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Item 8. Financial Statements and Supplementary Data

2025-02-21 compared with 2024-02-23 · 410 added, 609 removed, 1289 unchanged (44% 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, 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.

and subsidiaries (the Company) as of December 29, 2024 and December 31, 2023, the related consolidated statements of operations, comprehensive income, cash flows and statements of changes in consolidated equity for each of the three years in the period ended December 29, 2024, 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 29, 2024 and December 31, 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 29, 2024, 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 29, 2024, 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 21, 2025 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, specifically the weighted-average cost of capital assumption and a complex valuation methodology, such as the discounted cash flow.

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

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

12 unchanged sentences

Fiscal Year Ended

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

December 29, 2024 December 31, 2023 January 1, 2023

Sales $ 4,362.1 $ 4,173.7 $ 3,836.0

3 unchanged sentences

Restructuring charges (credits) 4.1 7.7 ( 4.8 )

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

Loss (gain) on asset sales and sales of businesses, net ( 57.1 ) 0.4 105.4

Operating income 608.9 466.4 316.1

1 unchanged sentence

Interest expense, net ( 108.2 ) ( 92.8 ) ( 87.4 )

Debt extinguishment charge — — ( 65.5 )

Other income (loss), net 14.4 1.3 ( 12.5 )

6 unchanged sentences

Diluted net income attributable to ATI per common share $ 2.55 $ 2.81 $ 2.23

*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.

and Subsidiaries

Consolidated Statements of Comprehensive Income (Loss)

Consolidated Statements of Comprehensive Income

(In millions)

Fiscal Year Ended

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

December 29, 2024 December 31, 2023 January 1, 2023

Net income $ 382.7 $ 423.4 $ 339.1

13 unchanged sentences

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

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

Settlement loss included in net income — 1.1 0.7

Income taxes on postretirement benefit plans 0.5 0.3 —

4 unchanged sentences

Comprehensive income attributable to ATI $ 361.5 $ 395.0 $ 397.4

*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, 2023 January 1, 2023*

(In millions, except share and per share amounts) December 29, 2024 December 31, 2023

Cash and cash equivalents $ 721.2 $ 743.9

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authorized- 500,000,000 shares;

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

issued- 142,871,688 shares at December 29, 2024 and 132,300,971 shares at December 31, 2023;

outstanding- 141,387,049 shares at December 29, 2024 and 126,879,099 shares at December 31, 2023

Additional paid-in capital 1,943.9 1,697.1

Retained loss ( 70.1 ) ( 480.9 )

Retained earnings (loss) 64.3 ( 70.1 )

Treasury stock:

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

1,484,639 shares at December 29, 2024 and 5,421,872 shares at December 31, 2023

( 82.6 ) ( 184.0 )

4 unchanged sentences

Total Liabilities and Stockholders’ Equity $ 5,230.6 $ 4,985.1

*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.

3 unchanged sentences

Fiscal Year Ended

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

December 29, 2024 December 31, 2023 January 1, 2023

Operating Activities:

4 unchanged sentences

Deferred taxes 86.4 ( 138.2 ) ( 0.1 )

Debt extinguishment charge — — 65.5

Gain from disposal of property, plant and equipment, net ( 15.7 ) ( 0.6 ) ( 0.9 )

19 unchanged sentences

Payments on long-term debt and finance leases ( 29.6 ) ( 25.2 ) ( 23.1 )

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

Net payments under credit facilities ( 4.9 ) ( 14.0 ) ( 5.6 )

Debt issuance costs — ( 6.2 ) —

Debt extinguishment charge — — ( 64.5 )

Receipt of convertible note capped call 76.1 — —

Purchase of treasury stock ( 260.0 ) ( 85.2 ) ( 139.9 )

3 unchanged sentences

Cash provided by (used in) financing activities ( 260.4 ) 267.2 ( 201.9 )

Effect of exchange rate changes on cash and cash equivalents ( 7.6 ) — —

Cash held for sale ( 2.3 ) — —

Increase (decrease) in cash and cash equivalents ( 22.7 ) 159.9 ( 103.7 )

1 unchanged sentence

Cash and cash equivalents at end of year $ 721.2 $ 743.9 $ 584.0

*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.

13 unchanged sentences

Net income — — 323.5 — — 15.6 339.1

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, 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

Other comprehensive income (loss) — — — — 73.9 ( 18.3 ) 55.6

11 unchanged sentences

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.

Net income — — 367.8 — — 14.9 382.7

Other comprehensive loss — — — — ( 6.3 ) ( 1.6 ) ( 7.9 )

Conversion of convertible notes 0.9 140.1 ( 233.9 ) 384.6 — — 291.7

Convertible note capped call — 76.1 — — — — 76.1

Purchase of treasury stock — — — ( 260.0 ) — — ( 260.0 )

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

Employee stock plans 0.2 30.6 0.5 ( 23.2 ) — — 8.1

Balance, December 29, 2024 $ 14.3 $ 1,943.9 $ 64.3 $ ( 82.6 ) $ ( 89.5 ) $ 104.8 $ 1,955.2

The accompanying notes are an integral part of these statements.

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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.

Fiscal years 2024, 2023 and 2022 ended on December 29, 2024, December 31, 2023 and January 1, 2023, 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

The preparation of consolidated financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities at the date of the financial statements, as well as the reported amounts of income and expenses during the reporting period.

The preparation of consolidated financial statements in conformity with United States (U.S.) generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities at the date of the financial statements, as well as the reported amounts of income and expenses during the reporting period.

Actual results could differ from those estimates.

Management believes that the estimates are reasonable.

The Company markets its products to a diverse customer base, principally throughout the United States.

The Company markets its products to a diverse customer base, principally throughout the U.S.

No single customer accounted for more than 10% of sales for any year presented.

The major end markets for ATI’s products are customers in the aerospace & defense, energy, automotive, construction and mining, food equipment and appliances, and medical markets.

At December 31, 2023, ATI has approximately 7,300 active employees, of which approximately 15 % are located outside the United States.

Approximately 35 % of ATI’s workforce is covered by various collective bargaining agreements (CBAs), predominantly with the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied & Industrial Service Workers International Union, AFL-CIO, CLC (USW).

The Company’s CBA with the USW involving approximately 1,100 active full- time represented employees located primarily within the Advanced Alloys & Solutions (AA&S) segment operations, as well as a number of inactive employees, expired on February 28, 2021.

USW-represented employees continued to work under the terms of the expired CBA until March 30, 2021 when they engaged in a strike.

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 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 )

The core end markets for ATI’s products are customers in the aerospace & defense, specialty energy, electronics, and medical markets.

At December 29, 2024, ATI has approximately 7,700 active employees, of which approximately 15 % are located outside the U.S.

The Company is currently renegotiating the CBAs, which expire on February 28, 2025, that cover approximately 1,100 USW-represented full-time employees within our Advanced Alloys & Solutions operations.

There can be no assurance that the Company will successfully conclude these renegotiations to replace the expiring CBA.

Cash and Cash Equivalents

1 unchanged sentence

Accounts Receivable

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.

The Company’s accounts receivable reserves are determined based on expected credit losses.

Accounts receivable are presented net of a reserve for doubtful accounts of $ 15.0 million and $ 3.2 million at December 29, 2024 and December 31, 2023, respectively.

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

The Company determines a reserve for doubtful accounts based on an aging of accounts receivable and reviews of specific accounts identified as collection risks, as well as expected credit losses.

Amounts are written-off against the reserve in the period it is determined that the receivable is uncollectible.

Inventories are stated at the lower of cost (first-in, first-out (FIFO) and average cost methods) or net realizable value.

Inventories are stated at the lower of cost or net realizable value with the cost of inventories determined using either first in, first out (FIFO) or average cost methods.

Costs include direct material, direct labor and applicable manufacturing and engineering overhead, and other direct costs.

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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.

ROU assets for operating leases are classified in other long-term assets, and ROU assets for finance leases are classified in property, plant and equipment on the consolidated balance sheet.

For operating leases, short-term lease liabilities are classified in other current liabilities, and long-term lease liabilities are classified in other long-term liabilities on the consolidated balance sheet.

For finance leases, short-term lease liabilities are classified in short-term debt, and long-term lease liabilities are classified in long-term debt on the consolidated balance sheet.

On the cash flow statement, payments for operating leases are classified as operating activities.

Payments for finance leases are classified as a financing activity, except for the interest component of the payment which is classified as an operating activity.

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

3 unchanged sentences

In addition, several real property leases include variable lease payments, for items such as common area maintenance and utilities, which are expensed as incurred as variable lease expense.

There are two types of leases:

operating leases and finance leases.

Lease classification is determined at lease commencement.

A finance lease exists when specific criteria are met that indicate that all the risk and rewards related to the leased assets are transferred to the lessee.

All other leases not meeting the finance lease criteria are classified as operating leases.

Operating lease expense is recognized on a straight-line basis on the consolidated statement of operations.

Finance leases have front-loaded expense recognition which is reported as amortization expense and interest expense on the consolidated statement of operations.

ROU assets for operating leases are classified in other long-term assets , and ROU assets for finance leases are classified in property, plant and equipment on the consolidated balance sheet.

For operating leases, short-term lease liabilities are classified in other current liabilities , and long-term lease liabilities are classified in other long-term liabilities on the consolidated balance sheet.

For finance leases, short-term lease liabilities are classified in short-term debt , and long-term lease liabilities are classified in long-term debt on the consolidated balance sheet.

On the cash flow statement, payments for operating leases are classified as operating activities.

Payments for finance leases are classified as a financing activity, with the exception of the interest component of the payment which is classified as an operating activity.

Goodwill is reviewed annually for impairment, or more frequently if impairment indicators arise.

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The quantitative assessment may be performed each year for a reporting unit at the Company’s option without first performing a qualitative assessment.

The Company’s quantitative assessment of goodwill for possible impairment includes estimating the fair market value of a reporting unit which has goodwill associated with its operations using discounted cash flow and multiples of cash earnings valuation techniques, plus valuation comparisons to recent public sale transactions of similar businesses, if any.

The Company’s quantitative assessment of goodwill for possible impairment includes estimating the fair value of a reporting unit which has goodwill associated with its operations using discounted cash flow and multiples of cash earnings valuation techniques, plus valuation comparisons to recent public sale transactions of similar businesses, if any.

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.

14 unchanged sentences

Such estimates take into consideration the Company’s prior experience in site investigation and remediation, the data concerning cleanup costs available from other companies and regulatory authorities, and the professional judgment of the Company’s environmental experts in consultation with outside environmental specialists, when necessary.

Foreign Currency Translation

Foreign Currencies

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

1 unchanged sentence

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

Gains and losses for transactions denominated in foreign currencies are reported in costs of sales or general and administrative expenses in the consolidated statement of operations based on the underlying nature of the transaction.

Sales Recognition

The following is the Company’s accounting policy as it relates to Accounting Standards Codification Topic 606 (ASC 606), Contracts with Revenue from Customers.

This guidance provides a five-step analysis of transactions to determine when and how revenue is recognized, and requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

The following is the Company’s accounting policy as it relates to the five-step analysis for revenue recognition:

Identify the contract :

The Company has determined that the contract with the customer is established when the customer purchase order is accepted or acknowledged.

Long-term agreements (LTAs), which typically extend multiple years, are used by the Company and certain of its customers for its specialty materials, in the form of mill products, powders, parts and components, to reduce their supply uncertainty.

While these LTAs generally define commercial terms including pricing, termination clauses and other contractual requirements, they do not represent the contract with the customer.

Identify the performance obligation in the contract :

When the Company accepts or acknowledges the customer purchase order, the type of good or service is defined on a line by line basis.

Individual performance obligations are established by virtue of the individual line items identified on the sales order acknowledgment at the time of issuance.

Generally, the Company’s revenue relates to the sale of goods and contains a single performance obligation for each distinct good.

Conversion services that transform customer-owned inventory to a different dimension, product form, and/or changed mechanical properties are classified as “goods”.

Determine the transaction price :

Pricing is also defined on a sales order acknowledgment on a line item basis and includes an estimate of variable consideration when required by the terms of the individual customer contract.

The Company’s contracts with customers are comprised of purchase orders, and for larger customers long-term agreements (LTAs).

LTAs typically extend multiple years and are utilized by the Company and certain of its customers for its specialty materials, in the form of mill products, powders, parts and components, to reduce supply uncertainty.

While LTAs generally define commercial terms including pricing, termination clauses and other contractual requirements, the Company has determined that the contract with a customer is established when the customer purchase order is accepted or acknowledged.

Contracts (purchase orders) with customers typically relate to the manufacturing of products, which are defined on a line by line basis, and each distinct good represents a single performance obligation that is satisfied at a point in time when control of the product passes to the customer.

For most transactions, control passes at the time of shipment in accordance with agreed upon delivery terms.

On occasion, shipping and handling charges occur after the customer obtains control of the good.

When this occurs, the shipping and handling services are considered activities to fulfill the promise to transfer the good.

Sales for conversion services that transform customer-owned inventory to a different dimension, product form, and/or changed mechanical properties are recognized when the service is completed.

Pricing for the Company’s products is also defined in the customer purchase order or LTA on a line item basis and, in some cases, includes variable consideration.

Variable consideration is when the selling price of the good is not known or is subject to adjustment under certain conditions.

2 unchanged sentences

As such, returns and refunds reserves are estimated based upon past product line history or, at certain locations, on a claim by claim basis.

Allocate the transaction price to the performance obligation :

Since a customer contract generally contains only one performance obligation, this step of the analysis is generally not applicable to the Company.

Recognize revenue when or as the performance obligation is satisfied :

Performance obligations generally occur at a point in time and are satisfied when control passes to the customer.

For most transactions, control passes at the time of shipment in accordance with agreed upon delivery terms.

On occasion, shipping and handling charges occur after the customer obtains control of the good.

When this occurs, the shipping and handling services are considered activities to fulfill the promise to transfer the good.

Certain customer agreements involving production of parts and components require revenue to be recognized over time due to there being no alternative use for the product without significant economic loss and an enforceable right to payment including a normal profit margin from the customer in the event of contract termination.

4 unchanged sentences

Contract assets are assessed separately for impairment purposes.

If ATI’s right to consideration from the customer is unconditional, this asset is accounted for as a receivable and presented separately from other contract assets.

When ATI’s right to consideration from the customer is unconditional, this asset is accounted for as a receivable and presented separately from contract assets.

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

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

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

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Research and Development

Research, development and technical service activities are closely interrelated and are directed toward development of new products, improvement of existing products, cost reduction, process improvement and control, quality assurance and control, development of new manufacturing methods, and improvement of existing manufacturing methods.

Research, development and technical service activities are closely interrelated and directed toward development of new products, improvement of existing products, quality assurance, development of new manufacturing methods, improvement of existing manufacturing methods, and reducing the Company’s manufacturing costs.

Research and development costs are expensed as incurred.

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

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.

For the fiscal years ended December 29, 2024, December 31, 2023 and January 1, 2023, these state-level programs reduced selling, general and administrative expenses by $ 1.7 million, $ 1.4 million, $ 1.6 million, respectively, and cash receipts were $ 2.5 million, $ 3.4 million and $ 2.8 million, respectively.

Receivables for ongoing programs are $ 1.2 million as of both December 29, 2024 and December 31, 2023.

Defined Benefit Pension and Postretirement Plans

The 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.

For the remeasurement of projected benefit obligation and plan assets for defined benefit postretirement plans, the Company defers the recognition of these gains and losses in accumulated other comprehensive loss on the consolidated balance sheet, and the accumulated actuarial gains/losses are then amortized into net periodic benefit costs within nonoperating retirement benefit expense on the consolidated statements of operations over the average expected remaining life of plan participants.

Stock-based Compensation

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Compensation expense is adjusted for equity awards that do not vest because service or performance conditions are not satisfied.

However, compensation expense already recognized on plans which vest based solely on the attainment of market conditions, such as total shareholder return measures, is not adjusted based on the award attainment status at the end of the measurement period.

However, compensation expense already recognized on awards which vest based solely on the attainment of market conditions, such as total shareholder return measures, is not adjusted based on the award attainment status at the end of the measurement period.

Compensation expense is adjusted for estimated forfeitures over the award measurement period.

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The evaluation includes the consideration of all available evidence, both positive and negative, regarding the estimated future reversals of existing taxable temporary differences, estimated future taxable income exclusive of reversing temporary differences and carryforwards, historical taxable income in prior carryback periods if carryback is permitted, and potential tax planning strategies which may be employed to prevent an operating loss or tax credit carryforward from expiring unused.

The verifiable evidence such as future reversals of existing temporary differences and the ability to carryback are considered before the subjective sources such as estimated future taxable income exclusive of temporary differences and tax planning strategies.

The verifiable evidence such as future reversals of existing temporary differences and the

ability to carryback are considered before the subjective sources such as estimated future taxable income exclusive of temporary differences and tax planning strategies.

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

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New Accounting Pronouncements Adopted

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.

As such, a convertible debt instrument will be accounted for as a single liability measured at its amortized cost, as long as no other features require bifurcation and recognition as derivatives.

By removing those separation models, the reported interest rate of convertible debt instruments typically will be closer to the coupon interest rate.

The new guidance also addresses how convertible instruments are accounted for in the diluted earnings per share calculation, requiring the if-converted method, and requires enhanced disclosures about the terms of convertible instruments and contracts in an entity’s own equity.

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

The Company early adopted this new accounting guidance related to accounting for convertible instruments effective January 4, 2021 using the modified transition approach with the cumulative effect recognized as an adjustment to the opening balance of retained earnings.

This new guidance was applicable to the Company’s 3.5 % Convertible Senior Notes due 2025 (the 2025 Convertible Notes) that were issued in June 2020, for which the embedded conversion option was required to be separately accounted for as a component of stockholders’ equity.

Upon adoption on January 4, 2021, long-term debt increased by $ 45.4 million and stockholders’ equity decreased by the same amount, representing the net impact of two adjustments:

(1) the $ 49.8 million value of the embedded conversion, which is net of allocated offering costs, previously classified in additional paid-in capital in stockholders’ equity, and (2) a $ 4.4 million increase to retained earnings for the cumulative effect of adoption primarily related to the non-cash interest expense recorded in fiscal year 2020 for the amortization of the portion of the 2025 Convertible Notes allocated to stockholders’ equity.

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.

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

In September 2022, the Financial Accounting Standards Board (FASB) issued new accounting guidance related to disclosures about supplier finance programs.

Supplier finance programs allow a buyer to offer its suppliers the option for access to payment in advance of an invoice due date, which is paid by a third-party finance provider or intermediary on the basis of invoices that the buyer has confirmed as valid.

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.

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 did not early adopt this guidance.

This new guidance, with the exception of annual disclosures on rollforward information, was effective for the Company in fiscal year 2023, and the Company adopted this new accounting guidance effective January 2, 2023.

The annual rollforward information disclosures were effective for the Company in fiscal year 2024, and the Company adopted this new accounting guidance effective January 1, 2024.

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.

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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.

The Company adopted this new guidance for annual disclosures for fiscal year 2024 and will adopt it for interim disclosures in fiscal year 2025.

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 18.

Pending Accounting Pronouncements

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

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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 November 2024, the FASB issued new accounting guidance related to expense disaggregation disclosures.

This guidance requires entities to disclose specified information about certain costs and expenses including (1) the amounts of purchases of inventory, employee compensation, depreciation, and intangible asset amortization, (2) include certain amounts that are already required to be disclosed under current generally accepted accounting principles in the same disclosure as the other disaggregation requirements, (3) a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, and (4) the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses.

This new guidance for annual disclosures will be effective for the Company for fiscal year 2027 and for interim disclosures will be effective for the Company for fiscal year 2028.

The guidance can be applied prospectively or 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.

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, 2023, January 1, 2023 and January 2, 2022 is as follows:

Comparative information of the Company’s overall revenues (in millions) by global and geographical markets for the fiscal years ended December 29, 2024, December 31, 2023 and January 1, 2023 is as follows:

(in millions) 2024 2023 2022

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Total Aerospace & Defense $ 1,959.9 $ 761.0 $ 2,720.9 $ 1,786.9 $ 687.9 $ 2,474.8 $ 1,318.0 $ 555.6 $ 1,873.6

Oil & Gas 10.6 404.0 414.6 35.0 441.7 476.7 42.2 290.1 332.3

Specialty Energy 96.8 187.8 284.6 93.9 179.3 273.2 113.6 163.0 276.6

Total Energy 104.5 583.3 687.8 148.6 604.7 753.3 178.3 413.6 591.9

Automotive 24.6 186.1 210.7 11.2 290.9 302.1 8.7 296.4 305.1

Medical 115.5 109.4 224.9 102.6 74.3 176.9 73.2 89.9 163.1

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

Electronics 3.0 191.3 194.3 3.1 156.8 159.9 2.4 197.6 200.0

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

Other Core Markets 215.3 488.5 703.8 199.6 410.4 610.0 189.2 450.5 639.7

Core End Markets 2,175.2 1,249.5 3,424.7 1,986.5 1,098.3 3,084.8 1,507.2 1,006.1 2,513.3

Conventional Energy 9.8 292.2 302.0 10.6 404.0 414.6 35.0 441.7 476.7

Automotive 15.2 244.2 259.4 24.6 186.1 210.7 11.2 290.9 302.1

Construction/Mining 26.3 132.2 158.5 35.0 127.9 162.9 34.1 142.3 176.4

Other 52.0 165.5 217.5 63.5 237.2 300.7 53.7 313.8 367.5

Industrial Markets $ 103.3 $ 834.1 $ 937.4 $ 133.7 $ 955.2 $ 1,088.9 $ 134.0 $ 1,188.7 $ 1,322.7

Total $ 2,278.5 $ 2,083.6 $ 4,362.1 $ 2,120.2 $ 2,053.5 $ 4,173.7 $ 1,641.2 $ 2,194.8 $ 3,836.0

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China 57.6 242.0 299.6 70.1 263.2 333.3 59.8 292.0 351.8

United Kingdom 224.8 34.3 259.1 165.7 52.0 217.7 136.7 17.2 153.9

Germany 202.5 57.2 259.7 204.2 38.8 243.0 148.4 52.5 200.9

United Kingdom 217.0 40.9 257.9 224.8 34.3 259.1 165.7 52.0 217.7

France 186.9 40.6 227.5 172.4 47.0 219.4 125.7 31.5 157.2

Mexico 102.3 25.4 127.7 56.7 23.4 80.1 25.6 37.6 63.2

Canada 60.9 55.3 116.2 64.9 46.1 111.0 46.2 41.2 87.4

Rest of World 419.6 256.4 676.0 468.5 288.6 757.1 352.5 249.9 602.4

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Titanium and titanium-based alloys 23 % 13 % 18 % 22 % 12 % 17 % 17 % 7 % 11 %

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

Zirconium and related alloys — % 19 % 9 % — % 15 % 7 % — % 14 % 8 %

Precision rolled strip — % 19 % 8 % 1 % 19 % 10 % — % 25 % 14 %

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

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.

The Company maintains a backlog of confirmed orders totaling $ 3.9 billion, $ 3.8 billion and $ 2.9 billion at December 29, 2024, December 31, 2023 and January 1, 2023, respectively.

Due to the structure of the Company’s LTAs, 70 % of this backlog at December 29, 2024 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, 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:

As of December 29, 2024 and December 31, 2023, accounts receivable with customers were $ 724.2 million and $ 628.2 million, respectively.

The following represents the rollforward of accounts receivable - reserve for doubtful accounts for the fiscal years ended December 29, 2024, December 31, 2023 and January 1, 2023:

(in millions)

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Write-off of uncollectible accounts ( 4.6 )

Balance as of January 1, 2023 7.7

Balance as of December 31, 2023 3.2

Expense to increase the reserve 12.3

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Contract balances

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:

The following represents the rollforward of contract assets and liabilities for the fiscal years ended December 29, 2024, December 31, 2023 and January 1, 2023:

(in millions)

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Current year amounts reclassified to revenue ( 56.3 ) ( 40.9 ) ( 72.3 )

Divestiture — — ( 0.8 )

Other — ( 0.7 ) 0.7

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(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):

Contract costs for obtaining and fulfilling a contract were $ 12.0 million and $ 8.1 million as of December 29, 2024 and December 31, 2023, respectively, which are reported in other long-term assets on the consolidated balance sheets.

Amortization expense for the fiscal years ended December 29, 2024, December 31, 2023 and January 1, 2023 of these contract costs was $ 1.1 million, $ 1.2 million, and $ 1.0 million, respectively.

Inventories at December 29, 2024 and December 31, 2023 were as follows (in millions):

Raw materials and supplies $ 206.4 $ 234.9

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Property, Plant and Equipment

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

Property, plant and equipment at December 29, 2024 and December 31, 2023 was as follows:

(In millions) 2024 2023

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Total property, plant and equipment, net $ 1,776.9 $ 1,665.9

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:

Construction in progress at December 29, 2024 and December 31, 2023 was $ 262.5 million and $ 305.9 million, respectively.

Capital expenditures on the consolidated statements of cash flows for the fiscal years ended December 29, 2024, December 31, 2023, and January 1, 2023 exclude $ 36.2 million, $ 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 29, 2024, December 31, 2023, and January 1, 2023, respectively.

Depreciation and amortization for the fiscal years ended December 29, 2024, December 31, 2023 and January 1, 2023 was as follows:

(In millions) 2024 2023 2022

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Goodwill and Other Intangible Assets

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.

At December 29, 2024 and December 31, 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.

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The Forged Products reporting unit had a fair value that exceeded carrying value by approximately 95 % for the fiscal year 2024 annual assessment, which increased compared to the annual evaluation for fiscal year 2023.

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 impairments were determined to exist from the annual goodwill impairment evaluation for the fiscal years ended December 29, 2024, December 31, 2023 and January 1, 2023.

No indicators of impairment were observed in fiscal years 2024, 2023 and 2022 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

Accumulated goodwill impairment losses as of December 29, 2024, December 31, 2023 and January 1, 2023 were $ 528.0 million.

Other intangible assets, which are included in Other assets on the accompanying consolidated balance sheets as of December 29, 2024 and December 31, 2023 were as follows:

December 29, 2024 December 31, 2023

(in millions) Gross

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Total amortizable intangible assets $ 134.8 $ ( 91.1 ) $ 134.8 $ ( 83.7 )

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.

Amortization expense related to intangible assets was approximately $ 7 million for each of the fiscal years ended December 29, 2024 and December 31, 2023 and $ 8 million for the fiscal year ended January 1, 2023.

Annual amortization expense is expected to be approximately $ 7 million for each of the fiscal years 2025 through 2028 and $ 4 million in fiscal year 2029.

During the fourth quarter of 2024, the Company completed the sale of its precision rolled strip operations in New Bedford, MA, which was part of the Specialty-Rolled Products business in the AA&S segment, and Remscheid, Germany, which was part of our European business in the HPMC segment.

A $ 52.9 million gain on sale of these operations is reported in gain on asset sales and sales of businesses, net, on the consolidated statement of operations for fiscal year 2024, and is excluded from segment results.

The Company received proceeds, net of transaction costs, of $ 48.0 million in fiscal year 2024, which is reported as an investing activity on the consolidated statement of cash flows.

In fiscal year 2023, these operations had external sales of approximately $ 100 million and income before tax of approximately $ 6 million.

Also during 2024, the Company approved plans to divest of other certain immaterial, non-core operations from the HPMC segment.

These non-core operations, which are classified as held for sale as of December 29, 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 December 29, 2024.

(in millions) December 29,

Accounts receivable, net 1.2

Inventories, net 3.6

Prepaid expenses and other current assets 0.7

Total current assets 7.8

Property, plant and equipment, net 0.2

Other assets 0.4

Total long-term assets 0.6

Total Assets 8.4

Other current liabilities 1.2

Total current liabilities 1.2

Other long-term liabilities 0.4

Total Liabilities 1.6

Net assets held for sale $ 6.8

On May 12, 2022, the Company completed the sale of its Sheffield, United Kingdom (U.K.) 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 $ 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 includes $ 26.8 million related to the U.K.

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 U.K.

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 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.

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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 in fiscal year 2022 and is excluded from AA&S segment results.

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 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.

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 $ 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;

however, there is no active development at this time.

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.

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These requests were denied by the U.S.

Department of Commerce in the second quarter of fiscal year 2020, and the 25% tariff remained in place.

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.

ATI’s share of the A&T Stainless results were losses of $ 1.0 million and $ 1.8 million for the fiscal years ended December 29, 2024 and December 31, 2023, 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 U.S.

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

As 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.

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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.

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.

As of December 29, 2024 and December 31, 2023, ATI had net receivables from A&T Stainless for working capital advances and administrative services of $ 0.6 million and $ 1.5 million, respectively.

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.

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

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

The Company received its final distribution in the first quarter of 2024 as a result of the termination, and formal dissolution occurred in the fourth quarter of 2024.

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.

ATI’s share of Uniti’s income was $ 0.2 million in fiscal year 2023 and $ 4.4 million in fiscal year 2022, which were 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 and $ 45.0 million in fiscal year 2022.

Asset Retirement Obligations

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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, 2023 and January 1, 2023 were as follows:

Changes in asset retirement obligations for the years ended December 29, 2024 and December 31, 2023 were as follows:

(In millions) 2024 2023

1 unchanged sentence

Accretion expense 0.5 0.7

Revision of estimates ( 0.7 ) —

Divestitures ( 10.0 ) —

Payments ( 0.2 ) ( 0.2 )

Balance at end of fiscal year $ 7.9 $ 18.3

During fiscal year 2024, the Company de-recognized $ 10.0 million of AROs in connection with the sale of its precision rolled strip operations (see Note 6 for further explanation).

Supplemental Financial Statement Information

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

Cash and cash equivalents at December 29, 2024 and December 31, 2023 were as follows:

(In millions) 2024 2023

2 unchanged sentences

Total cash and cash equivalents $ 721.2 $ 743.9

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:

Other current liabilities included salaries, wages and other employee-related liabilities of $ 113.6 million and $ 102.3 million at December 29, 2024 and December 31, 2023, respectively, and accrued interest of $ 23.9 million and $ 23.7 million at December 29, 2024 and December 31, 2023, respectively.

Other income (expense) for the fiscal years ended December 29, 2024, December 31, 2023, and January 1, 2023 was as follows:

(in millions) 2024 2023 2022

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Net equity income (loss) on joint ventures (See Note 7) ( 1.0 ) ( 1.6 ) 12.6

Gain on sales of businesses, net (See Note 6) — — 13.8

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

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

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

Other — — 0.3

Total other income (expense), net $ 14.4 $ 1.3 $ ( 12.5 )

Gains from disposal of property, plant and equipment, net for the fiscal year ended December 29, 2024 include an $ 11.6 million gain on the sale of certain oil and gas rights.

These cash gains are reported as an investing activity on the consolidated statement of cash flow for the fiscal year ended December 29, 2024.

Supplier Financing

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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:

As of December 29, 2024 and December 31, 2023, the Company had $ 34.8 million and $ 15.6 million, respectively, reported in accounts payable on the consolidated balance sheets under such programs.

The following represents the rollforward of the Company’s obligations under such programs for the fiscal year ended December 29, 2024:

(in millions) Fiscal Year

Balance as of beginning of fiscal year $ 15.6

New obligations confirmed 282.8

Obligations paid ( 263.6 )

Balance as of period end $ 34.8

Sale of Receivables Program

During the fourth quarter of 2024, the Company entered into an accounts receivables purchase agreement (Receivables Purchase Agreement) with a third-party financial institution to periodically sell certain accounts receivables at a discount.

These accounts receivable sales are accounted for as a sale of assets under ASC 860, Transfers and Servicing, as the Company’s continuing involvement is limited to servicing the accounts receivable, collecting the payments for the underlying accounts receivables and remitting such collections to the financial institution.

The financial institution is responsible for any credit risk associated with the sold accounts receivables.

The Company receives the purchase price, equal to the accounts receivable less the discount, at the time of the sale.

The Company sold $ 13.5 million of its receivables under this program during the fiscal year ended December 29, 2024, resulting in de-recognition of the receivables from the Company’s consolidated balance sheet.

The Company had no amounts collected on behalf of the financial institution under the Receivables Purchase Agreement at December 29, 2024 and the loss on the sales of accounts receivables were not material to the Company.

The cash received on these sales of accounts receivable during the fiscal year ended December 29, 2024 is presented in changes in receivables within operating activities in the consolidated statement of cash flows.

Other Customer Receivable Sales

In the fiscal years ended December 29, 2024, December 31, 2023 and January 1, 2023, the Company sold $ 300 million, $ 308 million and $ 133 million, respectively, of certain customers’ accounts receivables through programs established by those customers with third-party financial institutions.

These customers have extended payment terms and provide the programs to enable suppliers to receive more timely payments.

The Company has no continuing involvement with the receivables sold under these programs, including no servicing requirement.

The proceeds from these transactions are presented in changes in receivables within operating activities in the consolidated statement of cash flows.

The costs associated with these transactions of $ 6.0 million, $ 6.3 million and $ 1.5 million are reflected in the Company’s consolidated statement of operations for the fiscal years ended December 29, 2024, December 31, 2023 and January 1, 2023, respectively.

Debt at December 29, 2024 and December 31, 2023 was as follows:

(In millions) 2024 2023

7.25 % Notes due 2030

$ 425.0 $ 425.0

5.875 % Senior Notes due 2027

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

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

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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.

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.

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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

On September 14, 2021, ATI issued $ 325 million aggregate principal amount of 4.875 % Senior Notes due 2029 (2029 Notes) and $ 350 million aggregate principal amount of 5.125 % Senior Notes due 2031 (2031 Notes).

Interest on the 2029 Notes is payable semi-annually in arrears at a rate of 4.875 % per year, and the 2029 Notes will mature on October 1, 2029.

Interest on the 2031 Notes is payable semi-annually in arrears at a rate of 5.125 % per year, and the 2031 Notes will mature on October 1, 2031.

Total combined net proceeds of $ 665.7 million from both of these issuances were primarily used to fund the full redemption of the $ 500 million aggregate principal amount outstanding of the 2023 Notes on October 14, 2021, including a make-whole payment and accrued interest, resulting in a $ 65.5 million debt extinguishment charge.

Underwriting fees and other third-party expenses for the issuance of the 2029 and 2031 Notes were $ 4.7 million each, and are being amortized to interest expense over the 8-year and 10-year terms of the 2029 and 2031 Notes, respectively.

The 2029 and 2031 Notes are unsecured and unsubordinated obligations of the Company and equally ranked with all of its existing and future senior unsecured debt.

The 2029 and 2031 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 2029 and 2031 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 2029 and 2031 Notes.

The 2029 and 2031 Notes are subject to repurchase upon the occurrence of a change in control repurchase event (as defined in the 2029 and 2031 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 2029 or 2031 Notes repurchased, as applicable.

2025 Convertible Notes

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.

During the third quarter of 2024, the Company notified holders of the $ 291.4 million outstanding principal amount of its 3.5 % Convertible Notes due 2025 (2025 Convertible Notes) that they would be redeemed prior to their maturity date.

The holders of any outstanding 2025 Convertible Notes had the right to convert the principal amount of such notes into shares of ATI’s common stock prior to the redemption date.

Any 2025 Convertible Notes not tendered for conversion prior to the redemption date were redeemed in cash at a redemption price equal to the principal amount, plus accrued and unpaid interest.

As a result, $ 291.0 million principal amount of the outstanding notes was converted at a rate of 64.7178 shares of ATI common stock per $1,000 principal amount, equivalent to a conversion price of $ 15.45 per share or 18.8 million shares of ATI common stock.

Due to the early redemption of the 2025 Convertible Notes, the conversion rate was a premium to the conversion rate of 64.5745 shares of ATI common stock per $1,000 principal amount, or approximately $ 15.49 per share, that would have been due at maturity.

The remaining $ 0.4 million of outstanding principal balance were not tendered for conversion and, as a result, the Company redeemed those for cash.

For those holders who exercised the conversion rights, the terms of the 2025 Convertible Notes provided that any accrued but unpaid interest at the date of conversion was forfeited.

As a result, accrued interest from the last interest payment date of June 15, 2024 through the date of conversion, totaling $ 2.3 million, was credited to additional paid-in capital.

In addition, the remaining unamortized deferred issuance costs of $ 1.6 million at the date of conversion were charged to additional paid-in capital.

Coincident with its redemption of the 2025 Convertible Notes, the Company also settled the capped call transactions initiated as part of the issuance of the 2025 Convertible Notes.

The capped call transactions included a cap price of $ 19.76 per share and were settled for $ 76.1 million in cash, which is recorded as additional paid-in capital on the consolidated balance sheet and as a financing activity on the consolidated statement of cash flows.

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

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

Including amortization of deferred issuance costs, the effective interest rate up to the time of conversion was 4.2 % for the fiscal years ended December 29, 2024, December 31, 2023 and January 1, 2023.

Remaining deferred issuance costs were $ 2.9 million at December 31, 2023.

Interest expense on the 2025 Convertible Notes was as follows:

3 unchanged sentences

Total interest expense $ 8.5 $ 12.1 $ 12.0

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).

Prior to the close of business on the business day immediately preceding March 15, 2025, the 2025 Convertible Notes will be convertible at the option of the holders of 2025 Convertible Notes only upon the satisfaction of specified conditions and during certain periods.

Thereafter, until the close of business on the second scheduled trading day immediately preceding the maturity date, the 2025 Convertible Notes will be convertible at the option of holders of 2025 Convertible Notes at any time regardless of these conditions.

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.

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 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.

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.

2022 Convertible Notes

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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 January 1, 2023 and January 2, 2022.

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

Interest expense on the 2022 Convertible Notes was as follows:

3 unchanged sentences

Total interest expense $ 2.3

The 5.875 % stated interest rate payable on the 2023 Notes was subject to adjustment in the event of changes in the credit ratings on the 2023 Notes by either Moody’s or Standard & Poor’s.

Each notch of credit rating downgrade from the credit ratings in effect when the 2023 Notes were issued in July 2013 increased interest expense by 0.25 % on the 2023 Notes, up to a maximum 4 notches by each of the two rating agencies, or a total 2.0 % potential interest rate change up to 7.875 %.

The annual interest rate on the 2023 Notes was at the maximum 7.875 % from February 2016 until their redemption in October 2021 as discussed above.

Credit Agreements

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 credit 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 credit 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 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 :

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

The applicable interest rate for revolving credit borrowings under the ABL credit 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 credit facility contains a financial covenant whereby the Company must maintain a fixed charge coverage ratio of not less than 1.00 :

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 ABL Term Loan balance, or (ii) $ 60.0 million.

The Company was in compliance with the fixed charge coverage ratio as of December 29, 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.

Additionally, the Company must demonstrate minimum liquidity specified by the facility during the 90-day period immediately preceding the stated maturity date of its 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 :

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As of December 29, 2024, there were no outstanding borrowings under the revolving portion of the ABL, and $ 30.5 million was utilized to support the issuance of letters of credit.

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 2024.

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.

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.

The Company also has foreign credit facilities, primarily in China, that total $ 70 million based on December 29, 2024 foreign exchange rates, none of which was drawn as of December 29, 2024 and $ 5.0 million of which was drawn as of December 31, 2023.

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.

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Upon payment of the final progress payments by the lenders, finance leases will commence, and $ 95.4 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 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.

Progress payments made on behalf of the Company in fiscal years 2024, 2023 and 2022 include $ 9.7 million, $ 2.8 million and $ 1.8 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 29, 2024, December 31, 2023 and January 1, 2023.

Derivative Financial Instruments and Hedging

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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 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.

The ineffective portion at hedge inception, determined from the fair value of the swap immediately prior to amendment in July 2019, was amortized to interest expense over the initial ABL Term Loan swap maturity date of January 12, 2021.

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

There are no outstanding derivative interest rate contracts at December 29, 2024.

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

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All fair values for these derivatives were measured using Level 2 information as defined by the accounting standard hierarchy, which includes quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs derived principally from or corroborated by observable market data.

(In millions) December 31,

2023 January 1, 2023

(In millions) December 29, 2024 December 31, 2023

Asset derivatives Balance sheet location

Derivatives designated as hedging instruments:

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

Foreign exchange contracts Prepaid expenses and other current assets $ 0.2 $ 0.1

Natural gas contracts Prepaid expenses and other current assets 0.8 —

Nickel and other raw material contracts Prepaid expenses and other current assets — 12.5

Interest rate swap Other assets — 0.5

Interest rate swap Prepaid expenses and other current assets — 0.7

Natural gas contracts Other assets 0.9 0.1

Nickel and other raw material contracts Other assets — 0.5

Total derivatives designated as hedging instruments 1.9 0.9

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Assuming market prices remain constant with those at December 29, 2024, a pre-tax loss of $ 4.9 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.

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

There were no outstanding fair value hedges as of December 29, 2024 or December 31, 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.

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.

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):

Activity with regard to derivatives designated as cash flow hedges for the fiscal years ended December 29, 2024 and December 31, 2023 were as follows (in millions):

Derivatives in Cash Flow

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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 the Company recognized $ 2.2 million of expense, net, for settled foreign currency forward contracts that were not designated as hedges during the fiscal year ended December 29, 2024, which offset foreign currency gains/losses in the relevant currency.

We have no significant outstanding hedges that are not designated as of December 29, 2024.

Fair Value of Financial Instruments

11 unchanged sentences

Debt (a) 1,909.5 1,889.7 1,580.2 309.5

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

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

Fair Value Measurements at Reporting Date Using

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Short-term and long-term debt:

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 the 2025 Convertible Notes (prior to conversion in the third quarter of fiscal year 2024), the Allegheny Ludlum 6.95 % Debentures due 2025, the 5.875 % Senior Notes due 2027, the 4.875 % Senior Notes due 2029, the 2030 Notes and the 5.125 % Senior Notes due 2031 were determined using Level 1 information.

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

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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.

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.

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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.

Other postretirement benefit costs for a defined contribution plan under the terms of a CBA were $ 1.0 million for each of the fiscal years ended December 29, 2024, December 31, 2023, and January 1, 2023.

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) 2023 2022 Revised 2021 Revised 2023 2022 2021

(In millions) 2024 2023 2022 2024 2023 2022

Service cost—benefits earned during the year $ 5.8 $ 6.0 $ 11.9 $ 0.5 $ 0.6 $ 1.1

4 unchanged sentences

Recognized actuarial loss (gain)- mark to market 14.1 26.8 ( 100.3 ) — — —

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

Settlement loss — 41.7 0.7 — — —

Total retirement benefit expense (income) $ 20.2 $ 69.7 $ ( 145.8 ) $ 15.1 $ 16.6 $ 21.1

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.

Under the Company’s accounting method for recognizing actuarial gains and losses for its defined benefit pension plans, 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 actuarial losses of $ 14.1 million and $ 26.8 million in fiscal years 2024 and 2023, respectively, and an actuarial gain of $ 100.3 million in fiscal year 2022, 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.

1 unchanged sentence

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 $ 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.

On July 14, 2021, ATI announced that a new four-year labor agreement with the USW was ratified (see Note 1 for further discussion).

As a result of this new CBA, ATI recognized a $ 64.9 million pretax settlement gain, which is recorded in nonoperating retirement benefit income/expense on the consolidated statement of operations, related to a plan termination that eliminated certain postretirement medical benefit liabilities, comprised of $ 43.0 million of long-term postretirement benefit liabilities as of July 2021 and $ 21.9 million of amounts recorded in accumulated other comprehensive income at that date.

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

On May 12, 2022, the Company completed the sale of its Sheffield, U.K.

operations (see Note 6).

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 U.K.

defined benefit pension plan that transferred as part of the sale.

Pension liabilities and assets for this U.K.

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.

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

4 unchanged sentences

Rate of increase in future compensation levels 3.00 % 3.00 % 2.00 %- 3.00 %

2.00 % - 3.00 %

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

7 unchanged sentences

Rate of increase in future compensation levels 3.00 %- 5.00 %

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:

A reconciliation of the funded status for the Company’s defined benefit pension and other postretirement benefit plans at December 29, 2024 and December 31, 2023 was as follows:

Pension Benefits Other Postretirement Benefits

5 unchanged sentences

Benefits paid ( 3.5 ) ( 153.9 ) ( 25.4 ) ( 26.4 )

Subsidy received — — — 0.3

Divestiture — ( 75.8 ) — —

Effect of currency rates — ( 3.2 ) — —

Net actuarial (gains) losses – discount rate change ( 9.7 ) ( 95.8 ) ( 2.5 ) 0.7

9 unchanged sentences

Employer contributions 3.3 278.0 — —

Divestiture — ( 101.8 ) — —

Effect of currency rates — ( 4.4 ) — —

Plan settlement — ( 1,350.6 ) — —

14 unchanged sentences

Pension Benefits Other Postretirement Benefits

(In millions) 2023 2022 Revised 2023 2022

(In millions) 2024 2023 2024 2023

Beginning of year accumulated other comprehensive loss $ ( 7.4 ) $ ( 8.8 ) $ ( 54.5 ) $ ( 55.8 )

5 unchanged sentences

Net change in accumulated other comprehensive loss $ 0.3 $ 1.4 $ 2.2 $ 1.3

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

Amounts included in accumulated other comprehensive loss at December 29, 2024 and December 31, 2023 were as follows:

Pension Benefits Other Postretirement Benefits

(In millions) 2023 2022 Revised 2023 2022

(In millions) 2024 2023 2024 2023

Prior service (cost) credit $ ( 7.1 ) $ ( 7.4 ) $ 0.8 $ 1.7

16 unchanged sentences

Amortization of accumulated other comprehensive loss $ 0.4 $ 4.2 $ 4.6

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.

The accumulated benefit obligation for all defined benefit pension plans was $ 292.3 million and $ 281.3 million at December 29, 2024 and December 31, 2023, respectively.

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

5 unchanged sentences

Cash contributions to ATI’s U.S.

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.

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

There were no cash contributions in fiscal year 2024.

The Company funds the U.S.

30 unchanged sentences

equities $ 0.1 $ — $ 0.1 $ — $ —

International equities 0.1 — 0.1 — —

Fixed income and cash equivalents 199.2 5.3 193.9 — —

2 unchanged sentences

Total assets $ 279.8 $ 85.8 $ 194.0 $ — $ —

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

The fair values of the Company’s pension plan assets at December 31, 2023 were as follows:

(In millions) Quoted Prices in

17 unchanged sentences

These investments are not classified in the fair value hierarchy.

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.

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

4 unchanged sentences

Fair value of these investments is determined utilizing net asset values, and are not classified in the fair value hierarchy.

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 fiscal year 2025, the expected long-term rate of return on defined benefit pension assets is 5.80 %.

19 unchanged sentences

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.

As of December 29, 2024, the Company’s pension plan had outstanding commitments to invest up to $ 37 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.

5 unchanged sentences

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.

The Company’s participation in multiemployer plans for the fiscal years ended December 29, 2024, December 31, 2023 and January 1, 2023 is reported in the following table.

Protection Act

9 unchanged sentences

Boilermakers-Blacksmiths National Pension Trust 48-6168020

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

/ 001 Red Red Yes 2.7 2.6 2.3 No 9/30/2026

IAM National Pension Fund 51-6031295

8 unchanged sentences

In April 2019, the Company received notification from the IAM National Pension Fund (IAM Fund) that its’ actuary certified the IAM Fund as “endangered status” for the plan year beginning January 1, 2019, and that the IAM Fund was voluntarily placing itself in “red” zone status and implementing a rehabilitation plan.

In April 2020, 2021, 2022, and 2023 the Company received notification from the IAM Fund that it was certified by its actuary as being in “red” zone status for the plan years beginning January 1, 2020, 2021 and 2022.

Annually in April of each year

from 2020 through 2024, the Company received notification from the IAM Fund that it was certified by its actuary as being in “red” zone status for each of these plan years from January 1, 2020 through December 31, 2024.

A contribution surcharge was imposed as of June 1, 2019 in addition to the contribution rate specified in the applicable collective bargaining agreements.

4 unchanged sentences

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.

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, and in April 2024, the Blacksmiths Trust was certified by its actuary as being in “red” zone status for the plan years ending December 31, 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 unchanged sentences

(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 April 26, 2024 and July 14, 2028.

Expiration dates of these collective bargaining agreements range between March 27, 2025 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, 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

The changes in AOCI by component, net of tax, for the fiscal years ended December 29, 2024, December 31, 2023 and January 1, 2023 were as follows (in millions):

benefit plans Currency

adjustment Derivatives Deferred Tax Asset Valuation Allowance Revised Total

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

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

OCI before reclassifications 41.3 ( 25.2 ) 41.0 — 57.1

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

Amounts reclassified from AOCI (a) 10.6 (c) 20.0 (d) ( 32.6 ) (e) 18.8 16.8

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

1 unchanged sentence

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

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

Amounts reclassified from AOCI (a) 5.1 (b) — (d) 1.9 (e) 0.2 7.2

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

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

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

OCI before reclassifications ( 1.6 ) ( 11.4 ) ( 4.5 ) — ( 17.5 )

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

Amounts reclassified from AOCI (a) 3.6 (b) — (d) 8.4 (e) ( 0.8 ) 11.2

Net current-period OCI 2.0 ( 11.4 ) 3.9 ( 0.8 ) ( 6.3 )

3 unchanged sentences

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

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

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

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

1 unchanged sentence

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

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

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

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

Balance, January 1, 2023 — 7.7 — — 7.7

Balance, December 31, 2023 — 7.3 — — 7.3

OCI before reclassifications — ( 1.6 ) — — ( 1.6 )

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

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

Net current-period OCI — ( 1.6 ) — — ( 1.6 )

Balance, December 29, 2024 $ — $ 5.7 $ — $ — $ 5.7

(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).

(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, U.K.

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, U.K.

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 income tax provision for the fiscal year ended December 29, 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.

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

3 unchanged sentences

subsidiaries.

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

Reclassifications out of AOCI for the fiscal years ended December 29, 2024, December 31, 2023 and January 1, 2023 were as follows:

Amount reclassified from AOCI (d)

2 unchanged sentences

(In millions)

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

December 29, 2024 December 31, 2023 January 1, 2023 Affected line item in the

consolidated statement of operations

2 unchanged sentences

Actuarial losses ( 5.2 ) (a) ( 6.0 ) (a) ( 13.2 ) (a)

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

Settlement loss — (a) ( 1.1 ) (a) ( 0.7 ) (b)

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

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

( 1.1 ) ( 1.4 ) ( 2.8 ) Tax benefit (e)

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

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

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

Nickel and other raw material contracts $ ( 4.8 ) (c) $ 3.3 (c) $ 26.9 (c)

6 unchanged sentences

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

(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).

(b) A mounts in 2022 were included in loss on asset sales and sales of businesses, net, as part of the loss on sale of the Sheffield, U.K.

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.

7 unchanged sentences

At December 29, 2024, there were no shares of preferred stock issued.

Under the ABL facility, there is no limit on dividend declarations or payments provided that the undrawn availability, after giving effect to a particular dividend payment, is at least the greater of $ 120 million and 20 % of the total facility size, after giving effect to any repayment of term loans, and no event of default under the ABL facility has occurred and is continuing or would result from paying the dividend.

Under the ABL credit facility, there is no limit on dividend declarations or payments provided that the undrawn availability, after giving effect to a particular dividend payment, is at least the greater of $ 120 million and 20 % of the total facility size, after giving effect to any repayment of term loans, and no event of default under the ABL credit facility has occurred and is continuing or would result from paying the dividend.

In addition, there is no limit on dividend declarations or payments if the undrawn availability is less than the greater of $ 120 million and 20 % of the total facility size, after giving effect to any repayment of term loans, but more than the greater of $ 75 million and 12.5 % of the total facility size, after giving effect to any repayment of term loans, if (i) no event of default has occurred and is continuing or would result from paying the dividend, (ii) the Company demonstrates to the administrative agent that, prior to and after giving effect to the payment of the dividend (A) the undrawn availability, as measured both at the time of the dividend payment and as an average for the 60 consecutive day period immediately preceding the dividend payment, is at least the greater of $ 75 million and 12.5 % of the total facility size, after giving effect to any repayment of term loans, and (B) the Company maintains a fixed charge coverage ratio of at least 1.00 :

1.00 , as calculated in accordance with the terms of the ABL facility.

1.00 , as calculated in accordance with the terms of the ABL credit facility.

Share-based Compensation

17 unchanged sentences

Approximately $ 10.8 million of unrecognized fair value compensation expense relating to restricted stock units is expected to be recognized through fiscal year 2027, with $ 7.5 million expected to be recognized in fiscal year 2025, 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:

Activity under the Company’s RSU awards for the fiscal years ended December 29, 2024, December 31, 2023, and January 1, 2023 was as follows:

(Shares in thousands, $ in millions) 2024 2023 2022

15 unchanged sentences

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.

The metrics for PSU awards granted in fiscal year 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.

9 unchanged sentences

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;

For the 2023 and 2024 awards, TSR is determined over four distinct six-month periods as measured from January 1 of the grant year of the award through the end of each six-month period starting with the second quarter ending in the second 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.

1 unchanged sentence

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.

In fiscal year 2024, 6,530 shares were issued due to retirement vesting.

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.

14 unchanged sentences

In fiscal year 2024, the fiscal year 2022 PSU awards vested with TSR attainment of 200.0 %, resulting in the issuance of 849,422 shares in the first quarter of fiscal year 2025.

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) 2023 2022 Revised 2021 Revised

(In millions) 2024 2023 2022

$ 421.1 $ 258.2 $ 394.3

14 unchanged sentences

Federal income tax rate to the actual effective income tax provision (benefit):

(In millions) 2023 2022 Revised 2021 Revised

(In millions) 2024 2023 2022

Taxes computed at the federal rate $ 102.0 $ 62.0 $ 74.5

Goodwill — — 2.6

State and local income taxes, net of federal tax benefit 9.3 1.2 2.9

Valuation allowance ( 0.3 ) ( 198.8 ) ( 84.4 )

Repatriation of foreign earnings (GILTI ) 5.0 — 2.0

Divestiture — 23.0 —

Recognition of stranded deferred tax balance — — 3.9

Global Intangible Low Taxed Income (GILTI ) 3.3 5.0 —

Restructuring/Divestitures — — 23.0

Foreign earnings taxed at different rate 3.4 2.7 3.2

3 unchanged sentences

Income tax provision (benefit) $ 103.4 $ ( 128.2 ) $ 15.5

In fiscal year 2024, the income tax provision of $ 103.4 million includes discrete tax benefits of $ 6.2 million, which includes $ 3.3 million for share-based compensation and $ 0.8 million related to 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).

In fiscal year 2024, the amount of GILTI is representative of the amount after GILTI tax credits and deductions.

In fiscal year 2023, the amount of GILTI represents a full inclusion due to ATI’s net operating loss utilization and inability to utilize GILTI tax credits.

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.

Other benefits in the current year are primarily related to research and development benefits and the disallowance of the above the line income related to the Advanced Manufacturing Production Credit (AMPC) as discussed in Note 18.

In the fourth quarter of fiscal year 2024, the Company was granted a preferential tax rate related to the PRS joint venture operations in China for tax years 2024 through 2026.

The preferential tax rate is 15%, compared to the statutory rate of 25%.

The Company must re-apply for the High and New-Technology Enterprise (HNTE) status every three years to be eligible for the preferential rate.

This same preferential rate was in effect for tax years 2021-2023.

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 as the expense related to current year operations for federal and state purposes was mainly offset by the valuation allowance release attributable to that income.

On May 12, 2022, the Company sold its Sheffield, U.K.

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 Company’s income tax expense has been impacted by the effects of valuation allowances on federal and state deferred tax assets for fiscal years 2022 through 2023.

5 unchanged sentences

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.

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.

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.

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 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 2024, 2023 and 2022 of $ 23.3 million, $ 24.1 million, and $ 23.9 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 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 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%.

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, 2023 and January 1, 2023 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 29, 2024 and December 31, 2023 were as follows:

(In millions) 2024 2023

12 unchanged sentences

Basis of property, plant and equipment 180.5 124.8

Inventory valuation — 17.1

Basis of amortizable intangible assets 13.4 14.9

1 unchanged sentence

Total deferred tax liabilities 221.9 165.2

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).

Net deferred tax asset $ 41.8 $ 131.0

The Company’s valuation allowance for deferred taxes was $ 57.7 million at December 29, 2024, $ 60.3 million at December 31, 2023 and $ 266.9 million at January 1, 2023.

The reduction in the valuation allowance in fiscal year 2024 was primarily due to a state valuation allowance release, which was mostly offset by the expiration of state tax attributes for income tax purposes.

The change in the valuation allowance in fiscal year 2023 was due to a $ 206.6 million valuation allowance release due to

taxable income during that fiscal year as well as projections of future years’ taxable income, of which $ 7.8 million was reflected as a state and local tax benefit.

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.

Fiscal year 2024 is the final year of inclusion related to the recognition of the deferred tax liability associated with LIFO.

The following summarizes the carryforward periods for the tax attributes related to NOLs and credits by jurisdiction.

($ in millions, U.S.

NOL amounts are pre-tax and all other items are after-tax)

NOL amounts are pre-tax, all other items are after-tax, and state is before federal benefit)

Jurisdiction Attribute Amount Expiration Period Amount expiring within 5 years Amount expiring in 5-20 years

NOL $ 213 20 years $ — $ 213

NOL $ 83 Indefinite $ — $ —

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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 fiscal years ended December 31, 2023, January 1, 2023 and January 2, 2022 were as follows:

The changes in the liability for unrecognized income tax benefits for the fiscal years ended December 29, 2024, December 31, 2023 and January 1, 2023 were as follows:

(In millions) 2024 2023 2022

2 unchanged sentences

Decreases in prior period tax positions ( 0.9 ) — ( 3.3 )

Increases in current period tax positions — — 0.3

Settlements ( 0.2 ) — —

Expiration of the statute of limitations — ( 1.4 ) ( 1.8 )

Balance at end of fiscal year $ 7.8 $ 8.9 $ 9.1

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.

For fiscal years ended December 29, 2024, December 31, 2023 and January 1, 2023, the liability includes $ 6.9 million, $ 7.2 million and $ 7.8 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 $ 0.9 million.

At this time, the Company believes that it is reasonably possible that approximately $ 0.5 million of the estimated unrecognized tax benefits as of December 31, 2023 will be recognized within the next twelve months based on the expiration of statutory review periods.

At this time, the Company believes that it is reasonably

possible that approximately $ 0.5 million of the estimated unrecognized tax benefits as of December 29, 2024 will be recognized within the next twelve months based on the expiration of statutory review periods.

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 fiscal years 2024, 2023 and 2022 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.

At December 29, 2024 and December 31, 2023, the accrued liabilities for interest and penalties related to unrecognized tax benefits were $ 0.8 million and $ 1.3 million, respectively.

The Company, and/or one of its subsidiaries, files income tax returns in the U.S.

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Pennsylvania 2021

United Kingdom 2021

Illinois 2021

California 2020

Business Segments

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HPMC is comprised of the Specialty Materials and Forged Products businesses, as well as the ATI Europe distribution operations.

Approximately 85 % of its revenue is derived from the aerospace & defense markets including nearly 60 % of its revenue from products for commercial jet engines.

Other major HPMC end markets include medical and energy.

Approximately 86 % of its revenue is derived from the aerospace & defense markets including nearly 60 % of its revenue from products for commercial jet engines and 10 % from defense products.

Other core markets include medical and specialty energy.

HPMC produces a wide range of high performance materials, components, and advanced metallic powder alloys.

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, 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.

These products are made from nickel-based alloys and superalloys, titanium and titanium-based alloys, and a variety of other specialty materials.

HPMC’s 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 A&T Stainless 50 %-owned joint venture that is 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 over 60 % of its revenue.

Other important end markets for AA&S include electronics, medical and automotive.

AA&S is focused on delivering high-value flat products, with a focus in aerospace & defense and other core markets, which comprise approximately 60 % of its revenue.

Industrial markets comprise the remaining 40 % of AA&S sales, which includes the conventional energy and automotive end-markets.

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.

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.

ATI’s Chief Operating Decision Maker (CODM) is the Chief Executive Officer.

Segment EBITDA, the Company’s segment operating measure, is used by the CODM to assess segment operating performance and to determine the allocation of resources.

Segment EBITDA as a percentage of segment revenues is utilized to assess the profitability of each segment and whether the Company’s strategies are resulting in margin expansion and expected operating performance improvements.

The measure of segment EBITDA excludes net interest expense, income taxes, depreciation and amortization, goodwill impairment charges, debt extinguishment charges, corporate expenses, closed operations and other income (expense), restructuring and other credits/charges, gains or losses from the sale of accounts receivables, strike related costs, long-lived asset impairments, pension remeasurement gains and losses, other postretirement/pension curtailment and settlement gains and losses, and gains or losses on sales of businesses.

Management believes segment EBITDA, as defined, provides an appropriate measure of controllable operating results at the business segment level.

Intersegment sales are generally recorded at full cost or market.

Common services are allocated on the basis of estimated utilization.

(In millions) 2023 2022 2021

High Performance Materials & Components $ 2,302.0 $ 1,815.7 $ 1,248.3

Advanced Alloys & Solutions 2,336.9 2,433.7 1,762.4

Total sales 4,638.9 4,249.4 3,010.7

Intersegment sales:

High Performance Materials & Components 181.8 174.5 93.2

Advanced Alloys & Solutions 283.4 238.9 117.7

Total intersegment sales 465.2 413.4 210.9

Fiscal Year 2024 Fiscal Year 2023 Fiscal Year 2022

HPMC AA&S Total HPMC AA&S Total HPMC AA&S Total

Sales to external customers $ 2,278.5 $ 2,083.6 $ 4,362.1 $ 2,120.2 $ 2,053.5 $ 4,173.7 $ 1,641.2 $ 2,194.8 $ 3,836.0

High Performance Materials & Components 2,120.2 1,641.2 1,155.1

Advanced Alloys & Solutions 2,053.5 2,194.8 1,644.7

Total sales to external customers $ 4,173.7 $ 3,836.0 $ 2,799.8

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

Advanced Alloys & Solutions 276.6 375.3 246.8

Total segment EBITDA 710.2 678.7 417.1

Intersegment sales 247.7 275.1 522.8 181.8 283.4 465.2 174.5 238.9 413.4

Total sales 2,526.2 2,358.7 4,884.9 2,302.0 2,336.9 4,638.9 1,815.7 2,433.7 4,249.4

Reconciliation of sales

Elimination of intersegment sales ( 522.8 ) ( 465.2 ) ( 413.4 )

Total consolidated sales $ 4,362.1 $ 4,173.7 $ 3,836.0

Allocated corporate overhead (2)

65.7 65.4 60.1 58.6 37.9 34.2

Other segment items (3)

1,999.1 1,972.4 1,808.3 2,001.7 1,474.4 2,024.2

Segment EBITDA 461.4 320.9 782.3 433.6 276.6 710.2 303.4 375.3 678.7

Reconciliation of segment EBITDA

Corporate expenses ( 64.0 ) ( 62.3 ) ( 60.3 )

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Interest expense, net ( 108.2 ) ( 92.8 ) ( 87.4 )

Restructuring and other credits (charges) (See Note 19) ( 31.4 ) ( 23.7 ) 10.5

Strike related costs — — ( 63.2 )

Retirement benefit settlement gain (loss) (See Note 14) ( 41.7 ) — 64.9

Restructuring and other charges (See Note 19) ( 22.1 ) ( 31.4 ) ( 23.7 )

Retirement benefit settlement loss (See Note 14) — ( 41.7 ) —

Pension remeasurement gain (loss) (See Note 14) ( 14.1 ) ( 26.8 ) 100.3

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 before income taxes $ 295.2 $ 354.6 $ 233.4

Gain (loss) on sales of business, net 52.9 ( 0.6 ) ( 105.4 )

Income before taxes $ 486.1 $ 295.2 $ 354.6

(1) The CODM is regularly provided with allocated corporate overhead and segment EBITDA, which is used to assess operating performance.

Therefore, the significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM.

Intersegment expenses are included within the amounts shown.

(2) The increase in corporate overhead costs over the time periods presented represent the consolidation and centralization of certain functions, including information technology, human resources and talent acquisition, payroll and accounts payable, into the Company’s corporate shared services function.

Such amounts are subject to change from year to year as allocation methodologies are revised to match the nature of these corporate costs.

(3) Other segment items for each reportable segment include:

cost of sales, general and administrative expenses, and gain/loss on asset sales.

General & administrative expenses consist of non-manufacturing payroll and benefits, office expenses, professional service and legal expenses, occupancy expenses including rent and lease expense, and travel expense.

Total international sales were $ 1,836.9 million in fiscal year 2024, $ 1,922.9 million in fiscal year 2023, and $ 1,617.4 million in fiscal year 2022.

Of these amounts, sales by operations in the U.S.

to customers in other countries were $ 1,425.4 million in fiscal year 2024, $ 1,498.7 million in fiscal year 2023, and $ 1,217.9 million in fiscal year 2022.

Beginning in 2020, the U.S.

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

Results for the fiscal year ended January 1, 2023 include $ 34 million related to this government sponsored COVID relief in segment EBITDA.

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 fiscal year ended December 29, 2024, the Company recognized a benefit of $ 16.7 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.

For the fiscal year ended December 29, 2024, the Company recognized $ 9.0 million of the benefit in the HPMC segment and $ 7.7 million in the AA&S segment.

See Note 21 for further explanation.

In addition, 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.

AA&S segment EBITDA in fiscal year 2024 and 2023 included benefits from tax credits of $ 22.7 million and $ 10.1 million, respectively, for the AMPC, which were reported in cost of sales in the consolidated statement of operations.

Fiscal year 2024 segment EBITDA also includes charges of $ 11.8 million, primarily reported in selling & administrative expenses, for a commercial negotiation with a customer, of which $ 6.3 million was included in the HPMC segment and $ 5.5 million in the AA&S segment.

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.

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 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.

These items included costs at closed facilities, including legal matters, environmental, real estate and other facility costs, gains from the sale of non-core assets and foreign currency transaction gains and losses primarily related to ATI’s European Treasury Center operation.

Closed operations and other income (expense) for fiscal year 2024 includes an $ 11.6 million gain on the sale of certain oil and gas rights, included within other income, net, on the consolidated statement of operations, and favorable foreign currency transaction impacts as compared to the prior year period.

Fiscal year 2024 also includes a $ 2.3 million gain on the sale of assets for the Company’s idled Houston, PA facility, which is included within gain on asset sales and sales of businesses, net, on the consolidated statement of operations.

The Company received $ 3.5 million of proceeds from this sale that are reported as an investing activity on the consolidated statement of cash flows.

Closed operations and other expenses in fiscal year 2023 reflect higher insurance costs associated with an outstanding insurance claim involving our captive insurance company.

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.

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.

Gain on sales of businesses for fiscal year 2024 is related to a $ 52.9 million gain on the sale of the Company ’ s precision rolled strip operations in New Bedford, MA and Remscheid, Germany, for which $ 48.0 million of proceeds, net of transaction costs, were received and reported as an investing activity on the consolidated statement of cash flows.

Loss on 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 sales of businesses, net, for fiscal year 2022 relate to a $ 112.2 million loss on the sale of the Company’s Sheffield, U.K.

operations, partially offset by a $ 6.8 million gain from the sale of assets from the Pico Rivera, CA operations.

See Note 6 for further explanation regarding the sale of business transactions in fiscal years 2024 and 2022.

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China 310.3 6 % 295.8 6 % 321.1 7 %

United Kingdom 16.9 — % 13.4 — % 153.9 4 %

Other 254.0 5 % 225.6 4 % 181.8 4 %

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Restructuring and other charges

For the fiscal year ended December 29, 2024, restructuring and other charges were $ 22.1 million and include $ 11.3 million of start-up costs, $ 4.6 million of charges associated with the Company’s European restructuring, $ 4.1 million of severance-related restructuring charges for approximately 100 employees primarily related to cost reduction actions in our domestic operation, and $ 2.1 million of transaction related costs.

These costs were recorded in the consolidated statement of operations based on the nature of the charge, with $ 15.3 million recorded as cost of sales, $ 2.7 million recorded as selling and administrative expenses and $ 4.1 million as restructuring charges on the consolidated statements of operations.

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, 2023 January 1, 2023 January 2, 2022

December 29, 2024 December 31, 2023 January 1, 2023

Beginning of fiscal year balance $ 15.2 $ 9.8 $ 17.7

Additions/(Adjustments) 4.1 7.7 ( 4.8 )

Divestitures ( 3.5 ) — —

Payments ( 6.8 ) ( 2.3 ) ( 3.1 )

End of fiscal year balance $ 9.0 $ 15.2 $ 9.8

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.

During fiscal year 2024, the Company de-recognized $ 3.5 million of restructuring reserves in connection with the sale of its precision rolled strip operations (see Note 6 for further explanation).

All of the $ 9.0 million restructuring reserve balance at December 29, 2024 is recorded in other current liabilities on the December 29, 2024 consolidated balance sheet.

Of the $ 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.

Per Share Information

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(In millions, except per share amounts)

2023 2022 Revised 2021 Revised

2024 2023 2022

Numerator for basic net income per common share -

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Diluted net income attributable to ATI per common share $ 2.55 $ 2.81 $ 2.23

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).

Common stock that would be issuable upon the assumed conversion of the 2025 Convertible Notes, prior to their redemption during the third quarter of 2024, and the 2022 Convertible Notes, prior to their maturity during the second quarter of 2022, and other option equivalents and contingently issuable shares are excluded from the computation of contingently issuable shares, and therefore, from the denominator for diluted earnings per share, if the effect of inclusion is anti-dilutive.

There were no anti-dilutive shares for fiscal years 2024, 2023 and 2022.

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.

Periodically, the Company’s Board of Directors authorizes the repurchase of ATI common stock (the “Share Repurchase Program”), the most recent of which was $ 700 million that was announced in September 2024.

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

Open market repurchases are structured to occur within the pricing and

volume requirements of SEC Rule 10b-18.

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

In fiscal years 2024, 2023 and 2022, ATI used $ 260.0 million, $ 85.2 million and $ 139.9 million, respectively, to repurchase 5.3 million, 2.0 million and 5.2 million shares, respectively, of its common stock under the Share Repurchase Program.

At December 29, 2024, the Company has utilized $ 110 million of the $ 700 million currently authorized under the Share Repurchase Program.

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 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 may differ from the repurchases of common stock amounts in the consolidated statements of cash flows due to these excise taxes.

For fiscal year 2024, there was no excise tax due to the impact of the conversion of the 2025 Convertible Notes (see Note 10).

For fiscal year 2023, the cost of share repurchases of $ 85.8 million differs from the repurchases of common stock amounts in the consolidated statements of cash flows due to these excise taxes.

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.

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While the outcome of litigation cannot be predicted with certainty, and some of these lawsuits, claims or proceedings may be determined adversely to the Company, management does not believe that the disposition of any such pending matters is likely to have a material adverse effect on the Company’s financial condition or liquidity, although the resolution in any reporting period of one or more of these matters could have a material adverse effect on the Company’s consolidated results of operations for that period.

Beginning in 2020, the U.S.

government enacted various relief packages in response to the COVID-19 pandemic, one of which was the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).

The CARES Act included, among other items, provisions relating to refundable employee retention payroll tax credits.

The Company applied for these employee retention tax credits and recognized a portion of the benefit from these credits as they were received in the statement of operations in the fiscal year ended December 31, 2022 (see Noe 18).

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.

During the fiscal year ended December 29, 2024, the Company recognized a benefit of $ 16.7 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 December 29, 2024, the Company has approximately $ 12 million of remaining deferred retention tax credits, of which the statute of limitations expire for $ 7 million in 2025 with the remaining expirations occurring in 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.

In August 2024, the Company received notice that it and certain of its affiliates are parties to two lawsuits captioned (1) 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 (2) J ohn Souza and Karen Souza, individually and as representatives on behalf of a class of similarly situated persons v.

and State Street Global Advisors Trust Co.

2:24-cv-01214) , both of which are filed in federal district court for the Western District of Pennsylvania.

These lawsuits, which were consolidated in late 2024, assert 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 filed a Motion to Dismiss the consolidated claims on January 27, 2025.

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.

ATI Titanium LLC (ATI Titanium), a subsidiary of ATI Inc., was party to a lawsuit captioned US Magnesium, LLC v.

4 unchanged sentences

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

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What changed 10-K

Item 8. Financial Statements and Supplementary Data