What changed in this filing

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Item 1. Financial Statements

2023-11-02 compared with 2023-08-02 · 202 added, 168 removed, 679 unchanged (35% of the section changed)

4 unchanged sentences

(Current period unaudited)

September 30,

2023 December 31,

27 unchanged sentences

authorized- 500,000,000 shares;

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

issued- 132,292,666 shares at September 30, 2023 and 131,392,262 shares at December 31, 2022;

outstanding- 127,576,395 shares at September 30, 2023 and 128,273,042 shares at December 31, 2022

Additional paid-in capital 1,689.5 1,668.1

1 unchanged sentence

Treasury stock:

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

4,716,271 shares at September 30, 2023 and 3,119,220 shares at December 31, 2022

( 153.6 ) ( 87.0 )

8 unchanged sentences

(In millions, except per share amounts)

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

Three months ended September 30, Nine months ended September 30,

2023 2022 2023 2022

5 unchanged sentences

Loss on asset sales and sales of businesses, net 0.1 — 0.8 134.2

Operating income (loss) 120.3 ( 11.6 ) 232.9 65.4

Operating income 125.2 113.2 358.1 178.6

Nonoperating retirement benefit expense ( 16.9 ) ( 6.5 ) ( 50.6 ) ( 18.9 )

Interest expense, net ( 23.8 ) ( 20.8 ) ( 65.0 ) ( 67.8 )

Other income, net 0.7 10.7 1.3 3.2

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

Other income (expense), net — ( 18.5 ) 1.3 ( 15.3 )

Income before income taxes 84.5 67.4 243.8 76.6

Income tax provision 4.9 3.0 12.9 11.3

Net income (loss) 79.1 ( 34.3 ) 151.3 0.9

Net income 79.6 64.4 230.9 65.3

Net income attributable to noncontrolling interests 3.9 3.3 9.1 11.3

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 )

Net income attributable to ATI $ 75.7 $ 61.1 $ 221.8 $ 54.0

Basic net income attributable to ATI per common share $ 0.59 $ 0.47 $ 1.73 $ 0.43

Diluted net income attributable to ATI per common share $ 0.52 $ 0.42 $ 1.53 $ 0.42

The accompanying notes are an integral part of these statements.

2 unchanged sentences

(In millions)

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

Three months ended September 30, Nine months ended September 30,

2023 2022 2023 2022

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

Net income $ 79.6 $ 64.4 $ 230.9 $ 65.3

Currency translation adjustment

Unrealized net change arising during the period ( 9.2 ) ( 30.0 ) ( 14.0 ) ( 59.2 )

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

Reclassification adjustment included in net income — — — 20.0

Total ( 9.2 ) ( 30.0 ) ( 14.0 ) ( 39.2 )

Net derivatives gain (loss) on hedge transactions ( 3.2 ) 7.7 ( 20.6 ) 48.4

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

Reclassification to net income of net realized loss (gain) 1.8 ( 7.1 ) 0.1 ( 32.5 )

Income taxes on derivative transactions — — — —

4 unchanged sentences

Prior service cost

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

Amortization to net income of net prior service credits ( 0.1 ) ( 0.1 ) ( 0.4 ) ( 0.4 )

Settlement loss included in net income — — — 29.5

Income taxes on postretirement benefit plans — — — —

Total 15.9 19.0 47.4 86.7

Other comprehensive income, net of tax 9.0 41.9 7.6 73.8

Other comprehensive income (loss), net of tax 5.3 ( 10.4 ) 12.9 63.4

Comprehensive income 84.9 54.0 243.8 128.7

5 unchanged sentences

(In millions)

Six months ended June 30,

Nine months ended September 30,

Operating Activities:

20 unchanged sentences

Financing Activities:

Borrowings on long-term debt 425.0 —

Payments on long-term debt and finance leases ( 22.0 ) ( 16.6 )

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

Net payments under credit facilities ( 7.3 ) ( 16.0 )

Debt issuance costs ( 6.1 ) —

Purchase of treasury stock ( 55.1 ) ( 104.9 )

18 unchanged sentences

Interests Total

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

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

Net income — — 61.1 — — 3.3 64.4

Other comprehensive loss — — — — ( 1.0 ) ( 9.4 ) ( 10.4 )

Purchase of treasury stock — — — ( 15.0 ) — — ( 15.0 )

Employee stock plans — 5.6 — ( 0.1 ) — — 5.5

Balance, September 30, 2022 $ 13.1 $ 1,662.2 $ 100.0 $ ( 51.9 ) $ ( 909.9 ) $ 124.9 $ 938.4

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

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

Net income — — 75.7 — — 3.9 79.6

Other comprehensive income (loss) — — — — 7.4 ( 2.1 ) 5.3

Purchase of treasury stock — — — ( 45.4 ) — — ( 45.4 )

Employee stock plans — 7.5 — ( 0.3 ) — — 7.2

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

Balance, September 30, 2023 $ 13.2 $ 1,689.5 $ 398.7 $ ( 153.6 ) $ ( 708.9 ) $ 117.0 $ 1,355.9

ATI Stockholders

7 unchanged sentences

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

Net income — — 54.0 — — 11.3 65.3

Other comprehensive income (loss) — — — 81.8 ( 18.4 ) 63.4

4 unchanged sentences

Employee stock plans 0.1 20.1 — ( 5.7 ) — — 14.5

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

Balance, September 30, 2022 $ 13.1 $ 1,662.2 $ 100.0 $ ( 51.9 ) $ ( 909.9 ) $ 124.9 $ 938.4

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 21.4 — ( 11.1 ) — — 10.4

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

Balance, September 30, 2023 $ 13.2 $ 1,689.5 $ 398.7 $ ( 153.6 ) $ ( 708.9 ) $ 117.0 $ 1,355.9

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 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

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

(in millions) Third quarter ended

September 30, 2023 September 30, 2022

HPMC AA&S Total HPMC AA&S Total

9 unchanged sentences

Automotive 7.2 40.9 48.1 3.5 66.1 69.6

Construction/Mining 11.0 37.4 48.4 7.9 32.0 39.9

Medical 28.9 18.6 47.5 22.3 25.1 47.4

Electronics 0.6 44.2 44.8 0.7 47.8 48.5

Construction/Mining 7.7 32.3 40.0 9.5 38.3 47.8

Food Equipment & Appliances — 16.2 16.2 0.2 45.0 45.2

1 unchanged sentence

Total $ 539.5 $ 486.1 $ 1,025.6 $ 457.6 $ 574.4 $ 1,032.0

(in millions) Six months ended

June 30, 2023 June 30, 2022

(in millions) Nine months ended

September 30, 2023 September 30, 2022

HPMC AA&S Total HPMC AA&S Total

15 unchanged sentences

Total $ 1,537.7 $ 1,572.0 $ 3,109.7 $ 1,195.3 $ 1,630.3 $ 2,825.6

(in millions) Second quarter ended

June 30, 2023 June 30, 2022

(in millions) Third quarter ended

September 30, 2023 September 30, 2022

HPMC AA&S Total HPMC AA&S Total

6 unchanged sentences

Total $ 539.5 $ 486.1 $ 1,025.6 $ 457.6 $ 574.4 $ 1,032.0

(in millions) Six months ended

June 30, 2023 June 30, 2022

(in millions) Nine months ended

September 30, 2023 September 30, 2022

HPMC AA&S Total HPMC AA&S Total

8 unchanged sentences

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

Second quarter ended

June 30, 2023 June 30, 2022

Third quarter ended

September 30, 2023 September 30, 2022

HPMC AA&S Total HPMC AA&S Total

1 unchanged sentence

Nickel-based alloys and specialty alloys 42 % 52 % 47 % 52 % 57 % 54 %

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

Titanium and titanium-based alloys 24 % 13 % 19 % 16 % 7 % 11 %

Precision forgings, castings and components 33 % — % 18 % 32 % — % 15 %

Precision rolled strip products 1 % 19 % 9 % — % 22 % 12 %

1 unchanged sentence

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

Six months ended

June 30, 2023 June 30, 2022

Nine months ended

September 30, 2023 September 30, 2022

HPMC AA&S Total HPMC AA&S Total

6 unchanged sentences

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

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 Company maintained a backlog of confirmed orders totaling $ 3.6 billion and $ 2.7 billion at September 30, 2023 and 2022, respectively.

Due to the structure of the Company’s long-term agreements, approximately 70 % of this backlog at September 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 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:

As of September 30, 2023 and December 31, 2022, accounts receivable with customers were $ 686.7 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 nine months ended September 30, 2023 and 2022:

(in millions)

Accounts Receivable - Reserve for Doubtful Accounts June 30,

2023 June 30,

Accounts Receivable - Reserve for Doubtful Accounts September 30,

2023 September 30,

Balance as of beginning of fiscal year $ 7.7 $ 3.8

4 unchanged sentences

Contract Assets

Short-term June 30,

2023 June 30,

Short-term September 30,

2023 September 30,

Balance as of beginning of fiscal year $ 64.1 $ 53.9

1 unchanged sentence

Reclassified to accounts receivable ( 74.1 ) ( 57.9 )

Reclassification to/from long-term and contract liability — 0.1

Balance as of period end $ 56.6 $ 70.2

1 unchanged sentence

Contract Liabilities

Short-term June 30,

2023 June 30,

Short-term September 30,

2023 September 30,

Balance as of beginning of fiscal year $ 149.1 $ 116.2

5 unchanged sentences

Balance as of period end $ 110.2 $ 120.7

Long-term (a) June 30,

2023 June 30,

Long-term (a) September 30,

2023 September 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 $ 7.4 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):

Contract costs for obtaining and fulfilling a contract were $ 7.7 million and $ 7.3 million as of September 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 nine months ended September 30, 2023 was $ 0.2 million and $ 0.9 million, respectively.

Contract cost amortization expense for the three and nine months ended September 30, 2022 was $ 0.2 million and $ 0.7 million, respectively.

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

September 30,

2023 December 31,

7 unchanged sentences

Property, Plant and Equipment

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

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

September 30,

2023 December 31,

5 unchanged sentences

Total property, plant and equipment, net $ 1,626.3 $ 1,549.1

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.

The construction in progress portion of property, plant and equipment at September 30, 2023 was $ 267.1 million.

Capital expenditures on the consolidated statement of cash flows for the nine months ended September 30, 2023 exclude $ 28.9 million of incurred but unpaid capital expenditures that were included in property, plant and equipment and accrued at September 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 June 30, 2023 were $ 70.5 million.

Cash and cash equivalents held by STAL as of September 30, 2023 were $ 85.0 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 June 30, 2023 were $ 1.1 million.

Cash and cash equivalents held by this joint venture as of September 30, 2023 were $ 1.0 million.

Equity Method Joint Ventures

10 unchanged sentences

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 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.

ATI’s share of A&T Stainless results were losses of $ 0.5 million and $ 1.3 million for the three and nine months ended September 30, 2023, respectively, and a loss of $ 0.5 million for the three months ended September 30, 2022 and income of $ 8.7 million for the nine months ended September 30, 2022, 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 nine months ended September 30, 2022 included $ 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.

As of September 30, 2023 and December 31, 2022, ATI had net receivables for working capital advances and administrative services from A&T Stainless of $ 1.9 million and $ 3.2 million, respectively.

For the September 30, 2023 balance of net receivables, $ 0.5 million was reported in prepaid expenses and other current assets and $ 1.4 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 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 $ 0.3 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.

ATI’s share of Uniti’s results were losses of $ 0.2 million for the three months ended September 30, 2023 and income of $ 0.3 million for the nine months ended September 30, 2023, and income of $ 1.3 million and $ 2.5 million for the three and nine months ended September 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 third quarter of 2023.

The joint venture is expected to be dissolved in the fourth 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, 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,

Other income (expense), net for the three and nine months ended September 30, 2023 and 2022 was as follows:

(in millions) Three months ended September 30, Nine months ended September 30,

2023 2022 2023 2022

3 unchanged sentences

Litigation reserve — ( 19.9 ) — ( 28.5 )

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

Total other income (expense), net $ — $ ( 18.5 ) $ 1.3 $ ( 15.3 )

Restructuring

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.

Restructuring charges for the third quarter ended September 30, 2023 were a credit of $ 0.5 million for a reduction in severance-related reserves related to approximately 10 employees based on changes in planned operating rates and revised workforce reduction estimates.

Restructuring charges for the nine months ended September 30, 2023 were a charge of $ 2.2 million and represent severance for the involuntary reduction of approximately 40 employees across ATI’s domestic operations in conjunction with the continued transformation, partially offset by the credit in the third quarter 2023 discussed above for a reduction in severance-related reserves.

Restructuring charges for the third quarter and nine months ended September 30, 2022 were a net credit of $ 2.6 million and $ 5.0 million, respectively, for a reduction in severance-related reserves related to approximately 60 and 110 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.

3 unchanged sentences

Balance at December 31, 2022 $ 9.8

Additions 2.7

Additions, net 2.2

Payments ( 1.1 )

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.

Balance at September 30, 2023 $ 10.9

The $ 10.9 million restructuring reserve balance at September 30, 2023 includes $ 6.7 million recorded in other current liabilities and $ 4.2 million recorded in other long-term liabilities on the consolidated balance sheet.

Supplier Financing

1 unchanged sentence

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):

As of September 30, 2023 and December 31, 2022, the Company had $ 14.0 million and $ 23.7 million, respectively, reported in accounts payable on the consolidated balance sheets under such programs.

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

September 30,

2023 December 31,

2 unchanged sentences

5.125 % Notes due 2031

4.875 % Notes due 2029

3.5 % Convertible Senior Notes due 2025

11 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 June 30, 2023.

The Company was in compliance with the fixed charge coverage ratio as of September 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 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.

As of September 30, 2023, there were no outstanding borrowings under the revolving portion of the ABL facility, and $ 31.7 million was utilized to support the issuance of letters of credit.

There were average revolving credit borrowings of $ 17 million bearing an average annual interest rate of 6.5 % under the ABL facility for the first nine months of 2023.

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

The Company also has foreign credit facilities, primarily in China, that total $ 57 million based on September 30, 2023 foreign exchange rates, under which $ 11.2 million and $ 19.4 million was drawn as of September 30, 2023 and December 31, 2022, respectively.

In August 2023, ATI issued $ 425 million aggregate principal amount of 7.25 % Senior Notes due 2030 (2030 Notes).

Interest on the 2030 Notes is payable semi-annually in arrears at a rate of 7.25 % per year.

The 2030 Notes will mature on August 15, 2030.

Net proceeds were $ 418.8 million from this issuance, of which $ 222 million was used to fund ATI’s U.S.

qualified defined benefit pension plan in order to facilitate a pension derisking strategy (see Note 16), and the remaining proceeds were used for liquidity and general corporate purposes.

Underwriting fees and other third-party expenses for the issuance of the 2030 Notes were $ 6.2 million, and are being amortized to interest expense over the 7-year term of the 2030 Notes.

The 2030 Notes are unsecured and unsubordinated obligations of the Company and equally ranked with all of its existing and future senior unsecured debt.

The 2030 Notes restrict the Company’s ability to create certain liens, to enter into sale leaseback transactions, guarantee indebtedness and to consolidate or merge all, or substantially all, of its assets.

The Company has the option to redeem the 2030 Notes, as a whole or in part, at any time or from time to time, on at least 15 days, but not more than 60 days, prior notice to the holders of the Notes at redemption prices specified in the 2030 Notes.

The 2030 Notes are subject to repurchase upon the occurrence of a change in control repurchase event (as defined in the 2030 Notes) at a repurchase price in cash equal to 101 % of the aggregate principal amount of the Notes repurchased, plus any accrued and unpaid interest on the 2030 Notes repurchased.

2025 Convertible Notes

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.

As of September 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 September 30, 2023 and December 31, 2022, the fair value of the 2025 Convertible Notes was $ 786 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 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.

Including amortization of deferred issuance costs, the

effective interest rate is 4.2 % for the third quarters and nine months ended September 30, 2023 and 2022.

Remaining deferred issuance costs were $ 3.4 million and $ 4.8 million at September 30, 2023 and December 31, 2022, respectively.

Interest expense on the 2025 Convertible Notes was as follows:

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

Three months ended September 30, Nine months ended September 30,

(in millions) 2023 2022 2023 2022

2 unchanged sentences

Total interest expense $ 3.0 $ 2.9 $ 9.0 $ 8.9

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.

Currently, 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.

The initial conversion rate for the 2025 Convertible Notes is 64.5745 shares of ATI common stock per $1,000 principal amount of the 2025 Convertible Notes, equivalent to an initial conversion price of approximately $ 15.49 per share ( 18.8 million shares).

11 unchanged sentences

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

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.

However, as of September 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 6 million pounds of nickel with hedge dates through 2024.

The aggregate notional amount hedged is approximately 9 % of a single year’s estimated nickel raw material purchase requirements.

1 unchanged sentence

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 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.

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

At September 30, 2023, the Company hedged approximately 80 % of its forecasted domestic requirements for natural gas for the remainder of 2023, approximately 55 % 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 June 30, 2023, the Company had no significant outstanding foreign currency forward contracts.

At September 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 June 30,

Balance sheet location September 30,

2023 December 31,

17 unchanged sentences

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 June 30, 2023.

There were no outstanding fair value hedges as of September 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 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):

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 September 30, 2023, a pre-tax loss of $ 4.3 million is expected to be recognized over the next 12 months.

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

Amount of Gain (Loss)

4 unchanged sentences

into Income (a)

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

Three months ended September 30, Three months ended September 30,

Derivatives in Cash Flow Hedging Relationships 2023 2022 2023 2022

10 unchanged sentences

into Income (a)

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

Nine months ended September 30, Nine months ended September 30,

Derivatives in Cash Flow Hedging Relationships 2023 2022 2023 2022

9 unchanged sentences

Fair Value of Financial Instruments

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

The estimated fair value of financial instruments at September 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 June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2023 2022 2023 2022

10 unchanged sentences

$ 1,025.6 $ 1,032.0 $ 3,109.7 $ 2,825.6

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

Three months ended September 30, Nine months ended September 30,

2023 2022 2023 2022

6 unchanged sentences

Interest expense, net ( 23.8 ) ( 20.8 ) ( 65.0 ) ( 67.8 )

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

Restructuring and other charges ( 4.2 ) ( 17.3 ) ( 14.6 ) ( 23.5 )

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

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

Income before income taxes $ 84.5 $ 67.4 $ 243.8 $ 76.6

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

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

Three months ended September 30, Nine months ended September 30,

2023 2022 2023 2022

5 unchanged sentences

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

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.

Results for the nine months ended September 30, 2022 include $ 34.3 million related to this government sponsored COVID relief in segment EBITDA.

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

Restructuring and other charges of $ 4.2 million for the third quarter ended September 30, 2023 include $ 2.8 million of start up costs and $ 1.9 million of costs associated with an unplanned outage at our Lockport, NY facility, both of which are included within cost of sales on the consolidated statements of operations.

These charges were partially offset by a $ 0.5 million pre-tax credit for restructuring charges, primarily related to lowered severance-related reserves based on changes in planned operating rates and revised workforce reduction estimates (see Note 6).

Restructuring and other charges of $ 14.6 million for the nine months ended September 30, 2023 include $ 2.2 million of severance-related restructuring charges (see Note 6) as well as $ 8.5 million of start up costs, $ 1.9 million of costs associated with an unplanned outage at our Lockport, NY facility, and $ 2.0 million primarily for asset write-offs for the closure of our Robinson, PA operations, all of which are included within cost of sales on the consolidated statements of operations.

Restructuring and other charges for the third quarter and nine months ended September 30, 2022 include a $ 19.9 million and $ 28.5 million charge, respectively, for a litigation reserve, which is reported in other nonoperating income (expense) on the consolidated statement of operations, partially offset by $ 2.6 million and $ 5.0 million, respectively, of restructuring credits for a reduction in severance-related reserves (see Note 6).

Depreciation expense in the nine months ended September 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 nine months ended September 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 nine months ended September 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.

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 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):

For the three month periods ended September 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 June 30, Three months ended June 30,

Three months ended September 30, Three months ended September 30,

2023 2022 2023 2022

4 unchanged sentences

Amortization of net actuarial loss 14.5 15.8 1.5 3.3

Settlement loss — 29.5 — —

Total retirement benefit expense $ 14.4 $ 4.5 $ 4.2 $ 5.3

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):

For the nine month periods ended September 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,

Nine months ended September 30, Nine months ended September 30,

2023 2022 2023 2022

6 unchanged sentences

Total retirement benefit expense $ 43.3 $ 42.4 $ 12.5 $ 15.8

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

In May 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.

During the third quarter of 2023, ATI contributed $ 222 million to its U.S.

qualified defined benefit pension plan in order to facilitate a pension derisking strategy (see Note 16), bringing contributions for the first nine months of 2023 to $ 272 million.

The provision for income taxes for the third quarter and nine months ended September 30, 2023 was $ 4.9 million and $ 12.9 million, respectively.

The provision for income taxes for the third quarter and nine months ended September 30, 2022 was $ 3.0 million and $ 11.3 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.

5 unchanged sentences

Per Share Information

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,

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

(In millions, except per share amounts) Three months ended September 30, Nine months ended September 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 )

Numerator for basic income per common share –

Net income attributable to ATI $ 75.7 $ 61.1 $ 221.8 $ 54.0

Effect of dilutive securities:

3.5 % Convertible Senior Notes due 2025

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

2.7 2.8 7.9 —

Numerator for diluted net income per common share –

Net income attributable to ATI after assumed conversions $ 78.4 $ 63.9 $ 229.7 $ 54.0

Denominator for basic net income per common share – weighted average shares 128.1 129.8 128.4 126.9

Effect of dilutive securities:

2 unchanged sentences

18.8 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 )

Denominator for diluted net income per common share – adjusted weighted average shares and assumed conversions 150.2 150.8 150.1 128.9

Basic net income attributable to ATI per common share $ 0.59 $ 0.47 $ 1.73 $ 0.43

Diluted net income attributable to ATI per common share $ 0.52 $ 0.42 $ 1.53 $ 0.42

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.

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.

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

There were no anti-dilutive shares for the three months ended September 30, 2022, and 22.5 million anti-dilutive shares for the nine months ended September 30, 2022.

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

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

In the three months ended September 30, 2023, ATI used $ 45.0 million to repurchase 1.0 million shares of its common stock under the $ 75 million program, and in the nine months ended September 30, 2023, ATI used $ 55.1 million to repurchase 1.2 million shares of its common stock under both programs.

In the three and nine months ended September 30, 2022, ATI used $ 15.0 million and $ 104.9 million, respectively, to repurchase 0.5 million and 4.0 million shares, respectively, of its common stock under the $ 150 million program.

Effective January 1, 2023, the Company’s share repurchases are subject to a 1% excise tax as a result of the Inflation Reduction Act of 2022.

Excise taxes incurred in 2023 on share repurchases represent direct costs of the repurchase and are recorded as part of the cost basis of the shares within treasury stock.

The cost of share repurchases for the nine months ended September 30, 2023 of $ 55.5 million differs from the repurchases of common stock amounts in the consolidated statements of cash flows due to these excise taxes.

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 June 30, 2023 were as follows (in millions):

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

benefit plans Currency

1 unchanged sentence

Attributable to ATI:

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 )

OCI before reclassifications — ( 7.1 ) ( 2.4 ) — ( 9.5 )

1 unchanged sentence

Net current-period OCI 12.1 ( 7.1 ) ( 1.0 ) 3.4 7.4

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

Balance, September 30, 2023 $ ( 699.9 ) $ ( 80.7 ) $ ( 2.1 ) $ 73.8 $ ( 708.9 )

Attributable to noncontrolling interests:

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

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

OCI before reclassifications — ( 2.1 ) — — ( 2.1 )

1 unchanged sentence

Net current-period OCI — ( 2.1 ) — — ( 2.1 )

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):

Balance, September 30, 2023 $ — $ 4.3 $ — $ — $ 4.3

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

benefit plans Currency

5 unchanged sentences

Net current-period OCI 36.2 ( 10.6 ) ( 15.6 ) 6.3 16.3

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

Balance, September 30, 2023 $ ( 699.9 ) $ ( 80.7 ) $ ( 2.1 ) $ 73.8 $ ( 708.9 )

Attributable to noncontrolling interests:

3 unchanged sentences

Net current-period OCI — ( 3.4 ) — — ( 3.4 )

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

Balance, September 30, 2023 $ — $ 4.3 $ — $ — $ 4.3

(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):

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

benefit plans Currency

1 unchanged sentence

Attributable to ATI:

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

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

OCI before reclassifications — ( 20.6 ) 5.8 — ( 14.8 )

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

Amounts reclassified from AOCI (a) 14.5 (c) — (d) ( 5.4 ) (e) 4.7 13.8

Net current-period OCI 14.5 ( 20.6 ) 0.4 4.7 ( 1.0 )

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

Balance, September 30, 2022 $ ( 868.5 ) $ ( 85.7 ) $ 17.2 $ 27.1 $ ( 909.9 )

Attributable to noncontrolling interests:

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

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

OCI before reclassifications — ( 9.4 ) — — ( 9.4 )

1 unchanged sentence

Net current-period OCI — ( 9.4 ) — — $ ( 9.4 )

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):

Balance, September 30, 2022 $ — $ 7.6 $ — $ — $ 7.6

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

benefit plans Currency

5 unchanged sentences

Net current-period OCI 79.2 ( 20.8 ) 12.1 11.3 81.8

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

Balance, September 30, 2022 $ ( 868.5 ) $ ( 85.7 ) $ 17.2 $ 27.1 $ ( 909.9 )

Attributable to noncontrolling interests:

3 unchanged sentences

Net current-period OCI — ( 18.4 ) — — $ ( 18.4 )

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

Balance, September 30, 2022 $ — $ 7.6 $ — $ — $ 7.6

(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.

8 unchanged sentences

subsidiaries.

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

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

Details about AOCI Components

(In millions)

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

Three months ended September 30, 2023 Three months ended September 30, 2022 Nine months ended September 30, 2023 Nine months ended September 30, 2022 Affected line item in the statements

of operations

31 unchanged sentences

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.

At September 30, 2023, the Company’s reserves for environmental remediation obligations totaled approximately $ 13 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;

9 unchanged sentences

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 consolidated results of operations for that period.

Subsequent Event

In October 2023, the Company purchased group annuity contracts from an insurer covering approximately 85 % of the Company’s U.S.

qualified defined benefit pension plan obligations.

Under these contracts, the Company transferred the pension obligations and associated assets for approximately 8,200 plan participants to the selected insurance company.

This transaction had no impact on the amount, timing or form of the retirement benefit payments to the affected retirees and beneficiaries.

To facilitate this pension derisking strategy, the Company completed a voluntary cash out for term vested employees and contributed $ 222 million to its pension plan in the third quarter of 2023, to fully fund remaining pension liabilities ahead of this annuity transaction.

After these actions, the Company’s U.S.

qualified defined benefit plan will include approximately 1,900 participants.

In connection with this transaction, the Company expects to recognize a non-cash, non-operating settlement gain in the fourth quarter 2023.

The actual settlement gain will depend on the finalization of the actuarial calculations.

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