 2023 2022

Numerator for basic income (loss) per common share –

Net income (loss) attributable to ATI $ 76.0 $ ( 38.0 ) $ 146.1 $ ( 7.1 )

Effect of dilutive securities:

3.5 % Convertible Senior Notes due 2025

Numerator for diluted net income per common share –

Net income attributable to ATI after assumed conversions $ 72.7 $ 34.9

Denominator for basic net income per common share – weighted average shares 128.5 126.4

Numerator for diluted net income (loss) per common share –

Net income (loss) attributable to ATI after assumed conversions $ 78.6 $ ( 38.0 ) $ 151.3 $ ( 7.1 )

Denominator for basic net income (loss) per common share – weighted average shares 128.5 124.6 128.5 125.5

Effect of dilutive securities:

1 unchanged sentence

3.5 % Convertible Senior Notes due 2025

Denominator for diluted net income per common share – adjusted weighted average shares and assumed conversions 150.1 152.8

Basic net income attributable to ATI per common share $ 0.55 $ 0.24

Diluted net income attributable to ATI per common share $ 0.48 $ 0.23

Common stock that would be issuable upon the assumed conversion of the 2025 Convertible Notes, the 2022 Convertible Notes prior to their maturity on June 30, 2022, and other option equivalents and contingently issuable shares are excluded from the computation of contingently issuable shares, and therefore, from the denominator for diluted earnings per share, if the effect of inclusion is anti-dilutive.

There were no anti-dilutive shares for the three months ended March 31, 2023 or 2022.

18.8 — 18.8 —

Denominator for diluted net income (loss) per common share – adjusted weighted average shares and assumed conversions 150.1 124.6 150.1 125.5

Basic net income (loss) attributable to ATI per common share $ 0.59 $ ( 0.31 ) $ 1.14 $ ( 0.06 )

Diluted net income (loss) attributable to ATI per common share $ 0.52 $ ( 0.31 ) $ 1.01 $ ( 0.06 )

Common stock that would be issuable upon the assumed conversion of the 2025 Convertible Notes and other option equivalents and contingently issuable shares are excluded from the computation of contingently issuable shares, and therefore, from the denominator for diluted earnings per share, if the effect of inclusion is anti-dilutive.

There were no anti-dilutive shares for the three and six months ended June 30, 2023.

There were 26.1 million and 26.2 million anti-dilutive shares for the three and six months ended June 30, 2022.

On February 2, 2022, the Company’s Board of Directors authorized the repurchase of up to $ 150 million of ATI stock.

Repurchases under the program may be made in the open market or in privately negotiated transactions, with the amount and timing of repurchases depending on market conditions and corporate needs.

Open market repurchases will be structured to occur within the pricing and volume requirements of SEC Rule 10b-18.

The stock repurchase program does not obligate the Company to repurchase any specific number of shares and it may be modified, suspended, or terminated at any time by the Board of Directors without prior notice.

In the three months ended March 31, 2023 and 2022, ATI used $ 10.1 million and $ 89.9 million, respectively, to repurchase 0.2 million and 3.5 million shares, respectively, of its common stock under this program.

In the six months ended June 30, 2023 and 2022, ATI used $ 10.1 million and $ 89.9 million, respectively, to repurchase 0.2 million and 3.5 million shares, respectively, of its common stock under the $ 150 million program.

In addition, on April 28, 2023, the Company’s Board of Directors authorized the repurchase of an additional $ 75 million of ATI stock.

Repurchases under these programs were or may be made in the open market or in privately negotiated transactions, with the amount and timing of repurchases depending on market conditions and corporate needs.

Open market repurchases are structured to occur within the pricing and volume requirements of SEC Rule 10b-18.

The Company’s ongoing stock repurchase programs do not obligate the Company to repurchase any specific number of shares and may be modified, suspended, or terminated at any time by the Board of Directors without prior notice.

Accumulated Other Comprehensive Income (Loss)

The changes in AOCI by component, net of tax, for the three month period ended March 31, 2023 were as follows (in millions):

The changes in AOCI by component, net of tax, for the three month period ended June 30, 2023 were as follows (in millions):

benefit plans Currency

1 unchanged sentence

Attributable to ATI:

Balance, December 31, 2022 $ ( 736.1 ) $ ( 70.1 ) $ 13.5 $ 67.5 $ ( 725.2 )

Balance, March 31, 2023 $ ( 724.0 ) $ ( 71.2 ) $ ( 2.1 ) $ 66.3 $ ( 731.0 )

OCI before reclassifications — ( 2.4 ) ( 1.9 ) — ( 4.3 )

1 unchanged sentence

Net current-period OCI 12.0 ( 2.4 ) 1.0 4.1 14.7

Balance, March 31, 2023 $ ( 724.0 ) $ ( 71.2 ) $ ( 2.1 ) $ 66.3 $ ( 731.0 )

Balance, June 30, 2023 $ ( 712.0 ) $ ( 73.6 ) $ ( 1.1 ) $ 70.4 $ ( 716.3 )

Attributable to noncontrolling interests:

Balance, December 31, 2022 $ — $ 7.7 $ — $ — $ 7.7

Balance, March 31, 2023 $ — $ 12.1 $ — $ — $ 12.1

OCI before reclassifications — ( 5.7 ) — — ( 5.7 )

1 unchanged sentence

Net current-period OCI — ( 5.7 ) — — ( 5.7 )

Balance, March 31, 2023 $ — $ 12.1 $ — $ — $ 12.1

(a) Amounts were included in net periodic benefit cost for pension and other postretirement benefit plans (see Note 11).

(b) No amounts were reclassified to earnings.

(c) Amounts related to derivatives are included in sales, cost of goods sold or interest expense in the period or periods the hedged item affects earnings (see Note 8).

(d) Represents the net change in deferred tax asset valuation allowances on changes in AOCI balances between the balance sheet dates.

The changes in AOCI by component, net of tax, for the three month period ended March 31, 2022 were as follows (in millions):

Balance, June 30, 2023 $ — $ 6.4 $ — $ — $ 6.4

The changes in AOCI by component, net of tax, for the six month period ended June 30, 2023 were as follows (in millions):

benefit plans Currency

5 unchanged sentences

Net current-period OCI 24.1 ( 3.5 ) ( 14.6 ) 2.9 8.9

Balance, March 31, 2022 $ ( 933.2 ) $ ( 72.4 ) $ 20.0 $ 25.1 $ ( 960.5 )

Balance, June 30, 2023 $ ( 712.0 ) $ ( 73.6 ) $ ( 1.1 ) $ 70.4 $ ( 716.3 )

Attributable to noncontrolling interests:

3 unchanged sentences

Net current-period OCI — ( 1.3 ) — — ( 1.3 )

Balance, March 31, 2022 $ — $ 26.7 $ — $ — $ 26.7

Balance, June 30, 2023 $ — $ 6.4 $ — $ — $ 6.4

(a) Amounts were included in net periodic benefit cost for pension and other postretirement benefit plans (see Note 11).

2 unchanged sentences

(d) Represents the net change in deferred tax asset valuation allowances on changes in AOCI balances between the balance sheet dates.

The changes in AOCI by component, net of tax, for the three month period ended June 30, 2022 were as follows (in millions):

benefit plans Currency

adjustment Derivatives Deferred Tax Asset Valuation Allowance Total

Attributable to ATI:

Balance, March 31, 2022 $ ( 933.2 ) $ ( 72.4 ) $ 20.0 $ 25.1 $ ( 960.5 )

OCI before reclassifications — ( 12.7 ) 12.3 — ( 0.4 )

Amounts reclassified from AOCI (a) 50.2 (b) 20.0 (d) ( 15.5 ) (e) ( 2.7 ) 52.0

Net current-period OCI 50.2 7.3 ( 3.2 ) ( 2.7 ) 51.6

Balance, June 30, 2022 $ ( 883.0 ) $ ( 65.1 ) $ 16.8 $ 22.4 $ ( 908.9 )

Attributable to noncontrolling interests:

Balance, March 31, 2022 $ — $ 26.7 $ — $ — $ 26.7

OCI before reclassifications — ( 9.7 ) — — ( 9.7 )

Amounts reclassified from AOCI — (c) — — — —

Net current-period OCI — ( 9.7 ) — — $ ( 9.7 )

Balance, June 30, 2022 $ — $ 17.0 $ — $ — $ 17.0

The changes in AOCI by component, net of tax, for the six month period ended June 30, 2022 were as follows (in millions):

benefit plans Currency

adjustment Derivatives Deferred Tax Asset Valuation Allowance Total

Attributable to ATI:

Balance, December 31, 2021 $ ( 947.7 ) $ ( 64.9 ) $ 5.1 $ 15.8 $ ( 991.7 )

OCI before reclassifications — ( 20.2 ) 31.0 — 10.8

Amounts reclassified from AOCI (a) 64.7 (b) 20.0 (d) ( 19.3 ) (e) 6.6 72.0

Net current-period OCI 64.7 ( 0.2 ) 11.7 6.6 82.8

Balance, June 30, 2022 $ ( 883.0 ) $ ( 65.1 ) $ 16.8 $ 22.4 $ ( 908.9 )

Attributable to noncontrolling interests:

Balance, December 31, 2021 $ — $ 26.0 $ — $ — $ 26.0

OCI before reclassifications — ( 9.0 ) — — ( 9.0 )

Amounts reclassified from AOCI — (c) — — — —

Net current-period OCI — ( 9.0 ) — — $ ( 9.0 )

Balance, June 30, 2022 $ — $ 17.0 $ — $ — $ 17.0

(a) Amounts were included in net periodic benefit cost for pension and other postretirement benefit plans (see Note 11) and/or loss on asset sales and sales of businesses, net, as part of the loss on sale of the Sheffield, UK operations.

(b) Amounts were included in loss on asset sales and sales of businesses, net, as part of the loss on sale of the Sheffield, UK operations.

(d) Amounts related to derivatives are included in sales, cost of goods sold or interest expense in the period or periods the hedged item affects earnings (see Note 8).

(e) Represents the net change in deferred tax asset valuation allowances on changes in AOCI balances between the balance sheet dates.

Other comprehensive income (loss) amounts (OCI) reported above by category are net of applicable income tax expense (benefit) for each year presented.

3 unchanged sentences

subsidiaries.

Reclassifications out of AOCI for the three month periods ended March 31, 2023 and 2022 were as follows:

Reclassifications out of AOCI for the three and six month periods ended June 30, 2023 and 2022 were as follows:

Details about AOCI Components

(In millions)

Three months ended March 31, 2023 Three months ended March 31, 2022 Affected line item in the statements

Three months ended June 30, 2023 Three months ended June 30, 2022 Six months ended June 30, 2023 Six months ended June 30, 2022 Affected line item in the statements

of operations

2 unchanged sentences

Actuarial losses ( 15.9 ) ( 19.2 ) ( 31.8 ) ( 38.5 ) (a)

( 15.8 ) ( 19.1 ) (c) Total before tax

( 3.7 ) ( 4.6 ) Tax benefit (d)

Settlement loss — ( 29.5 ) — ( 29.5 ) (b)

( 15.7 ) ( 48.6 ) ( 31.5 ) ( 67.7 ) (d) Total before tax

( 3.7 ) 1.6 ( 7.4 ) ( 3.0 ) Tax expense (benefit) (e)

$ ( 12.0 ) $ ( 50.2 ) $ ( 24.1 ) $ ( 64.7 ) Net of tax

Nickel and other raw material contracts $ 6.9 $ 3.2 (b)

Natural gas contracts ( 1.8 ) 2.1 (b)

Foreign exchange contracts 0.1 — (b)

Interest rate swap 0.3 ( 0.3 ) (b)

5.5 5.0 (c) Total before tax

1.3 1.2 Tax expense (d)

Currency translation adjustment $ — $ ( 20.0 ) $ — $ ( 20.0 ) (b,d)

Nickel and other raw material contracts $ ( 1.8 ) $ 15.9 $ 5.1 $ 19.1 (c)

Natural gas contracts ( 2.4 ) 4.5 ( 4.2 ) 6.6 (c)

Foreign exchange contracts — 0.1 0.1 0.1 (c)

Interest rate swap 0.4 ( 0.1 ) 0.7 ( 0.4 ) (c)

( 3.8 ) 20.4 1.7 25.4 (d) Total before tax

( 0.9 ) 4.9 0.4 6.1 Tax expense (benefit) (e)

$ ( 2.9 ) $ 15.5 $ 1.3 $ 19.3 Net of tax

(a) Amounts are reported in nonoperating retirement benefit expense (see Note 11).

(b) Amounts related to derivatives, with the exception of the interest rate swap, are included in sales or cost of goods sold in the period or periods the hedged item affects earnings.

(b) Amounts in 2022 were included in loss on asset sales and sales of businesses, net, as part of the loss on sale of the Sheffield UK operations.

(c) Amounts related to derivatives, with the exception of the interest rate swap, are included in sales or cost of goods sold in the period or periods the hedged item affects earnings.

Amounts related to the interest rate swap are included in interest expense in the same period as the interest expense on the Term Loan is recognized in earnings (see Note 8).

(d) For pre-tax items, positive amounts are income and negative amounts are expense in terms of the impact to net income.

Tax effects are presented in conformity with ATI’s presentation in the consolidated statements of operations.

(d) These amounts exclude the impact of any deferred tax asset valuation allowances, when applicable.

(e) These amounts exclude the impact of any deferred tax asset valuation allowances, when applicable.

Commitments and Contingencies

6 unchanged sentences

The Company adjusts its accruals to reflect new information as appropriate.

Future adjustments could have a material adverse effect on the Company’s consolidated results of operations in a given period, but the Company cannot reliably predict the amounts of such future adjustments.

At March 31, 2023, the Company’s reserves for environmental remediation obligations totaled approximately $ 13 million, of which $ 5 million was included in other current liabilities.

Future adjustments could have a material adverse effect on the Company’s

consolidated results of operations in a given period, but the Company cannot reliably predict the amounts of such future adjustments.

At June 30, 2023, the Company’s reserves for environmental remediation obligations totaled approximately $ 14 million, of which $ 6 million was included in other current liabilities.

The reserve includes estimated probable future costs of $ 3 million for federal Superfund and comparable state-managed sites;

$ 8 million for formerly owned or operated sites for which the

Company has remediation or indemnification obligations;

$ 8 million for formerly owned or operated sites for which the Company has remediation or indemnification obligations;

and $ 3 million for owned or controlled sites at which Company operations have been or plan to be discontinued.

8 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements