What changed in this filing

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Item 1. Financial Statements

2024-08-06 compared with 2024-04-30 · 294 added, 128 removed, 586 unchanged (42% of the section changed)

33 unchanged sentences

authorized- 500,000,000 shares;

issued- 133,796,517 shares at March 31, 2024 and 132,300,971 shares at December 31, 2023;

outstanding- 124,441,401 shares at March 31, 2024 and 126,879,099 shares at December 31, 2023

issued- 133,796,517 shares at June 30, 2024 and 132,300,971 shares at December 31, 2023;

outstanding- 124,463,814 shares at June 30, 2024 and 126,879,099 shares at December 31, 2023

Additional paid-in capital 1,712.9 1,697.1

Retained loss ( 4.0 ) ( 70.1 )

Retained earnings (loss) 78.4 ( 70.1 )

Treasury stock:

9,355,116 shares at March 31, 2024 and 5,421,872 shares at December 31, 2023

9,332,703 shares at June 30, 2024 and 5,421,872 shares at December 31, 2023

( 359.3 ) ( 184.0 )

8 unchanged sentences

(In millions, except per share amounts)

Quarter ended

March 31, 2024 April 2, 2023

Quarter ended Year-to-date period ended

June 30, 2024 July 2, 2023 June 30, 2024 July 2, 2023

Sales $ 1,095.3 $ 1,046.0 $ 2,138.2 $ 2,084.1

2 unchanged sentences

Selling and administrative expenses 88.9 85.4 170.9 166.0

Restructuring charges 0.2 —

Restructuring charges (credits) ( 1.9 ) 2.7 ( 1.7 ) 2.7

Loss (gain) on asset sales and sales of businesses, net ( 2.2 ) 0.7 ( 2.2 ) 0.7

Operating income 142.6 120.3 257.8 232.9

13 unchanged sentences

(In millions)

Quarter ended

March 31, 2024 April 2, 2023

Quarter ended Year-to-date period ended

June 30, 2024 July 2, 2023 June 30, 2024 July 2, 2023

Net income $ 85.6 $ 93.5 $ 154.0 $ 180.1

14 unchanged sentences

Comprehensive income 83.6 88.1 146.2 158.9

Comprehensive income attributable to noncontrolling interests 2.1 6.5

Comprehensive income (loss) attributable to noncontrolling interests 3.1 ( 2.6 ) 5.2 3.9

Comprehensive income attributable to ATI $ 80.5 $ 90.7 $ 141.0 $ 155.0

3 unchanged sentences

(In millions)

Quarter ended

March 31, 2024 April 2, 2023

Year-to-date period ended

June 30, 2024 July 2, 2023

Operating Activities:

Net income $ 154.0 $ 180.1

Adjustments to reconcile net income to net cash used in operating activities:

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

Depreciation and amortization 73.9 71.0

2 unchanged sentences

Net gains from disposal of property, plant and equipment ( 2.1 ) ( 0.3 )

Loss (gain) on sales of businesses — 0.6

Changes in operating assets and liabilities:

5 unchanged sentences

Accrued liabilities and other ( 84.4 ) ( 42.5 )

Cash used in operating activities ( 98.8 ) ( 285.2 )

Cash provided by (used in) operating activities 2.3 ( 217.1 )

Investing Activities:

1 unchanged sentence

Proceeds from disposal of property, plant and equipment 5.9 1.6

Transaction costs for sales of businesses, net of proceeds — ( 0.3 )

Other 3.0 1.2

2 unchanged sentences

Payments on long-term debt and finance leases ( 14.1 ) ( 11.3 )

Net payments under credit facilities ( 4.9 ) ( 16.8 )

Net borrowings (payments) under credit facilities ( 4.9 ) 33.2

Purchase of treasury stock ( 150.0 ) ( 10.1 )

Shares repurchased for income tax withholding on share-based compensation and other ( 24.9 ) ( 10.8 )

Cash used in financing activities ( 186.9 ) ( 43.3 )

Cash provided by (used in) financing activities ( 193.9 ) 1.0

Cash held for sale ( 9.6 ) —

Decrease in cash and cash equivalents ( 318.3 ) ( 316.9 )

13 unchanged sentences

Interests Total

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

Balance, April 2, 2023 $ 13.2 $ 1,675.1 $ ( 396.4 ) $ ( 107.8 ) $ ( 87.6 ) $ 117.8 $ 1,214.3

Net income — — 90.4 — — 3.1 93.5

Other comprehensive income (loss) — — — — 0.3 ( 5.7 ) ( 5.4 )

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

Balance, July 2, 2023 $ 13.2 $ 1,682.0 $ ( 306.0 ) $ ( 107.9 ) $ ( 87.3 ) $ 115.2 $ 1,309.2

Balance, March 31, 2024 $ 13.4 $ 1,703.1 $ ( 4.0 ) $ ( 360.1 ) $ ( 88.8 ) $ 109.6 $ 1,373.2

Net income — — 81.9 — — 3.7 85.6

Other comprehensive loss — — — — ( 1.4 ) ( 0.6 ) ( 2.0 )

Employee stock plans — 9.8 0.5 0.8 — — 11.1

Balance, June 30, 2024 $ 13.4 $ 1,712.9 $ 78.4 $ ( 359.3 ) $ ( 90.2 ) $ 112.7 $ 1,467.9

ATI Stockholders

Stock Additional

Capital Retained

Earnings Treasury

Stock Accumulated

Comprehensive

Income (Loss) Non-

Interests Total

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

Net income — — 174.9 — — 5.2 180.1

Other comprehensive loss — — — — ( 19.9 ) ( 1.3 ) ( 21.2 )

Purchase of treasury stock — — — ( 10.1 ) — — ( 10.1 )

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

Balance, April 2, 2023 $ 13.2 $ 1,675.1 $ ( 396.4 ) $ ( 107.8 ) $ ( 87.6 ) $ 117.8 $ 1,214.3

Balance, July 2, 2023 $ 13.2 $ 1,682.0 $ ( 306.0 ) $ ( 107.9 ) $ ( 87.3 ) $ 115.2 $ 1,309.2

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

3 unchanged sentences

Employee stock plans 0.2 15.8 0.5 ( 24.1 ) — — ( 7.6 )

Balance, March 31, 2024 $ 13.4 $ 1,703.1 $ ( 4.0 ) $ ( 360.1 ) $ ( 88.8 ) $ 109.6 $ 1,373.2

Balance, June 30, 2024 $ 13.4 $ 1,712.9 $ 78.4 $ ( 359.3 ) $ ( 90.2 ) $ 112.7 $ 1,467.9

The accompanying notes are an integral part of these statements.

12 unchanged sentences

In management’s opinion, all adjustments (which include only normal recurring adjustments) considered necessary for a fair presentation have been included.

Certain prior year amounts have been reclassified in order to conform with year 2024 presentation.

Certain prior year amounts have been reclassified in order to conform with 2024 presentation.

These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2023 Annual Report on Form 10-K.

21 unchanged sentences

This guidance also eliminates several current disclosure requirements related to:

(1) the nature and estimate of the range of the reasonably possible change in the unrecognized tax benefits balance in the next 12 months, (2) making a statement that an estimate of the range cannot be made, and (3) 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.

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.

5 unchanged sentences

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

Comparative information regarding the Company’s overall revenues by global and geographical markets for the quarters ended March 31, 2024 and April 2, 2023 is included in the following tables.

Comparative information regarding the Company’s overall revenues by global and geographical markets for the quarters and year-to-date periods ended June 30, 2024 and July 2, 2023 is included in the following tables.

(in millions) Quarter ended

March 31, 2024 April 2, 2023

June 30, 2024 July 2, 2023

HPMC AA&S Total HPMC AA&S Total

5 unchanged sentences

Total Aerospace & Defense 477.5 206.4 683.9 436.2 170.6 606.8

Oil & Gas 3.5 99.0 102.5 2.4 125.1 127.5

Conventional Energy 2.4 63.7 66.1 3.7 107.6 111.3

Specialty Energy 22.5 54.1 76.6 29.9 38.3 68.2

Total Energy 24.9 117.8 142.7 33.6 145.9 179.5

Automotive 3.8 67.0 70.8 6.0 46.8 52.8

Medical 33.0 28.7 61.7 24.3 17.6 41.9

Construction/Mining 8.3 35.9 44.2 11.0 37.4 48.4

Electronics 2.0 38.8 40.8 0.7 35.3 36.0

Food Equipment & Appliances — 16.2 16.2 — 20.9 20.9

Other 12.5 22.5 35.0 15.3 44.4 59.7

Total $ 562.0 $ 533.3 $ 1,095.3 $ 527.1 $ 518.9 $ 1,046.0

(in millions) Year-to-date period ended

June 30, 2024 July 2, 2023

HPMC AA&S Total HPMC AA&S Total

Diversified Global Markets:

Aerospace & Defense:

Jet Engines- Commercial $ 628.7 $ 35.3 $ 664.0 $ 601.7 $ 50.1 $ 651.8

Airframes- Commercial 179.4 221.5 400.9 138.0 196.1 334.1

Defense 112.0 122.7 234.7 91.9 104.7 196.6

Total Aerospace & Defense 920.1 379.5 1,299.6 831.6 350.9 1,182.5

Conventional Energy 5.9 162.7 168.6 6.1 232.7 238.8

Specialty Energy 40.7 92.0 132.7 54.8 96.1 150.9

Total Energy 46.6 254.7 301.3 60.9 328.8 389.7

Automotive 8.8 118.0 126.8 12.3 99.9 112.2

Medical 68.9 51.9 120.8 41.8 35.1 76.9

Electronics 3.0 90.7 93.7 1.2 69.2 70.4

4 unchanged sentences

(in millions) Quarter ended

March 31, 2024 April 2, 2023

June 30, 2024 July 2, 2023

HPMC AA&S Total HPMC AA&S Total

6 unchanged sentences

Total $ 562.0 $ 533.3 $ 1,095.3 $ 527.1 $ 518.9 $ 1,046.0

(in millions) Year-to-date period ended

June 30, 2024 July 2, 2023

HPMC AA&S Total HPMC AA&S Total

Primary Geographical Market:

United States $ 512.1 $ 698.0 $ 1,210.1 $ 418.5 $ 738.1 $ 1,156.6

Europe 435.5 104.9 540.4 402.0 88.0 490.0

Asia 76.2 165.5 241.7 95.0 213.0 308.0

Canada 29.0 24.5 53.5 28.6 24.5 53.1

South America, Middle East and other 39.1 53.4 92.5 54.1 22.3 76.4

Total $ 1,091.9 $ 1,046.3 $ 2,138.2 $ 998.2 $ 1,085.9 $ 2,084.1

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

1 unchanged sentence

Quarter ended

March 31, 2024 April 2, 2023

June 30, 2024 July 2, 2023

HPMC AA&S Total HPMC AA&S Total

1 unchanged sentence

Nickel-based alloys and specialty alloys 39 % 49 % 44 % 49 % 55 % 52 %

Titanium and titanium-based alloys 24 % 15 % 20 % 17 % 11 % 14 %

Precision forgings, castings and components 37 % — % 19 % 33 % — % 17 %

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

Zirconium and related alloys — % 18 % 8 % — % 16 % 8 %

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

Year-to-date period ended

June 30, 2024 July 2, 2023

HPMC AA&S Total HPMC AA&S Total

Diversified Products and Services:

Nickel-based alloys and specialty alloys 39 % 50 % 44 % 47 % 57 % 52 %

Precision forgings, castings and components 36 % — % 19 % 33 % — % 16 %

Titanium and titanium-based alloys 24 % 13 % 19 % 19 % 10 % 14 %

2 unchanged sentences

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

The Company maintained a backlog of confirmed orders totaling $ 3.9 billion and $ 3.3 billion at March 31, 2024 and April 2, 2023, respectively.

Due to the structure of the Company’s long-term agreements, approximately 70 % of this backlog at March 31, 2024 represented booked orders with performance obligations that will be satisfied within the next 12 months.

The Company maintained a backlog of confirmed orders totaling $ 4.1 billion and $ 3.5 billion at June 30, 2024 and July 2, 2023, respectively.

Due to the structure of the Company’s long-term agreements, approximately 70 % of this backlog at June 30, 2024 represented booked orders with performance obligations that will be satisfied within the next 12 months.

The backlog does not reflect any elements of variable consideration.

Contract balances

As of March 31, 2024 and December 31, 2023, accounts receivable from customers were $ 723.6 million and $ 628.2 million, respectively.

The following represents the rollforward of accounts receivable - reserve for doubtful accounts and contract assets and liabilities for the quarters ended March 31, 2024 and April 2, 2023:

As of June 30, 2024 and December 31, 2023, accounts receivable from customers were $ 722.5 million and $ 628.2 million, respectively.

The following represents the rollforward of accounts receivable - reserve for doubtful accounts and contract assets and liabilities for the year-to-date periods ended June 30, 2024 and July 2, 2023:

(in millions)

Accounts Receivable - Reserve for Doubtful Accounts March 31,

2024 April 2,

Accounts Receivable - Reserve for Doubtful Accounts June 30,

Balance as of beginning of year $ 3.2 $ 7.7

4 unchanged sentences

Contract Assets

Short-term March 31,

2024 April 2,

Short-term June 30,

Balance as of beginning of year $ 59.1 $ 64.1

4 unchanged sentences

Contract Liabilities

Short-term March 31,

2024 April 2,

Short-term June 30,

Balance as of beginning of year $ 163.6 $ 149.1

2 unchanged sentences

Current year amounts reclassified to revenue ( 20.5 ) ( 22.9 )

Other — ( 0.1 )

Reclassification to/from long-term 8.8 22.3

Balance as of period end $ 160.9 $ 137.8

Long-term (a) March 31,

2024 April 2,

Long-term (a) June 30,

Balance as of beginning of year $ 39.4 $ 66.8

3 unchanged sentences

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

Contract costs for obtaining and fulfilling a contract were $ 8.2 million and $ 8.1 million as of March 31, 2024 and December 31, 2023, respectively, and are reported in other long-term assets on the consolidated balance sheet.

Contract cost amortization expense for the quarters ended March 31, 2024 and April 2, 2023 was $ 0.3 million.

Inventories at March 31, 2024 and December 31, 2023 were as follows (in millions):

Contract costs for obtaining and fulfilling a contract were $ 9.0 million and $ 8.1 million as of June 30, 2024 and December 31, 2023, respectively, and are reported in other long-term assets on the consolidated balance sheet.

Contract cost amortization expense for the quarter and year-to-date period ended June 30, 2024 was $ 0.3 million and $ 0.6 million, respectively.

Contract cost amortization expense for the quarter and year-to-date period ended July 2, 2023 was $ 0.4 million and $ 0.7 million, respectively.

Inventories at June 30, 2024 and December 31, 2023 were as follows (in millions):

2024 December 31,

7 unchanged sentences

Property, Plant and Equipment

Property, plant and equipment at March 31, 2024 and December 31, 2023 was as follows (in millions):

Property, plant and equipment at June 30, 2024 and December 31, 2023 was as follows (in millions):

2024 December 31,

5 unchanged sentences

Total property, plant and equipment, net $ 1,705.5 $ 1,665.9

The construction in progress portion of property, plant and equipment at March 31, 2024 was $ 343.3 million.

Capital expenditures on the consolidated statement of cash flows for the quarters ended March 31, 2024 and April 2, 2023 exclude $ 33.0 million and $ 11.6 million, respectively, of accrued capital expenditures that were included in property, plant and equipment at March 31, 2024 and April 2, 2023, respectively.

The construction in progress portion of property, plant and equipment at June 30, 2024 was $ 242.5 million.

Capital expenditures on the consolidated statement of cash flows for the year-to-date periods ended June 30, 2024 and July 2, 2023 exclude $ 26.0 million and $ 19.3 million, respectively, of accrued capital expenditures that were included in property, plant and equipment at June 30, 2024 and July 2, 2023, respectively.

During the second quarter of 2024, the Company approved plans to divest of certain immaterial, non-core operations from both the HPMC and AA&S segments.

These non-core operations, which are classified as held for sale as of June 30, 2024, do not meet the criteria to be classified as discontinued operations in the consolidated financial statements.

The following are the assets and liabilities classified as held for sale that are reported as prepaid expenses and other current assets, other long-term assets, other current liabilities, and other long-term liabilities on the consolidated balance sheet as of June 30, 2024.

(in millions) June 30,

Accounts receivable, net 8.6

Inventories, net 24.3

Prepaid expenses and other current assets 1.7

Total current assets 44.2

Property, plant and equipment, net 3.7

Other assets 2.3

Total long-term assets 6.0

Total Assets 50.2

Accounts payable 1.1

Other current liabilities 2.7

Total current liabilities 3.8

Other long-term liabilities 1.6

Total Liabilities 5.4

Net assets held for sale $ 44.8

Joint Ventures

5 unchanged sentences

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

Cash and cash equivalents held by STAL as of March 31, 2024 were $ 73.7 million.

Cash and cash equivalents held by STAL as of June 30, 2024 were $ 93.9 million.

Next Gen Alloys LLC:

2 unchanged sentences

Next Gen Alloys LLC funds its development activities through the sale of shares to the two joint venture partners.

Cash and cash equivalents held by this joint venture as of March 31, 2024 were $ 1.0 million.

Cash and cash equivalents held by this joint venture as of June 30, 2024 were $ 1.0 million.

Equity Method Joint Ventures

6 unchanged sentences

ATI accounts for the A&T Stainless joint venture under the equity method of accounting.

ATI’s share of A&T Stainless results were losses of $ 0.4 million and $ 0.5 million for the quarters ended March 31, 2024 and April 2, 2023, respectively, which is included within other income/expense, net, on the consolidated statements of operations and in the AA&S segment’s operating results.

As of March 31, 2024 and December 31, 2023, ATI had net receivables for working capital advances and administrative services from A&T Stainless of $ 1.0 million and $ 1.5 million, respectively.

ATI’s share of A&T Stainless results were losses of $ 0.4 million and $ 0.8 million for the quarter and year-to-date period ended June 30, 2024, respectively, and $ 0.3 million and $ 0.8 million for the quarter and year-to-date period ended July 2, 2023, respectively, which are included within other income/expense, net, on the consolidated statements of operations and in the AA&S segment’s operating results.

As of June 30, 2024 and December 31, 2023, ATI had net receivables for working capital advances and administrative services from A&T Stainless of $ 0.5 million and $ 1.5 million, respectively.

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

2 unchanged sentences

Uniti was accounted for under the equity method of accounting.

ATI’s share of Uniti’s results was income of $ 0.2 million for the quarter ended April 2, 2023, which was included in the AA&S segment’s operating results, and within other income/expense, net on the consolidated statements of operations.

ATI’s share of Uniti’s results was income of $ 0.3 million and $ 0.5 million for the quarter and year-to-date period ended July 2, 2023, respectively, which was included in the AA&S segment’s operating results, and within other income/expense, net on the consolidated statements of operations.

The Company received its final distribution in the first quarter of 2024 as a result of the termination, with formal dissolution expected in the second half of 2024.

Supplemental Financial Statement Information

Other income (expense), net for the quarters ended March 31, 2024 and April 2, 2023 was as follows:

(in millions) Quarter ended

March 31, 2024 April 2, 2023

Other income (expense), net for the quarters and year-to-date periods ended June 30, 2024 and July 2, 2023 was as follows:

(in millions) Quarter ended Year-to-date period ended

June 30, 2024 July 2, 2023 June 30, 2024 July 2, 2023

Rent and royalty income $ 0.8 $ 0.7 $ 1.6 $ 1.3

3 unchanged sentences

Restructuring

Restructuring charges for the quarter ended March 31, 2024 were $ 0.2 million, primarily for the involuntary termination of several employees in ATI’s domestic operations.

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

Restructuring charges were a credit for the quarter and year-to-date period ended June 30, 2024 of $ 1.9 million and $ 1.7 million, respectively, primarily for a reduction in severance-related reserves for approximately 80 employees based on changes in planned operating rates and revised workforce reduction estimates, which includes the ongoing restructuring for the Company’s European operations.

Restructuring charges for both the quarter and year-to-date periods ended July 2, 2023 were $ 2.7 million and represent severance for the involuntary reduction of approximately 40 employees across ATI’s domestic operations.

These amounts were presented as restructuring charges/credits in the consolidated statements of operations and are excluded from segment EBITDA.

Restructuring reserves for severance cost activity is as follows:

2 unchanged sentences

Balance at December 31, 2023 $ 15.2

Additions, net 0.2

Adjustments ( 1.7 )

Payments ( 4.1 )

Balance at March 31, 2024 $ 13.9

The $ 13.9 million restructuring reserve balance at March 31, 2024 includes $ 9.7 million recorded in other current liabilities and $ 4.2 million recorded in other long-term liabilities on the consolidated balance sheet.

Balance at June 30, 2024 $ 9.4

The $ 9.4 million restructuring reserve balance at June 30, 2024 is recorded in other current liabilities on the consolidated balance sheet.

Supplier Financing

1 unchanged sentence

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

As of March 31, 2024 and December 31, 2023, the Company had $ 18.4 million and $ 15.6 million, respectively, reported in accounts payable on the consolidated balance sheets under such programs.

Debt at March 31, 2024 and December 31, 2023 was as follows (in millions):

As of June 30, 2024 and December 31, 2023, the Company had $ 33.4 million and $ 15.6 million, respectively, reported in accounts payable on the consolidated balance sheets under such programs.

Debt at June 30, 2024 and December 31, 2023 was as follows (in millions):

2024 December 31,

19 unchanged sentences

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

The 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.

The Term Loan has an interest rate of 2.0 % above the 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 in the maximum amount available 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 Term Loan to a 4.21 % fixed interest rate.

The swap matures in June 2024.

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

The swap matured in June 2024.

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.

1 unchanged sentence

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

The Company was in compliance with the fixed charge coverage ratio as of March 31, 2024.

The Company was in compliance with the fixed charge coverage ratio as of June 30, 2024.

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.

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 :

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 Term Loan balance.

As of March 31, 2024, there were no outstanding borrowings under the revolving portion of the ABL facility, and $ 31.7 million was utilized to support the issuance of letters of credit.

There were no revolving credit borrowings under the ABL facility during the first quarter of 2024 or 2023.

The Company also has foreign credit facilities, primarily in China, that total $ 57 million based on March 31, 2024 foreign exchange rates, none of which was drawn as of March 31, 2024 and $ 5.0 million of which was drawn as of December 31, 2023.

As of June 30, 2024, there were no outstanding borrowings under the revolving portion of the ABL facility, and $ 31.7 million was utilized to support the issuance of letters of credit.

There were no revolving credit borrowings under the ABL facility during the year-to-date period ended June 30, 2024.

There were average revolving credit borrowings of $ 11 million bearing an average annual interest rate of 6.4 % under the ABL facility for the year-to-date period ended July 2, 2023.

The Company also has foreign credit facilities, primarily in China, that total $ 57 million based on June 30, 2024 foreign exchange rates, none of which was drawn as of June 30, 2024 and $ 5.0 million of which was drawn as of December 31, 2023.

2025 Convertible Notes

As of March 31, 2024, the Company had $ 291.4 million aggregate principal amount of 3.5 % Convertible Notes due 2025 (2025 Convertible Notes) outstanding, which mature on June 15, 2025.

As of March 31, 2024 and December 31, 2023, the fair value of the 2025 Convertible Notes was $ 967 million and $ 864 million, respectively, based on the quoted market price, which is classified in Level 1 of the fair value hierarchy.

As of June 30, 2024, the Company has $ 291.4 million aggregate principal amount of 3.5 % Convertible Notes due 2025 (2025 Convertible Notes) outstanding, which mature on June 15, 2025 and is included in short-term debt and current portion of long-term debt on the consolidated balance sheet as of June 30, 2024.

As of June 30, 2024 and December 31, 2023, the fair value of the 2025 Convertible Notes was $ 1.04 billion and $ 864 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 quarters ended March 31, 2024 and April 2, 2023.

Remaining deferred issuance costs were $ 2.4 million and $ 2.9 million at March 31, 2024 and December 31, 2023, respectively.

Including amortization of deferred issuance costs, the effective interest rate is 4.2 % for the quarters and year-to-date periods ended June 30, 2024 and July 2, 2023.

Remaining deferred issuance costs were $ 2.0 million and $ 2.9 million at June 30, 2024 and December 31, 2023, respectively.

Interest expense on the 2025 Convertible Notes was as follows:

Quarter ended

(in millions) March 31, 2024 April 2, 2023

Quarter ended Year-to-date period ended

(in millions) June 30, 2024 July 2, 2023 June 30, 2024 July 2, 2023

Contractual coupon rate $ 2.6 $ 2.6 $ 5.1 $ 5.1

8 unchanged sentences

The capped call transactions are expected generally to reduce potential dilution to ATI’s common stock upon any conversion of the 2025 Convertible Notes and/or offset any cash payments ATI is required to make in excess of the principal amount of converted 2025 Convertible Notes, as the case may be, with such reduction and/or offset subject to a cap based on the cap price.

The cap price of the capped call transactions initially is approximately $ 19.76 per share, and is subject to adjustments under the terms of the capped call transactions.

The capped call transactions initially included a cap price of $ 19.76 per share, and is subject to adjustments under the terms of the capped call transactions.

Derivative Financial Instruments and Hedging

4 unchanged sentences

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

However, as of March 31, 2024, 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 2 million pounds of nickel with hedge dates through 2024.

The aggregate notional amount hedged is less than 5 % of a single year’s estimated nickel raw material purchase requirements.

However, as of June 30, 2024, 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 2025.

The aggregate notional amount hedged is approximately 5 % of a single year’s estimated nickel raw material purchase requirements.

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

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

At March 31, 2024, the outstanding financial derivatives used to hedge the Company’s exposure to energy cost volatility included natural gas cost hedges.

At March 31, 2024, the Company hedged approximately 70 % of its forecasted domestic requirements for natural gas for the remainder of 2024 and approximately 35 % for 2025.

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

At June 30, 2024, the outstanding financial derivatives used to hedge the Company’s exposure to energy cost volatility included natural gas cost hedges.

At June 30, 2024, the Company hedged approximately 65 % of its forecasted domestic requirements for natural gas for the remainder of 2024 and approximately 35 % for 2025.

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

3 unchanged sentences

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

At March 31, 2024, the Company had no material outstanding foreign currency forward contracts.

At June 30, 2024, the Company had no material outstanding foreign currency forward contracts.

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

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 rate.

The swap matures in June 2024.

The Company had a $ 50 million floating-for-fixed interest rate swap which converted a portion of the ABL Term Loan to a 4.21 % fixed rate, which matured during the quarter ended June 30, 2024.

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 Term Loan borrowings.

7 unchanged sentences

Asset derivatives

Balance sheet location March 31,

Balance sheet location June 30,

2024 December 31,

9 unchanged sentences

Natural gas contracts Other long-term liabilities 0.3 1.1

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

Total derivatives designated as hedging instruments $ 7.5 $ 14.2

1 unchanged sentence

For derivative financial instruments that are designated as fair value hedges, changes in the fair value of these derivatives are recognized in current period results.

There were no outstanding fair value hedges as of March 31, 2024.

There were no outstanding fair value hedges as of June 30, 2024.

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.

1 unchanged sentence

The effects of derivative instruments in the tables below are presented net of related income taxes, excluding any impacts of changes to income tax valuation allowances affecting results of operations or other comprehensive income, when applicable (see Note 15 for further explanation).

Assuming market prices remain constant with those at March 31, 2024, a pre-tax loss of $ 9.4 million is expected to be recognized over the next 12 months.

Activity with regard to derivatives designated as cash flow hedges for the quarters ended March 31, 2024 and April 2, 2023 was as follows (in millions):

Assuming market prices remain constant with those at June 30, 2024, a pre-tax loss of $ 6.4 million is expected to be recognized over the next 12 months.

Activity with regard to derivatives designated as cash flow hedges for the quarters and year-to-date periods ended June 30, 2024 and July 2, 2023 was as follows (in millions):

Amount of Gain (Loss)

5 unchanged sentences

Quarter ended Quarter ended

Derivatives in Cash Flow Hedging Relationships March 31, 2024 April 2, 2023 March 31, 2024 April 2, 2023

Derivatives in Cash Flow Hedging Relationships June 30, 2024 July 2, 2023 June 30, 2024 July 2, 2023

Nickel and other raw material contracts $ ( 0.9 ) $ ( 1.6 ) $ ( 1.1 ) $ ( 1.4 )

3 unchanged sentences

Total $ ( 0.4 ) $ ( 1.9 ) $ ( 2.0 ) $ ( 2.9 )

Amount of Gain (Loss)

Recognized in OCI on

Derivatives Amount of Gain (Loss)

Reclassified from

Accumulated OCI

into Income (a)

Year-to-date period ended Year-to-date period ended

Derivatives in Cash Flow Hedging Relationships June 30, 2024 July 2, 2023 June 30, 2024 July 2, 2023

Nickel and other raw material contracts $ ( 1.1 ) $ ( 6.9 ) $ ( 1.1 ) $ 3.9

Natural gas contracts ( 1.0 ) ( 6.8 ) ( 3.6 ) ( 3.2 )

Foreign exchange contracts 0.3 0.2 0.2 0.1

Interest rate swap — 0.2 1.2 0.5

Total $ ( 1.8 ) $ ( 13.3 ) $ ( 3.3 ) $ 1.3

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

2 unchanged sentences

Since these derivative contracts represent hedges, the net effect of any gain or loss on results of operations may be fully or partially offset.

The Company may also use derivative instruments that are not designated as hedges to protect the Company’s results from certain fluctuations in foreign exchange rates, as well as to offset a portion of the foreign currency gains and losses generated by the remeasurement of certain assets and liabilities denominated in non-functional currencies.

Changes in the fair value of these foreign exchange contract derivatives not designated as hedging instruments are recorded in cost of sales or selling, general and administrative expenses on the consolidated statement of operations, and we recognized $ 0.5 million of expense for settled foreign currency forward contracts that were not designated as hedges during the second quarter and year-to-date period ended June 30, 2024, which offset foreign currency gains in the relevant currency.

We have no significant outstanding hedges that are not designated as of June 30, 2024

Fair Value of Financial Instruments

The estimated fair value of financial instruments at March 31, 2024 was as follows:

The estimated fair value of financial instruments at June 30, 2024 was as follows:

Fair Value Measurements at Reporting Date Using

23 unchanged sentences

Accounting standards established three levels of a fair value hierarchy that prioritize the inputs used to measure fair value.

This hierarchy requires entities to maximize the use of

observable inputs and minimize the use of unobservable inputs.

This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs.

The three levels of inputs used to measure fair value are as follows:

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High Performance Materials & Components (HPMC) and Advanced Alloys & Solutions (AA&S).

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 credits/charges, strike related costs, pension remeasurement gains/losses, debt extinguishment charges and gains or losses on asset sales and sales of businesses.

The measure of segment EBITDA 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 credits/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.

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

Quarter ended

March 31, 2024 April 2, 2023

Quarter ended Year-to-date period ended

June 30, 2024 July 2, 2023 June 30, 2024 July 2, 2023

High Performance Materials & Components $ 643.8 $ 562.8 $ 1,215.7 $ 1,092.4

4 unchanged sentences

Advanced Alloys & Solutions 71.3 94.5 119.0 153.3

153.1 130.2 242.8 247.5

Sales to external customers:

2 unchanged sentences

$ 1,095.3 $ 1,046.0 $ 2,138.2 $ 2,084.1

Quarter ended

March 31, 2024 April 2, 2023

Quarter ended Year-to-date period ended

June 30, 2024 July 2, 2023 June 30, 2024 July 2, 2023

High Performance Materials & Components $ 113.8 $ 109.7 $ 211.4 $ 191.3

2 unchanged sentences

Corporate expenses ( 19.4 ) ( 17.7 ) ( 36.5 ) ( 34.6 )

Closed operations and other expense ( 1.3 ) ( 1.3 )

Closed operations and other income (expense) 0.7 ( 1.9 ) ( 0.6 ) ( 3.2 )

Depreciation & amortization (a) ( 37.9 ) ( 35.9 ) ( 73.9 ) ( 71.0 )

1 unchanged sentence

Restructuring and other charges ( 5.4 ) ( 9.2 ) ( 8.5 ) ( 10.4 )

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

Income before income taxes $ 110.9 $ 97.2 $ 196.2 $ 188.1

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

Quarter ended

March 31, 2024 April 2, 2023

Quarter ended Year-to-date period ended

June 30, 2024 July 2, 2023 June 30, 2024 July 2, 2023

High Performance Materials & Components $ 17.9 $ 17.9 $ 34.2 $ 35.3

2 unchanged sentences

$ 37.9 $ 35.9 $ 73.9 $ 71.0

Restructuring and other charges of $ 3.1 million for the quarter ended March 31, 2024 include $ 2.9 million of start up costs, which are included within cost of sales on the consolidated statements of operations, and $ 0.2 million of restructuring charges (see Note 6).

Restructuring and other charges for the quarter ended April 2, 2023 include $ 1.2 million of start up costs, which are classified within cost of sales on the consolidated statements of operations.

Beginning in 2020, the U.S.

government enacted various relief packages in response to the COVID-19 pandemic, including refundable employee retention tax credits.

The Company applied for these employee retention tax credits and deferred recognition of a portion of the tax credits pending the completion of any potential audit or examination, or the expiration of the related statute of limitations.

During the quarter and year-to-date periods ended June 30, 2024, the Company recognized a benefit of $ 8.6 million in cost of sales on the consolidated statement of operations due to the expiration of the statute of limitations for a portion of these credits.

The Company recognized $ 3.5 million of the benefit in the HPMC segment and $ 5.1 million in the AA&S segment.

See Note 16 for further explanation.

Closed operations and other income (expense) for the quarter and year-to-date period ended June 30, 2024 includes a $ 2.3 million gain on the sale of assets for the Company’s idled Houston, PA facility included within gain on asset sales and sales of businesses, net, on the consolidated statement of operations, for which $ 3.5 million of proceeds were received and reported as an investing activity on the consolidated statement of cash flows.

Restructuring and other charges of $ 5.4 million for the quarter ended June 30, 2024 include $ 5.5 million of inventory write-downs related to the Company’s ongoing European restructuring and $ 1.8 million of start-up costs, both of which are included within cost of sales on the consolidated statements of operations.

These charges were partially offset by credits of $ 1.9 million primarily for lowered severance-related reserves based on changes in planned operating rates and revised workforce reduction estimates (see Note 7).

Restructuring and other charges of $ 8.5 million for the year-to-date period ended June 30, 2024 include $ 5.5 million of inventory write-downs related to the Company’s ongoing European restructuring and $ 4.7 million of start-up costs, both of which are included within cost of sales on the consolidated statements of operations.

These charges were partially offset by credits of $ 1.7 million primarily for lowered severance-related reserves based on changes in planned operating rates and revised workforce reduction estimates (see Note 7).

Restructuring and other charges of $ 9.2 million for the quarter ended July 2, 2023 include $ 2.7 million of severance-related restructuring charges as well as $ 4.5 million of start-up costs and $ 2.0 million primarily for asset write-offs for the closure of the Robinson, PA operations, both of which are included within cost of sales on the consolidated statements of operations.

Restructuring and other charges of $ 10.4 million for the year-to-date period ended July 2, 2023 also include $ 1.2 million of additional start-up costs related to the Company’s titanium operations in Albany, OR, which are included within cost of sales on the consolidated statements of operations.

Depreciation expense in the quarter and year-to-date period ended July 2, 2023 includes $ 0.8 million of accelerated depreciation on fixed assets for the closure of our Robinson, PA operations.

Loss on asset sales and sales of businesses, net, for the quarter and year-to-date period ended July 2, 2023 is related to a $ 0.6 million loss on the sale of the Company’s Northbrook, IL operations.

Retirement Benefits

8 unchanged sentences

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

For the quarters ended March 31, 2024 and April 2, 2023, the components of pension and other postretirement benefit expense for the Company’s defined benefit plans included the following (in millions):

For the quarters ended June 30, 2024 and July 2, 2023, the components of pension and other postretirement benefit expense for the Company’s defined benefit plans included the following (in millions):

Pension Benefits Other Postretirement Benefits

Quarter ended Quarter ended

March 31, 2024 April 2, 2023 March 31, 2024 April 2, 2023

June 30, 2024 July 2, 2023 June 30, 2024 July 2, 2023

Service cost - benefits earned during the year $ 1.4 $ 1.6 $ 0.1 $ 0.1

4 unchanged sentences

Total retirement benefit expense $ 1.4 $ 0.1 $ 3.8 $ 4.1

The Company’s effective tax rate was 19.8 %, resulting in an income tax provision of $ 16.9 million for the quarter ended March 31, 2024.

The Company’s effective tax rate was 4.7 %, resulting in an income tax provision of $ 4.3 million for the quarter ended April 2, 2023.

The effective tax rate for the quarter ended March 31, 2024 included discrete tax benefits, primarily $ 3.0 million for share-based compensation.

The Company’s effective tax rate for the quarter ended April 2, 2023 was impacted by the net valuation allowance position in the U.S.

For the year-to-date periods ended June 30, 2024 and July 2, 2023, the components of pension and other postretirement benefit expense for the Company’s defined benefit plans included the following (in millions):

Pension Benefits Other Postretirement Benefits

Year-to-date period ended Year-to-date period ended

June 30, 2024 July 2, 2023 June 30, 2024 July 2, 2023

Service cost - benefits earned during the year $ 2.9 $ 3.2 $ 0.2 $ 0.3

Interest cost on benefits earned in prior years 8.2 48.0 5.1 5.5

Expected return on plan assets ( 8.2 ) ( 51.3 ) — —

Amortization of prior service cost (credit) 0.1 0.2 ( 0.4 ) ( 0.5 )

Amortization of net actuarial loss — — 2.6 3.0

Total retirement benefit expense $ 3.0 $ 0.1 $ 7.5 $ 8.3

For the quarter and year-to-date period ended June 30, 2024, the Company’s effective tax rate was 22.8 % and 21.5 %, respectively, resulting in an income tax provision of $ 25.3 million and $ 42.2 million, respectively.

For the quarter and year-to-date period ended July 2, 2023, the Company’s effective tax rate was 3.8 % and 4.3 %, respectively, resulting in an income tax provision of $ 3.7 million and $ 8.0 million, respectively.

The effective tax rate for the quarter ended June 30, 2024 includes discrete tax benefits of $ 1.6 million, which includes the recognition of a stranded deferred tax valuation allowance in accumulated other comprehensive loss that was associated with the Company’s interest rate swap due to its maturity (see Note 15).

Discrete tax benefits for the year-to-date period ended June 30, 2024 were $ 4.7 million, which also includes $ 3.2 million for share-based compensation.

The Company’s effective tax rates for the quarter and year-to-date period ended July 2, 2023 were impacted by the net valuation allowance position in the U.S.

and the Company’s foreign earnings.

1 unchanged sentence

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

(In millions, except per share amounts) Quarter ended

March 31, 2024 April 2, 2023

(In millions, except per share amounts) Quarter ended Year-to-date period ended

June 30, 2024 July 2, 2023 June 30, 2024 July 2, 2023

Numerator for basic income per common share –

2 unchanged sentences

3.5 % Convertible Senior Notes due 2025

2.2 2.6 4.3 5.2

Numerator for diluted net income per common share –

4 unchanged sentences

3.5 % Convertible Senior Notes due 2025

18.8 18.8 18.8 18.8

Denominator for diluted net income per common share – adjusted weighted average shares and assumed conversions 146.3 150.1 146.9 150.1

2 unchanged sentences

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

There were no anti-dilutive shares for the quarters ended March 31, 2024 and April 2, 2023.

There were no anti-dilutive shares for the quarters and year-to-date periods ended June 30, 2024 and July 2, 2023.

Periodically, the Company’s Board of Directors authorizes the repurchase of ATI common stock (the “Share Repurchase Program”), the most recent of which was $ 150 million in November 2023.

1 unchanged sentence

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

In the quarter ended March 31, 2024, ATI used $ 150.0 million to repurchase 3.4 million shares of its common stock under the Share Repurchase Program.

In the quarter ended April 2, 2023, ATI used $ 10.1 million to repurchase 0.2 million shares of its common stock under the Share Repurchase Program.

At March 31, 2024, the Company has utilized the full amount currently authorized under the Share Repurchase Program.

In the year-to-date period ended June 30, 2024, ATI used $ 150.0 million to repurchase 3.4 million shares of its common stock under the Share Repurchase Program.

At June 30, 2024, the Company has utilized the full amount currently authorized under the Share Repurchase Program.

In the year-to-date period ended July 2, 2023, ATI used $ 10.1 million to repurchase 0.2 million shares of its common stock under the Share Repurchase Program.

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

The cost of share repurchases for the quarter ended March 31, 2024 of $ 151.2 million differs from the repurchases of common stock amounts in the consolidated statements of cash flows due to these excise taxes.

The cost of share repurchases for the year-to-date period ended June 30, 2024 of $ 151.2 million differs from the repurchases of common stock amounts in the consolidated statements of cash flows due to these excise taxes.

Accumulated Other Comprehensive Income (Loss)

The changes in AOCI by component, net of tax, for the quarter ended March 31, 2024 were as follows (in millions):

The changes in AOCI by component, net of tax, for the quarter ended June 30, 2024 were as follows (in millions):

benefit plans Currency

1 unchanged sentence

Attributable to ATI:

Balance, December 31, 2023 $ ( 32.5 ) $ ( 68.4 ) $ ( 6.4 ) $ 24.1 $ ( 83.2 )

Balance, March 31, 2024 $ ( 31.6 ) $ ( 74.8 ) $ ( 6.5 ) $ 24.1 $ ( 88.8 )

OCI before reclassifications — ( 3.1 ) ( 0.4 ) — ( 3.5 )

1 unchanged sentence

Net current-period OCI 0.9 ( 3.1 ) 1.6 ( 0.8 ) ( 1.4 )

Balance, June 30, 2024 $ ( 30.7 ) $ ( 77.9 ) $ ( 4.9 ) $ 23.3 $ ( 90.2 )

Attributable to noncontrolling interests:

Balance, March 31, 2024 $ — $ 7.1 $ — $ — $ 7.1

OCI before reclassifications — ( 0.6 ) — — ( 0.6 )

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

Net current-period OCI — ( 0.6 ) — — ( 0.6 )

Balance, June 30, 2024 $ — $ 6.5 $ — $ — $ 6.5

The changes in AOCI by component, net of tax, for the year-to-date period ended June 30, 2024 were as follows (in millions):

benefit plans Currency

adjustment Derivatives Deferred Tax Asset Valuation Allowance Total

Attributable to ATI:

Balance, December 31, 2023 $ ( 32.5 ) $ ( 68.4 ) $ ( 6.4 ) $ 24.1 $ ( 83.2 )

OCI before reclassifications — ( 9.5 ) ( 1.8 ) — ( 11.3 )

Amounts reclassified from AOCI (a) 1.8 (b) — (c) 3.3 (d) ( 0.8 ) 4.3

Net current-period OCI 1.8 ( 9.5 ) 1.5 ( 0.8 ) ( 7.0 )

Balance, June 30, 2024 $ ( 30.7 ) $ ( 77.9 ) $ ( 4.9 ) $ 23.3 $ ( 90.2 )

Attributable to noncontrolling interests:

3 unchanged sentences

Net current-period OCI — ( 0.8 ) — — ( 0.8 )

Balance, March 31, 2024 $ — $ 7.1 $ — $ — $ 7.1

Balance, June 30, 2024 $ — $ 6.5 $ — $ — $ 6.5

(a) Amounts were included in net periodic benefit cost for pension and other postretirement benefit plans (see Note 12).

2 unchanged sentences

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

The changes in AOCI by component, net of tax, for the quarter ended April 2, 2023 were as follows (in millions):

The income tax provision for the quarter and year-to-date period ended June 30, 2024 includes $ 0.8 million of a tax benefit for the recognition of a stranded deferred tax valuation allowance that was associated with the Company’s interest rate swap due to its maturity (see Notes 9 and 13).

The changes in AOCI by component, net of tax, for the quarter ended July 2, 2023 were as follows (in millions):

benefit plans Currency

1 unchanged sentence

Attributable to ATI:

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

Balance, April 2, 2023 $ ( 33.6 ) $ ( 71.2 ) $ ( 2.1 ) $ 19.3 $ ( 87.6 )

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

1 unchanged sentence

Net current-period OCI 1.0 ( 2.4 ) 1.0 0.7 0.3

Balance, July 2, 2023 $ ( 32.6 ) $ ( 73.6 ) $ ( 1.1 ) $ 20.0 $ ( 87.3 )

Attributable to noncontrolling interests:

Balance, April 2, 2023 $ — $ 12.1 $ — $ — $ 12.1

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

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

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

Balance, July 2, 2023 $ — $ 6.4 $ — $ — $ 6.4

The changes in AOCI by component, net of tax, for the year-to-date period ended July 2, 2023 were as follows (in millions):

benefit plans Currency

adjustment Derivatives Deferred Tax Asset Valuation Allowance Total

Attributable to ATI:

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

OCI before reclassifications — ( 3.5 ) ( 13.3 ) — ( 16.8 )

Amounts reclassified from AOCI (a) 2.1 (b) — (c) ( 1.3 ) (d) ( 3.9 ) ( 3.1 )

Net current-period OCI 2.1 ( 3.5 ) ( 14.6 ) ( 3.9 ) ( 19.9 )

Balance, July 2, 2023 $ ( 32.6 ) $ ( 73.6 ) $ ( 1.1 ) $ 20.0 $ ( 87.3 )

Attributable to noncontrolling interests:

3 unchanged sentences

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

Balance, April 2, 2023 $ — $ 12.1 $ — $ — $ 12.1

Balance, July 2, 2023 $ — $ 6.4 $ — $ — $ 6.4

(a) Amounts were included in net periodic benefit cost for pension and other postretirement benefit plans (see Note 12).

2 unchanged sentences

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

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

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

Income tax expense (benefit) on OCI items is recorded as a change in a deferred tax asset or liability.

2 unchanged sentences

subsidiaries.

Reclassifications out of AOCI for the quarters ended March 31, 2024 and April 2, 2023 were as follows:

Reclassifications out of AOCI for the quarters and year-to-date periods ended June 30, 2024 and July 2, 2023 were as follows:

Details about AOCI Components

(In millions)

Three months ended March 31, 2024 Three months ended April 2, 2023 Affected line item in the statements

Three months ended June 30, 2024 Three months ended July 2, 2023 Year-to-date period ended June 30, 2024 Year-to-date period ended July 2, 2023 Affected line item in the statements

of operations

27 unchanged sentences

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

At March 31, 2024, the Company’s reserves for environmental remediation obligations totaled approximately $ 14 million, of which $ 7 million was included in other current liabilities.

At June 30, 2024, the Company’s reserves for environmental remediation obligations totaled approximately $ 14 million, of which $ 6 million was included in other current liabilities.

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

15 unchanged sentences

Due to the complex nature of the employee retention credit computations, the Company deferred recognition of a portion of the tax credits pending the completion of any potential audit or examination, or the expiration of the related statute of limitations.

As of March 31, 2024, we have approximately $ 28 million of deferred retention tax credits with statute of limitations beginning to expire during the second quarter of 2024 and continuing through 2027.

Based on when the Company received the retention tax credits, $ 17 million of the deferred retention tax credits have a statute of limitations that expire in 2024 with the remaining expirations occurring in 2025 and 2027.

There is pending legislation that could extend the statute of limitations, which would impact the timing of the expected recognition of these credits if and when such legislation is passed.

During the quarter ended June 30, 2024, the Company recognized a benefit of $ 8.6 million in cost of sales on the consolidated statement of operations due to the expiration of the statute of limitations for a portion of these credits.

As of June 30, 2024, the Company has approximately $ 20 million of remaining deferred retention tax credits, of which the statue of limitations expire for $ 8 million in 2024 with the remaining expirations occurring in 2025 and 2027.

There is pending legislation that could extend the statute of limitations, which would impact the timing of the expected recognition of the remaining credits if and when such legislation is passed.

Subsequent Event

On August 2, 2024, the Company received notice that it and certain of its affiliates are parties to a lawsuit captioned William L.

Schoen, Mary J.

Nesbit, Robin L.

Rosewicz, George E.

Poole and James E.

Swartz, Jr., individually and as representatives of a class of participants and beneficiaries of the Allegheny Technologies Incorporated Pension Plan v.

ATI Inc., The Allegheny Technologies Incorporated Pension Plan Administrative Committee, State Street Global Advisors Trust Co., and John Does 1-5 (Case No.

2:24-cv-01109) and filed in federal district court for the Western District of Pennsylvania.

The lawsuit asserts various claims associated with the Company’s October 2023 purchase of group annuity contracts to transfer a portion of its U.S.

qualified defined benefit pension plan obligations to Athene Annuity and Life Company and Athene Annuity & Life Assurance of New York.

The Company disputes and intends to vigorously defend against these claims, but given the preliminary nature of these matters, cannot predict their outcome or estimate any range of reasonably possible loss at this time.

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

What changed 10-Q

Item 1. Financial Statements