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Item 8. Financial Statements and Supplementary Data

2024-02-23 compared with 2023-02-24 · 680 added, 485 removed, 1218 unchanged (49% of the section changed)

4 unchanged sentences

We have audited the accompanying consolidated balance sheets of ATI Inc.

and Subsidiaries (the Company) as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive income (loss), cash flows, and statements of changes in consolidated equity for each of the three years in the period ended December 31, 2022, and the related notes (collectively referred to as the “consolidated financial statements”.) In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with U.S.

and subsidiaries (the Company) as of December 31, 2023 and January 1, 2023, the related consolidated statements of operations, comprehensive income (loss), cash flows and statements of changes in consolidated equity for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred to as the “consolidated financial statements”.) In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023 and January 1, 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with U.S.

generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 23, 2024 expressed an unqualified opinion thereon.

Change in Accounting Principle

As discussed in Note 1 to the consolidated financial statements, the Company changed its method of accounting for recognizing actuarial gains and losses for its defined benefit pension plans during the year ended December 31, 2023.

The Company adopted this change on a retrospective basis.

Basis for Opinion

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If the Company’s carrying amount of a reporting unit exceeds its fair value, an impairment loss would be measured as the excess of the carrying value over the calculated fair value.

Auditing the Company’s annual goodwill impairment test for the Forged Products reporting unit was complex because the estimation of fair value involves subjective management assumptions, such as revenue growth, profitability and the weighted-average cost of capital, and a complex valuation methodology, such as the discounted cash flow.

Assumptions used in the Company’s valuation model are forward-looking, and changes in these assumptions can have a material effect on the determination of fair value.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s goodwill impairment evaluation process, including controls over management’s review of the assumptions described above.

Our audit procedures to test management’s impairment evaluation of the Forged Products reporting unit included, among others, assessing the valuation methodology and assumptions discussed above, and the underlying data used to develop such assumptions.

For example, we compared certain assumptions to current industry, market and economic trends.

Where appropriate, we evaluated whether changes to the Company’s business and other factors would affect the assumptions.

Auditing the Company’s annual goodwill impairment test for the Forged Products reporting unit was complex because the estimation of fair value involves subjective management assumptions, specifically the weighted-average cost of capital assumption and a complex valuation methodology, such as the discounted cash flow.

Changes in this assumption can have a material effect on the determination of fair value.

Our audit procedures to test management’s impairment evaluation of the Forged Products reporting unit included, among others, assessing the valuation methodology, the assumption discussed above, and the underlying data used to develop the assumption.

Where appropriate, we evaluated whether changes to the market inputs and other factors would affect the assumption.

We also assessed the historical accuracy of management’s estimates and performed independent sensitivity analyses.

We involved our valuation specialists to assist us in evaluating the methodology and auditing the assumptions used to calculate the estimated fair value of the Forged Products reporting unit.

We involved our valuation specialists to assist us in evaluating the methodology and auditing the assumption used to calculate the estimated fair value of the Forged Products reporting unit.

/s/ Ernst & Young LLP

5 unchanged sentences

(In millions, except per share amounts)

For the Years Ended December 31, 2022 2021 2020

Fiscal Year Ended

December 31, 2023 January 1, 2023* January 2, 2022*

Sales $ 4,173.7 $ 3,836.0 $ 2,799.8

2 unchanged sentences

Selling and administrative expenses 328.1 297.5 226.9

Impairment of goodwill — — 287.0

Restructuring charges (credits) 7.7 ( 4.8 ) ( 11.3 )

Loss on asset sales and sales of businesses, net 0.4 105.4 —

Operating income (loss) 287.3 117.6 ( 1,302.7 )

Operating income 466.4 316.1 117.6

Nonoperating retirement benefit income (expense) ( 79.7 ) 138.4 260.0

2 unchanged sentences

Other income (loss), net 1.3 ( 12.5 ) 18.2

Income (loss) before income taxes 162.0 10.6 ( 1,481.9 )

Income tax provision 15.5 26.8 77.7

Net income (loss) 146.5 ( 16.2 ) ( 1,559.6 )

Income before income taxes 295.2 354.6 233.4

Income tax provision (benefit) ( 128.2 ) 15.5 26.8

Net income 423.4 339.1 206.6

Net income attributable to noncontrolling interests 12.6 15.6 22.0

Net income (loss) attributable to ATI $ 130.9 $ ( 38.2 ) $ ( 1,572.6 )

Basic net income (loss) attributable to ATI per common share $ 1.03 $ ( 0.30 ) $ ( 12.43 )

Diluted net income (loss) attributable to ATI per common share $ 0.96 $ ( 0.30 ) $ ( 12.43 )

Net income attributable to ATI $ 410.8 $ 323.5 $ 184.6

Basic net income attributable to ATI per common share $ 3.21 $ 2.54 $ 1.45

Diluted net income attributable to ATI per common share $ 2.81 $ 2.23 $ 1.32

*Fiscal years ended January 1, 2023 and January 2, 2022 reflect a change in accounting principle, as described in Note 1 of the Notes to the Consolidated Financial Statements.

The accompanying notes are an integral part of these statements.

2 unchanged sentences

(In millions)

For the Years Ended December 31, 2022 2021 2020

Net income (loss) $ 146.5 $ ( 16.2 ) $ ( 1,559.6 )

Fiscal Year Ended

December 31, 2023 January 1, 2023* January 2, 2022*

Net income $ 423.4 $ 339.1 $ 206.6

Currency translation adjustment

Unrealized net change arising during the period 1.3 ( 43.5 ) ( 4.6 )

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

Reclassification adjustment included in net income — 20.0 —

Total 1.3 ( 23.5 ) ( 4.6 )

Net derivatives gain (loss) on hedge transactions ( 28.5 ) 53.8 15.5

Reclassification to net income (loss) of net realized (gain) loss ( 42.8 ) ( 11.4 ) 6.0

Reclassification to net income of net realized loss (gain) 2.5 ( 42.8 ) ( 11.4 )

Income taxes on derivative transactions ( 6.1 ) — —

1 unchanged sentence

Postretirement benefit plans

Actuarial loss

Actuarial gain/loss

Amortization of net actuarial loss 6.0 13.2 13.9

1 unchanged sentence

Prior service cost

Amortization to net income (loss) of net prior service credits ( 0.5 ) ( 1.8 ) ( 3.1 )

Settlement loss (gain) included in net income (loss) 29.5 ( 21.9 ) —

Amortization to net income of net prior service credits ( 0.6 ) ( 0.5 ) ( 1.8 )

Settlement loss (gain) included in net income 1.1 0.7 ( 21.9 )

Income taxes on postretirement benefit plans 0.3 — ( 15.5 )

1 unchanged sentence

Other comprehensive income (loss), net of tax ( 16.2 ) 55.6 13.9

Comprehensive income (loss) 394.7 220.5 ( 1,570.1 )

Comprehensive income 407.2 394.7 220.5

Comprehensive income (loss) attributable to noncontrolling interests 12.2 ( 2.7 ) 26.8

Comprehensive income (loss) attributable to ATI $ 397.4 $ 193.7 $ ( 1,594.5 )

Comprehensive income attributable to ATI $ 395.0 $ 397.4 $ 193.7

*Fiscal years ended January 1, 2023 and January 2, 2022 reflect a change in accounting principle, as described in Note 1 of the Notes to the Consolidated Financial Statements.

The accompanying notes are an integral part of these statements.

1 unchanged sentence

Consolidated Balance Sheets

(In millions, except share and per share amounts) December 31,

2022 December 31,

(In millions, except share and per share amounts) December 31, 2023 January 1, 2023*

Cash and cash equivalents $ 743.9 $ 584.0

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authorized- 500,000,000 shares;

issued- 131,392,262 shares at December 31, 2022 and 127,484,902 shares at December 31, 2021;

outstanding- 128,273,042 shares at December 31, 2022 and 127,253,045 shares at December 31, 2021

issued- 132,300,971 shares at December 31, 2023 and 131,392,262 shares at January 1, 2023;

outstanding- 126,879,099 shares at December 31, 2023 and 128,273,042 shares at January 1, 2023

Additional paid-in capital 1,697.1 1,668.1

Retained earnings 176.9 72.7

Retained loss ( 70.1 ) ( 480.9 )

Treasury stock:

3,119,220 shares at December 31, 2022 and 231,857 shares at December 31, 2021

5,421,872 shares at December 31, 2023 and 3,119,220 shares at January 1, 2023

( 184.0 ) ( 87.0 )

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Total Liabilities and Stockholders’ Equity $ 4,985.1 $ 4,445.6

*Fiscal year ended January 1, 2023 reflects a change in accounting principle, as described in Note 1 of the Notes to the Consolidated Financial Statements.

The accompanying notes are an integral part of these statements.

2 unchanged sentences

(In millions)

For the Years Ended December 31, 2022 2021 2020

Fiscal Year Ended

December 31, 2023 January 1, 2023* January 2, 2022*

Operating Activities:

Net income (loss) $ 146.5 $ ( 16.2 ) $ ( 1,559.6 )

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Net income $ 423.4 $ 339.1 $ 206.6

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 146.1 142.9 143.9

1 unchanged sentence

Deferred taxes ( 138.2 ) ( 0.1 ) 1.0

Impairment of goodwill — — 287.0

Debt extinguishment charge — — 65.5

1 unchanged sentence

Net loss (gain) from sales of businesses 0.6 112.2 ( 13.8 )

Non-cash restructuring charges — — 1,041.5

Non-cash impairment charges 3.0 — —

Change in operating assets and liabilities:

Pension plan contributions ( 272.0 ) ( 51.3 ) ( 71.6 )

Retirement benefits 53.8 ( 159.2 ) ( 261.9 )

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Net borrowings (payments) under credit facilities ( 14.0 ) ( 5.6 ) 21.7

Purchase of convertible note capped call — — ( 19.4 )

Debt issuance costs ( 6.2 ) — ( 9.5 )

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Cash and cash equivalents at end of year $ 743.9 $ 584.0 $ 687.7

*Fiscal years ended January 1, 2023 and January 2, 2022 reflect a change in accounting principle, as described in Note 1 of the Notes to the Consolidated Financial Statements.

Amounts presented on the Consolidated Statements of Cash Flows may not agree to the corresponding changes in consolidated balance sheet items due to the accounting for purchases and sales of businesses and the effects of foreign currency translation.

6 unchanged sentences

Capital Retained

Earnings Treasury

Earnings (Loss) Treasury

Stock Accumulated

2 unchanged sentences

Interests Total

Balance, December 31, 2019 $ 12.7 $ 1,618.0 $ 1,679.3 $ ( 18.2 ) $ ( 1,201.7 ) $ 103.1 $ 2,193.2

Net income (loss) — — ( 1,572.6 ) — — 13.0 ( 1,559.6 )

Other comprehensive income (loss) — — — — ( 21.9 ) 11.4 ( 10.5 )

Equity component of convertible note — 49.8 — — — — 49.8

Convertible note capped call — ( 19.4 ) — — — — ( 19.4 )

Dividends paid to noncontrolling interest — — — — — ( 7.2 ) ( 7.2 )

Employee stock plans — ( 22.9 ) ( 0.2 ) 18.2 — — ( 4.9 )

Balance, December 31, 2020 $ 12.7 $ 1,625.5 $ 106.5 $ — $ ( 1,223.6 ) $ 120.3 $ 641.4

Net income (loss) — — ( 38.2 ) — — 22.0 ( 16.2 )

Balance, January 3, 2021 $ 12.7 $ 1,625.5 $ 106.5 $ — $ ( 1,223.6 ) $ 120.3 $ 641.4

Net income — — 184.6 — — 22.0 206.6

Other comprehensive income — — — — 9.1 4.8 13.9

Cumulative effect of adoption of new accounting standard — ( 49.8 ) 4.4 — — — ( 45.4 )

Cumulative effect of change in accounting principle — — ( 1,073.2 ) — 1,073.2 — —

Employee stock plans — 21.0 — ( 4.8 ) — — 16.2

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

Balance, January 2, 2022* $ 12.7 $ 1,596.7 $ ( 777.7 ) $ ( 4.8 ) $ ( 141.3 ) $ 147.1 $ 832.7

Net income — — 323.5 — — 15.6 339.1

5 unchanged sentences

Employee stock plans 0.1 26.0 — ( 5.8 ) — — 20.3

Balance, January 1, 2023* $ 13.1 $ 1,668.1 $ ( 480.9 ) $ ( 87.0 ) $ ( 67.4 ) $ 111.3 $ 1,157.2

Net income — — 410.8 — — 12.6 423.4

Other comprehensive loss — — — — ( 15.8 ) ( 0.4 ) ( 16.2 )

Purchase of treasury stock — — — ( 85.8 ) — — ( 85.8 )

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

Employee stock plans 0.1 29.0 — ( 11.2 ) — — 17.9

Balance, December 31, 2023 $ 13.2 $ 1,697.1 $ ( 70.1 ) $ ( 184.0 ) $ ( 83.2 ) $ 107.5 $ 1,480.5

*Fiscal years ended January 1, 2023 and January 2, 2022 reflect a change in accounting principle, as described in Note 1 of the Notes to the Consolidated Financial Statements.

The accompanying notes are an integral part of these statements.

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and its subsidiaries.

The Company follows a 4-4-5 or 5-4-4 fiscal calendar, whereby each fiscal quarter consists of thirteen weeks grouped into two four-week months and one five-week month, and its fiscal year ends on the Sunday closest to December 31.

Unless otherwise stated, references to years in this Annual Report on Form 10-K relate to fiscal years, rather than calendar years.

Fiscal years 2023, 2022 and 2021 ended on December 31, 2023, January 1, 2023 and January 2, 2022, respectively.

All fiscal years presented include 52 weeks of operations.

The dates for prior fiscal years have been revised to more precisely reflect the exact day of the year end periods for these fiscal years given our 4-4-5 or 5-4-4 calendar.

Risks and Uncertainties and Use of Estimates

10 unchanged sentences

On July 14, 2021, ATI announced that a new four-year labor agreement with the USW was ratified, ending the strike.

The Company has no significant CBAs that expire in 2023.

The Company has no significant CBAs that expire in fiscal year 2024.

Change in Accounting Principle

During the fourth quarter of fiscal year 2023, the Company voluntarily changed the method of accounting for recognizing actuarial gains and losses for its defined benefit pension plans.

Under the accounting method change, remeasurement of projected benefit obligation and plan assets for defined benefit pension plans are immediately recognized in earnings through net periodic pension benefit cost within nonoperating retirement benefit expense on the consolidated statements of operations, with pension plans to be remeasured annually in the fourth quarter or on an interim basis as triggering events require remeasurement.

Prior to this accounting method change, the Company deferred the recognition of these gains and losses in accumulated other comprehensive loss on the consolidated balance sheet.

The accumulated actuarial gains/losses were then amortized into net periodic benefit costs within nonoperating retirement benefit expense on the consolidated statement of operations over the average expected remaining life of plan participants.

While the historical accounting principle was acceptable, we believe that the current accounting policy is preferable because it provides a better representation of the

operating results of the Company and the economic performance of plan assets in relation to the measurement of its benefit obligations for the period.

The change in accounting will more clearly reflect the current period impact of the Company’s pension asset investment strategy to readers of the financial statements.

This change has been applied to all defined benefit pension plans on a retrospective basis for all prior periods presented, and as of January 4, 2021, resulted in a cumulative effect decrease to retained earnings of $ 1.07 billion with a corresponding offset to accumulated other comprehensive loss.

The following table reflects the effect of the change in the accounting principle on the consolidated financial statements:

For the Fiscal Year Ending December 31, 2023 As Computed Under Previous Policy As Reported under New Policy Effect of Accounting Change

(dollars in millions, except per share data)

Statement of Operations

Nonoperating retirement benefit expense $ ( 1,036.6 ) $ ( 79.7 ) $ 956.9

Income (loss) before income taxes $ ( 661.7 ) $ 295.2 $ 956.9

Income tax benefit $ ( 342.5 ) $ ( 128.2 ) $ 214.3

Net income (loss) $ ( 319.2 ) $ 423.4 $ 742.6

Net income (loss) attributable to ATI $ ( 331.8 ) $ 410.8 $ 742.6

Basic net income (loss) per common share $ ( 2.59 ) $ 3.21 $ 5.80

Diluted net income (loss) per common share $ ( 2.59 ) $ 2.81 $ 5.40

Statement of Comprehensive Income (Loss)

Net income (loss) $ ( 319.2 ) $ 423.4 $ 742.6

Postretirement benefit plans

Actuarial gain/ loss

Amortization of net actuarial loss $ 55.7 $ 6.0 $ ( 49.7 )

Net loss arising during the period $ ( 71.4 ) $ ( 3.8 ) $ 67.6

Settlement loss included in net income (loss) $ 975.9 $ 1.1 $ ( 974.8 )

Income taxes on postretirement benefits $ 214.6 $ 0.3 $ ( 214.3 )

Total $ 745.0 $ 2.4 $ ( 742.6 )

Other comprehensive income (loss), net of tax $ 726.4 $ ( 16.2 ) $ ( 742.6 )

Balance Sheet

Retained loss $ ( 154.9 ) $ ( 70.1 ) $ 84.8

Accumulated other comprehensive income (loss), net of tax $ 1.6 $ ( 83.2 ) $ ( 84.8 )

Statement of Cash Flows

Operating Activities:

Net income (loss) $ ( 319.2 ) $ 423.4 $ 742.6

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Deferred taxes $ ( 352.5 ) $ ( 138.2 ) $ 214.3

Change in operating assets and liabilities:

Retirement benefits $ 1,010.7 $ 53.8 $ ( 956.9 )

Statements of Changes in Consolidated Equity

Retained Loss

Net income (loss) $ ( 331.8 ) $ 410.8 $ 742.6

Balance, December 31, 2023 $ ( 154.9 ) $ ( 70.1 ) $ 84.8

Accumulated Other Comprehensive Income (Loss)

Other comprehensive income (loss) $ 726.8 $ ( 15.8 ) $ ( 742.6 )

Balance, December 31, 2023 $ 1.6 $ ( 83.2 ) $ ( 84.8 )

Net income (loss) $ ( 319.2 ) $ 423.4 $ 742.6

Other comprehensive income (loss) $ 726.4 $ ( 16.2 ) $ ( 742.6 )

For the Fiscal Year Ending January 1, 2023 As Computed Under Previous Policy As Reported under New Policy Effect of Accounting Change

(dollars in millions, except per share data)

Statement of Operations

Loss on asset sales and sales of businesses, net $ 134.2 $ 105.4 $ ( 28.8 )

Operating income $ 287.3 $ 316.1 $ 28.8

Nonoperating retirement benefit income (expense) $ ( 25.4 ) $ 138.4 $ 163.8

Income before income taxes $ 162.0 $ 354.6 $ 192.6

Net income $ 146.5 $ 339.1 $ 192.6

Net income attributable to ATI $ 130.9 $ 323.5 $ 192.6

Basic net income per common share $ 1.03 $ 2.54 $ 1.51

Diluted net income per common share $ 0.96 $ 2.23 $ 1.27

Statement of Comprehensive Income (Loss)

Net income $ 146.5 $ 339.1 $ 192.6

Postretirement benefit plans

Actuarial gain/loss

Amortization of net actuarial loss $ 76.7 $ 13.2 $ ( 63.5 )

Net gain arising during the period $ 155.0 $ 54.7 $ ( 100.3 )

Settlement loss included in net income $ 29.5 $ 0.7 $ ( 28.8 )

Total $ 260.7 $ 68.1 $ ( 192.6 )

Other comprehensive income, net of tax $ 248.2 $ 55.6 $ ( 192.6 )

Balance Sheet

Retained earnings (loss) $ 176.9 $ ( 480.9 ) $ ( 657.8 )

Accumulated other comprehensive loss, net of tax $ ( 725.2 ) $ ( 67.4 ) $ 657.8

Statement of Cash Flows

Operating Activities:

Net income $ 146.5 $ 339.1 $ 192.6

Adjustments to reconcile net income to net cash provided by operating activities:

Net loss from sales of businesses $ 141.0 $ 112.2 $ ( 28.8 )

Change in operating assets and liabilities:

Retirement benefits $ 4.6 $ ( 159.2 ) $ ( 163.8 )

Statements of Changes in Consolidated Equity

Retained Earnings (Loss)

Net income $ 130.9 $ 323.5 $ 192.6

Balance, January 1, 2023 $ 176.9 $ ( 480.9 ) $ ( 657.8 )

Accumulated Other Comprehensive Income (Loss)

Other comprehensive income $ 266.5 $ 73.9 $ ( 192.6 )

Balance, January 1, 2023 $ ( 725.2 ) $ ( 67.4 ) $ 657.8

Net income $ 146.5 $ 339.1 $ 192.6

Other comprehensive income $ 248.2 $ 55.6 $ ( 192.6 )

For the Fiscal Year Ending January 2, 2022 As Computed Under Previous Policy As Reported under New Policy Effect of Accounting Change

(dollars in millions, except per share data)

Statement of Operations

Nonoperating retirement benefit income $ 37.2 $ 260.0 $ 222.8

Income before income taxes $ 10.6 $ 233.4 $ 222.8

Net income (loss) $ ( 16.2 ) $ 206.6 $ 222.8

Net income (loss) attributable to ATI $ ( 38.2 ) $ 184.6 $ 222.8

Basic net income (loss) per common share $ ( 0.30 ) $ 1.45 $ 1.75

Diluted net income (loss) per common share $ ( 0.30 ) $ 1.32 $ 1.62

Statement of Comprehensive Income (Loss)

Net income (loss) $ ( 16.2 ) $ 206.6 $ 222.8

Postretirement benefit plans

Actuarial gain/loss

Amortization of net actuarial loss $ 89.5 $ 13.9 $ ( 75.6 )

Net gain arising during the period $ 155.9 $ 8.7 $ ( 147.2 )

Total $ 237.2 $ 14.4 $ ( 222.8 )

Other comprehensive income, net of tax $ 236.7 $ 13.9 $ ( 222.8 )

Balance Sheet

Retained earnings (loss) $ 72.7 $ ( 777.7 ) $ ( 850.4 )

Accumulated other comprehensive loss, net of tax $ ( 991.7 ) $ ( 141.3 ) $ 850.4

Statement of Cash Flows

Operating Activities:

Net income (loss) $ ( 16.2 ) $ 206.6 $ 222.8

Change in operating assets and liabilities:

Retirement benefits $ ( 39.1 ) $ ( 261.9 ) $ ( 222.8 )

Statements of Changes in Consolidated Equity

Retained Earnings (Loss)

Net income (loss) $ ( 38.2 ) $ 184.6 $ 222.8

Cumulative effect of change in accounting principle $ — $ ( 1,073.2 ) $ ( 1,073.2 )

Balance, January 2, 2022 $ 72.7 $ ( 777.7 ) $ ( 850.4 )

Accumulated Other Comprehensive Income (Loss)

Other comprehensive income $ 231.9 $ 9.1 $ ( 222.8 )

Cumulative effect of change in accounting principle $ — $ 1,073.2 $ 1,073.2

Balance, January 2, 2022 $ ( 991.7 ) $ ( 141.3 ) $ 850.4

Net income (loss) $ ( 16.2 ) $ 206.6 $ 222.8

Other comprehensive income $ 236.7 $ 13.9 $ ( 222.8 )

Cash and Cash Equivalents

1 unchanged sentence

Accounts Receivable

Accounts receivable are presented net of a reserve for doubtful accounts of $ 7.7 million and $ 3.8 million at December 31, 2022 and 2021, respectively.

Accounts receivable are presented net of a reserve for doubtful accounts of $ 3.2 million and $ 7.7 million at December 31, 2023 and January 1, 2023, respectively.

Trade credit is extended based upon evaluations of each customer’s ability to perform its obligations, which are updated periodically.

6 unchanged sentences

The calculation of a resulting reserve, if any, is recognized as an expense in the period that the need for the reserve is identified.

It is the Company’s general policy to write-down to scrap value any inventory that is identified as slow-

moving or aged more than twelve months, subject to sales, backlog and anticipated order considerations.

It is the Company’s general policy to write-down to scrap value any inventory that is identified as slow-moving or aged more than twelve months, subject to sales, backlog and anticipated order considerations.

In some instances this aging criterion is up to twenty-four months.

3 unchanged sentences

Depreciation is primarily recorded using the straight-line method.

Prior to December 2020, property, plant and equipment associated with the Hot-Rolling and Processing Facility (HRPF) in the AA&S segment was being depreciated utilizing the units of production method of depreciation, which the Company believed provided a better matching of costs and revenues.

However, based on changed business conditions resulting from the decision to exit production of standard stainless sheet products and the recognition of an impairment charge on the property, plant and equipment associated with the HRPF in December 2020 (see Note 19 for further discussion), depreciation of the remaining carrying value of the HRPF began using the straight-line method in December 2020.

The Company periodically reviews estimates of useful life and production capacity assigned to new and in service assets.

13 unchanged sentences

The Company has elected to not separate lease components from non-lease components for all asset classes, and has made an accounting policy election to apply the short-term exception, which does not require the capitalization of leases with terms of 12 months or less.

The Company has lease contracts for real property and machinery and equipment, primarily for mobile, office and information technology equipment.

The Company has lease contracts for real property and machinery and equipment.

At inception of a contract, the Company determines whether the contract is or contains a lease.

39 unchanged sentences

Assets and liabilities of international operations are translated into U.S.

dollars using year-end exchange rates, while revenues and expenses are translated at average exchange rates during the period.

dollars using fiscal year-end exchange rates, while revenues and expenses are translated at average exchange rates during the period.

The resulting net translation adjustments are recorded as a component of accumulated other comprehensive income (loss) in stockholders’ equity.

33 unchanged sentences

A right is unconditional if nothing other than the passage of time is required before payment of that consideration is due.

Performance obligations that are recognized as revenue at a point-in-time and are billed to the customer are recognized as accounts receivable.

Performance obligations that are recognized as revenue at a point-in-time and are billed to the customer are recognized as accounts

Payment terms vary from customer to customer depending upon credit worthiness, prior payment history and other credit considerations.

8 unchanged sentences

Research and development costs are expensed as incurred.

Company funded research and development costs were $ 16.3 million in 2022, $ 16.5 million in 2021, and $ 14.1 million in 2020.

Customer funded research and development costs were $ 1.4 million in 2022, $ 3.5 million in 2021, and $ 0.7 million in 2020.

Company funded research and development costs were $ 20.7 million in fiscal year 2023, $ 16.3 million in fiscal year 2022, and $ 16.5 million in fiscal year 2021.

Customer funded research and development costs were $ 1.4 million in fiscal year 2023, $ 1.4 million in fiscal year 2022, and $ 3.5 million in fiscal year 2021.

Government Assistance

6 unchanged sentences

Department of Transportation under the Aviation Manufacturing Jobs Protection (AMJP) program for a grant of up to $ 22.2 million.

The receipt of the award was primarily conditioned upon the Company committing to not furlough or lay off a defined group of employees in High Performance Materials & Components (HPMC) segment operations during the six-month period of performance between November 2021 and May 2022.

The AMJP grant benefit was recognized over the six-month performance period as a reduction to cost of sales in proportion to the compensation expense that the award was intended to defray, with $ 16.6 million recognized in 2022 operating results.

Cash receipts from the AMJP program were $ 11.0 million in 2022, and this program is now completed.

The receipt of the award was primarily conditioned upon the Company committing to not furlough or lay off a defined group of employees in the High Performance Materials & Components (HPMC) segment operations during the six-month period of performance between November 2021 and May 2022.

Cash receipts from the AMJP program were $ 11.0 million in fiscal year 2022, and this program is now completed.

ATI is a party to various U.S.

1 unchanged sentence

These programs generally include requirements for levels of capital spending and/or employment to qualify for the government assistance.

For the year ended December 31, 2022, these state-level programs reduced selling, general and administrative expenses by $ 1.6 million and cash receipts were $ 2.8 million.

Receivables for ongoing programs are $ 3.7 million as of December 31, 2022.

For the fiscal years ended December 31, 2023 and January 1, 2023, these state-level programs reduced selling, general and administrative expenses by $ 1.4 million and $ 1.6 million, respectively, and cash receipts were $ 3.4 million and $ 2.8 million, respectively.

Receivables for ongoing programs are $ 1.2 million and $ 3.7 million as of December 31, 2023 and January 1, 2023, respectively.

Stock-based Compensation

12 unchanged sentences

It is the Company’s policy to classify interest and penalties recognized on underpayment of income taxes as income tax expense.

It is also the Company’s policy to recognize deferred tax amounts stranded in accumulated other comprehensive

income (AOCI), which result from tax rate differences on changes in AOCI balances, as an element of income tax expense in the period that the related balance sheet item associated with the AOCI balance ceases to exist.

It is also the Company’s policy to recognize deferred tax amounts stranded in accumulated other comprehensive income (AOCI), which result from tax rate differences on changes in AOCI balances, as an element of income tax expense in the period that the related balance sheet item associated with the AOCI balance ceases to exist.

In the case of derivative financial instruments accounted for as hedges, or marketable securities, ATI uses the portfolio method where the stranded deferred tax amount is recognized when all items of a particular category, such as cash flow hedges of a particular risk such as a foreign currency hedge, are settled.

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Net Income Per Common Share

Basic and diluted net income per share are calculated by dividing the net income available to common stockholders by the weighted average number of common shares outstanding during the year.

Basic and diluted net income per share are calculated by dividing the net income available to common stockholders by the weighted average number of common shares outstanding during the fiscal year.

Diluted amounts assume the issuance of common stock for all potentially dilutive share equivalents outstanding.

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New Accounting Pronouncements Adopted

In November 2021, the Financial Accounting Standards Board (FASB) issued new accounting guidance related to disclosures about certain types of government assistance.

This new guidance requires business entities that account for transactions with a government by analogizing to a grant or contribution accounting model to make certain annual disclosures.

It requires disclosure of the nature and significant terms and considerations of the transactions, the accounting policies used and the effects of those transactions on an entity’s financial statements.

This new guidance is effective for the Company in fiscal year 2022, with early adoption permitted.

The Company adopted this new accounting guidance effective January 1, 2022.

The adoption of these changes did not have an impact on the Company’s consolidated financial statements other than the annual disclosure requirements included in the accounting policies discussion above.

In August 2020, the FASB issued new accounting guidance related to accounting for convertible instruments.

In August 2020, the Financial Accounting Standards Board (FASB) issued new accounting guidance related to accounting for convertible instruments.

Under this new guidance, embedded conversion features are no longer separated from the host contract for convertible instruments with conversion features that are not required to be accounted for as derivatives, or that do not result in substantial premiums accounted for as paid-in capital.

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Prospectively, the reported interest expense for the 2025 Convertible Notes no longer included the non-cash interest expense of the equity component as required under prior accounting standards and is closer to the 3.5 % cash coupon rate.

There was no impact to the Company’s earnings per share calculation as it previously applied the if-converted method to the 2025 Convertible Notes given ATI’s flexibility to settle conversions of the 2025 Convertible Notes in cash, shares of ATI’s common stock or a combination thereof, at ATI’s election.

Pending Accounting Pronouncements

There was no impact to the Company’s earnings per share calculation as it

previously applied the if-converted method to the 2025 Convertible Notes given ATI’s flexibility to settle conversions of the 2025 Convertible Notes in cash, shares of ATI’s common stock or a combination thereof, at ATI’s election.

In September 2022, the FASB issued new accounting guidance related to disclosures about supplier finance programs.

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This new guidance requires a buyer in a supplier finance program to disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period, and potential magnitude, using both qualitative and quantitative information about its supplier finance programs.

guidance, with the exception of disclosures on rollforward information, will be effective for the Company in fiscal year 2023, with early adoption permitted.

This new guidance, with the exception of disclosures on rollforward information, is effective for the Company in fiscal year 2023.

The Company adopted this new accounting guidance effective January 2, 2023.

The rollforward information disclosures are effective for the Company in fiscal year 2024, with early adoption permitted.

The Company does not plan to early adopt this guidance.

The adoption of these changes is not expected to have an impact on the Company’s consolidated financial statements other than disclosure requirements.

The Company did not early adopt this guidance.

The adoption of these changes did not have an impact on the Company’s consolidated financial statements other than disclosure requirements which are included in Note 9.

Pending Accounting Pronouncements

In November 2023, the FASB issued new accounting guidance related to segment reporting disclosures.

This guidance requires additional disclosures on an annual and interim basis of segment information, including significant segment expenses that are regularly provided to the chief operating decision maker (CODM) and the presentation and composition of other segment items, which is the difference between segment revenue less segment expenses and the measure of segment profit or loss.

The guidance also requires that all current segment disclosures required on an annual basis be provided on an interim basis and requires disclosure of the title and position of the CODM and how the CODM uses the reported measure of segment profit or loss in assessing performance and allocating resources.

This guidance does not change how an entity identifies its reportable segments.

This new guidance for annual disclosures will be effective for the Company for fiscal year 2024 and for interim disclosures will be effective for the Company for fiscal year 2025.

The guidance must be applied retrospectively and early adoption is permitted.

The Company does not expect to early adopt this guidance and does not expect these changes to have an impact on the Company’s consolidated financial statements other than disclosure requirements.

In December 2023, the FASB issued new accounting guidance related to income tax disclosures.

This guidance requires entities to disclose specific categories in its annual rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold.

This guidance also requires additional annual disclosures for income taxes paid and requires disaggregation of income before tax, between domestic and foreign, and income tax expense, between federal, state and foreign.

This guidance also eliminates several current disclosure requirements related to the nature and estimate of the range of the reasonably possible change in the unrecognized tax benefits balance in the next 12 months and making a statement that an estimate of the range cannot be made and disclosing the cumulative amount of each type of temporary difference when a deferred tax liability is not recognized because of the exceptions to comprehensive recognition of deferred taxes related to subsidiaries and corporate joint ventures.

This new guidance will be effective for the Company for fiscal year 2025 and must be applied on a prospective basis with retrospective application permitted.

Early adoption of this guidance is also permitted.

The Company does not expect to early adopt this guidance and does not expect these changes to have an impact on the Company’s consolidated financial statements other than disclosure requirements.

Revenue from Contracts with Customers

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

Comparative information of the Company’s overall revenues (in millions) by global and geographical markets for the fiscal years ended December 31, 2022, 2021 and 2020 is as follows:

Comparative information of the Company’s overall revenues (in millions) by global and geographical markets for the fiscal years ended December 31, 2023, January 1, 2023 and January 2, 2022 is as follows:

(in millions) 2023 2022 2021

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Automotive 24.6 186.1 210.7 11.2 290.9 302.1 8.7 296.4 305.1

Electronics 2.4 197.6 200.0 1.2 213.9 215.1 0.9 176.8 177.7

Construction/Mining 34.1 142.3 176.4 24.0 98.2 122.2 18.6 123.4 142.0

Medical 102.6 74.3 176.9 73.2 89.9 163.1 60.3 71.2 131.5

Construction/Mining 35.0 127.9 162.9 34.1 142.3 176.4 24.0 98.2 122.2

Electronics 3.1 156.8 159.9 2.4 197.6 200.0 1.2 213.9 215.1

Food Equipment & Appliances — 71.9 71.9 0.2 158.3 158.5 0.1 153.0 153.1

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France 172.4 47.0 219.4 125.7 31.5 157.2 48.7 9.8 58.5

Canada 46.2 41.2 87.4 36.3 39.6 75.9 28.3 40.6 68.9

Mexico 102.3 25.4 127.7 56.7 23.4 80.1 25.6 37.6 63.2

Rest of World 431.1 309.3 740.4 342.0 267.7 609.7 249.2 248.4 497.6

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

The Company no longer reports standard stainless product sales as a separate product category.

Prior period information includes these sales within the nickel-based alloys and specialty alloys category.

HRPF conversion service sales in the AA&S segment are excluded from this presentation.

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Precision forgings, castings and components 33 % — % 17 % 34 % — % 15 % 38 % — % 16 %

Precision rolled strip — % 25 % 14 % — % 33 % 19 % — % 25 % 15 %

Titanium and titanium-based alloys 22 % 12 % 17 % 17 % 7 % 11 % 19 % 6 % 12 %

Precision rolled strip 1 % 19 % 10 % — % 25 % 14 % — % 33 % 19 %

Zirconium and related alloys — % 15 % 7 % — % 14 % 8 % — % 17 % 10 %

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

The Company maintains a backlog of confirmed orders totaling $ 2.9 billion, $ 2.1 billion and $ 1.4 billion at December 31, 2022, 2021 and 2020, respectively.

The Company maintains a backlog of confirmed orders totaling $ 3.8 billion, $ 2.9 billion and $ 2.1 billion at December 31, 2023, January 1, 2023 and January 2, 2022, respectively.

Due to the structure of the Company’s LTAs, 70 % of this backlog at December 31, 2023 represented booked orders with performance obligations that will be satisfied within the next twelve months.

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Accounts Receivable

As of December 31, 2022 and 2021, accounts receivable with customers were $ 586.9 million and $ 473.8 million, respectively.

The following represents the rollforward of accounts receivable - reserve for doubtful accounts for the fiscal years ended December 31, 2022, 2021 and 2020:

As of December 31, 2023 and January 1, 2023, accounts receivable with customers were $ 628.2 million and $ 586.9 million, respectively.

The following represents the rollforward of accounts receivable - reserve for doubtful accounts for the fiscal years ended December 31, 2023, January 1, 2023 and January 2, 2022:

(in millions)

Accounts Receivable - Reserve for Doubtful Accounts

Balance as of December 31, 2019 4.6

Balance as of January 3, 2021 $ 4.3

Expense to increase the reserve 0.3

Write-off of uncollectible accounts ( 0.8 )

Balance as of December 31, 2020 4.3

Balance as of January 2, 2022 3.8

Expense to increase the reserve 4.6

Write-off of uncollectible accounts ( 0.7 )

Balance as of December 31, 2021 3.8

Balance as of January 1, 2023 7.7

Expense to increase the reserve 0.1

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Contract balances

The following represents the rollforward of contract assets and liabilities for the fiscal years ended December 31, 2022, 2021 and 2020:

The following represents the rollforward of contract assets and liabilities for the fiscal years ended December 31, 2023, January 1, 2023 and January 2, 2022:

(in millions)

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Reclassified to accounts receivable ( 89.5 ) ( 88.0 ) ( 76.2 )

Reclassification to/from long-term and contract liability ( 6.8 ) ( 2.6 ) 0.1

Balance as of period end $ 64.1 $ 53.9 $ 38.9

Long-term (a) 2022 2021 2020

Balance as of beginning of fiscal year $ — $ — $ 0.1

Reclassification to/from short-term — — ( 0.1 )

Reclassification to/from contract liability 0.4 ( 6.8 ) ( 2.6 )

Balance as of period end $ 59.1 $ 64.1 $ 53.9

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Balance as of period end $ 39.4 $ 66.8 $ 84.4

(a) Long-term contract assets are included in Other long-term assets and 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 $ 7.3 million and $ 5.2 million as of December 31, 2022 and 2021, respectively, which are reported in other long-term assets on the consolidated balance sheets.

Amortization expense for the fiscal years ended December 31, 2022, 2021 and 2020 of these contract costs was $ 1.0 million, $ 1.0 million, and $ 1.4 million, respectively.

Inventories at December 31, 2022 and 2021 were as follows (in millions):

(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 $ 8.1 million and $ 7.3 million as of December 31, 2023 and January 1, 2023, respectively, which are reported in other long-term assets on the consolidated balance sheets.

Amortization expense for the fiscal years ended December 31, 2023, January 1, 2023 and January 2, 2022 of these contract costs was $ 1.2 million, $ 1.0 million, and $ 1.0 million, respectively.

Inventories at December 31, 2023 and January 1, 2023 were as follows (in millions):

Raw materials and supplies $ 234.9 $ 213.6

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Total inventories, net $ 1,247.5 $ 1,195.7

Inventories are stated at the lower of cost (FIFO and average cost methods) or net realizable value.

Property, Plant and Equipment

Property, plant and equipment at December 31, 2022 and 2021 was as follows:

Property, plant and equipment at December 31, 2023 and January 1, 2023 was as follows:

(In millions) 2023 2022

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Total property, plant and equipment, net $ 1,665.9 $ 1,549.1

Construction in progress at December 31, 2022 and 2021 was $ 262.1 million and $ 215.3 million, respectively.

Capital expenditures on the consolidated statement of cash flows for the year ended December 31, 2022 exclude $ 38.3 million of incurred but unpaid capital expenditures that were included in property, plant and equipment and accrued at December 31, 2022.

Depreciation and amortization for the years ended December 31, 2022, 2021 and 2020 was as follows:

Construction in progress at December 31, 2023 and January 1, 2023 was $ 305.9 million and $ 262.1 million, respectively.

Capital expenditures on the consolidated statement of cash flows for the fiscal years ended December 31, 2023 and January 1, 2023 exclude $ 41.9 million and $ 38.3 million, respectively, of incurred but unpaid capital expenditures that were included in property, plant and equipment and accrued at December 31, 2023 and January 1, 2023, respectively.

Depreciation and amortization for the fiscal years ended December 31, 2023, January 1, 2023 and January 2, 2022 was as follows:

(In millions) 2023 2022 2021

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Goodwill and Other Intangible Assets

At December 31, 2022, the Company had $ 227.2 million of goodwill on its consolidated balance sheet, all of which relates to the HPMC segment.

Goodwill decreased in 2022 by $ 0.7 million as a result of currency translation on goodwill denominated in functional currencies other than the U.S.

The Company performs its annual goodwill impairment evaluations in the fourth quarter of each year.

At December 31, 2023 and January 1, 2023, the Company had $ 227.2 million of goodwill on its consolidated balance sheet, all of which relates to the HPMC segment.

The Company performs its annual goodwill impairment evaluations in the fourth quarter of each fiscal year.

The $ 227.2 million of goodwill as of December 31, 2023 on the Company’s consolidated balance sheet is comprised of $ 161.2 million at the Forged Products reporting unit and $ 66.0 million at the Specialty Materials reporting unit.

For the Company’s annual goodwill impairment evaluation in 2022, quantitative goodwill assessments were performed for these two HPMC reporting units with goodwill.

This quantitative fair value assessment may include discounted cash flow and multiples of cash earnings valuation techniques, plus valuation comparisons to recent public sale transactions of similar businesses, if any, which represents Level 3 unobservable information in the fair value hierarchy.

For the Company’s annual goodwill impairment evaluation in fiscal year 2023, quantitative goodwill assessments were performed for these two HPMC reporting units with goodwill.

This quantitative fair value assessment includes discounted cash flow and multiples of cash earnings valuation techniques, plus valuation comparisons to recent public sale transactions of similar businesses, if any, which represents Level 3 unobservable information in the fair value hierarchy.

These impairment assessments and valuation methods require the Company to make estimates and assumptions regarding revenue growth, changes in working capital and capital expenditures, selling prices and profitability that drive cash flows, and the weighted average cost of capital.

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The Specialty Materials reporting unit had a fair value that was significantly in excess of carrying value.

The Forged Products reporting unit had a fair value that exceeded carrying value by more than 50 % for the 2022 annual assessment, which increased compared to the annual evaluation for 2021.

No impairments were determined to exist from the annual goodwill impairment evaluation for the years ended December 31, 2022, 2021 or 2020.

During the second quarter of 2020, the Company performed an interim goodwill impairment analysis on the Forged Products reporting unit and its $ 460.4 million goodwill balance based on assessed potential indicators of impairment, including recent disruptions to the global commercial aerospace market resulting from the COVID-19 pandemic, and the increasing uncertainty of near-term demand requirements of aero-engine and airframe markets based on government responses to the pandemic and ongoing interactions with customers.

For the 2020 interim impairment analysis, fair value was determined by a quantitative assessment that used a discounted cash flow technique.

As a result of the 2020 interim goodwill impairment evaluation, the Company determined that the fair value of the Forged Products reporting unit was below carrying value, including goodwill, by $ 287.0 million, primarily due to changes in the timing and amount of expected cash flows resulting from lower projected revenues, profitability and cash flows due to near-term reductions in commercial aerospace market demand.

Consequently, during the second quarter of 2020, the Company recorded a $ 287.0 million charge for the partial impairment of the Forged Products reporting unit goodwill, most of which was assigned from the Company’s 2011 Ladish acquisition that was not

deductible for income tax purposes.

This goodwill impairment charge was excluded from 2020 HPMC business segment results.

No indicators of impairment were observed in 2022, 2021 and 2020 associated with any of the Company’s long-lived assets in the HPMC segment.

Accumulated goodwill impairment losses as of December 31, 2022, 2021 and 2020 were $ 528.0 million.

Other intangible assets, which are included in Other assets on the accompanying consolidated balance sheets as of December 31, 2022 and 2021 were as follows:

December 31, 2022 December 31, 2021

The Forged Products reporting unit had a fair value that exceeded carrying value by approximately 60 % for the fiscal year 2023 annual assessment, which increased compared to the annual evaluation for fiscal year 2022.

No impairments were determined to exist from the annual goodwill impairment evaluation for the fiscal years ended December 31, 2023, January 1, 2023 and January 2, 2022.

No indicators of impairment were observed in fiscal years 2023, 2022 and 2021 associated with any of the Company’s long-lived assets.

Accumulated goodwill impairment losses as of December 31, 2023, January 1, 2023 and January 2, 2022 were $ 528.0 million.

Other intangible assets, which are included in Other assets on the accompanying consolidated balance sheets as of December 31, 2023 and January 1, 2023 were as follows:

December 31, 2023 January 1, 2023

(in millions) Gross

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Total amortizable intangible assets $ 134.8 $ ( 83.7 ) $ 134.8 $ ( 76.3 )

Amortization expense related to intangible assets was approximately $ 8 million for each of the years ended December 31, 2022, 2021 and 2020.

For each of the years ending December 31, 2023 through 2027, annual amortization expense is expected to be approximately $ 7 million.

Amortization expense related to intangible assets was approximately $ 7 million for the fiscal year ended December 31, 2023 and $ 8 million for each of the fiscal years ended January 1, 2023 and January 2, 2022.

For each of the fiscal years 2024 through 2028, annual amortization expense is expected to be approximately $ 7 million.

On May 12, 2022, the Company completed the sale of its Sheffield, UK operations, which included facilities for melting and re-melting, machining and bar mill operations, and was part of the Specialty Materials business in the HPMC segment.

A $ 141.0 million loss on sale of the Sheffield operations is reported in loss on asset sales and sales of businesses, net, on the consolidated statement of operations for 2022, and is excluded from HPMC segment results.

A $ 112.2 million loss on sale of the Sheffield operations is reported in loss on asset sales and sales of businesses, net, on the consolidated statement of operations for fiscal year 2022, and is excluded from HPMC segment results.

The loss includes $ 26.8 million related to the UK defined benefit pension plan, of which $ 26.1 million was reported as a net pension asset but which was in a deficit funding position for UK statutory reporting purposes, and $ 0.7 million in accumulated other comprehensive loss on the consolidated ATI balance sheet.

The loss also includes $ 20.0 million of cumulative translation adjustment foreign exchange losses since ATI’s acquisition of these operations in 1998.

The Company received proceeds, net of transaction costs, of $ 0.3 million in 2022, which is reported as an investing activity on the consolidated statement of cash flows.

In 2021, the Sheffield operations had external sales of $ 36 million, with over 80 % of its sales to energy markets, primarily oil & gas, and had a net loss before tax of $ 9 million.

The Company completed the sale of the small Pico Rivera, CA operations, as part of the strategy to exit standard stainless products, on January 31, 2022.

The Company received cash proceeds of $ 6.2 million on the sale of these assets.

The Company recognized a $ 6.8 million pretax gain on sale, including de-recognizing certain lease liabilities, which is reported in loss on asset sales and sales of businesses, net, on the consolidated statement of operations and is excluded from AA&S segment results.

The Company received proceeds, net of transaction costs, of $ 0.3 million in fiscal year 2022, which is reported as an investing activity on the consolidated statement of cash flows.

In fiscal year 2021, the Sheffield operations had external sales of $ 36 million, with over 80 % of its sales to energy markets, primarily oil & gas, and had a net loss before tax of $ 7 million.

The Company completed the sale of the Pico Rivera, CA operations, as part of the strategy to exit standard stainless products, on January 31, 2022.

The Company received cash proceeds of $ 6.2 million on the sale of these assets in fiscal year 2022.

On August 13, 2021, the Company completed the sale of its Flowform Products business for $ 55 million.

Located in Billerica, MA, this operation uses flowforming process technologies to produce thin-walled components in net or near-net shapes across multiple alloy systems for use in the aerospace & defense and energy markets.

The Company received cash proceeds, net of transaction costs and working capital adjustments, of $ 53.1 million on the sale of this business during the year ended December 31, 2021, which is reported as an investing activity on the consolidated statement of cash flows.

With $ 12.2 million of goodwill allocated to this operation from ATI’s Forged Products reporting unit, the Company recognized a $ 13.8 million pretax gain in 2021, which is recorded in other income/expense, net, on the consolidated statement of operations and is excluded from HPMC segment results.

The Company received cash proceeds, net of transaction costs and working capital adjustments, of $ 53.1 million on the sale of this business during the year ended January 2, 2022, which is reported as an investing activity on the consolidated statement of cash flows.

With $ 12.2 million of goodwill allocated to this operation from ATI’s Forged Products reporting unit, the Company recognized a $ 13.8 million pretax gain in fiscal year 2021, which is recorded in other income/expense, net, on the consolidated statement of operations and is excluded from HPMC segment results.

This business was historically reported as part of the HPMC segment through the date of sale.

Flowform Products’ sales were $ 26 million in 2020.

Joint Ventures

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Investments in which the Company exercises significant influence, but which it does not control (generally a 20% to 50% ownership interest) are accounted for under the equity method of accounting.

Stockholders’ equity includes undistributed

earnings of investees accounted for under the equity method of accounting of approximately $ 7.8 million at December 31, 2022.

Stockholders’ equity includes undistributed earnings of investees accounted for under the equity method of accounting of approximately $ 0.7 million at December 31, 2023.

Majority-Owned Joint Ventures

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The Company has a 51 % interest in Next Gen Alloys LLC, a joint venture with GE Aviation for the development of a new meltless titanium alloy powder manufacturing technology.

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.

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 fiscal year 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 December 31, 2023 were $ 1.0 million.

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The Company has a 50 % interest in A&T Stainless, a joint venture with an affiliate company of Tsingshan Group (Tsingshan) to produce 60-inch wide stainless sheet products for sale in North America.

Tsingshan purchased its 50 % joint venture interest in A&T Stainless in 2018 for $ 17.5 million, of which $ 12.0 million had been received by ATI through December 31, 2021.

ATI received the remaining $ 5.5 million from Tsingshan in the fourth quarter of 2022, which is reported as a financing activity on the consolidated statement of cash flows.

Tsingshan purchased its 50 % joint venture interest in A&T Stainless in fiscal year 2018 for $ 17.5 million, of which $ 12.0 million had been received by ATI through January 2, 2022.

ATI received the remaining $ 5.5 million from Tsingshan in the fourth quarter of fiscal year 2022, which is reported as a financing activity on the consolidated statement of cash flows.

The A&T Stainless operations included the Company’s previously-idled direct roll and pickle (DRAP) facility in Midland, PA.

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These requests were denied by the U.S.

Department of Commerce in the second quarter of 2020, and the 25% tariff remains in place.

Due to repeated tariff exclusion denials, the DRAP facility was idled in an orderly

shut down process that was completed in 2020.

A&T Stainless recorded a $ 4.8 million charge in 2020 for contractual termination benefits as a result of the idling decision, of which $ 1.8 million was reversed in 2022 as a result of revised estimates.

Department of Commerce in the second quarter of fiscal year 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 fiscal year 2020.

ATI’s share of the A&T Stainless results were losses of $ 1.8 million and $ 0.9 million for the fiscal years ended December 31, 2023 and January 2, 2022, respectively, and were income of $ 9.1 million for the fiscal year ended January 1, 2023, which are included within other income/expense, net, on the consolidated statements of operations.

In April 2022, ATI and A&T Stainless entered into a settlement agreement with the United States pursuant to which the United States, without admitting liability, agreed to refund a substantial portion of the Section 232 tariffs previously paid by A&T Stainless.

As a result of the settlement agreement, A&T Stainless recorded tariff refunds and accrued interest of approximately $ 19.7 million, which was recognized as income by the joint venture in 2022.

ATI’s share of the A&T Stainless results were income of $ 9.1 million for the fiscal year ended December 31, 2022, which included ATI’s $ 9.9 million share of the tariff refund and accrued interest, and losses of $ 0.9 million and $ 10.6 million for the fiscal years ended December 31, 2021 and 2020, respectively, which is included within other income/expense, net, on the consolidated statements of operations.

AA&S segment results in 2022 include equity method recognition of A&T Stainless operating income of $ 8.2 million, and in 2021 and 2020 include operating losses of $ 0.9 million and $ 8.2 million, respectively.

ATI’s share of the A&T Stainless credits/charges for termination benefits in 2022 and 2020 were excluded from AA&S segment results.

As of December 31, 2022, ATI had net receivables from A&T Stainless for working capital advances and administrative services of $ 3.2 million, of which $ 0.4 million was reported in prepaid expenses and other current assets and $ 2.8 million in other long-term assets on the consolidated balance sheet.

As a result of the settlement agreement, A&T Stainless recorded tariff refunds and accrued interest of approximately $ 19.7 million, which was recognized as income by the joint venture in fiscal year 2022.

ATI’s share of the A&T Stainless results for the fiscal year ended January 1, 2023 included ATI’s $ 9.9 million share of this tariff refund and accrued interest.

AA&S segment results in fiscal years 2023 and 2021 include equity method recognition of A&T Stainless operating losses of $ 1.8 million and $ 0.9 million, respectively, and in fiscal year 2022 include equity method recognition of A&T Stainless operating income of $ 8.2 million.

In fiscal year 2022, A&T Stainless reversed $ 1.8 million of previously-recognized charges for contractual termination benefits as a result of revised estimates and ATI’s share of this credit for termination benefits in fiscal year 2022 was excluded from AA&S segment results.

As of December 31, 2023, ATI had net receivables from A&T Stainless for working capital advances and administrative services of $ 1.5 million, of which $ 0.5 million was reported in prepaid expenses and other current assets and $ 1.0 million in other long-term assets on the consolidated balance sheet.

Sales to A&T Stainless, which are included in ATI’s consolidated statement of operations for the 2020 fiscal year, were $ 18.4 million.

There were no sales to A&T Stainless for the 2022 and 2021 fiscal years.

ATI has a 50 % interest in the industrial titanium joint venture known as Uniti LLC (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 $ 4.4 million in 2022, $ 1.0 million in 2021, and $ 1.2 million in 2020, which is included in AA&S segment’s operating results, and within other income/expense, net, on the consolidated statements of operations.

Sales to Uniti, which are included in ATI’s consolidated statements of operations, were $ 45.0 million in 2022, $ 45.8 million in 2021, and $ 36.7 million in 2020.

Accounts receivable from Uniti were $ 4.5 million and $ 6.1 million at December 31, 2022 and 2021, respectively.

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

The joint venture is expected to be dissolved in early 2023.

As of January 1, 2023, ATI had net receivables from A&T Stainless for working capital advances and administrative services of $ 3.2 million, of which $ 0.4 million was reported in prepaid expenses and other current assets and $ 2.8 million in other long-term assets on the consolidated balance sheet.

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

On March 9, 2022, the Company announced the termination of Uniti, and this joint venture is expected to be fully dissolved in the first quarter of fiscal year 2024.

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

Uniti was accounted for under the equity method of accounting.

ATI’s share of Uniti’s income was $ 0.2 million in fiscal year 2023, $ 4.4 million in fiscal year 2022, and $ 1.0 million in fiscal year 2021, which is included in AA&S segment’s operating results, and within other income/expense, net, on the consolidated statements of operations.

Sales to Uniti, which are included in ATI’s consolidated statements of operations, were $ 4.9 million in fiscal year 2023, $ 45.0 million in fiscal year 2022, and $ 45.8 million in fiscal year 2021.

Accounts receivable from Uniti was $ 4.5 million at January 1, 2023.

Asset Retirement Obligations

5 unchanged sentences

The Company may determine that additional AROs are required to be recognized as new information becomes available.

Changes in asset retirement obligations for the years ended December 31, 2022 and 2021 were as follows:

Changes in asset retirement obligations for the years ended December 31, 2023 and January 1, 2023 were as follows:

(In millions) 2023 2022

Balance at beginning of year $ 19.0 $ 24.0

Balance at beginning of fiscal year $ 17.8 $ 19.0

Accretion expense 0.7 0.8

Payments ( 0.2 ) ( 2.0 )

Divestiture — ( 0.2 )

Balance at end of year $ 17.8 $ 19.0

Balance at end of fiscal year $ 18.3 $ 17.8

Supplemental Financial Statement Information

Cash and cash equivalents at December 31, 2022 and 2021 were as follows:

Cash and cash equivalents at December 31, 2023 and January 1, 2023 were as follows:

(In millions) 2023 2022

2 unchanged sentences

Total cash and cash equivalents $ 743.9 $ 584.0

Other current liabilities included salaries, wages and other employee-related liabilities of $ 100.8 million and $ 92.7 million, and accrued interest of $ 11.8 million and $ 15.2 million at December 31, 2022 and 2021, respectively.

Other income (expense) for the years ended December 31, 2022, 2021, and 2020 was as follows:

Other current liabilities included salaries, wages and other employee-related liabilities of $ 102.3 million and $ 100.8 million at December 31, 2023 and January 1, 2023, respectively, and accrued interest of $ 23.7 million and $ 11.8 million at December 31, 2023 and January 1, 2023, respectively.

Other income (expense) for the fiscal years ended December 31, 2023, January 1, 2023, and January 2, 2022 was as follows:

(in millions) 2023 2022 2021

4 unchanged sentences

Joint venture restructuring credit (charge) (See Note 7) — 0.9 —

Adjustment to indemnification for conditional ARO costs — — 4.3

Litigation settlement (See Note 21) — ( 28.5 ) —

1 unchanged sentence

Total other income (expense), net $ 1.3 $ ( 12.5 ) $ 18.2

Gains from disposal of property, plant and equipment, net for the year ended December 31, 2020 include $ 2.5 million on sales of certain oil and gas rights in Eddy County, NM.

These cash gains are reported as an investing activity on the consolidated statement of cash flows for the year ended December 31, 2020, and are excluded from segment operating results.

These oil and gas rights were initially acquired in 1972 along with land purchased by Teledyne, Inc., which later became part of ATI.

The land was subsequently sold, with the Company retaining the underlying oil and gas rights that it sold in 2020.

In 2020, the Company finalized a settlement agreement for an indemnity claim concerning a conditional ARO with the buyer of a formerly-owned business and as a result, the Company reduced ARO reserves by $ 4.3 million, which is recorded in other income/expense, net, on the consolidated statements of operations.

Debt at December 31, 2022 and 2021 was as follows:

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, 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 December 31, 2023 and January 1, 2023, the Company had $ 15.6 million and $ 23.7 million, respectively, reported in accounts payable on the consolidated balance sheets under such programs.

Debt at December 31, 2023 and January 1, 2023 was as follows:

(In millions) 2023 2022

7.25 % Notes due 2030

5.875 % Senior Notes due 2027

2 unchanged sentences

3.5 % Convertible Senior Notes due 2025

4.75 % Convertible Senior Notes due 2022

Allegheny Ludlum 6.95 % Debentures due 2025 (a)

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(a) The payment obligations of these debentures issued by Allegheny Ludlum, LLC are fully and unconditionally guaranteed by ATI.

Interest expense was $ 92.1 million in 2022, $ 97.6 million in 2021, and $ 96.1 million in 2020.

Interest expense was reduced by $ 5.1 million, $ 4.3 million, and $ 7.7 million, in 2022, 2021, and 2020, respectively, from interest capitalization on capital projects.

Interest and commitment fees paid were $ 92.8 million in 2022, $ 97.5 million in 2021, and $ 95.4 million in 2020.

Net interest expense includes interest income of $ 4.7 million in 2022, $ 0.7 million in 2021, and $ 1.7 million in 2020.

Scheduled principal payments during the next five years are $ 41.7 million in 2023, $ 19.9 million in 2024, $ 457.8 million in 2025, $ 10.5 million in 2026, and $ 557.4 million in 2027.

Interest expense was $ 105.8 million in fiscal year 2023, $ 92.1 million in fiscal year 2022, and $ 97.6 million in fiscal year 2021.

Interest expense was reduced by $ 13.5 million, $ 5.1 million, and $ 4.3 million, in fiscal years 2023, 2022, and 2021, respectively, from interest capitalization on capital projects.

Interest and commitment fees paid were $ 114.7 million in fiscal year 2023, $ 92.8 million in fiscal year 2022, and $ 97.5 million in fiscal year 2021.

Net interest expense includes interest income of $ 13.0 million in fiscal year 2023, $ 4.7 million in fiscal year 2022, and $ 0.7 million in fiscal year 2021.

Scheduled principal payments during the next five fiscal years are $ 31.9 million in 2024, $ 465.3 million in 2025, $ 18.5 million in 2026, $ 565.3 million in 2027, and $ 9.6 million in 2028.

See Note 11, Leases, for the portion of these scheduled principal payments that are related to finance leases.

Debt Extinguishment Charges

Debt Extinguishment Charge

In October 2021, ATI recognized a $ 65.5 million debt extinguishment charge on the redemption of its 5.875 % Senior Notes due 2023 (2023 Notes), which included a $ 64.5 million cash make-whole payment related to the early extinguishment of the 2023 Notes as required by the applicable indenture, and a $ 1.0 million charge for deferred debt issue costs, as further discussed below.

In June 2020, ATI recognized a $ 21.5 million debt extinguishment charge on the partial redemption of its 4.75 % Convertible Senior Notes due 2022 (the 2022 Convertible Notes), which included a $ 19.1 million cash make-whole payment related to the early extinguishment of the 2022 Convertible Notes partial redemption, as required by the applicable indenture, and a $ 2.4 million charge for deferred debt issue costs, as further discussed below.

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 14), 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.

2029 and 2031 Notes

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2025 Convertible Notes

In 2020, the Company issued $ 291.4 million aggregate principal amount of 3.5 % Convertible Senior Notes due 2025 (2025 Convertible Notes).

The Company used a portion of the net proceeds from the offering of the 2025 Convertible Notes to repurchase $ 203.2 million aggregate principal amount of its outstanding 2022 Convertible Notes, resulting in a $ 21.5 million debt extinguishment charge.

The Company also used $ 19.4 million of the net proceeds of the offering of the 2025 Convertible Notes to pay the cost of capped call transactions, described below, which was recorded as a reduction to additional paid-in-capital in stockholders’ equity on the consolidated balance sheet.

The remainder of the net proceeds from the offering were used for general corporate purposes.

As of December 31, 2022 and 2021, the fair value of the 2025 Convertible Notes was $ 590 million and $ 379 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, commencing December 15, 2020.

Including amortization of deferred issuance costs, the effective interest rate is 4.2 % for the years ended December 31, 2022 and 2021 and 8.4 % for the year ended December 31, 2020.

The effective interest rate is lower in 2022 and 2021 due to the early-adoption of new accounting guidance on January 1, 2021, as described below.

Remaining deferred issuance costs were $ 4.8 million and $ 6.5 million at December 31, 2022 and 2021, respectively.

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

As of December 31, 2023 and January 1, 2023, the fair value of the 2025 Convertible Notes was $ 864 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 fiscal years ended December 31, 2023, January 1, 2023 and January 2, 2022.

Remaining deferred issuance costs were $ 2.9 million and $ 4.8 million at December 31, 2023 and January 1, 2023, respectively.

Interest expense on the 2025 Convertible Notes was as follows:

Fiscal year ended December 31,

(in millions) 2023 2022 2021

2 unchanged sentences

Total interest expense $ 12.1 $ 12.0 $ 11.9

The Company does 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).

2 unchanged sentences

Conversions of the 2025 Convertible Notes may be settled in cash, shares of ATI’s common stock or a combination thereof, at ATI’s election.

As a result of this flexible settlement feature of the 2025 Convertible Notes, the embedded conversion option was required to be separately accounted for as a component of stockholders’ equity.

The value of the embedded conversion option was determined to be $ 51.4 million based on the estimated fair value of comparable senior unsecured debt without the conversion feature, using an income approach of expected present value.

During the 2020 fiscal year, the equity component was amortized as additional non-cash interest expense, commonly referred to as phantom yield, over the term of the 2025 Convertible Notes using the effective interest method.

As a result, as of December 31, 2020, $ 49.8 million of the 2025 Convertible Notes was recorded in additional paid-in-capital in stockholders’ equity ($ 51.4 million of the gross $ 291.4 million net of $ 1.6 million of allocated offering costs).

Due to the non-cash phantom yield and including debt issue cost amortization, the 2025 Convertible Notes had reported interest expense in 2020 at an 8.4 % rate, higher than the 3.5 % cash coupon rate.

Effective January 1, 2021, ATI early-adopted new accounting guidance as discussed in Note 1 that eliminated the equity component classification of the embedded conversion option, as well as the phantom yield portion of interest expense on a prospective basis.

Upon adoption on January 1, 2021, long-term debt increased by $ 45.4 million representing the $ 46.8 million equity component of convertible debt as of December 31, 2020, net of reclassified debt issue costs.

Holders of the 2025 Convertible Notes may require ATI to repurchase their 2025 Convertible Notes upon the occurrence of certain events that constitute a fundamental change under the indenture governing the 2025 Convertible Notes at a purchase price equal to 100 % of the principal amount thereof, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date.

In connection with certain corporate events or if ATI issues a notice of redemption, it will, under certain circumstances, increase the conversion rate for holders who elect to convert their 2025 Convertible Notes in connection with such corporate event or during the relevant redemption period.

In connection with certain corporate events or if ATI issues a notice of redemption, it will, under

certain circumstances, increase the conversion rate for holders who elect to convert their 2025 Convertible Notes in connection with such corporate event or during the relevant redemption period.

In connection with the pricing of the 2025 Convertible Notes, ATI entered into privately negotiated capped call transactions with certain of the initial purchasers or their respective affiliates.

2 unchanged sentences

2022 Convertible Notes

In 2022, $ 82.5 million of the 2022 Convertible Senior Notes were converted into 5.7 million shares of ATI common stock, with the remaining $ 1.7 million of outstanding principal balance paid in cash for notes that were not converted at the July 1, 2022 maturity date.

In fiscal year 2022, $ 82.5 million of the 2022 Convertible Senior Notes were converted into 5.7 million shares of ATI common stock, with the remaining $ 1.7 million of outstanding principal balance paid in cash for notes that were not converted at the July 1, 2022 maturity date.

The conversion rate for the 2022 Convertible Notes was 69.2042 shares of ATI common stock per $1,000 principal amount of the 2022 Convertible Notes, equivalent to a conversion price of $ 14.45 per share.

As of December 31, 2021, the fair value of the 2022 Convertible Notes was $ 102 million based on the quoted market price, which is classified in Level 1 of the fair value hierarchy.

Interest on the 2022 Convertible Notes at the 4.75 % cash coupon rate was payable semi-annually in arrears on each January 1 and July 1.

Including amortization of deferred issuance costs, the effective interest rate was 5.4 % for the fiscal years ended December 31, 2022, 2021 and 2020.

Remaining deferred issuance costs were $ 0.3 million at December 31, 2021.

Including amortization of deferred issuance costs, the effective interest rate was 5.4 % for the fiscal years ended January 1, 2023 and January 2, 2022.

Interest expense on the 2022 Convertible Notes was as follows:

Fiscal year ended December 31,

(in millions) 2022 2021

6 unchanged sentences

Credit Agreements

On September 9, 2022, the Company amended and restated its Asset Based Lending (ABL) Credit Facility, which is collateralized by the accounts receivable and inventory of the Company’s operations.

As amended, 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.

This amendment and restatement extended the ABL facility through September 2027 and includes an increase of $ 100 million in the revolving credit facility, to $ 600 million.

The ABL continues to include a letter of credit sub-facility of up to $ 200 million, a $ 200 million term loan (ABL Term Loan), and a swing loan facility of up to $ 60 million.

The ABL Term Loan can be prepaid in increments of $ 25 million if certain minimum liquidity conditions are satisfied.

In addition, as amended, the Company has the right to request an increase of up to $ 300 million in the maximum amount available under the revolving credit facility for the duration of the ABL.

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, 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 (ABL Term Loan), and a swing loan facility of up to $ 60 million.

The ABL Term Loan has an interest rate of 2.0 % above adjusted Secured Overnight Financing Rate (SOFR) and can be prepaid in increments of $ 25 million if certain minimum liquidity conditions are satisfied.

In addition, the Company has the right to request an increase of up to $ 300 million under the revolving credit facility for the duration of the ABL.

The Company has a $ 50 million floating-for-fixed interest rate swap which converts a portion of the ABL Term Loan to a 4.21 % fixed interest rate.

The swap matures in June 2024.

The ABL, as amended, has interest rates that are consistent with the previous facility, replacing LIBOR with Secured Overnight Financing Rate (SOFR) plus an applicable SOFR adjustment.

The ABL Term Loan, as amended, has an interest rate of 2.0 % above adjusted SOFR.

As amended, the applicable interest rate for revolving credit borrowings under the ABL facility includes interest rate spreads based on available borrowing capacity that range between 1.25 % and 1.75 % for SOFR-based borrowings and between 0.25 % and 0.75 % for base rate borrowings.

The applicable interest rate for revolving credit borrowings under the ABL facility includes interest rate spreads based on available borrowing capacity that range between 1.25 % and 1.75 % for SOFR-based borrowings and between 0.25 % and 0.75 % for base rate borrowings.

The ABL facility contains a financial covenant whereby the Company must maintain a fixed charge coverage ratio of not less than 1.00 :

1 unchanged sentence

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

Costs associated with entering into the ABL amendment were $ 2.4 million, and are being amortized to interest expense over the extended term of the facility ending September 2027, along with $ 1.7 million of unamortized deferred costs previously recorded for the ABL.

The ABL, as amended, also contains customary affirmative and negative covenants for credit facilities of this type, including limitations on the Company’s ability to incur additional indebtedness or liens or to enter into investments, mergers and acquisitions, dispositions of assets and transactions with affiliates, some of which are more restrictive, at any time during the term of the ABL when the Company’s fixed charge coverage ratio is less than 1.00 :

owned subsidiary, Allegheny Ludlum LLC.

The ABL also contains customary affirmative and negative covenants for credit facilities of this type, including limitations on the Company’s ability to incur additional indebtedness or liens or to enter into investments, mergers and acquisitions, dispositions of assets and transactions with affiliates, some of which are more restrictive, at any time during the term of the ABL when the Company’s fixed charge coverage ratio is less than 1.00 :

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 ABL Term Loan balance.

On September 9, 2022, the Company amended and restated the ABL and costs associated with entering into this amendment were $ 2.4 million, and are being amortized to interest expense over the term of the facility ending September 2027, along with $ 1.7 million of unamortized deferred costs previously recorded for the ABL.

As of December 31, 2023, there were no outstanding borrowings under the revolving portion of the ABL, and $ 31.7 million was utilized to support the issuance of letters of credit.

There were no revolving credit borrowings under the ABL during 2022 or 2021.

The Company also has foreign credit facilities, primarily in China, that total $ 60 million based on December 31, 2022 foreign exchange rates, under which $ 19.4 million and $ 27.4 million was drawn as of December 31, 2022 and 2021, respectively.

There were average revolving credit borrowings of $ 13 million bearing an average annual interest rate of 6.5 % under the ABL during fiscal year 2023.

There were no revolving credit borrowings under the ABL during fiscal year 2022.

The Company also has foreign credit facilities, primarily in China, that total $ 58 million based on December 31, 2023 foreign exchange rates, under which $ 5.0 million and $ 19.4 million was drawn as of December 31, 2023 and January 1, 2023, respectively.

The Company has no off-balance sheet financing relationships as defined in Item 303(a)(4) of SEC Regulation S-K, with variable interest entities, structured finance entities, or any other unconsolidated entities.

At December 31, 2023, the Company had not guaranteed any third-party indebtedness.

The following represents the components of lease cost and other information for both operating and financing leases for the years ending December 31, 2022, 2021 and 2020:

($ in millions) Year ended

December 31, 2022 December 31, 2021 December 31, 2020

The following represents the components of lease cost and other information for both operating and financing leases for the fiscal years 2023, 2022 and 2021:

($ in millions) Fiscal Year

2023 2022 2021

Finance Lease Cost:

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The following table reconciles future minimum undiscounted rental commitments for operating leases to the operating lease liabilities recorded on the consolidated balance sheet as of December 31, 2023 (in millions):

December 31, 2022

Fiscal Year December 31, 2023

2029 and thereafter 24.9

3 unchanged sentences

The following table reconciles future minimum undiscounted rental commitments for finance leases to the finance lease liabilities recorded on the consolidated balance sheet as of December 31, 2023 (in millions):

December 31, 2022

Fiscal Year December 31, 2023

2029 and thereafter 9.1

2 unchanged sentences

Finance lease liabilities $ 102.2

The Company has entered into certain finance lease contracts with lenders for progress payments on machinery and equipment that is being constructed at the request and specification of the Company.

The Company has agreed to enter into certain finance lease contracts with lenders for progress payments on machinery and equipment that is being constructed at the request and specification of the Company.

As of December 31, 2023, the lenders had made $ 28.4 million of progress payments on behalf of the Company, and $ 39.7 million of progress payments are scheduled to be paid.

Upon payment of the final progress payments by the lenders, finance leases will commence, and $ 68.1 million, discounted using the applicable discount rates at lease inceptions, of ROU assets and lease liabilities will be recognized by the Company.

Progress payments made on behalf of the Company in 2022 and 2021 include $ 1.8 million and $ 16.2 million, respectively, received as proceeds on the sale of ongoing construction in progress projects that were converted to leases, which is presented as investing activities source of cash on the consolidated statements of cash flows for the years ended December 31, 2022 and 2021.

Progress payments made on behalf of the Company in fiscal years 2023, 2022 and 2021 include $ 2.8 million, $ 1.8 million and $ 16.2 million, respectively, received as proceeds on the sale of ongoing construction in progress projects that were converted to leases, which is presented as investing activities source of cash on the consolidated statements of cash flows for the fiscal years ended December 31, 2023, January 1, 2023 and January 2, 2022.

Derivative Financial Instruments and Hedging

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

However, as of December 31, 2022, 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.

However, as of December 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 4 million pounds of nickel with hedge dates through fiscal year 2024.

The aggregate notional amount hedged is approximately 6 % of a single year’s estimated nickel raw material purchase requirements.

2 unchanged sentences

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

At December 31, 2022, the company hedged approximately 70 % of the Company’s annual forecasted domestic requirements for natural gas for 2023 and approximately 25 % for 2024.

At December 31, 2023, the company hedged approximately 75 % of the Company’s annual forecasted domestic requirements for natural gas for fiscal year 2024 and approximately 35 % for fiscal year 2025.

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

2 unchanged sentences

dollar amounts at specified dates.

The forward contracts are denominated in the same foreign currencies in which export sales are denominated.

These contracts are designated as hedges of the variability in cash flows of a portion of the forecasted future export sales transactions which otherwise would expose the Company to foreign currency risk, primarily euros.

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.

1 unchanged sentence

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

The Company has a $ 50 million floating-for-fixed interest rate swap that matures in June 2024 which converts half of the ABL Term Loan to a 4.21 % fixed rate.

The Company has a $ 50 million floating-for-fixed interest rate swap that matures in June 2024 which converts a portion of the ABL Term Loan to a 4.21 % fixed rate.

The Company designated the interest rate swap as a cash flow hedge of the Company’s exposure to the variability of the payment of interest on a portion of its ABL Term Loan borrowings.

7 unchanged sentences

(In millions) December 31,

2022 December 31,

2023 January 1, 2023

Asset derivatives Balance sheet location

1 unchanged sentence

Interest rate swap Prepaid expenses and other current assets $ 0.7 $ 1.4

Foreign exchange contracts Prepaid expenses and other current assets 0.1 —

Natural gas contracts Prepaid expenses and other current assets — 2.4

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Derivatives designated as hedging instruments:

Interest rate swap Other current liabilities $ — $ 0.9

Natural gas contracts Other current liabilities $ 5.6 $ 2.0

Nickel and other raw material contracts Other current liabilities 7.5 2.1

Interest rate swap Other long-term liabilities — 0.7

Natural gas contracts Other long-term liabilities 1.1 0.5

1 unchanged sentence

Total liability derivatives $ 14.2 $ 4.6

Assuming market prices remain constant with those at December 31, 2022, a pre-tax gain of $ 12.2 million is expected to be recognized over the next 12 months.

For derivative financial instruments that are designated as cash flow hedges, the gain or loss on the derivative is reported as a component of other comprehensive income (OCI) and reclassified into earnings in the same period or periods during which the hedged item affects earnings.

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 December 31, 2022 or 2021.

Assuming market prices remain constant with those at December 31, 2023, a pre-tax loss of $ 12.3 million is expected to be recognized over the next 12 months.

hedged item affects earnings.

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.

There were no outstanding fair value hedges as of December 31, 2023 or January 1, 2023.

The cash flow impact for all derivative financial instruments is reported in cash flows provided by operating activities on the consolidated statement of cash flows.

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.

Activity with regard to derivatives designated as cash flow hedges for the years ended December 31, 2022 and 2021 were as follows (in millions):

Activity with regard to derivatives designated as cash flow hedges for the fiscal years ended December 31, 2023 and January 1, 2023 were as follows (in millions):

Derivatives in Cash Flow

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Debt (a) 2,199.2 2,746.7 2,438.9 307.8

The estimated fair value of financial instruments at December 31, 2021 was as follows:

The estimated fair value of financial instruments at January 1, 2023 was as follows:

Fair Value Measurements at Reporting Date Using

30 unchanged sentences

Short-term and long-term debt:

The fair values of the 2022 Convertible Notes (prior to conversion in the second quarter of 2022), the 2025 Convertible Notes, the Allegheny Ludlum 6.95 % Debentures due 2025, the 2027 Notes, the 2029 Notes and the 2031 Notes were determined using Level 1 information.

The fair values of the 2025 Convertible Notes, the Allegheny Ludlum 6.95 % Debentures due 2025, the 2027 Notes, the 2029 Notes, 2030 notes (after issuance in the third quarter of fiscal year 2023) and the 2031 Notes were determined using Level 1 information.

The fair values of other short-term and long-term debt were determined using Level 2 information.

6 unchanged sentences

In most retiree health care plans, Company contributions towards premiums are capped based on the cost as of a certain date, thereby creating a defined contribution.

ATI instituted several initiatives over a multi-year period as part of its retirement benefit liability reduction strategy.

In the fourth quarter of fiscal year 2023, the Company voluntarily changed the method of accounting for recognizing actuarial gains and losses for the defined benefit pension plans.

See Note 1 for amounts recognized related to this change.

The information within this Note has been revised to reflect the change in accounting principle for current and prior periods.

ATI instituted several initiatives over a multi-year period as part of its retirement benefit liability derisking strategy.

Future benefit accruals for all participants in the U.S.

defined benefit pension plans other than those subject to a CBA were frozen at the end of 2014, and subsequently CBAs were negotiated to close these plans to new entrants.

As a result of these actions, the Company has now completely closed all defined benefit pension plans to new entrants, and has substantially limited the number of employees still accruing benefit service to less than 900 participants, or approximately 7 % of the population in the U.S.

qualified defined benefit pension plans.

defined benefit pension plans other than those subject to a CBA were frozen at the end of fiscal year 2014, and subsequently CBAs were negotiated to close these plans to new entrants.

As a result of these actions, the Company has completely closed all defined benefit pension plans to new entrants, and has substantially limited the number of employees still accruing benefit service to less than 800 participants.

Additionally, all of ATI’s remaining collectively-bargained, capped defined benefit retiree health care plans are closed to new entrants.

These liability management actions have transitioned ATI’s retirement benefit and other postretirement benefit programs largely to a defined contribution structure.

Since 2013, five annuity buyouts of retired participants and two voluntary cash out programs of deferred participants during this period have helped to reduce the total participants in ATI’s U.S.

From fiscal years 2013 to 2022, five annuity buyouts of retired participants and two voluntary cash out programs of deferred participants during this period helped to reduce the total participants in ATI’s U.S.

qualified defined benefit pension plans by more than 60 %.

Costs for defined contribution retirement plans were $ 31.1 million in 2022, $ 20.4 million in 2021, and $ 29.9 million in 2020.

During the fourth quarter of fiscal year 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.

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 fiscal year 2023, to fully fund remaining pension liabilities ahead of this annuity transaction.

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

qualified defined benefit pension plan includes approximately 1,980 participants.

Costs for defined contribution retirement plans were $ 38.8 million in fiscal year 2023, $ 31.1 million in fiscal year 2022, and $ 20.4 million in fiscal year 2021.

Company contributions to these defined contribution plans are funded with cash.

From June 1, 2020 in response to the economic challenges created by the COVID-19 pandemic, the Company reduced its qualified non-elective contribution percentage and suspended all Company match contributions for salaried participants in the ATI 401(k) Savings Plan, and deferred the funding of Company contributions to this plan, until mid-2021.

In 2022, the Company implemented certain plan

design changes to the ATI 401(k) Savings Plan which decreased the qualified non-elective contribution percentage and increased the Company match contribution percentage.

Other postretirement benefit costs for a defined contribution plan under the terms of a CBA were $ 1.0 million and $ 0.7 million for the years ended December 31, 2022 and 2020, respectively.

There were no costs for this plan in 2021.

In fiscal year 2022, the Company implemented certain plan design changes to the ATI 401(k) Savings Plan which decreased the qualified non-elective contribution percentage and increased the Company match contribution percentage.

Other postretirement benefit costs for a defined contribution plan under the terms of a CBA were $ 1.0 million for both the fiscal years ended December 31, 2023 and January 1, 2023.

There were no costs for this plan in fiscal year 2021.

The components of pension and other postretirement benefit expense for the Company’s defined benefit plans included the following:

Pension Benefits Other Postretirement Benefits

(In millions) 2022 2021 2020 2022 2021 2020

(In millions) 2023 2022 Revised 2021 Revised 2023 2022 2021

Service cost—benefits earned during the year $ 6.0 $ 11.9 $ 15.1 $ 0.6 $ 1.1 $ 1.5

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Amortization of net actuarial loss — — — 6.0 13.2 13.9

Recognized actuarial loss (gain)- mark to market 26.8 ( 100.3 ) ( 147.2 ) — — —

Settlement loss (gain) 41.7 0.7 — — — ( 64.9 )

Curtailment gain — — — — — ( 0.2 )

Termination benefits — — 10.9 — — 6.7

Total retirement benefit expense (income) $ 69.7 $ ( 145.8 ) $ ( 199.5 ) $ 16.6 $ 21.1 $ ( 43.9 )

In the fourth quarter of fiscal year 2023, the Company voluntarily changed the method of accounting for recognizing actuarial gains and losses for its defined benefit pension plans.

Under the accounting method change, remeasurement of projected benefit obligation and plan assets for defined benefit pension plans are immediately recognized in earnings through net periodic pension benefit cost from remeasurements annually in the fourth quarter and on an interim basis due to triggering events that require remeasurement.

This resulted in an actuarial loss of $ 26.8 million in fiscal year 2023 and actuarial gains of $ 100.3 million and $ 147.2 million in fiscal years 2022 and 2021, respectively, within nonoperating retirement benefit income/expense on the consolidated statements of operations.

On October 17, 2023, the Company completed a voluntary cash out for term vested employees and a large annuity buyout related to approximately 8,200 U.S.

qualified defined benefit pension plan participants.

As a result of the annuity buyout, ATI recognized a $ 41.7 million pretax settlement loss, which is recorded in nonoperating retirement benefit income/expense on the consolidated statement of operations.

On May 12, 2022, the Company completed the sale of its Sheffield, UK operations (see Note 6).

As a result of this sale, ATI recognized a $ 29.5 million settlement loss, 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.

As a result of this sale, ATI recognized a $ 0.7 million settlement loss, 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.

Pension liabilities and assets for this UK defined benefit pension plan that were removed as a result of this divestiture are included below in the tables of changes in benefit obligations and changes in plan assets, respectively.

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Discrete tax effects related to this event were $ 15.5 million of income tax expense (see Note 17 for further discussion).

In 2020, the Company recorded a $ 17.4 million termination benefits charge for pension and postretirement medical obligations, net of a $ 0.2 million curtailment gain, related to facility closures in the AA&S segment resulting from the Company’s strategic shift to exit lower-margin standard stainless products.

See Note 19 for further explanation.

Actuarial assumptions used to develop the components of defined benefit pension expense and other postretirement benefit expense were as follows:

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2023 2022 2021 2023 2022 2021

Discount rate 2.95 % 2.60 % 3.40 % 2.80 % 2.45 % 3.25 %

Discount rate (a) 5.55 % - 6.40 %

2.95 % 2.60 % 5.45 % 2.80 % 2.45 %

Rate of increase in future compensation levels 3.00 %

2.00 % - 3.00 %

Weighted average expected long-term rate of return on assets 6.43 % 6.71 % 7.16 % — % — % — %

Weighted average expected long-term rate of return on assets (a) 5.80 % - 6.57 %

6.43 % 6.71 % — % — % — %

(a) Pension expense for fiscal year 2023 was initially measured at a 5.55 % discount rate and 6.57 % weighted average expected long-term rate of return on assets.

qualified pension plans were remeasured using a 6.40 % weighted average discount rate and 5.80 % weighted average expected long-term rate of return on assets as of October 17, 2023, following the large annuity buyout of retirees.

Actuarial assumptions used for the valuation of defined benefit pension and other postretirement benefit obligations at the end of the respective periods were as follows:

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Rate of increase in future compensation levels 3.00 % 3.00 % — —

A reconciliation of the funded status for the Company’s defined benefit pension and other postretirement benefit plans at December 31, 2022 and 2021 was as follows:

A reconciliation of the funded status for the Company’s defined benefit pension and other postretirement benefit plans at December 31, 2023 and January 1, 2023 was as follows:

Pension Benefits Other Postretirement Benefits

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Change in benefit obligations:

Benefit obligation at beginning of year $ 2,517.0 $ 2,720.1 $ 287.3 $ 357.6

Benefit obligation at beginning of fiscal year $ 1,818.3 $ 2,517.0 $ 212.7 $ 287.3

Service cost 6.0 11.9 0.6 1.1

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– other ( 5.3 ) 11.1 3.1 ( 5.8 )

Settlement gain — — — ( 43.0 )

Benefit obligation at end of year $ 1,818.3 $ 2,517.0 $ 212.7 $ 287.3

Plan settlement ( 1,350.6 ) — — —

Benefit obligation at end of fiscal year $ 298.4 $ 1,818.3 $ 201.6 $ 212.7

Actuarial effects of changes in discount rates are separately identified in the preceding table.

Net actuarial (gains) losses – other for 2021 is primarily comprised of revisions to estimates for mortality, termination rates, retirement rates, forms of benefit payment elected, and other demographic assumptions based on an updated study of plan experience.

Pension Benefits Other Postretirement Benefits

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Change in plan assets:

Fair value of plan assets at beginning of year $ 2,120.9 $ 2,046.4 $ — $ —

Fair value of plan assets at beginning of fiscal year $ 1,599.5 $ 2,120.9 $ — $ —

Actual returns on plan assets and plan expenses ( 83.9 ) ( 317.0 ) — —

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Effect of currency rates — ( 4.4 ) — —

Plan settlement ( 1,350.6 ) — — —

Benefits paid ( 153.9 ) ( 155.6 ) — —

Fair value of plan assets at end of year $ 1,599.5 $ 2,120.9 $ — $ —

Pension benefit payments in 2021 include $ 70 million for the annuity buyout of smaller pension balances in a U.S.

defined benefit pension plan.

This action was part of ATI’s retirement benefit liability management strategy to reduce the overall size of the pension obligation and to lower administrative costs.

Fair value of plan assets at end of fiscal year $ 289.1 $ 1,599.5 $ — $ —

On October 17, 2023, the Company completed a voluntary cash out for term vested employees and a large annuity buyout related to approximately 8,200 U.S.

qualified defined benefit pension plan participants.

These actions resulted in a reduction in the benefit obligations and plan assets of $ 1.35 billion.

Assets (liabilities) recognized in the consolidated balance sheets:

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2023 2022 2023 2022

Current assets $ 2.4 $ — $ — $ —

Noncurrent assets 33.6 12.5 — —

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Total amount recognized $ ( 9.3 ) $ ( 218.8 ) $ ( 201.6 ) $ ( 212.7 )

Changes to accumulated other comprehensive loss related to pension and other postretirement benefit plans in 2022 and 2021 were as follows:

Changes to accumulated other comprehensive loss related to pension and other postretirement benefit plans in fiscal years 2023 and 2022 were as follows:

Pension Benefits Other Postretirement Benefits

(In millions) 2022 2021 2022 2021

(In millions) 2023 2022 Revised 2023 2022

Beginning of year accumulated other comprehensive loss $ ( 8.8 ) $ ( 9.9 ) $ ( 55.8 ) $ ( 121.2 )

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Amortization of prior service cost (credit) 0.3 0.4 ( 0.9 ) ( 0.9 )

Settlement loss (gain) 29.5 — — ( 21.9 )

Settlement loss 1.1 0.7 — —

Remeasurements — — ( 3.8 ) 53.1

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Net change in accumulated other comprehensive loss $ 1.4 $ 1.1 $ 1.3 $ 65.4

Amounts included in accumulated other comprehensive loss at December 31, 2022 and 2021 were as follows:

Amounts included in accumulated other comprehensive loss at December 31, 2023 and January 1, 2023 were as follows:

Pension Benefits Other Postretirement Benefits

(In millions) 2022 2021 2022 2021

(In millions) 2023 2022 Revised 2023 2022

Prior service (cost) credit $ ( 7.4 ) $ ( 8.8 ) $ 1.7 $ 2.5

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See Note 15 for further discussion on deferred tax asset valuation allowances.

Retirement benefit expense for 2023 for defined benefit plans is estimated to be approximately $ 74 million, comprised of $ 58 million for pension expense and $ 16 million of expense for other postretirement benefits.

The net actuarial loss is recognized in the consolidated statement of operations using a corridor method.

Because all of ATI’s pension plans are inactive, cumulative gains and losses in excess of 10% of the greater of the projected benefit obligation or the market value of plan assets are amortized over the expected average remaining future lifetime of participants, which is approximately 17 years on a weighted average basis.

Prior service cost (credit) amortization is recognized in level amounts over the expected service of the active membership as of the amendment effective date.

Amounts in accumulated other comprehensive loss that are expected to be recognized as components of net periodic benefit cost in 2023 are:

Retirement benefit expense for fiscal year 2024 for defined benefit plans is estimated to be approximately $ 21 million, comprised of $ 6 million for pension expense and $ 15 million of expense for other postretirement benefits.

For other postretirement benefits, the net actuarial loss is recognized in the consolidated statement of operations using a corridor method.

For both pension and other postretirement benefits, prior service cost (credit) amortization is recognized in level amounts over the expected service of the active membership as of the amendment effective date.

Amounts in accumulated other comprehensive loss that are expected to be recognized as components of net periodic benefit cost in fiscal year 2024 are:

(In millions) Pension

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Amortization of accumulated other comprehensive loss $ 0.4 $ 4.4 $ 4.8

The accumulated benefit obligation for all defined benefit pension plans was $ 1,716.8 million and $ 2,398.0 million at December 31, 2022 and 2021, respectively.

The accumulated benefit obligation for all defined benefit pension plans was $ 283.1 million and $ 1,716.8 million at December 31, 2023 and January 1, 2023, respectively.

Additional information for pension plans with accumulated benefit obligations and projected benefit obligations in excess of plan assets:

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Cash contributions to ATI’s U.S.

qualified defined benefit pension plans were $ 50 million in 2022, $ 67 million in 2021 and $ 130 million in 2020.

qualified defined benefit pension plans were $ 272 million in fiscal year 2023, $ 50 million in fiscal year 2022 and $ 67 million in fiscal year 2021.

The Company funds the U.S.

defined benefit pension plans in accordance with the Employee Retirement Income Security Act of 1974, as amended, and the Internal Revenue Code.

As a result of the American Rescue Plan Act (ARPA) enacted in March 2021, the rules governing pension funding calculations changed, and minimum funding requirements were reduced.

As a result of these ARPA changes, ATI’s prior contributions have generated a credit balance that may be utilized to offset future minimum required contributions.

The Company has no required cash contributions to its U.S.

qualified defined benefit pension plans in 2023, and made a voluntary cash contribution of approximately $ 50 million to these plans in

In addition, for 2023, the Company expects approximately $ 6 million of payments for U.S.

qualified defined benefit pension plan in fiscal year 2024.

In addition, for fiscal year 2024, the Company expects approximately $ 6 million of payments for U.S.

nonqualified pension benefits.

The following table summarizes expected benefit payments from the Company’s various pension and other postretirement defined benefit plans through 2032, and also includes estimated Medicare Part D subsidies projected to be received during this period based on currently available information.

The following table summarizes expected benefit payments from the Company’s various pension and other postretirement defined benefit plans through fiscal year 2033, and also includes estimated Medicare Part D subsidies projected to be received during this period based on currently available information.

Pension benefit payments for the U.S.

qualified defined benefit pension plans are made from pension plan assets.

(In millions) Pension

qualified defined benefit pension plan are made from pension plan assets.

(In millions)

Fiscal Year Pension

Benefits Other

24 unchanged sentences

Total assets $ 289.1 $ 166.9 $ 122.2 $ — $ —

The fair values of the Company’s pension plan assets at December 31, 2021 were as follows:

The fair values of the Company’s pension plan assets at January 1, 2023 were as follows:

(In millions) Quoted Prices in

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and International equities, and Fixed Income are predominantly held in common/collective trust funds and registered investment companies.

Some of these investments are publicly traded securities and are classified as Level 1, while others are public investment vehicles valued using the NAV provided by the administrator

Some of these investments are publicly traded securities and are classified as Level 1, while others are public investment vehicles valued using the NAV provided by the administrator of the fund.

The NAV is based on the value of the underlying assets owned by the fund, minus its liabilities, and then divided by the number of shares outstanding.

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In addition, some fixed income instruments are investments in debt instruments that are valued using external pricing vendors and are classified within Level 2 of the fair value hierarchy.

Floating interest rate global debt instruments are both domestic and foreign and include first lien debt, second lien debt and structured finance obligations, among others.

These instruments are valued using NAV and are not classified in the fair value hierarchy.

Private equity investments include both Direct Funds and Fund-of-Funds.

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For certain investments which have formal financial valuations reported on a one-quarter lag, fair value is determined utilizing net asset values adjusted for subsequent cash flows, estimated financial performance and other significant events.

For 2023, the weighted average expected long-term rate of return on defined benefit pension assets is 6.57 %.

For fiscal year 2024, the expected long-term rate of return on defined benefit pension assets is 5.80 %.

In developing expected long-term rate of return assumptions, the Company evaluated input from its third party pension plan asset managers and actuaries, including reviews of their asset class return expectations and long-term inflation assumptions.

An expected long-term rate of return is based on expected asset allocations within ranges for each investment category and projected annual compound returns.

The Company’s actual, weighted average returns on pension assets for the last five years have been ( 14.5 )% for 2022, 12.4 % for 2021, 15.2 % for 2020, 15.1 % for 2019, and ( 4.8 )% for 2018.

The plan assets for the ATI Pension Plan, the Company’s primary U.S.

qualified defined benefit pension plan, represent nearly 95 % of ATI’s total pension plan assets at December 31, 2022.

The ATI Pension Plan invests in a diversified portfolio consisting of an array of asset classes that attempts to maximize returns while minimizing volatility.

These asset classes include U.S.

The Company’s actual, weighted average returns on pension assets for the last five fiscal years have been 2.0 % for 2023, ( 14.5 )% for 2022, 12.4 % for 2021, 15.2 % for 2020, and 15.1 % for 2019.

The ATI Pension Plan (the Plan), the Company’s remaining U.S.

qualified defined benefit pension plan, continues to invest in a diversified portfolio consisting of an array of asset classes that attempts to maintain the Plan’s funded status while maximizing returns and minimizing volatility.

These asset classes may include U.S.

domestic equities, non-U.S.

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The Company continually monitors the investment results of these asset classes and its fund managers, and explores other potential asset classes for possible future investment.

The target asset allocations for ATI Pension Plan for 2023, by major investment category, are:

The ability to redeem investments at year-end are based on the type of investment and the agreements with fund managers.

Generally, the Company’s fixed income and equity investments are readily redeemable with limited restrictions.

The ability to redeem investments in hedge funds can vary significantly.

Managers may require longer notice periods and may limit the amount able to be redeemed in a period (e.g., month or quarter) to a percent of the overall investment.

Investments in private equity are not redeemable at ATI’s option.

Distributions are based on the sale of the underlying investments in the fund, subject to the terms in each fund agreement.

The target asset allocations for ATI Pension Plan for fiscal year 2024, by major investment category, are:

Asset category Target asset allocation range

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Fixed income and cash equivalents 50 % - 100 %

Private equity 0 % - 30 %

Alternative investments- hedge funds, real estate and other 10 % - 30 %

As of December 31, 2022, the Company’s pension plans had outstanding commitments to invest up to $ 45 million in global debt securities, $ 125 million in private equity investments and $ 29 million in real estate investments.

Private equity and other 0 % - 40 %

As of December 31, 2023, the Company’s pension plan had outstanding commitments to invest up to $ 7 million in global debt securities and $ 33 million in private equity investments.

These commitments are expected to be satisfied through the reallocation of pension trust assets while maintaining investments within the target asset allocation ranges.

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If the Company ceases to have an obligation to contribute to the multiemployer plan in which it had been a contributing employer, it may be required to pay to the plan an amount based on the underfunded status of the plan and on the history of the Company’s participation in the plan prior to the cessation of its obligation to contribute.

The amount that an

employer that has ceased to have an obligation to contribute to a multiemployer plan is required to pay to the plan is referred to as a withdrawal liability.

A subsidiary of the Company participates in the Steelworkers Western Independent Shops Pension Plan (WISPP) for union-represented employees of the primary titanium operations in Albany, OR, which is funded on an hours-worked basis.

Manufacturing operations at this facility have been idled throughout 2021 and most of 2022, with a limited number of employees that participate in the WISPP remaining active in maintenance and other functions.

It is at least reasonably possible that significant reductions in, or the elimination of hours-worked contributions due to changes in operating rates at this facility could result in a withdrawal liability assessment in a future period.

A complete withdrawal liability is estimated to be approximately $ 27 million on an undiscounted basis, based on information for the plan year ended September 30, 2021, which is the most recent information available from the Plan Administrator.

If this complete withdrawal liability was incurred, ATI estimates that payments of the obligation would be required on a straight-line basis over a 15 -year period.

The Company’s participation in multiemployer plans for the years ended December 31, 2022, 2021 and 2020 is reported in the following table.

The amount that an employer that has ceased to have an obligation to contribute to a multiemployer plan is required to pay to the plan is referred to as a withdrawal liability.

The Company’s participation in multiemployer plans for the fiscal years ended December 31, 2023, January 1, 2023 and January 2, 2022 is reported in the following table.

Protection Act

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Plan Number Company Contributions Surcharge

Fiscal Year Fiscal Year

Pension Fund 2023 2022 2023 2022 2021

2 unchanged sentences

Boilermakers-Blacksmiths National Pension Trust 48-6168020

/ 001 Green Yellow Yes 2.3 2.0 2.1 No 9/30/2026

/ 001 Red Green Yes 2.6 2.3 2.0 No 9/30/2026

IAM National Pension Fund 51-6031295

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In April 2019, the Company received notifications from the Boilermakers-Blacksmiths National Pension Trust (Blacksmiths Trust) that it was certified by its actuary as being in “red” zone status for the plan year beginning January 1, 2019.

A rehabilitation plan has been adopted for the Blacksmiths Trust, and the Company and the Blacksmiths union agreed to adopt the rehabilitation plan in 2019 prior to a contribution surcharge being imposed.

A rehabilitation plan was adopted for the Blacksmiths Trust, and the Company and the Blacksmiths union agreed to adopt the rehabilitation plan in 2019 prior to a contribution surcharge being imposed.

In April 2020 and 2021, the funding status improved for the Blacksmiths Trust as it was certified by its actuary as being in the “yellow” zone for the plan years beginning January 1, 2020 and 2021.

In April 2022, the funding status further improved to being in the “green” zone for the plan year beginning January 1, 2022.

In April 2023, the Blacksmiths Trust was certified by its actuary as being in “red” zone status for the plan years beginning January 1, 2023.

A rehabilitation plan has been adopted for the Blacksmiths Trust, and the Company and the Blacksmiths union agreed to adopt the rehabilitation plan in 2023 prior to a contribution surcharge being imposed.

(2) The “FIP / RP Status Pending / Implemented” column indicates whether a Funding Improvement Plan, as required under the Code by plans in the “yellow” zone, or a Rehabilitation Plan, as required under the Code to be adopted by plans in the “red” or “deep red” zones, is pending or has been implemented as of the end of the plan year that ended in 2023.

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(4) The Company is party to five separate bargaining agreements that require contributions to this plan.

Expiration dates of these collective bargaining agreements range between November 13, 2023 and July 14, 2028.

Expiration dates of these collective bargaining agreements range between April 26, 2024 and July 14, 2028.

Accumulated Other Comprehensive Income (Loss)

The changes in AOCI by component, net of tax, for the fiscal years ended December 31, 2022, 2021 and 2020 were as follows (in millions):

benefit plans Currency

adjustment Derivatives Deferred Tax Asset Valuation Allowance Total

Balance, December 31, 2019 $ ( 1,083.1 ) $ ( 76.6 ) $ ( 0.5 ) $ ( 41.5 ) $ ( 1,201.7 )

The changes in AOCI by component, net of tax, for the fiscal years ended December 31, 2023, January 1, 2023 and January 2, 2022 were as follows (in millions):

benefit plans Revised Currency

adjustment Derivatives Deferred Tax Asset Valuation Allowance Revised Total Revised

Balance, January 3, 2021 $ ( 1,119.9 ) $ ( 55.5 ) $ 2.1 $ ( 50.3 ) $ ( 1,223.6 )

Cumulative effect of change in accounting principle (a) 1,030.3 — — (a) 42.9 1,073.2

OCI before reclassifications 6.6 ( 9.4 ) 11.7 — 8.9

Amounts reclassified from AOCI (a) 62.5 (b) — (d) 4.6 (e) ( 8.8 ) 58.3

Amounts reclassified from AOCI (b) ( 3.6 ) (c) — (e) ( 8.7 ) (f) 12.5 0.2

Net current-period OCI 1,033.3 ( 9.4 ) 3.0 55.4 1,082.3

Balance, December 31, 2020 ( 1,119.9 ) ( 55.5 ) 2.1 ( 50.3 ) ( 1,223.6 )

Balance, January 2, 2022 ( 86.6 ) ( 64.9 ) 5.1 5.1 ( 141.3 )

OCI before reclassifications 41.3 ( 25.2 ) 41.0 — 57.1

Amounts reclassified from AOCI (a) 53.9 (b) — (d) ( 8.7 ) (e) 66.1 111.3

Amounts reclassified from AOCI (b) 10.6 (d) 20.0 (e) ( 32.6 ) (f) 18.8 16.8

Net current-period OCI 51.9 ( 5.2 ) 8.4 18.8 73.9

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

Balance, January 1, 2023 ( 34.7 ) ( 70.1 ) 13.5 23.9 ( 67.4 )

OCI before reclassifications ( 2.9 ) 1.7 ( 21.8 ) — ( 23.0 )

Amounts reclassified from AOCI (a) 93.7 (c) 20.0 (d) ( 32.6 ) (e) 51.7 132.8

Amounts reclassified from AOCI (b) 5.1 (c) — (e) 1.9 (f) 0.2 7.2

Net current-period OCI 2.2 1.7 ( 19.9 ) 0.2 ( 15.8 )

1 unchanged sentence

Attributable to noncontrolling interests:

Balance, December 31, 2019 $ — $ 9.8 $ — $ — $ 9.8

Balance, January 3, 2021 $ — $ 21.2 $ — $ — $ 21.2

OCI before reclassifications — 4.8 — — 4.8

Amounts reclassified from AOCI — (b) — — — —

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

Net current-period OCI — 4.8 — — 4.8

Balance, December 31, 2020 — 21.2 — — 21.2

Balance, January 2, 2022 — 26.0 — — 26.0

OCI before reclassifications — ( 18.3 ) — — ( 18.3 )

Amounts reclassified from AOCI — (b) — — — —

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

Net current-period OCI — ( 18.3 ) — — ( 18.3 )

Balance, December 31, 2021 — 26.0 — — 26.0

Balance, January 1, 2023 — 7.7 — — 7.7

OCI before reclassifications — ( 0.4 ) — — ( 0.4 )

Amounts reclassified from AOCI — (b) — — — —

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

Net current-period OCI — ( 0.4 ) — — ( 0.4 )

Balance, December 31, 2023 $ — $ 7.3 $ — $ — $ 7.3

(a) Amounts were included in net periodic benefit cost for pension and other postretirement benefit plans (see Note 14) and/or loss on asset sales and sales of businesses, net, as part of the loss on sale of the Sheffield, UK operations (see Note 6).

(b) No amounts were reclassified to earnings.

(c) 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 (see Note 6).

(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 12).

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

The 2021 income tax provision includes $ 6.4 million of tax expense for the recognition of a stranded deferred tax balance arising from deferred tax valuation allowances that was associated with certain postretirement medical benefits due to plan termination (see Notes 14 and 17).

(a) In the fourth quarter of fiscal year 2023, the Company voluntarily changed its method of accounting for recognizing actuarial gains and losses for our defined benefit pension plans.

See Note 1 for amounts recognized related to this change.

The information within this Note has been revised to reflect the change in accounting principle for current and prior periods.

(b) Amounts were included in net periodic benefit cost for pension and other postretirement benefit plans (see Note 14) and/or loss on asset sales and sales of businesses, net, as part of the loss on sale of the Sheffield, UK operations (see Note 6).

(d) 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 (see Note 6).

(e) 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 12).

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

The fiscal year 2021 income tax provision includes $ 6.4 million of tax expense for the recognition of a stranded deferred tax balance arising from deferred tax valuation allowances that was associated with certain postretirement medical benefits due to plan termination (see Notes 14 and 17).

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

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subsidiaries.

Reclassifications out of AOCI for the fiscal years ended December 31, 2022, 2021 and 2020 were as follows:

Reclassifications out of AOCI for the fiscal years ended December 31, 2023, January 1, 2023 and January 2, 2022 were as follows:

Amount reclassified from AOCI (d)

2 unchanged sentences

(In millions)

December 31, 2022 December 31, 2021 December 31, 2020 Affected line item in the

December 31, 2023 January 1, 2023 January 2, 2022 Affected line item in the

consolidated statement of operations

Postretirement benefit plans

Postretirement benefit plans Revised

Prior service credit $ 0.6 (a) $ 0.5 (a) $ 1.8 (a)

Actuarial losses ( 6.0 ) (a) ( 13.2 ) (a) ( 13.9 ) (a)

Settlement gain (loss) ( 29.5 ) (b) 21.9 (a) —

Settlement gain (loss) ( 1.1 ) (a) ( 0.7 ) (b) 21.9 (a)

( 6.5 ) (d) ( 13.4 ) (d) 9.8 (d) Total before tax

( 12.0 ) ( 11.9 ) ( 19.7 ) Tax benefit (e)

( 1.4 ) ( 2.8 ) 6.2 Tax provision (benefit) (e)

$ ( 5.1 ) $ ( 10.6 ) $ 3.6 Net of tax

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

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

Nickel and other raw material contracts $ 3.3 (c) $ 26.9 (c) $ 7.1 (c)

6 unchanged sentences

(a) Amounts are included in nonoperating retirement benefit expense (see Note 14).

(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 (see Note 6).

(b) Amounts in fiscal year 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 (see Note 6).

(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.

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Outstanding grants previously made under prior incentive plans remain in effect in accordance with relevant terms.

Awards earned under the Company’s share-based incentive compensation programs are generally paid with shares held in treasury, if sufficient treasury shares are held, and any additional required share payments are made with newly issued shares.

Awards earned under the Company’s share-based incentive compensation programs are paid with shares held in treasury or newly issued shares depending on the level of treasury shares held.

At December 31, 2023, 5.4 million shares of common stock were available for future awards under the 2022 Incentive Plan.

8 unchanged sentences

The fair value of the RSU award is measured based on the stock price at the grant date.

Compensation expense related to RSU awards was $ 13.4 million in 2022, $ 14.3 million in 2021, and $ 9.6 million in 2020.

Approximately $ 8.2 million of unrecognized fair value compensation expense relating to restricted stock units is expected to be recognized through 2025, with $ 6.3 million expected to be recognized in 2023, including estimates of service period forfeitures.

Activity under the Company’s RSU awards for the years ended December 31, 2022, 2021, and 2020 was as follows:

Compensation expense related to RSU awards was $ 14.5 million in fiscal year 2023, $ 13.4 million in fiscal year 2022, and $ 14.3 million in fiscal year 2021.

Approximately $ 8.7 million of unrecognized fair value compensation expense relating to restricted stock units is expected to be recognized through fiscal year 2026, with $ 6.6 million expected to be recognized in fiscal year 2024, including estimates of service period forfeitures.

Activity under the Company’s RSU awards for the fiscal years ended December 31, 2023, January 1, 2023, and January 2, 2022 was as follows:

(Shares in thousands, $ in millions) 2023 2022 2021

6 unchanged sentences

Average Grant

Nonvested, beginning of year 1,409 $ 25.6 929 $ 17.9 756 $ 19.6

Nonvested, beginning of fiscal year 1,479 $ 26.0 1,409 $ 25.6 929 $ 17.9

Granted 512 16.0 831 14.8 1,033 17.5

1 unchanged sentence

Forfeited ( 42 ) ( 0.9 ) ( 127 ) ( 2.1 ) ( 48 ) ( 0.9 )

Nonvested, end of year 1,479 $ 26.0 1,409 $ 25.6 929 $ 17.9

Nonvested, end of fiscal year 1,220 $ 28.0 1,479 $ 26.0 1,409 $ 25.6

Performance condition awards:

The Company awarded performance share units (PSUs) with performance requirements through fiscal year 2020.

These PSU award opportunities, the last of which vested at the conclusion of its applicable three-year performance period on December 31, 2022, were determined at a target number of units, and the number of shares awarded was based on attainment of two ATI financial performance metrics.

PSU awards through 2020 are accounted for as performance condition plans with service vesting requirements, with compensation expense during the performance period recognized based on estimates of attaining the performance criteria, including estimated forfeitures.

The metrics for PSU awards granted through 2018 measured (1) net income attributable to ATI and (2) return on invested capital, over a three-year performance period.

The metrics for PSU awards granted in 2019 and 2020 measured (1) net income attributable to ATI and (2) return on capital employed, over a three-year performance period with a threshold attainment of 25 % and a maximum attainment of 200 % of the target financial performance metrics and target share units, measured over the applicable three-year performance period.

These PSU award opportunities, the last of which vested at the conclusion of its applicable three-year performance period on January 1, 2023, were determined at a target number of units, and the number of shares awarded was based on attainment of two ATI financial performance metrics.

PSU awards through fiscal year 2020 are accounted for as performance condition plans with service vesting requirements, with compensation expense during the performance period recognized based on estimates of attaining the performance criteria, including estimated forfeitures.

The metrics for PSU awards granted in fiscal years 2019 and 2020 measured (1) net income attributable to ATI and (2) return on capital employed, over a three-year performance period with a threshold attainment of 25 % and a maximum attainment of 200 % of the target financial performance metrics and target share units, measured over the applicable three-year performance period.

For certain senior executives, the number of PSUs to be awarded based on the performance criteria was modified up or down by up to 20 % based on the Company’s relative total shareholder return (TSR) over the performance measurement period (“TSR Modifier”), but not above the maximum number of PSUs to be vested.

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Market condition awards:

The Company awarded PSUs with market requirements in 2021 and 2022.

The 2021 and 2022 PSU award opportunities are determined at a target number of share units, and the number of shares awarded is based on TSR, representing the measured return of the Company’s stock price (including assumed dividend reinvestment, if any) at the end of the three year period as compared to the stock prices (including assumed dividend reinvestment, if any) of a group of industry peers.

The 2021 and 2022 PSU awards are accounted for as a market condition plan with service vesting requirements, with expense recognized over the service period without regard to the level of TSR attainment or shares awarded.

The Company awarded PSUs with market requirements in fiscal years 2021, 2022 and 2023.

These PSU award opportunities are determined at a target number of share units, and the number of shares awarded is based on TSR, representing the measured return of the Company’s stock price (including assumed dividend reinvestment, if any) at the end of the three year period as compared to the stock prices (including assumed dividend reinvestment, if any) of a group of industry peers.

The fiscal year 2021, 2022 and 2023 PSU awards are accounted for as a market condition plan with service vesting requirements, with expense recognized over the service period without regard to the level of TSR attainment or shares awarded.

The actual number of shares awarded at the end of the measurement period may range from a minimum of zero to a maximum of two times target.

TSR is determined over eight distinct quarterly periods as measured from January 1 of the grant year of the award through the end of each quarterly period starting with the first quarter ending in the second year following the grant of the award;

For the fiscal year 2021 and 2022 awards, TSR is determined over eight distinct quarterly periods as measured from January 1 of the grant year of the award through the end of each quarterly period starting with the first quarter ending in the second year following the grant of the award.

For the 2023 awards, TSR is determined over four distinct quarterly periods as measured from January 1 of the grant year of the award through the end of each quarterly period starting with the first quarter ending in the third year following the grant of the award;

earned payouts from each TSR measurement period are averaged to determine the final payout at the conclusion of the three-year period.

The fair value for this award was determined by using Monte Carlo simulations of stock price correlation, projected dividend yields and other variables over the three-year time horizon matching the TSR measurement period.

In 2022, the Company awarded a new one-time grant of PSUs with market requirements, called the Breakout Performance Award (BPA).

The BPA has a target number of share units, and the number of shares awarded is based on the absolute return on the Company’s stock during a four-year measurement period.

In fiscal year 2022, the Company awarded a new one-time grant of PSUs with market requirements, called the Breakout Performance Award (BPA).

In fiscal year 2023, 46,046 additional share units under the fiscal year 2022 BPA were awarded to new members of senior management and 4,807 shares were issued due to retirement vesting.

The BPA has a target number of

share units, and the number of shares awarded is based on the absolute return on the Company’s stock during a four-year measurement period.

The service vesting requirements of the BPA award are four years for one half of the award and five years for the remaining half.

The BPA award is accounted for as a market condition plan with service vesting requirements, with expense recognized over the service periods without regard to the level of absolute return attainment or shares awarded.

The actual number of BPA shares awarded at the end of the measurement period may

range from a minimum of zero to a maximum of three times target.

The actual number of BPA shares awarded at the end of the measurement period may range from a minimum of zero to a maximum of three times target.

The fair value for this award was determined by using Monte Carlo simulations of stock price correlation, projected dividend yields and other variables over the four-year time horizon matching the BPA measurement period.

At December 31, 2023, a maximum of 4.8 million shares have been reserved for issuance for all PSU awards.

The Company recognized $ 12.6 million and $ 6.8 million of compensation expense in 2022 and 2021, respectively, for all PSU awards, and compensation income of $ 6.7 million in 2020 due to decreased financial performance attainment estimates, which required reversal of previously-recognized expense.

Forfeited share units in 2020, 2021 and 2022 were 50,050 , 71,801 and 159,298 , respectively, with a weighted average grant date fair value of $ 1.4 million, $ 1.7 million and $ 3.4 million, respectively.

The Company recognized $ 14.6 million, $ 12.6 million and $ 6.8 million of compensation expense in fiscal years 2023, 2022 and 2021, respectively, for all PSU awards.

Forfeited share units in fiscal years 2023, 2022 and 2021 were 19,863 , 159,298 , and 71,801 , respectively, with a weighted average grant date fair value of $ 0.5 million, $ 3.4 million, and $ 1.7 million, respectively.

The fair value of each PSU award, the target share units awarded and projected future compensation expense to be recognized for these awards, including actual and estimated forfeitures at December 31, 2023 was as follows:

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PSU Award Performance Period Award Fair Value December 31, 2023 Unrecognized Compensation Expense Compensation Expense Expected to be Recognized in the next 12 months Target Share Units

2020-2022 $ 13.5 $ — $ — 674

2021-2023 $ 9.3 3.1 3.1 459

2022-2024 $ 11.0 8.9 3.9 494

2022-2025 BPA $ 18.5 12.1 3.3 811

Fiscal Year 2021-2023 $ 9.3 $ — $ — 459

Fiscal Year 2022-2024 $ 11.0 3.9 3.9 494

Fiscal Year 2023-2025 $ 12.6 8.9 4.2 330

Fiscal Year 2022-2025 BPA $ 20.3 11.0 4.4 857

Total $ 23.8 $ 12.5

At December 31, 2022, the 2020 PSU awards vested with financial performance attainment between threshold and target and at 0 % for the TSR Modifier, resulting in the issuance of 182,628 shares in the first quarter of 2023.

At December 31, 2021, the 2019 PSU awards vested with financial performance attainment between threshold and target and at - 20 % for the TSR Modifier, resulting in the issuance of 103,621 shares in the first quarter of 2022.

At December 31, 2020, the 2018 PSU awards vested between threshold and target attainment, and at - 10 % for the TSR Modifier, resulting in 301,170 shares being issued in early 2021.

In fiscal year 2023, the fiscal year 2021 PSU awards vested with TSR attainment of 198.5 %, resulting in the issuance of 848,194 shares in the first quarter of fiscal year 2024.

In fiscal year 2022, the fiscal year 2020 PSU awards vested with financial performance attainment between threshold and target and at 0 % for the TSR Modifier, resulting in the issuance of 182,628 shares in the first quarter of fiscal year 2023.

In fiscal year 2021, the fiscal year 2019 PSU awards vested with financial performance attainment between threshold and target and at - 20 % for the TSR Modifier, resulting in 103,621 shares in the first quarter of fiscal year 2022.

Income (loss) before income taxes for the Company’s U.S.

operations was as follows:

(In millions) 2022 2021 2020

(In millions) 2023 2022 Revised 2021 Revised

$ 258.2 $ 394.3 $ 168.7

37.0 ( 39.7 ) 64.7

Income (loss) before income taxes $ 162.0 $ 10.6 $ ( 1,481.9 )

Income before income taxes $ 295.2 $ 354.6 $ 233.4

The income tax provision (benefit) was as follows:

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Total ( 139.5 ) ( 3.2 ) 17.0

Income tax provision $ 15.5 $ 26.8 $ 77.7

Income tax provision (benefit) $ ( 128.2 ) $ 15.5 $ 26.8

The following is a reconciliation of income taxes computed at the statutory U.S.

Federal income tax rate to the actual effective income tax provision (benefit):

(In millions) 2022 2021 2020

(In millions) 2023 2022 Revised 2021 Revised

Taxes computed at the federal rate $ 62.0 $ 74.5 $ 49.0

9 unchanged sentences

Other ( 1.5 ) ( 1.4 ) ( 2.1 )

Income tax provision $ 15.5 $ 26.8 $ 77.7

The Company’s income tax expense has been impacted by the effects of valuation allowances on federal and state deferred tax assets for years 2020 through 2022.

Income tax provision (benefit) $ ( 128.2 ) $ 15.5 $ 26.8

The Company’s income tax expense has been impacted by the effects of valuation allowances on federal and state deferred tax assets for fiscal years 2021 through 2023.

The Company recognizes deferred tax assets to the extent it believes these deferred tax assets are more likely than not to be realized.

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If the Company determines that it would not be able to realize its deferred tax assets in the future in excess of their recorded net amount, an adjustment to the deferred tax asset valuation allowance would result.

In 2020, ATI’s U.S.

operations returned to a three-year cumulative loss position, limiting the ability to utilize future projections as verifiable sources of income when analyzing the need for a valuation allowance.

The consolidated income tax provision for fiscal year 2020 included a $ 335.5 million increase to the deferred tax asset valuation allowance based on an analysis of the expected more likely than not realization of deferred tax assets and liabilities within applicable expiration periods, primarily on U.S.

federal and state tax attributes.

In 2021, ATI incurred tax expense associated with the valuation allowance due to the postretirement medical benefit settlement gain along with the U.S.

operations plus permanent adjustments (goodwill and Global Intangible Low-Taxed Income (GILTI)) being a loss.

The overall balance of the valuation allowance decreased in total mainly due to the overall change in AOCI associated with the Company’s retirement benefit plans.

In 2022, ATI recorded a tax benefit associated with the valuation allowance due to the current year income for the U.S.

Since fiscal year 2020, ATI’s U.S.

operations were in a three-year cumulative loss position, limiting the ability to utilize future projections as verifiable sources of income when analyzing the need for a valuation allowance.

This cumulative loss continued until fiscal year 2023 when ATI exited the three-year cumulative loss position and the Company concluded it was appropriate to consider future projections as a source of income when analyzing the need for a valuation allowance.

In fiscal year 2023, ATI recorded a tax benefit associated with the valuation allowance due to the current year income for the U.S.

operations and a $ 140.3 million additional benefit was recorded related to the valuation allowance release associated with ATI’s ability to utilize projections for future income.

Revised fiscal years 2022 and 2021 results reflect the voluntary change, as discussed in Note 1, in the method of accounting for recognizing actuarial gains and losses for defined benefit pension plans whereby gains or losses from the remeasurement of the projected benefit obligation and plan assets for these pension plans are immediately recognized in earnings.

These gains and losses were historically recognized in AOCI which included a full valuation allowance offset in AOCI.

Overall, the underlying liability associated with pension did not change with this accounting policy change, therefore the deferred tax asset did not change for each year, only the reclassification of taxes recorded changed from AOCI on the consolidated balance sheet to the consolidated statement of operations.

Given the full valuation allowance offset, there was no impact to earnings from this reclassification in prior years.

In fiscal year 2022, ATI recorded a tax benefit associated with the valuation allowance due to the current year income for the U.S.

As a result of the current year income, ATI utilized net operating loss carryovers which in turn resulted in a release of the corresponding valuation allowance on the operating loss deferred tax assets.

The provision for income taxes for the year ended December 31, 2022, is mainly attributable to the Company’s foreign operations and state income tax expense associated with states that limit net operating loss utilization.

The provision for income taxes for the fiscal year ended January 1, 2023, is mainly attributable to the Company’s foreign operations and state income tax expense associated with states that limit net operating loss utilization.

On May 12, 2022, the Company sold its Sheffield, UK operations which resulted in a pre-tax loss of $ 112.2 million (see Note 6 for further explanation) for which the benefit was disallowed for tax purposes, resulting in a $ 23.0 million tax expense impact as shown in the effective tax rate reconciliation table above.

The provision for income taxes for the year ended December 31, 2021 is mainly attributable to the $ 15.5 million in discrete tax effects related to the postretirement medical benefits settlement gain discussed in Note 14, in accordance with ATI’s accounting policy for recognizing deferred tax amounts stranded in accumulated other comprehensive income (loss) (AOCI).

This $ 15.5 million is presented within two lines in the above table, $ 11.6 million within valuation allowance and $ 3.9 million on the

recognition of stranded deferred tax balance line which represents the difference between current and historical tax rates in AOCI.

In fiscal year 2021, ATI incurred tax expense associated with the valuation allowance due to the postretirement medical benefit settlement gain along with the U.S.

operations plus permanent adjustments (goodwill and Global Intangible Low-Taxed Income (GILTI)) being a loss.

The provision for income taxes for the fiscal year ended January 2, 2022 is mainly attributable to the $ 15.5 million in discrete tax effects related to the postretirement medical benefits settlement gain discussed in Note 14, in accordance with ATI’s accounting policy for recognizing deferred tax amounts stranded in AOCI.

This $ 15.5 million is presented within two lines in the above table, $ 11.6 million within valuation allowance and $ 3.9 million on the recognition of stranded deferred tax balance line which represents the difference between current and historical tax rates in AOCI.

The $ 11.6 million has two components:

$ 5.2 million of additional required valuation allowance on ATI’s net deferred tax assets following the reduction of deferred tax liabilities in AOCI associated with the recognition of the AOCI portion of the retirement benefit settlement gain of $ 21.9 million, and $ 6.4 million of “trapped” valuation allowances remaining in AOCI from prior periods that are now recognized upon extinguishment of the retirement benefit plan (see Notes 14 and 15).

In 2021, the Company allocated $ 12.2 million of the goodwill from ATI’s Forged Products reporting unit to the sale of Flowform Products (see Note 6 for further explanation) which was non-deductible for tax purposes, resulting in a $ 2.6 million expense included as a reconciling item in the table above.

In 2020, the Company recorded a $ 287.0 million pre-tax charge for goodwill impairment (see Note 5 for additional information) which included a portion that was non-deductible for tax purposes, resulting in a $ 50.4 million expense included as a reconciling item in the table above.

The Company also maintained valuation allowances on deferred tax amounts recorded in AOCI in 2022, 2021 and 2020 of $ 67.5 million, $ 15.8 million, and $ 50.3 million, respectively, which are not reflected in the preceding table reconciling amounts recognized in the income tax provision (benefit) recorded in the statement of operations (see Note 15).

In fiscal year 2021, the Company allocated $ 12.2 million of the goodwill from ATI’s Forged Products reporting unit to the sale of Flowform Products (see Note 6 for further explanation) which was non-deductible for tax purposes, resulting in a $ 2.6 million expense included as a reconciling item in the table above.

The Company also maintained valuation allowances on deferred tax amounts recorded in AOCI in fiscal years 2023, 2022 and 2021 of $ 24.1 million, $ 23.9 million, and $ 5.1 million, respectively, which are not reflected in the preceding table reconciling amounts recognized in the income tax provision (benefit) recorded in the statement of operations (see Note 15).

Additionally, the Tax Cuts and Jobs Act (Tax Act) requires a current year inclusion in U.S.

federal taxable income of certain earnings of controlled foreign corporations, commonly referred to as GILTI.

In 2022, due to the loss on the sale of the Sheffield operations, there is no current year inclusion.

In 2021, GILTI represents an unfavorable tax rate item of $ 2.0 million which is primarily related to the Company’s income associated with the PRS joint venture operations in China.

The impact in 2020 related to GILTI is minimal due to the global COVID-19 pandemic.

In fiscal years 2023 and 2021, the amount of GILTI represents a full inclusion due to ATI’s net operating loss utilization and inability to utilize GILTI credits when taxable income is zero.

In fiscal year 2022, due to the loss on the sale of the Sheffield operations, there is no current year inclusion.

The Company has elected to recognize GILTI liabilities as an element of income tax expense in the period incurred.

In the fourth quarter of 2021, the Company was granted a preferential tax rate related to the PRS joint venture operations in China for tax years 2021 through 2023.

In the fourth quarter of fiscal year 2021, the Company was granted a preferential tax rate related to the PRS joint venture operations in China for tax years 2021 through 2023.

The preferential tax rate is 15%, compared to the statutory rate of 25%.

The Company must re-apply for the High Tech-New Enterprise status every three years to be eligible for the preferential rate.

This same preferential tax rate was in effect for tax years 2018 through 2020.

As of December 31, 2023, the preferential tax rate has expired, and the Company will prospectively utilize the 25% statutory tax rate pending a ruling by the Chinese government on a new preferential rate tax application which will be filed in 2024.

Deferred income taxes result from temporary differences in the recognition of income and expense for financial and income tax reporting purposes, and differences between the fair value of assets acquired in business combinations accounted for as purchases for financial reporting purposes and their corresponding tax bases.

Deferred income taxes represent future tax benefits or costs to be recognized when those temporary differences reverse.

The categories of assets and liabilities that have resulted in differences in the timing of the recognition of income and expense at December 31, 2022 and 2021 were as follows:

The categories of assets and liabilities that have resulted in differences in the timing of the recognition of income and expense at December 31, 2023 and January 1, 2023 were as follows:

(In millions) 2023 2022

4 unchanged sentences

Tax credits 43.5 42.0

Research and development 20.7 7.4

Inventory valuation 1.1 —

Other items 107.5 95.6

3 unchanged sentences

Deferred income tax liabilities

Bases of property, plant and equipment 122.2 114.0

Basis of property, plant and equipment 124.8 122.2

Inventory valuation — 17.1

Bases of amortizable intangible assets 9.0 18.0

Basis of amortizable intangible assets 14.9 16.4

Other items 25.5 23.0

Total deferred tax liabilities 165.2 178.7

Net deferred tax liability $ ( 13.3 ) $ ( 13.3 )

Changes in the valuation allowance for deferred tax assets in 2022 in the above table compared to 2021 include the following:

• $ 50 million of valuation allowance recorded as income tax benefit and included in the reconciliation of the current year income tax provision;

Net deferred tax asset (liability) $ 131.0 $ ( 13.3 )

Changes in the valuation allowance for deferred tax assets in fiscal year 2023 in the above table compared to fiscal year 2022 include the following:

• $ 198.8 million of valuation allowance recorded as income tax benefit and included in the reconciliation of the current year income tax provision and $ 7.8 million of a benefit related to current year activity is recorded on the state and local income tax line within the rate reconciliation above.

• Reductions in the valuation allowance related to the benefit in AOCI of $ 0.2 million (as discussed in Note 15).

• $ 13.6 million removal of valuation allowance associated with the sale of the Sheffield operations.

• $ 43.4 million related to the presentation of state taxes and certain adjustments that have a direct valuation allowance offset, resulting in no net tax expense or benefit.

Due to the change in future tax rates in Pennsylvania, the Company recorded an overall decrease in deferred tax assets and liabilities which resulted in an offsetting removal of the valuation allowance.

As part of the Tax Act in 2017, a limitation on deductible interest expense was created, which limits deductible interest expense to 30% of adjusted taxable income, as defined in the Tax Act, for various periods.

The Company is not limited in its deductible interest expense for 2022 and is utilizing part of the carryover amount associated with the 2021 disallowance of interest expense.

A deferred tax asset associated with the carryover limitation is within the “other items” asset category above at December 31, 2022 and December 31, 2021.

In fiscal year 2023, the deferred tax liability related to inventory changed from a deferred tax liability to a deferred tax asset.

This change is related to the recognition of the deferred tax liability associated with the accounting policy change from the LIFO inventory cost method adopted by the Company during the fourth quarter of fiscal year 2021, which for tax purposes is recognized over four years versus one year for book purposes.

The following summarizes the carryforward periods for the tax attributes related to NOLs and credits by jurisdiction.

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Income taxes paid, net $ 15.8 $ 18.5 $ 13.6

In general, the Company is responsible for filing consolidated U.S.

federal, foreign and combined, unitary or separate state income tax returns.

The Company is responsible for paying the taxes relating to such returns, including any subsequent adjustments resulting from the redetermination of such tax liability by the applicable taxing authorities.

Deferred taxes of $ 7.7 million have been recorded for foreign withholding taxes on earnings expected to be repatriated to the U.S.

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Uncertain tax positions are recorded using a two-step process based on (1) determining whether it is more-likely-than-not the tax positions will be sustained on the basis of the technical merits of the position and (2) for those positions that meet the more-likely-than-not recognition threshold, the Company records the largest amount of the tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority.

The changes in the liability for unrecognized income tax benefits for the years ended December 31, 2022, 2021 and 2020 were as follows:

The changes in the liability for unrecognized income tax benefits for the fiscal years ended December 31, 2023, January 1, 2023 and January 2, 2022 were as follows:

(In millions) 2023 2022 2021

Balance at beginning of year $ 14.2 $ 15.2 $ 14.4

Balance at beginning of fiscal year $ 9.1 $ 14.2 $ 15.2

Increases in prior period tax positions 1.2 — —

Decreases in prior period tax positions — ( 3.3 ) —

1 unchanged sentence

Expiration of the statute of limitations ( 1.4 ) ( 1.8 ) ( 1.3 )

Balance at end of year $ 9.1 $ 14.2 $ 15.2

For years ended December 31, 2022, 2021 and 2020, the liability includes $ 7.8 million, $ 12.3 million and $ 13.0 million, respectively, of unrecognized tax benefits that are classified within deferred income taxes as a reduction of NOL carryforwards and other tax attributes.

Balance at end of fiscal year $ 8.9 $ 9.1 $ 14.2

For fiscal years ended December 31, 2023, January 1, 2023 and January 2, 2022, the liability includes $ 7.2 million, $ 7.8 million and $ 12.3 million, respectively, of unrecognized tax benefits that are classified within deferred income taxes as a reduction of NOL carryforwards and other tax attributes.

The total estimated unrecognized tax benefit that, if recognized, would affect ATI’s effective tax rate is approximately $ 1.7 million.

1 unchanged sentence

The Company recognizes accrued interest and penalties related to uncertain tax positions as income tax expense.

The amounts accrued for interest and penalty charges for the years ended December 31, 2022, 2021 and 2020 were not significant.

At December 31, 2022 and 2021, the accrued liabilities for interest and penalties related to unrecognized tax benefits were $ 1.4 million and $ 1.9 million, respectively.

The amounts accrued for interest and penalty charges for the fiscal years 2023, 2022 and 2021 were not significant.

At December 31, 2023 and January 1, 2023, the accrued liabilities for interest and penalties related to unrecognized tax benefits were $ 1.3 million and $ 1.4 million, respectively.

The Company, and/or one of its subsidiaries, files income tax returns in the U.S.

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These are made from nickel-based alloys and superalloys, titanium and titanium-based alloys, and a variety of other specialty materials.

Capabilities range from cast/wrought and powder alloy development to final production of highly engineered finished components, including those used for next-generation jet engine forgings and 3D-printed aerospace products.

Capabilities range from cast/wrought and powder alloy development to final production of highly engineered finished components, and 3D-printed aerospace products.

The AA&S segment includes the Specialty Alloys & Components business, the Specialty Rolled Products business, the 60 %-owned STAL PRS joint venture, and the Uniti and A&T Stainless 50 %-owned joint ventures that are reported in AA&S segment results under the equity method of accounting.

See Note 7 for further information on the Company’s joint ventures.

AA&S is focused on delivering high-value flat products primarily to the energy, aerospace, and defense markets, which comprise approximately 50 % of its revenue.

Other important end markets for AA&S include automotive and electronics.

AA&S is focused on delivering high-value flat products primarily to the energy, aerospace, and defense markets, which comprise over 60 % of its revenue.

Other important end markets for AA&S include electronics, medical and automotive.

AA&S produces nickel-based alloys, titanium and titanium-based alloys, and specialty alloys in a variety of forms including plate, sheet, and strip products.

On December 2, 2020, the Company announced a strategic repositioning of its SRP business, which includes exiting production of lower-margin standard stainless sheet products, streamlining the production footprint of

the AA&S segment and making certain capital investments to increase its focus on higher-margin products and its aerospace & defense end markets.

See Note 19 for further discussion of this strategic realignment and its associated long-lived asset impairments, restructuring and other charges recorded in the fourth quarter of 2020.

The measure of segment EBITDA categorically excludes income taxes, depreciation and amortization, corporate expenses, net interest expense, closed operations and other expenses, charges for goodwill and asset impairments, restructuring and other charges, strike related costs, debt extinguishment charges and gains or losses on asset sales and sales of businesses.

The measure of segment EBITDA categorically excludes income taxes, depreciation and amortization, corporate expenses, net interest expense, closed operations and other expenses, charges for goodwill and asset impairments, restructuring and other charges, strike related costs, pension remeasurement gains/losses, debt extinguishment charges and gains or losses on asset sales and sales of businesses.

Management believes segment EBITDA, as defined, provides an appropriate measure of controllable operating results at the business segment level.

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Total sales to external customers $ 4,173.7 $ 3,836.0 $ 2,799.8

Total international sales were $ 1,617.4 million in 2022, $ 1,264.9 million in 2021, and $ 1,173.0 million in 2020.

Of these amounts, sales by operations in the United States to customers in other countries were $ 1,217.9 million in 2022, $ 846.3 million in 2021, and $ 812.3 million in 2020.

(In millions) 2022 2021 2020

Total international sales were $ 1,922.9 million in fiscal year 2023, $ 1,617.4 million in fiscal year 2022, and $ 1,264.9 million in fiscal year 2021.

Of these amounts, sales by operations in the United States to customers in other countries were $ 1,498.7 million in fiscal year 2023, $ 1,217.9 million in fiscal year 2022, and $ 846.3 million in fiscal year 2021.

(In millions) 2023 2022 Revised 2021 Revised

High Performance Materials & Components $ 433.6 $ 303.4 $ 170.3

2 unchanged sentences

Corporate expenses ( 62.3 ) ( 60.3 ) ( 53.7 )

Closed operations and other expenses ( 12.1 ) ( 4.8 ) ( 7.4 )

Closed operations and other income (expenses) ( 13.3 ) ( 5.6 ) 3.1

Depreciation & amortization ( 146.1 ) ( 142.9 ) ( 143.9 )

2 unchanged sentences

Strike related costs — — ( 63.2 )

Retirement benefit settlement gain (See Note 14) — 64.9 —

Impairment of goodwill (See Note 5) — — ( 287.0 )

Joint venture restructuring credit (charge) (See Note 7) 0.9 — ( 2.4 )

Retirement benefit settlement gain (loss) (See Note 14) ( 41.7 ) — 64.9

Pension remeasurement gain (loss) (See Note 14) ( 26.8 ) 100.3 147.2

Joint venture restructuring credit (See Note 7) — 0.9 —

Debt extinguishment charge (See Note 10) — — ( 65.5 )

Gain (loss) on asset sales and sale of business, net ( 0.6 ) ( 105.4 ) 13.8

Income (loss) before income taxes $ 162.0 $ 10.6 $ ( 1,481.9 )

Income before income taxes $ 295.2 $ 354.6 $ 233.4

Beginning in 2020, the U.S.

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

Results for the fiscal year ended December 31, 2022 include $ 34 million related to this government sponsored COVID relief in segment EBITDA.

HPMC segment results for 2022 include $ 27 million of benefits from the AMJP Program and employee retention credits, and AA&S segment results for 2022 include $ 7 million in employee retention credits.

Results for the fiscal year ended January 1, 2023 include $ 34 million related to this government sponsored COVID relief in segment EBITDA.

HPMC segment results for fiscal year 2022 include $ 27 million of benefits from the AMJP Program and employee retention credits, and AA&S segment results for fiscal year 2022 include $ 7 million in employee retention credits.

Corporate expenses are primarily classified as selling and administrative expenses in the consolidated statement of operations, and consist of salaries and benefits, incentive compensation, facility leases and other costs of ATI’s corporate functions.

Corporate expenses in 2022 reflect business transformation initiatives and higher incentive compensation costs compared to the prior year periods.

Closed operations and other expenses are primarily presented in selling and administrative expenses in the consolidated statements of operations.

These items included costs at closed facilities, including legal matters, environmental, real estate and other facility costs, and changes in foreign currency remeasurement impacts primarily related to ATI’s European Treasury Center operation.

Closed operations and other expenses in 2022 primarily relate to unfavorable foreign currency remeasurement impacts primarily related to ATI’s European Treasury Center operation and higher legal costs for closed facilities compared to prior year periods.

During the fiscal year ended December 31, 2021, the Company recorded $ 63.2 million in strike related costs, of which $ 59.7 million were excluded from AA&S segment EBITDA and $ 3.5 million were excluded from HPMC segment EBITDA.

Closed operations and other expenses in fiscal year 2023 reflect higher retirement benefit expense and higher insurance costs associated with an outstanding insurance claim involving our captive insurance company compared to prior year periods.

Depreciation expense in fiscal year 2023 includes $ 3.8 million of accelerated depreciation of fixed assets related to the restructuring of our European operations and the closure of our Robinson, PA operations.

During the fiscal year ended January 2, 2022, the Company recorded $ 63.2 million in strike related costs, of which $ 59.7 million were excluded from AA&S segment EBITDA and $ 3.5 million were excluded from HPMC segment EBITDA.

These items primarily consisted of overhead costs recognized in the period due to below-normal operating rates, higher costs for outside conversion activities, and ongoing benefit costs for striking employees.

Gain (loss) on asset sales and sales of businesses, net, for 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.

The $ 13.8 million net gain on asset sales in 2021 consists of a gain on the sale of the Company’s Flowform Products business.

See Note 6 for further explanation regarding the sale of business transactions in 2022 and 2021.

The $ 2.5 million net gain on asset sales in 2020 consists of a gain on the sale of certain oil and gas rights (see Note 9).

Loss on asset sales and sales of businesses for fiscal year 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.

Gain (loss) on asset sales and sales of businesses, net, for fiscal year 2022 relate to a $ 112.2 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.

The $ 13.8 million gain on asset sales in fiscal year 2021 consists of a gain on the sale of the Company’s Flowform Products business.

See Note 6 for further explanation regarding the sale of business transactions in fiscal years 2022 and 2021.

Certain additional information regarding the Company’s business segments is presented below:

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Total assets $ 4,985.1 $ 4,445.6 $ 4,285.2

Fiscal Year Fiscal Year Fiscal Year

($ in millions) 2023 Percent

8 unchanged sentences

Restructuring and other charges

For the year ended December 31, 2022, restructuring and other charges were $ 23.7 million, which included a $ 28.5 million charge for a litigation settlement (see Note 21), partially offset by $ 4.8 million of restructuring credits for reductions in severance-related reserves related to approximately 110 employees based on changes in planned operating rates and revised workforce estimates.

For the year ended December 31, 2021, restructuring and other charges were a net benefit of $ 10.5 million, which primarily included $ 11.3 million of reversals of previously-recognized restructuring charges separately classified on the consolidated statement of operations, as well as an $ 0.8 million charge for inventory valuation reserves classified in cost of sales on the consolidated statement of operations related to the 2020 idling of the Albany, OR primary titanium facility.

Restructuring items in 2021 include a $ 12.0 million reduction in severance-related reserves related to approximately 350 employees based on changes in planned operating rates and revised workforce reduction estimates, partially offset by $ 0.7 million of other costs related to facility idlings.

For the year ended December 31, 2020, the Company recorded restructuring and other charges of $ 1,132.1 million, predominantly related to the Company’s December 2020 announcement to cease production of standard stainless sheet products.

On December 2, 2020, the Company announced a strategic repositioning of its SRP business within the AA&S segment, with a focus of increasing emphasis on the specialty rolled products portion of its product portfolio, which is comprised of titanium-based alloys including aerospace-grade titanium plate products, nickel-based alloys, and stainless products with more differentiated characteristics for specialty applications, including thin-gauge PRS.

Restructuring charges recorded on the consolidated statement of operations for the year ended December 31, 2020 were $ 1,107.5 million, comprised of $ 1,041.5 million of non-cash asset impairment charges, $ 60.5 million of employee benefit-related costs, and $ 5.5 million of other costs related to facility idlings.

The December 2, 2020 decision to exit production of standard stainless products represented a significant indicator of impairment in the carrying value of certain long-lived assets.

Based on projected cash flows of the Brackenridge, PA operations, including the HRPF, the Company completed a fair value analysis as of the beginning of the fourth quarter of 2020 and recognized a $ 1,032.6 million impairment charge for this facility based on an estimated fair value of $ 354 million.

This long-lived asset impairment charge was determined using a held in use framework and an income approach, which represents Level 3 unobservable information in the fair value hierarchy.

This impairment assessment and valuation method require the Company to make estimates and assumptions regarding future operating results, cash flows, changes in working capital and capital expenditures, selling prices, profitability, and the cost of capital.

Many of these assumptions are determined by reference to market participants the Company has identified.

For example, the weighted average cost of capital used in the discounted cash flow assessment was 9.3 % and the long-term growth rate was 2 %.

Other long-lived asset impairment charges of $ 8.9 million were also recognized in 2020 for various AA&S segment operations identified for closure as part of the standard stainless sheet exit decision.

Restructuring charges in 2020 also include $ 60.5 million of employee benefit costs, representing severance, supplemental unemployment and medical benefits for the elimination of approximately 1,400 positions related to the standard stainless exit, as well as for employees impacted by the idling of the Albany, OR primary titanium operations in the fourth quarter of 2020, and workforce right-sizing actions, including both involuntary reductions and voluntary retirement incentive programs implemented throughout 2020 to better match the Company’s cost structure to expected demand, primarily as a result of economic challenges created by the COVID-19 pandemic.

Other costs of $ 5.5 million included in 2020 restructuring charges primarily relate to asset retirement and environmental obligations associated with facility idlings.

Other charges for the year ended December 31, 2020 include:

• $ 17.4 million of termination benefits for pension and postretirement medical obligations related to facility closures from the standard stainless exit (see Note 14 for further explanation).

These costs are classified within nonoperating retirement benefit expense in the consolidated statements of operations.

• $ 7.2 million of other charges for inventory valuation reserves, classified in cost of sales on the consolidated statement of operations, primarily related to excess raw material and work in process inventory at the idled Albany, OR primary titanium facility.

For the fiscal year ended December 31, 2023, restructuring and other charges were $ 31.4 million and include $ 7.7 million of severance-related restructuring charges and $ 23.7 million of charges included within cost of sales on the consolidated statements of operations.

The $ 7.7 million of severance-related restructuring charges represent severance for the involuntary reduction of approximately 110 employees primarily for the restructuring of the European operations and across ATI’s domestic operations in conjunction with the continued transformation.

The $ 23.7 million of charges within cost of sales include $ 11.5 million of start up costs, $ 1.9 million of costs associated with an unplanned outage at our Lockport, NY facility, and $ 10.3 million primarily for asset write-offs for the restructuring of our European operations and the closure of our Robinson, PA operations.

For the fiscal year ended January 1, 2023, restructuring and other charges were $ 23.7 million, which included a $ 28.5 million charge for a litigation settlement (see Note 21), partially offset by $ 4.8 million of restructuring credits for reductions in severance-related reserves related to approximately 110 employees based on changes in planned operating rates and revised workforce estimates.

For the fiscal year ended January 2, 2022, restructuring and other charges were a net benefit of $ 10.5 million, which primarily included $ 11.3 million of reversals of previously-recognized restructuring charges separately classified on the consolidated statement of operations, as well as an $ 0.8 million charge for inventory valuation reserves classified in cost of sales on the consolidated statement of operations related to the fiscal year 2020 idling of the Albany, OR primary titanium facility.

Restructuring items in fiscal year 2021 include a $ 12.0 million reduction in severance-related reserves related to approximately 350 employees based on changes in planned operating rates and revised workforce reduction estimates, partially offset by $ 0.7 million of other costs related to facility idlings.

Restructuring reserves for severance cost activity is as follows:

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Benefit Costs

December 31, 2022 December 31, 2021 December 31, 2020

Beginning of year balance $ 17.7 $ 43.4 $ 4.5

December 31, 2023 January 1, 2023 January 2, 2022

Beginning of fiscal year balance $ 9.8 $ 17.7 $ 43.4

Additions/(Adjustments) 7.7 ( 4.8 ) ( 12.0 )

Payments ( 2.3 ) ( 3.1 ) ( 13.7 )

End of year balance $ 9.8 $ 17.7 $ 43.4

Of this $ 9.8 million restructuring reserve balance at December 31, 2022, $ 5.4 million is recorded in other current liabilities and $ 4.4 million is recorded in other long-term liabilities on the December 31, 2022 consolidated balance sheet.

End of fiscal year balance $ 15.2 $ 9.8 $ 17.7

Of this $ 15.2 million restructuring reserve balance at December 31, 2023, $ 10.9 million is recorded in other current liabilities and $ 4.3 million is recorded in other long-term liabilities on the December 31, 2023 consolidated balance sheet.

Of this $ 9.8 million restructuring reserve balance at January 1, 2023, $ 5.4 million is recorded in other current liabilities and $ 4.4 million is recorded in other long-term liabilities on the January 1, 2023 consolidated balance sheet.

Per Share Information

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

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

(In millions, except per share amounts)

For the Years Ended December 31, 2022 2021 2020

Numerator for basic net income (loss) per common share -

Net income (loss) attributable to ATI $ 130.9 $ ( 38.2 ) $ ( 1,572.6 )

2023 2022 Revised 2021 Revised

Numerator for basic net income per common share -

Net income attributable to ATI $ 410.8 $ 323.5 $ 184.6

Effect of dilutive securities:

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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 $ 144.4 $ ( 38.2 ) $ ( 1,572.6 )

Denominator for basic net income (loss) per common share—weighted average shares 127.5 127.1 126.5

10.6 11.3 11.8

Numerator for diluted net income per common share -

Net income attributable to ATI after assumed conversions $ 421.4 $ 337.0 $ 200.8

Denominator for basic net income per common share—weighted average shares 128.1 127.5 127.1

Effect of dilutive securities:

2 unchanged sentences

3.5 % Convertible Senior Notes due 2025

Denominator for diluted net income (loss) per common share—adjusted weighted average shares and assumed conversions 151.2 127.1 126.5

Basic net income (loss) attributable to ATI per common share $ 1.03 $ ( 0.30 ) $ ( 12.43 )

Diluted net income (loss) attributable to ATI per common share $ 0.96 $ ( 0.30 ) $ ( 12.43 )

18.8 18.8 18.8

Denominator for diluted net income per common share—adjusted weighted average shares and assumed conversions 150.0 151.2 152.7

Basic net income attributable to ATI per common share $ 3.21 $ 2.54 $ 1.45

Diluted net income attributable to ATI per common share $ 2.81 $ 2.23 $ 1.32

Common stock that would be issuable upon the assumed conversion of the 2025 Convertible Notes, and the 2022 Convertible Notes prior to their maturity, 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.

The 2022 Convertible Notes were converted as of June 30, 2022 (see Note 10 for further explanation).

There were no anti-dilutive shares for 2022.

There were 25.6 million and 22.8 million anti-dilutive shares for 2021 and 2020, respectively.

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.

There were no anti-dilutive shares for fiscal years 2023, 2022 and 2021.

In February 2022 and April 2023, the Company’s Board of Directors authorized the repurchase of up to $ 150 million and $ 75 million, respectively, of ATI stock.

In fiscal year 2023, ATI used $ 85.2 million to repurchase 2.0 million shares of its common stock under both programs.

In fiscal year 2022, ATI used $ 139.9 million to repurchase 5.2 million shares of its common stock under the $ 150 million program.

In addition, in November 2023, the Company’s Board of Directors authorized the repurchase of an additional $ 150 million of ATI stock.

Effective January 2, 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 fiscal year 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 fiscal year 2023 of $ 85.8 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 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 2022, ATI used $ 139.9 million to repurchase 5.2 million shares of its common stock under this program.

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 Company’s Board of Directors without prior notice.

Commitments and Contingencies

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The Company is subject to various domestic and international environmental laws and regulations that govern the discharge of pollutants and disposal of wastes, and which may require that it investigate and remediate the effects of the release or disposal of materials at sites associated with past and present operations.

The Company could incur substantial cleanup costs, fines, and civil or criminal sanctions, third party property damage or personal injury claims as a result of violations or liabilities under these laws or noncompliance with environmental permits required at its facilities.

The Company could incur substantial cleanup costs, fines, and civil or criminal sanctions, third party property damage or personal injury claims as a result of violations or liabilities under

these laws or noncompliance with environmental permits required at its facilities.

The Company is currently involved in the investigation and remediation of a number of its current and former sites, as well as third party sites.

7 unchanged sentences

$ 7 million for formerly owned or operated sites for which the Company has remediation or indemnification obligations;

and $ 2 million for owned or controlled sites at which Company operations have been or plan to be discontinued.

$ 2 million for owned or controlled sites at which Company operations have been or plan to be discontinued;

and $ 1 million for sites utilized by the Company in its ongoing operations.

The Company continues to evaluate whether it may be able to recover a portion of future costs for environmental liabilities from third parties and to pursue such recoveries where appropriate.

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USM subsequently filed a claim challenging ATI Titanium’s right to suspend performance under the Supply Agreement.

ATI Titanium and USM reached a litigation settlement in 2022 for $ 28.5 million, which is reported within other (nonoperating) expense on the consolidated statement of operations and was paid in the year ended December 31, 2022.

ATI Titanium and USM reached a litigation settlement in fiscal year 2022 for $ 28.5 million, which is reported within other (nonoperating) expense on the consolidated statement of operations and was paid in the fiscal year ended January 1, 2023.

Quarterly Financial Data (Unaudited)

The following selected quarterly operating results for each quarter of fiscal years 2023 and 2022 have been revised to reflect the voluntary change in accounting method as described in Note 1.

Quarterly financial data for fiscal years 2023 and 2022 was as follows:

Quarter Ended

(In millions except share and per share amounts) April 2, 2023 July 2, 2023 October 1, 2023 December 31, 2023

Fiscal Year 2023 -

Sales $ 1,038.1 $ 1,046.0 $ 1,025.6 $ 1,064.0

Operating income 112.6 120.3 125.2 108.3

Net income 86.6 93.5 94.1 149.2

Net income attributable to ATI 84.5 90.4 90.2 145.7

Basic income attributable to ATI per common share* $ 0.66 $ 0.70 $ 0.70 $ 1.15

Diluted income attributable to ATI per common share* $ 0.58 $ 0.62 $ 0.62 $ 0.99

Quarter Ended

April 3, 2022 July 3, 2022 October 2, 2022 January 1, 2023

Fiscal Year 2022-

Sales $ 834.1 $ 959.5 $ 1,032.0 $ 1,010.4

Operating income 77.0 17.2 113.2 108.7

Net income 51.2 10.4 80.2 197.3

Net income attributable to ATI 46.9 6.7 76.9 193.0

Basic income attributable to ATI per common share* $ 0.37 $ 0.05 $ 0.59 $ 1.49

Diluted income attributable to ATI per common share* $ 0.33 $ 0.05 $ 0.53 $ 1.30

* The sum of quarterly earnings per share may not equal the annual earnings per share due to changes in the weighted-average shares between periods and the dilutive effect of dilutive share equivalents.

The comparability of the Company’s quarterly financial results during fiscal years 2023 and 2022 was impacted by certain items, as follows:

First quarter of fiscal year 2023 results include a $ 1.2 million pre-tax ($ 1.1 million, net of tax) charge for costs to restart the Company’s titanium operations in Albany, OR.

Second quarter of fiscal year 2023 results include pre-tax charges totaling $ 10.6 million ($ 10.2 million, net of tax), which include $ 4.5 million for start-up costs, $ 2.7 million of severance-related restructuring charges, $ 2.8 million primarily for asset write-offs related to the closure of our Robinson, PA operation, and $ 0.6 million for the loss on the sale of the Company’s Northbrook, IL operation.

Third quarter of fiscal year 2023 results include pre-tax net charges totaling $ 4.2 million ($ 4.0 million, net of tax), which include $ 2.8 million for start-up costs and $ 1.9 million of costs associated with an unplanned outage at the Company’s Lockport, NY melt facility, partially offset by a $ 0.5 million credit for restructuring charges, primarily related to lowered severance-related reserves based on changes in planned operating rates and revised workforce reduction estimates.

Fourth quarter of fiscal year 2023 results include net pre-tax charges totaling $ 88.3 million ($ 84.7 million, net of tax), which include $ 3.0 million for start-up costs, $ 5.5 million of severance-related restructuring charges, $ 11.3 million for inventory and asset write-offs related to the restructuring of the Company’s European operations, $ 26.8 million for a pension plan remeasurement loss, and $ 41.7 million for a pension plan settlement loss.

Fourth quarter of fiscal year 2023 results also include a $ 140.3 million discrete tax benefit primarily related to the reversal of a portion of deferred tax valuation allowances due to exiting the three-year cumulative loss condition for U.S.

Federal and state jurisdictions at fiscal year-end 2023.

First quarter of fiscal year 2022 results include net pre-tax net charges totaling $ 25.8 million ($ 25.8 million, net of tax), which include an $ 8.6 million litigation reserve for the case of US Magnesium, LLC v.

ATI Titanium LLC and a $ 25.1 million partial loss on the sale of the Company’s Sheffield, UK operations, partially offset by a $ 1.1 million credit for restructuring charges, primarily related to lowered severance-related reserves based on changes in planned operating rates and revised workforce reduction estimates and a $ 6.8 million gain on the sale of the Company’s Pico Rivera, CA operations.

Second quarter of fiscal year 2022 results include net pre-tax net charges totaling $ 85.8 million ($ 85.9 million, net of tax), which include an $ 87.1 million loss on the sale of our Sheffield, UK operations, which was completed in the second quarter of fiscal year 2022, partially offset by a $ 1.3 million credit for restructuring charges, primarily related to lowered severance-related reserves based on changes in planned operating rates and revised workforce reduction estimates.

Third quarter of fiscal year 2022 results include pre-tax net charges totaling $ 17.3 million ($ 16.3 million, net of tax), which include a $ 19.9 million litigation reserve, partially offset by a $ 2.6 million credit for restructuring charges, primarily related to lowered severance-related reserves based on changes in planned operating rates and revised workforce reduction estimates.

Fourth quarter of fiscal year 2022 results include a $ 100.3 million pre-tax and net of tax pension plan remeasurement gain.

Below reflects the quarterly impact of the change in accounting principle on our quarterly financial data presented:

(dollars in millions, except per share data) As Computed Under Previous Policy As Reported Under New Policy Effect of Accounting Change

Three months ended April 2, 2023

Net income $ 72.2 $ 86.6 $ 14.4

Net income attributable to ATI $ 70.1 $ 84.5 $ 14.4

Basic income attributable to ATI per common share* $ 0.55 $ 0.66 $ 0.11

Diluted income attributable to ATI per common share* $ 0.48 $ 0.58 $ 0.10

Three months ended July 2, 2023

Net income $ 79.1 $ 93.5 $ 14.4

Net income attributable to ATI $ 76.0 $ 90.4 $ 14.4

Basic income attributable to ATI per common share* $ 0.59 $ 0.70 $ 0.11

Diluted income attributable to ATI per common share* $ 0.52 $ 0.62 $ 0.10

Three months ended October 1, 2023

Net income $ 79.6 $ 94.1 $ 14.5

Net income attributable to ATI $ 75.7 $ 90.2 $ 14.5

Basic income attributable to ATI per common share* $ 0.59 $ 0.70 $ 0.11

Diluted income attributable to ATI per common share* $ 0.52 $ 0.62 $ 0.10

Three months ended December 31, 2023

Net income (loss) $ ( 550.1 ) $ 149.2 $ 699.3

Net income (loss) attributable to ATI $ ( 553.6 ) $ 145.7 $ 699.3

Basic income (loss) attributable to ATI per common share* $ ( 4.35 ) $ 1.15 $ 5.50

Diluted income (loss) attributable to ATI per common share* $ ( 4.35 ) $ 0.99 $ 5.34

(dollars in millions, except per share data) As Computed Under Previous Policy As Reported Under New Policy Effect of Accounting Change

Three months ended April 3, 2022

Net income $ 35.2 $ 51.2 $ 16.0

Net income attributable to ATI $ 30.9 $ 46.9 $ 16.0

Basic income attributable to ATI per common share* $ 0.24 $ 0.37 $ 0.13

Diluted income attributable to ATI per common share* $ 0.23 $ 0.33 $ 0.10

Three months ended July 3, 2022

Operating income (loss) $ ( 11.6 ) $ 17.2 $ 28.8

Net income (loss) $ ( 34.3 ) $ 10.4 $ 44.7

Net income (loss) attributable to ATI $ ( 38.0 ) $ 6.7 $ 44.7

Basic income (loss) attributable to ATI per common share* $ ( 0.31 ) $ 0.05 $ 0.36

Diluted income (loss) attributable to ATI per common share* $ ( 0.31 ) $ 0.05 $ 0.36

Three months ended October 2, 2022

Net income $ 64.4 $ 80.2 $ 15.8

Net income attributable to ATI $ 61.1 $ 76.9 $ 15.8

Basic income attributable to ATI per common share* $ 0.47 $ 0.59 $ 0.12

Diluted income attributable to ATI per common share* $ 0.42 $ 0.53 $ 0.11

Three months ended January 1, 2023

Net income $ 81.2 $ 197.3 $ 116.1

Net income attributable to ATI $ 76.9 $ 193.0 $ 116.1

Basic income attributable to ATI per common share* $ 0.60 $ 1.49 $ 0.89

Diluted income attributable to ATI per common share* $ 0.53 $ 1.30 $ 0.77

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

1 unchanged sentence

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-K

Item 8. Financial Statements and Supplementary Data