ATI INC 10-K

Item 8. Financial Statements and Supplementary Data Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of ATI Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of ATI Inc. and Subsidiaries (the Company) as of December 28, 2025 and December 29, 2024, 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 28, 2025, 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 28, 2025 and December 29, 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 28, 2025, 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 28, 2025, 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 20, 2026 expressed an unqualified opinion thereon. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. 39 Goodwill impairment assessment Description of the Matter At December 28, 2025, the Company had $225 million of goodwill on its consolidated balance sheet. As discussed in Note 1 to the consolidated financial statements, goodwill is reviewed annually for impairment, or more frequently if impairment indicators arise. The assessment of goodwill for impairment requires a comparison of the fair value of each reporting unit that has goodwill associated with its operations to its carrying amount, including goodwill. 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 assessment for the Company’s reporting units was complex due to the use of valuation methodologies in the determination of the estimated fair value, which included the evaluation of the underlying assumptions, such as the discount rate. How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s goodwill impairment evaluation process. Our audit procedures to test management’s impairment evaluation of the Company’s reporting units included, among others, assessing the valuation methodologies, assessing the historical accuracy of management’s estimates and performing independent sensitivity analyses. We involved our valuation specialists to assist in evaluating the methodologies and discount rate used to calculate the estimated fair value of the Company’s reporting units. /s/ Ernst & Young LLP We have served as the Company’s auditor since 1996. Pittsburgh, Pennsylvania February 20, 2026 40 ATI Inc. and Subsidiaries Consolidated Statements of Operations (In millions, except per share amounts) Fiscal Year Ended December 28, 2025 December 29, 2024 December 31, 2023 Sales $ 4,587.4 $ 4,362.1 $ 4,173.7 Cost of sales 3,580.4 3,463.9 3,371.1 Gross profit 1,007.0 898.2 802.6 Selling and administrative expenses 365.1 342.3 328.1 Restructuring (credits) charges ( 1.9 ) 4.1 7.7 Loss (gain) on asset sales and sales of businesses, net 2.9 ( 57.1 ) 0.4 Operating income 640.9 608.9 466.4 Nonoperating retirement benefit expense ( 34.6 ) ( 29.0 ) ( 79.7 ) Interest expense, net ( 98.6 ) ( 108.2 ) ( 92.8 ) Other income, net 14.6 14.4 1.3 Income before income taxes 522.3 486.1 295.2 Income tax provision (benefit) 103.7 103.4 ( 128.2 ) Net income 418.6 382.7 423.4 Less: Net income attributable to noncontrolling interests 14.3 14.9 12.6 Net income attributable to ATI $ 404.3 $ 367.8 $ 410.8 Basic net income attributable to ATI per common share $ 2.92 $ 2.82 $ 3.21 Diluted net income attributable to ATI per common share $ 2.85 $ 2.55 $ 2.81 The accompanying notes are an integral part of these statements. 41 ATI Inc. and Subsidiaries Consolidated Statements of Comprehensive Income (In millions) Fiscal Year Ended December 28, 2025 December 29, 2024 December 31, 2023 Net income $ 418.6 $ 382.7 $ 423.4 Currency translation adjustment Unrealized net change arising during the period 28.9 ( 13.0 ) 1.3 Reclassification adjustment included in net income 5.1 — — Total 34.0 ( 13.0 ) 1.3 Derivatives Net derivatives loss on hedge transactions ( 1.3 ) ( 5.9 ) ( 28.5 ) Reclassification to net income of net realized loss 5.3 11.0 2.5 Income taxes on derivative transactions 0.9 2.0 ( 6.1 ) Total 3.1 3.1 ( 19.9 ) Postretirement benefit plans Actuarial gain/loss Amortization of net actuarial loss 5.1 5.2 6.0 Net loss arising during the period ( 6.7 ) ( 2.2 ) ( 3.8 ) Prior service cost Amortization to net income of net prior service credits ( 0.5 ) ( 0.5 ) ( 0.6 ) Settlement loss included in net income — — 1.1 Income taxes on postretirement benefit plans ( 0.4 ) 0.5 0.3 Total ( 1.7 ) 2.0 2.4 Other comprehensive income (loss), net of tax 35.4 ( 7.9 ) ( 16.2 ) Comprehensive income 454.0 374.8 407.2 Less: Comprehensive income attributable to noncontrolling interests 20.6 13.3 12.2 Comprehensive income attributable to ATI $ 433.4 $ 361.5 $ 395.0 The accompanying notes are an integral part of these statements. 42 ATI Inc. and Subsidiaries Consolidated Balance Sheets (In millions, except share and per share amounts) December 28, 2025 December 29, 2024 Assets Cash and cash equivalents $ 416.7 $ 721.2 Accounts receivable, net 686.1 709.2 Short-term contract assets 72.8 75.6 Inventories, net 1,403.2 1,353.0 Prepaid expenses and other current assets 101.2 86.0 Total Current Assets 2,680.0 2,945.0 Property, plant and equipment, net 1,940.6 1,776.9 Goodwill 225.2 227.2 Other assets 253.8 281.5 Total Assets $ 5,099.6 $ 5,230.6 Liabilities and Stockholders’ Equity Accounts payable $ 568.2 $ 609.1 Short-term contract liabilities 146.4 169.4 Short-term debt and current portion of long-term debt 31.1 180.4 Other current liabilities 260.6 249.6 Total Current Liabilities 1,006.3 1,208.5 Long-term debt 1,718.3 1,714.9 Accrued postretirement benefits 158.5 164.3 Pension liabilities 41.4 37.2 Other long-term liabilities 258.4 150.5 Total Liabilities 3,182.9 3,275.4 Equity: ATI Stockholders’ Equity: Preferred stock, par value $ 0.10 : authorized- 50,000,000 shares; issued- none — — Common stock, par value $ 0.10 : authorized- 500,000,000 shares; issued- 142,871,688 shares at December 28, 2025 and 142,871,688 shares at December 29, 2024; outstanding- 135,934,852 shares at December 28, 2025 and 141,387,049 shares at December 29, 2024 14.3 14.3 Additional paid-in capital 1,884.6 1,943.9 Retained earnings 468.7 64.3 Treasury stock: 6,936,836 shares at December 28, 2025 and 1,484,639 shares at December 29, 2024 ( 502.7 ) ( 82.6 ) Accumulated other comprehensive loss, net of tax ( 60.4 ) ( 89.5 ) Total ATI Stockholders’ Equity 1,804.5 1,850.4 Noncontrolling Interests 112.2 104.8 Total Stockholders’ Equity 1,916.7 1,955.2 Total Liabilities and Stockholders’ Equity $ 5,099.6 $ 5,230.6 The accompanying notes are an integral part of these statements. 43 ATI Inc. and Subsidiaries Consolidated Statements of Cash Flows (In millions) Fiscal Year Ended December 28, 2025 December 29, 2024 December 31, 2023 Operating Activities: Net income $ 418.6 $ 382.7 $ 423.4 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 168.1 151.5 146.1 Share-based compensation 29.0 34.1 29.1 Deferred taxes 59.1 86.4 ( 138.2 ) Gain from disposal of property, plant and equipment, net ( 10.7 ) ( 15.7 ) ( 0.6 ) Net loss (gain) from sales of businesses 2.9 ( 52.9 ) 0.6 Non-cash impairment charges — — 3.0 Change in operating assets and liabilities: Pension plan contributions — — ( 272.0 ) Retirement benefits 11.2 4.4 53.8 Accounts receivable 27.1 ( 85.0 ) ( 46.1 ) Inventories ( 52.8 ) ( 118.5 ) ( 51.8 ) Accounts payable ( 43.4 ) 87.6 ( 29.8 ) Accrued income taxes ( 26.4 ) ( 0.3 ) ( 4.8 ) Accrued liabilities and other 31.6 ( 67.1 ) ( 26.8 ) Cash provided by operating activities 614.3 407.2 85.9 Investing Activities: Purchases of property, plant and equipment ( 280.6 ) ( 239.1 ) ( 200.7 ) Proceeds from disposal of property, plant and equipment 11.1 27.6 3.8 Proceeds from sales of businesses, net of transaction costs 26.8 48.0 ( 0.3 ) Other 8.2 3.9 4.0 Cash used in investing activities ( 234.5 ) ( 159.6 ) ( 193.2 ) Financing Activities: Borrowings on long-term debt — — 425.0 Payments on long-term debt and finance leases ( 182.6 ) ( 29.6 ) ( 25.2 ) Net payments under credit facilities — ( 4.9 ) ( 14.0 ) Debt issuance costs — — ( 6.2 ) Receipt of convertible note capped call — 76.1 — Purchase of treasury stock ( 470.0 ) ( 260.0 ) ( 85.2 ) Dividends paid to noncontrolling interests ( 13.2 ) ( 16.0 ) ( 16.0 ) Shares repurchased for income tax withholding on share-based compensation ( 34.1 ) ( 26.0 ) ( 11.2 ) Cash provided by (used in) financing activities ( 699.9 ) ( 260.4 ) 267.2 Effect of exchange rate changes on cash and cash equivalents 15.6 ( 7.6 ) — Less: Cash held for sale — ( 2.3 ) — Increase (decrease) in cash and cash equivalents ( 304.5 ) ( 22.7 ) 159.9 Cash and cash equivalents at beginning of year 721.2 743.9 584.0 Cash and cash equivalents at end of year $ 416.7 $ 721.2 $ 743.9 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. The accompanying notes are an integral part of these statements. 44 ATI Inc. and Subsidiaries Statements of Changes in Consolidated Equity ATI Stockholders (In millions) Common Stock Additional Paid-In Capital Retained Earnings (Loss) Treasury Stock Accumulated Other Comprehensive Income (Loss) Non- controlling Interests Total Equity Balance, January 1, 2023 $ 13.1 $ 1,668.1 $ ( 480.9 ) $ ( 87.0 ) $ ( 67.4 ) $ 111.3 $ 1,157.2 Net income — — 410.8 — — 12.6 423.4 Other comprehensive loss — — — — ( 15.8 ) ( 0.4 ) ( 16.2 ) Purchase of treasury stock — — — ( 85.8 ) — — ( 85.8 ) Dividends paid to noncontrolling interests — — — — — ( 16.0 ) ( 16.0 ) Employee stock plans 0.1 29.0 — ( 11.2 ) — — 17.9 Balance, December 31, 2023 $ 13.2 $ 1,697.1 $ ( 70.1 ) $ ( 184.0 ) $ ( 83.2 ) $ 107.5 $ 1,480.5 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 interests — — — — — ( 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 Net income — — 404.3 — — 14.3 418.6 Other comprehensive income — — — — 29.1 6.3 35.4 Purchase of treasury stock — — — ( 474.2 ) — — ( 474.2 ) Dividends paid to noncontrolling interests — — — — — ( 13.2 ) ( 13.2 ) Employee stock plans — ( 59.3 ) 0.1 54.1 — — ( 5.1 ) Balance, December 28, 2025 $ 14.3 $ 1,884.6 $ 468.7 $ ( 502.7 ) $ ( 60.4 ) $ 112.2 $ 1,916.7 The accompanying notes are an integral part of these statements. 45 Notes to Consolidated Financial Statements Note 1. Summary of Significant Accounting Policies Principles of Consolidation and Reporting The consolidated financial statements include the accounts of ATI Inc. and its subsidiaries. The financial results of majority-owned joint ventures are consolidated into the Company’s operating results and financial position, with the minority ownership interest recognized in the consolidated statement of operations as net income attributable to noncontrolling interests, and as equity attributable to the noncontrolling interests within total stockholders’ equity. The results for the Shanghai STAL Precision Stainless Steel Company Limited (STAL) are reported on a one month lag (see Note 7 for further discussion). Intercompany accounts and transactions have been eliminated. Unless the context requires otherwise, “ATI” and the “Company” refer to ATI Inc. and its subsidiaries. Fiscal Year The Company follows a 4-4-5 or 5-4-4 fiscal calendar, whereby each fiscal quarter consists of thirteen weeks grouped into two four-week months and one five-week month, and its fiscal year ends on the Sunday closest to December 31. Unless otherwise stated, references to years in this Annual Report on Form 10-K relate to fiscal years, rather than calendar years. Fiscal years 2025, 2024 and 2023 ended on December 28, 2025, December 29, 2024 and December 31, 2023, respectively. All fiscal years presented include 52 weeks of operations. Risks and Uncertainties and Use of Estimates The preparation of consolidated financial statements in conformity with United States (U.S.) generally accepted accounting principles (GAAP) 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 U.S. No single customer accounted for more than 10% of sales for any year presented. T he core end markets for ATI’s products are customers in the aerospace & defense, specialty energy, electronics, and medical markets. At December 28, 2025, ATI has approximately 7,600 active employees, of which approximately 15 % are located outside the U.S. 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 (USW). On April 22, 2025, we reached agreements with the USW for new CBAs that cover approximately 1,100 USW represented full-time employees within our AA&S operations for a six-year term that extends through February 28, 2031. Cash and Cash Equivalents Cash equivalents are highly liquid investments that are readily convertible to cash with original maturities of three months or less. Accounts Receivable Accounts receivable are presented net of a reserve for doubtful accounts of $ 4.2 million and $ 15.0 million at December 28, 2025 and December 29, 2024, 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 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. The term net realizable value is defined as estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The Company evaluates product lines on a quarterly basis to identify inventory carrying values that exceed estimated net realizable value. The calculation of a resulting reserve, if any, is recognized as an expense in the period that the need for the reserve is identified. It is the Company’s general policy to write-down to scrap value any inventory that is identified as slow- 46 moving or aged more than twelve months, subject to sales, backlog and anticipated order considerations. In some instances this aging criterion is up to twenty-four months. Inventory valuation reserves also include amounts pertaining to intercompany profit elimination between different subsidiaries. Long-Lived Assets Property, plant and equipment are recorded at cost, including capitalized interest, and include long-lived assets acquired under finance leases. Depreciation is primarily recorded using the straight-line method. The Company periodically reviews estimates of useful life and production capacity assigned to new and in-service assets. Significant enhancements, including major maintenance activities that extend the lives of property and equipment, are capitalized. Costs related to repairs and maintenance are charged to expense in the period incurred. The cost and related accumulated depreciation of property and equipment retired or disposed of are removed from the accounts and any related gains or losses are included in income. The Company monitors the recoverability of the carrying value of its long-lived assets. An impairment charge is recognized when an indicator of impairment occurs and the expected net undiscounted future cash flows from an asset’s use (including any proceeds from disposition) are less than the asset’s carrying value and the asset’s carrying value exceeds its fair value. If an impairment loss is recognized, the adjusted carrying value of the long-lived asset is its new cost basis and this new cost basis is depreciated over the remaining useful life of the asset. Assets to be disposed of by sale are stated at the lower of their fair values or carrying amounts and depreciation is no longer recognized. Leases The Company classifies leases as either operating or financing and records a right-of-use (ROU) asset and a lease liability on the consolidated balance sheets as further discussed below. The lease liability is equal to the present value of the minimum lease payments for the term of the lease, including any optional renewal periods determined to be reasonably certain to be exercised, using the discount rate determined at lease commencement. This discount rate is the rate implicit in the lease, if known; otherwise, the incremental borrowing rate (IBR) for the expected lease term is used. The Company’s IBRs approximate the rate the Company would have to pay to borrow on a collateralized basis over a similar term at lease inception. The ROU asset is equal to the initial measurement of the lease liability plus any lease payments made to the lessor at or before the commencement date and any unamortized initial direct costs incurred by the lessee, less any unamortized lease incentives received. 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. At inception of a contract, the Company determines whether the contract is or contains a lease. If the Company has a right to obtain substantially all of the economic benefits from the use of the identified asset and the right to direct the use of the asset, then the contract contains a lease. Several of the Company’s real property lease contracts include options to extend the lease term, and the Company reassesses the likelihood of renewal on at least an annual basis. 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. Goodwill Goodwill is reviewed annually for impairment, or more frequently if impairment indicators arise. The review for goodwill impairment requires a comparison of the fair value of each reporting unit that has goodwill associated with its operations with its carrying amount, including goodwill. If this comparison reflects impairment, then the loss would be measured as the excess of the carrying value over the calculated fair value. Generally accepted accounting principles provide the option to qualitatively assess goodwill for impairment before completing a quantitative assessment. Under the qualitative approach, if, after assessing the totality of events or circumstances, including both macroeconomic, industry and market factors, and entity-specific factors, the Company determines it is likely (more likely than not) that the fair value of a reporting unit is greater than its carrying amount, then the quantitative impairment analysis is not required. The quantitative assessment may be performed each year for a reporting unit at the Company’s option without 47 first performing a qualitative assessment. The Company’s quantitative assessments of goodwill for possible impairment includes estimating the fair value of a reporting unit which has goodwill associated with its operations using discounted cash flows. 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. Many of these assumptions are determined by reference to market participants identified by the Company. Although management believes that the estimates and assumptions used were reasonable, actual results could differ from those estimates and assumptions. Other events and changes in circumstances may also require goodwill to be tested for impairment between annual measurement dates. While a decline in stock price and market capitalization is not specifically cited as a goodwill impairment indicator, a company’s stock price and market capitalization should be considered in determining whether it is more likely than not that the fair value of a reporting unit is less that its carrying value. Additionally, a significant decline in a company’s stock price may suggest that an adverse change in the business climate may have caused the fair value of one or more reporting units to fall below carrying value. A sustained decline in market capitalization below book value may be determined to require an interim goodwill impairment review. Environmental Costs that mitigate or prevent future environmental contamination or extend the life, increase the capacity or improve the safety or efficiency of property utilized in current operations are capitalized. Other costs that relate to current operations or an existing condition caused by past operations are expensed. Environmental liabilities are recorded when the Company’s liability is probable and the costs are reasonably estimable, but generally not later than the completion of the feasibility study or the Company’s recommendation of a remedy or commitment to an appropriate plan of action. The accruals are reviewed periodically and, as investigations and remediations proceed, adjustments of the accruals are made to reflect new information as appropriate. Accruals for losses from environmental remediation obligations are not discounted to their present value. The accruals are not reduced by possible recoveries from insurance carriers or other third parties, but do reflect allocations among potentially responsible parties (PRPs) at Federal Superfund sites or similar state-managed sites after an assessment is made of the likelihood that such parties will fulfill their obligations at such sites and after appropriate cost-sharing or other agreements are entered. The measurement of environmental liabilities by the Company is based on currently available facts, present laws and regulations, and current technology. 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 Currencies Assets and liabilities of international operations are translated into U.S. dollars using fiscal year-end exchange rates, while revenues and expenses are translated at average exchange rates during the period. The resulting net translation adjustments are recorded as a component of accumulated other comprehensive income (loss) in stockholders’ equity. 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 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 typically 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 48 adjustment under certain conditions. Types of variable consideration may include volume discounts, customer rebates and surcharges. ATI also provides assurances that goods or services will meet the product specifications contained within the acknowledged customer contract. As such, returns and refunds reserves are estimated based upon past product line history or, at certain locations, on a claim by claim basis. 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. The Company uses an input method for determining the amount of revenue, and associated standard cost, to recognize over-time revenue, cost and gross margin for these customer agreements. The input methods used for these agreements include costs incurred and labor hours expended, both of which give an accurate representation of the progress made toward complete satisfaction of that particular performance obligation. Contract assets are recognized when ATI’s conditional right to consideration for goods or services have transferred to the customer. A conditional right indicates that additional performance obligations associated with the contract are yet to be satisfied. Contract assets are assessed separately for impairment purposes. 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 receivable. Payment terms vary from customer to customer depending upon credit worthiness, prior payment history and other credit considerations. Contract costs are the incremental costs of obtaining and fulfilling a contract (i.e., costs that would not have been incurred if the contract had not been obtained) to provide goods and services to customers. Contract costs for ATI largely consist of design and development costs for molds, dies and other tools that ATI will own and that will be used in producing the products under the supply arrangement. Contract costs are classified as non-current assets and amortized to expense on a systematic and rational basis over a period consistent with the transfer to the customer of the goods or services to which the asset relates. Contract liabilities are recognized when ATI has received consideration from a customer to transfer goods or services at a future point in time when the Company performs under the contract. Elements of variable consideration discussed above may be recorded as contract liabilities. In addition, progress billings and advance payments from customers for costs incurred to date are also reported as contract liabilities. Research and Development 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. Company funded research and development costs were $ 21.3 million in fiscal year 2025, $ 19.6 million in fiscal year 2024, and $ 20.7 million in fiscal year 2023. Customer funded research and development costs were $ 1.9 million in fiscal year 2025, $ 2.5 million in fiscal year 2024, and $ 1.4 million in fiscal year 2023. Government Assistance The Company enters into agreements with U.S. federal agencies, U.S. state and local governments, and foreign governments that provide financial assistance and incentives supporting both new capital projects to expand and enhance manufacturing capabilities and also to sustain and maintain existing operations. Depending on the nature of the government program, the financial impacts may be recorded as a reduction to cost of sales through direct offset of labor and overhead costs or lower depreciation expense, or as a reduction of selling, general and administrative expenses for property tax abatement or other similar categories. Benefits from government assistance are recognized as the activities are incurred, subject to ongoing assessments of meeting other relevant terms such as employment or expenditure levels. ATI is a party to various U.S. states’ economic development incentive programs that provide economic benefits in the forms of property tax relief or cash payments to offset capital expenditures. 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 28, 2025, December 29, 2024 and December 31, 2023, these state-level programs reduced selling, general and administrative expenses by $ 2.4 million, $ 1.7 million, $ 1.4 million, respectively, and cash receipts were $ 1.8 million, $ 2.5 million and $ 3.4 million, respectively. Receivables for ongoing programs are $ 1.2 million as of both December 28, 2025 and December 29, 2024. 49 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 The Company accounts for stock-based compensation transactions, such as nonvested restricted stock or stock units and performance equity awards, using fair value. Compensation expense for an award is estimated at the date of grant and is recognized over the requisite service period. 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 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. Income Taxes The provision for, or benefit from, income taxes includes deferred taxes resulting from temporary differences in income for financial and tax purposes using the liability method. Such temporary differences result primarily from differences in the carrying value of assets and liabilities. Future realization of deferred income tax assets requires sufficient taxable income within the carryback and/or carryforward period available under tax law. The Company evaluates on a quarterly basis whether, based on all available evidence, it is probable that the deferred income tax assets are realizable. Valuation allowances are established when it is estimated that it is more likely than not that the tax benefit of the deferred tax asset will not be realized. 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. It is the Company’s policy to classify interest and penalties recognized on underpayment of income taxes as income tax expense. It is also the Company’s policy to recognize deferred tax amounts stranded in accumulated other comprehensive income (AOCI), which result from tax rate differences on changes in AOCI balances, as an element of income tax expense in the period that the related balance sheet item associated with the AOCI balance ceases to exist. In the case of derivative financial instruments accounted for as hedges, or marketable securities, ATI uses the portfolio method where the stranded deferred tax amount is recognized when all items of a particular category, such as cash flow hedges of a particular risk such as a foreign currency hedge, are settled. In the case of defined benefit pension and other postretirement benefit plans, the stranded deferred tax balance is recognized as an element of income tax expense in the period the benefit plan is extinguished or divested. Net Income Per Common Share Basic and diluted net income per share are calculated by dividing the net income available to common stockholders by the weighted average number of common shares outstanding during the fiscal year. Diluted amounts assume the issuance of common stock for all potentially dilutive share equivalents outstanding. The calculations of all diluted income/loss per share figures for a period exclude the potentially dilutive effect of dilutive share equivalents if there is a net loss since the inclusion in the calculation of additional shares in the net loss per share would result in a lower per share loss and therefore be anti-dilutive. New Accounting Pronouncements Adopted In December 2023, the FASB issued new accounting guidance related to income tax disclosures. This guidance requires entities to disclose specific categories in its annual rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. This guidance also requires additional annual disclosures for income taxes paid and requires disaggregation of income before tax, between domestic and foreign, and income tax expense, between federal, state and foreign. 50 This guidance also eliminates several current disclosure requirements related to the nature and estimate of the range of the reasonably possible change in the unrecognized tax benefits balance in the next 12 months and making a statement that an estimate of the range cannot be made and disclosing the cumulative amount of each type of temporary difference when a deferred tax liability is not recognized because of the exceptions to comprehensive recognition of deferred taxes related to subsidiaries and corporate joint ventures. The Company adopted this new guidance for 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 17. Pending Accounting Pronouncements 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. Note 2. Revenue from Contracts with Customers Disaggregation of Revenue The Company operates in two business segments: High Performance Materials & Components (HPMC) and Advanced Alloys & Solutions (AA&S). 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 28, 2025, December 29, 2024 and December 31, 2023 is as follows: Fiscal Year (in millions) 2025 2024 2023 HPMC AA&S Total HPMC AA&S Total HPMC AA&S Total Aerospace & Defense: Jet-Engines- Commercial $ 1,649.6 $ 113.3 $ 1,762.9 $ 1,365.4 $ 92.4 $ 1,457.8 $ 1,255.3 $ 78.2 $ 1,333.5 Airframes- Commercial 312.1 478.8 790.9 369.7 403.2 772.9 350.6 388.8 739.4 Defense 277.7 280.0 557.7 224.8 265.4 490.2 181.0 220.9 401.9 Total Aerospace & Defense $ 2,239.4 $ 872.1 $ 3,111.5 $ 1,959.9 $ 761.0 $ 2,720.9 $ 1,786.9 $ 687.9 $ 2,474.8 Other Markets: Specialty Energy 75.8 181.5 257.3 96.8 187.8 284.6 93.9 179.3 273.2 Electronics — 184.8 184.8 3.0 191.3 194.3 3.1 156.8 159.9 Medical 55.2 84.2 139.4 115.5 109.4 224.9 102.6 74.3 176.9 Automotive 6.5 238.1 244.6 15.2 244.2 259.4 24.6 186.1 210.7 Conventional Energy 6.1 322.3 328.4 9.8 292.2 302.0 10.6 404.0 414.6 Construction/Mining 27.7 117.7 145.4 26.3 132.2 158.5 35.0 127.9 162.9 Other 31.0 145.0 176.0 52.0 165.5 217.5 63.5 237.2 300.7 Total Other Markets $ 126.5 $ 1,092.1 $ 1,218.6 $ 221.8 $ 1,134.8 $ 1,356.6 $ 239.4 $ 1,186.3 $ 1,425.7 Total $ 2,441.7 $ 2,145.7 $ 4,587.4 $ 2,278.5 $ 2,083.6 $ 4,362.1 $ 2,120.2 $ 2,053.5 $ 4,173.7 51 Fiscal Year (in millions) 2025 2024 2023 HPMC AA&S Total HPMC AA&S Total HPMC AA&S Total Primary Geographical Market: United States $ 1,336.2 $ 1,303.6 $ 2,639.8 $ 1,134.0 $ 1,391.2 $ 2,525.2 $ 915.3 $ 1,335.5 $ 2,250.8 China 81.5 242.8 324.3 57.6 242.0 299.6 70.1 263.2 333.3 United Kingdom 222.0 55.2 277.2 217.0 40.9 257.9 224.8 34.3 259.1 Germany 160.2 67.2 227.4 202.5 57.2 259.7 204.2 38.8 243.0 France 156.0 90.2 246.2 186.9 40.6 227.5 172.4 47.0 219.4 Canada 90.7 78.8 169.5 60.9 55.3 116.2 64.9 46.1 111.0 Rest of World 395.1 307.9 703.0 419.6 256.4 676.0 468.5 288.6 757.1 Total $ 2,441.7 $ 2,145.7 $ 4,587.4 $ 2,278.5 $ 2,083.6 $ 4,362.1 $ 2,120.2 $ 2,053.5 $ 4,173.7 Comparative information of the Company’s major products based on their percentages of sales is included in the following table. HRPF conversion service sales in the AA&S segment are excluded from this presentation. Fiscal Year 2025 2024 2023 HPMC AA&S Total HPMC AA&S Total HPMC AA&S Total Diversified Products: Nickel-based alloys and specialty alloys 43 % 50 % 46 % 41 % 49 % 45 % 44 % 54 % 49 % Precision forgings, castings and components 40 % — % 22 % 36 % — % 20 % 33 % — % 17 % Titanium and titanium-based alloys 17 % 19 % 18 % 23 % 13 % 18 % 22 % 12 % 17 % Zirconium and related alloys — % 19 % 9 % — % 19 % 9 % — % 15 % 7 % Precision rolled strip — % 12 % 5 % — % 19 % 8 % 1 % 19 % 10 % Total 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % The Company maintains a backlog of confirmed orders totaling $ 3.7 billion, $ 3.9 billion and $ 3.8 billion at December 28, 2025, December 29, 2024 and December 31, 2023, respectively. Due to the structure of the Company’s LTAs, 70 % of this backlog at December 28, 2025 represented booked orders with performance obligations that will be satisfied within the next twelve months. The backlog does not reflect any elements of variable consideration. Accounts Receivable As of December 28, 2025 and December 29, 2024, accounts receivable with customers were $ 690.3 million and $ 724.2 million, respectively. The following represents the rollforward of accounts receivable - reserve for doubtful accounts for the fiscal years ended December 28, 2025, December 29, 2024 and December 31, 2023: (in millions) Accounts Receivable - Reserve for Doubtful Accounts Balance as of January 1, 2023 $ 7.7 Expense to increase the reserve 0.1 Write-off of uncollectible accounts ( 4.6 ) Balance as of December 31, 2023 3.2 Expense to increase the reserve 12.3 Write-off of uncollectible accounts ( 0.5 ) Balance as of December 29, 2024 15.0 Expense to increase the reserve 1.9 Write-off of uncollectible accounts ( 12.7 ) Balance as of December 28, 2025 $ 4.2 52 Contract balances The following represents the rollforward of contract assets and liabilities for the fiscal years ended December 28, 2025, December 29, 2024 and December 31, 2023: (in millions) Contract Assets Fiscal Year Short-term 2025 2024 2023 Balance as of beginning of fiscal year $ 75.6 $ 59.1 $ 64.1 Recognized in current year 117.3 88.9 84.1 Reclassified to accounts receivable ( 120.1 ) ( 72.4 ) ( 89.5 ) Reclassification to/from contract liability — — 0.4 Balance as of period end $ 72.8 $ 75.6 $ 59.1 (in millions) Contract Liabilities Fiscal Year Short-term 2025 2024 2023 Balance as of beginning of fiscal year $ 169.4 $ 163.6 $ 149.1 Recognized in current year 158.8 133.6 133.4 Amounts in beginning balance reclassified to revenue ( 109.1 ) ( 88.2 ) ( 107.9 ) Current year amounts reclassified to revenue ( 76.0 ) ( 56.3 ) ( 40.9 ) Other ( 2.0 ) — ( 0.7 ) Reclassification to/from long-term and contract asset 5.3 16.7 30.6 Balance as of period end $ 146.4 $ 169.4 $ 163.6 Fiscal Year Long-term (a) 2025 2024 2023 Balance as of beginning of fiscal year $ 45.3 $ 39.4 $ 66.8 Recognized in current year 58.2 22.6 2.8 Amounts in beginning balance reclassified to revenue ( 2.2 ) — — Current year amounts reclassified to revenue ( 1.8 ) — — Other ( 2.9 ) — — Reclassification to/from short-term ( 5.3 ) ( 16.7 ) ( 30.2 ) Balance as of period end $ 91.3 $ 45.3 $ 39.4 (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 $ 15.6 million and $ 12.0 million as of December 28, 2025 and December 29, 2024, respectively, which are reported in other long-term assets on the consolidated balance sheets. Amortization expense for the fiscal years ended December 28, 2025, December 29, 2024 and December 31, 2023 of these contract costs was $ 1.8 million, $ 1.1 million, and $ 1.2 million, respectively. Note 3. Inventories Inventories at December 28, 2025 and December 29, 2024 were as follows (in millions): Fiscal Year 2025 2024 Raw materials and supplies $ 245.6 $ 206.4 Work-in-process 1,137.4 1,144.1 Finished goods 100.6 71.0 1,483.6 1,421.5 Inventory valuation reserves ( 80.4 ) ( 68.5 ) Total inventories, net $ 1,403.2 $ 1,353.0 53 Note 4. Property, Plant and Equipment Property, plant and equipment at December 28, 2025 and December 29, 2024 was as follows: Fiscal Year (In millions) 2025 2024 Land $ 31.2 $ 30.8 Buildings 759.2 735.2 Equipment and leasehold improvements 3,389.8 3,145.3 4,180.2 3,911.3 Accumulated depreciation and amortization ( 2,239.6 ) ( 2,134.4 ) Total property, plant and equipment, net $ 1,940.6 $ 1,776.9 Construction in progress at December 28, 2025 and December 29, 2024 was $ 359.4 million and $ 262.5 million, respectively. Capital expenditures on the consolidated statements of cash flows for the fiscal years ended December 28, 2025, December 29, 2024, and December 31, 2023 exclude $ 37.7 million, $ 36.2 million, and $ 41.9 million, respectively, of incurred but unpaid capital expenditures that were included in property, plant and equipment and accrued at December 28, 2025, December 29, 2024, and December 31, 2023, respectively. Depreciation and amortization for the fiscal years ended December 28, 2025, December 29, 2024 and December 31, 2023 was as follows: Fiscal Year (In millions) 2025 2024 2023 Depreciation of property, plant and equipment $ 146.6 $ 118.8 $ 117.4 Software and other amortization 21.5 32.7 28.7 Total depreciation and amortization $ 168.1 $ 151.5 $ 146.1 Note 5. Goodwill and Other Intangible Assets At December 28, 2025 and December 29, 2024, the Company reported goodwill amounts of $ 225.2 million and $ 227.2 million, respectively, on its consolidated balance sheet, all of which relates to the HPMC segment. Goodwill decreased by $ 2.0 million during fiscal year 2025 due to the sale of the Company’s East Hartford, Connecticut operations and related allocation of goodwill from the Forged Products reporting unit. The Company performs its annual goodwill impairment evaluation in the fourth quarter of each fiscal year. The $ 225.2 million of goodwill as of December 28, 2025 on the Company’s consolidated balance sheet is comprised of $ 159.2 million at the Forged Products reporting unit and $ 66.0 million at the Specialty Materials reporting unit. For the Company’s annual goodwill impairment evaluation in fiscal year 2025, quantitative goodwill assessments were performed for these two reporting units. Fair values were determined using discounted cash flows, which represents Level 3 unobservable information in the fair value hierarchy. These quantitative assessments and valuations require estimates and assumptions regarding revenue growth, changes in working capital, capital expenditures, selling prices, income taxes, and profitability, all of which impact estimated future cash flows. In addition, discounted cash flow valuations are impacted by the determination of ATI's WACC, which also requires the Company to exercise judgment and make estimates. Actual results could differ from those estimates and assumptions. For the annual goodwill impairment in fiscal year 2025, a WACC of 10.5 % and long-term growth rates ranging from 3 % to 3.5 % were used in the discounted cash flow valuation. Further, to validate the reasonableness of the estimated fair values of the reporting units as of the valuation date, a reconciliation of the aggregate fair values of all reporting units to market capitalization was performed using a reasonable control premium. Although the Company believes that the estimates and assumptions used were reasonable, actual results could differ from those estimates and assumptions. Based on the annual goodwill impairment evaluation for fiscal year 2025, the Company determined that the fair values of the Specialty Materials and Forged Products reporting units exceeded their respective carrying values. As a result, it was concluded that no impairments existed for the fiscal year ended December 28, 2025. Also, there were no impairments for the fiscal years ended December 29, 2024 and December 31, 2023. No indicators of impairment were observed in fiscal years 2025, 2024 and 2023 associated with any of the Company’s long-lived assets. Accumulated goodwill impairment losses as of December 28, 2025, December 29, 2024 and December 31, 2023 were $ 528.0 million. 54 Other intangible assets, which are included in other assets on the accompanying consolidated balance sheets as of December 28, 2025 and December 29, 2024 were as follows: December 28, 2025 December 29, 2024 (in millions) Gross carrying amount Accumulated amortization Gross carrying amount Accumulated amortization Technology $ 60.5 $ ( 44.4 ) $ 61.2 $ ( 41.8 ) Customer relationships 24.5 ( 14.3 ) 24.8 ( 13.5 ) Trademarks 48.2 ( 38.6 ) 48.8 ( 35.8 ) Total amortizable intangible assets $ 133.2 $ ( 97.3 ) $ 134.8 $ ( 91.1 ) During fiscal year 2025, total amortizable intangible assets, net, decreased approximately $ 0.5 million as a result of the sale of the Company’s East Hartford, CT operations. This decrease consists of the sale of approximately $ 1.6 million of gross intangible assets, net of approximately $ 1.1 million of accumulated amortization. Amortization expense related to intangible assets was approximately $ 7.0 million for each of the fiscal years ended December 28, 2025, December 29, 2024, and December 31, 2023. Annual amortization expense is expected to be approximately $ 7.0 million for each of the fiscal years 2026 through 2028 and $ 4.0 million in fiscal year 2029 and 2030. Note 6. Divestitures During fiscal year 2025, the Company completed the sale of its East Hartford, CT operations, an immaterial, non-core operation that was part of the Forged Products business unit, for $ 20.5 million. The Company recognized a gain of $ 0.8 million, which is reported in gain/loss on asset sales and sale of business, net, on the consolidated statement of operations. The Company received proceeds, net of transaction costs and working capital adjustments, of $ 19.3 million, which are reported as an investing activity on the consolidated statements of cash flows. In fiscal year 2024, this operation had external sales of approximately $ 37.0 million and income before tax of approximately $ 2.9 million. During fiscal year 2025, the Company completed the sale of certain immaterial, non-core operations in Birmingham, UK and Dusseldorf, Germany, which were part of our European business in the HPMC Segment. A $ 3.7 million loss on the sale of these operations is reported in gain/loss on asset sales and sales of businesses, net , on the consolidated statement of operations. The Company received proceeds, net of transaction costs, of $ 5.0 million, which are reported as an investing activity on the consolidated statement of cash flows. The Company will receive additional proceeds of approximately $ 4.9 million during fiscal year 2026. In fiscal year 2024, these operations had external sales of approximately $ 39.1 million and income before tax of approximately $ 2.4 million. During fiscal year 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. The Company received proceeds, net of transaction costs, of $ 48.0 million and $ 2.5 million in fiscal years 2024 and 2025, respectively, 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. Note 7. Joint Ventures The Company has a 60 % interest in the Chinese joint venture known as STAL, which manufactures Precision Rolled Strip ® (PRS) stainless products mainly for the electronics and automotive markets located in Asia. The remaining 40 % interest in STAL is owned by China Baowu Steel Group Corporation Limited, a state authorized investment company whose equity securities are publicly traded in the People’s Republic of China. As a majority-owned joint venture, STAL is consolidated into the Company's operating results and financial position. The minority ownership interest is recognized in the consolidated statement of operations as net income attributable to noncontrolling interests, and as equity attributable to the noncontrolling interests within total stockholders’ equity. Cash equivalents held by STAL as of December 28, 2025 were $ 97.6 million. 55 Note 8. Asset Retirement Obligations The Company maintains reserves where a legal obligation exists to perform an asset retirement activity and the fair value of the liability can be reasonably estimated. These asset retirement obligations (AROs) include liabilities where the timing and (or) method of settlement may be conditional on a future event, that may or may not be within the control of the entity. At December 28, 2025, the Company had recognized AROs of $ 8.3 million related to landfill closures, decommissioning costs, facility leases and conditional AROs associated with manufacturing activities using what may be characterized as potentially hazardous materials. Estimates of AROs are evaluated annually in the fourth quarter, or more frequently if material new information becomes known. Accounting for asset retirement obligations requires significant estimation and in certain cases, the Company has determined that an ARO exists, but the amount of the obligation is not reasonably estimable. 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 28, 2025 and December 29, 2024 were as follows: Fiscal Year (In millions) 2025 2024 Balance at beginning of fiscal year $ 7.9 $ 18.3 Accretion expense 0.5 0.5 Revision of estimates — ( 0.7 ) Divestitures — ( 10.0 ) Payments ( 0.1 ) ( 0.2 ) Balance at end of fiscal year $ 8.3 $ 7.9 During fiscal year 2024, the Company derecognized $ 10.0 million of AROs in connection with the sale of its precision rolled strip operations (see Note 6 for further explanation). Note 9. Supplemental Financial Statement Information Cash and cash equivalents at December 28, 2025 and December 29, 2024 were as follows: Fiscal Year (In millions) 2025 2024 Cash $ 294.9 $ 391.5 Other short-term investments 121.8 329.7 Total cash and cash equivalents $ 416.7 $ 721.2 Other current liabilities included salaries, wages and other employee-related liabilities of $ 122.8 million and $ 113.6 million at December 28, 2025 and December 29, 2024, respectively, and accrued interest of $ 23.5 million and $ 23.9 million at December 28, 2025 and December 29, 2024, respectively. Other income (expense) for the fiscal years ended December 28, 2025, December 29, 2024, and December 31, 2023 was as follows: Fiscal Year (in millions) 2025 2024 2023 Rent, royalty income and other income $ 4.1 $ 3.8 $ 2.6 Gains from disposal of property, plant and equipment, net 10.5 11.6 0.3 Other — ( 1.0 ) ( 1.6 ) Total other income, net $ 14.6 $ 14.4 $ 1.3 Gains from disposal of property, plant and equipment, net for the fiscal year ended December 28, 2025 and December 29, 2024 include a $ 10.5 million and $ 11.6 million, respectively, 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 28, 2025. 56 Supplier Financing The Company participates in supplier financing programs with two financial institutions to offer its suppliers the option for access to payment in advance of an invoice due date. Under such programs, these financial institutions provide early payment to suppliers at their request for invoices that ATI has confirmed as valid at a pre-determined discount rate commensurate with the creditworthiness of ATI. As of December 28, 2025 and December 29, 2024, the Company had $ 52.8 million and $ 34.8 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 28, 2025: (in millions) Fiscal Year 2025 Balance as of beginning of fiscal year $ 34.8 New obligations confirmed 299.7 Obligations paid ( 281.6 ) Balance as of period end $ 52.8 Accounts Receivable Securitization On September 19, 2025, ATI Specialty Materials, LLC (“Specialty Materials”) and its indirect wholly owned subsidiary, ATI Securitization LLC (“ATI Securitization”) entered into a three-year , $ 125.0 million Receivables Purchase and Financing Agreement (the “Receivables Facility”) with PNC Bank, National Association, as Administrative Agent, and certain Purchasers/Lenders party thereto. Under the Receivables Facility, Specialty Materials sells or contributes, on an ongoing basis, certain of its trade accounts receivable, together with related security and interests in the proceeds thereof, to its wholly owned subsidiary, ATI Securitization Holdings LLC (ATI Holdings). ATI Holdings subsequently sells or contributes those receivable and related security and interests to ATI Securitization, its wholly owned subsidiary, which is a consolidated bankruptcy-remote special purpose entity created for the sole purpose of transacting under the Receivables Facility. ATI Securitization may borrow from, and/or sell receivables under the Receivables Facility at fair value and will secure its obligations with a pledge of undivided interests in such receivables, together with related security and interest in the proceeds thereof. In all instances, Specialty Materials retains the servicing of the accounts receivable transferred, which includes collection and administrative activities. ATI has agreed to guarantee the performance of Specialty Materials obligations under the Receivables Facility. The maximum aggregate funding available under the Receivables Facility is $ 125.0 million at any one time, subject to the availability of eligible receivables and other customary factors and conditions as well as covenants as set forth in the Receivables Facility. Amounts outstanding under the Receivables Facility accrue interest at an adjusted Secured Overnight Financing Rate (SOFR) plus the applicable margin. The Receivables Facility also requires the maintenance of a minimum utilization level equal to 50 % of the facility amount. ATI Securitization is a separate legal entity with its own creditors. In the event of a liquidation of ATI Securitization, its creditors would be entitled to be satisfied out of the assets of ATI Securitization prior to any assets or value becoming available to creditors or equity holders for other ATI entities. The assets of ATI Securitization, including any funds of ATI Securitization that may be commingled with funds of any of its affiliates for purposes of cash management and related efficiencies, are not available to pay creditors of ATI or any affiliate thereof, except to the extent collections of receivables are in excess of the amounts owed by ATI Securitization under the Receivables Facility. Sales of accounts receivable under the Receivables Facility meet the sale criteria under ASC 860, Transfers and Servicing (“ASC 860”) , and are derecognized from the consolidated balance sheet. Cash receipts, received at the time of the sale of receivables under the Receivables Facility, are classified as cash flow from operating activities in the consolidated statement of cash flows. As the Company retains the servicing rights of the receivables sold, the Company assessed the associated servicing liability under ASC 860 and determined that the liability is immaterial to the Company’s financial statements. For the fiscal year ended December 28, 2025, ATI Securitization sold $ 80.0 million of accounts receivable in exchange for $ 80.0 million of cash. The Company recorded a $ 1.8 million charge associated with the sale of the accounts receivable within selling and administrative expenses on its consolidated statement of operations and the amount is excluded from segment results. There were no borrowings during the fiscal year ended December 28, 2025 under the Receivable Facility. 57 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 $ 94.2 million and $ 13.5 million of its receivables under this program during the fiscal years ended December 28, 2025 and December 29, 2024, respectively, resulting in de-recognition of the receivables from the Company’s consolidated balance sheet. As of December 28, 2025, substantially all amounts under the Receivables Purchase Agreement have been repaid to the financial institution. The losses associated with these transactions of $ 0.7 million for the fiscal year ended December 28, 2025 are reflected in the Company’s consolidated statement of operations and are excluded from segment results. The loss on the sales of these accounts receivables were not material to the Company for the fiscal year ended December 29, 2024. The cash received on these sales of accounts receivable during the fiscal years ended December 28, 2025 and 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 28, 2025, December 29, 2024 and December 31, 2023, the Company sold $ 375 million, $ 300 million and $ 308 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 $ 5.3 million, $ 6.0 million and $ 6.3 million are reflected in the Company’s consolidated statement of operations for the fiscal years ended December 28, 2025, December 29, 2024 and December 31, 2023, respectively, and are excluded from segment results. Note 10. Debt Debt at December 28, 2025 and December 29, 2024 was as follows: Fiscal Year (In millions) 2025 2024 ATI Inc. 7.25 % Senior Notes due 2030 $ 425.0 $ 425.0 ATI Inc. 5.875 % Senior Notes due 2027 350.0 350.0 ATI Inc. 5.125 % Senior Notes due 2031 350.0 350.0 ATI Inc. 4.875 % Senior Notes due 2029 325.0 325.0 Allegheny Ludlum 6.95 % Debentures due 2025 (a) — 150.0 ABL Term Loan 200.0 200.0 U.S. revolving credit facility — — Foreign credit agreements — — Finance leases and other 111.0 109.5 Debt issuance costs ( 11.6 ) ( 14.2 ) Total short-term and long-term debt 1,749.4 1,895.3 Short-term debt and current portion of long-term debt 31.1 180.4 Total long-term debt $ 1,718.3 $ 1,714.9 (a) The payment obligations of these debentures issued by Allegheny Ludlum, LLC are fully and unconditionally guaranteed by ATI. The $ 150.0 million Allegheny Ludlum 6.95 % Debentures were fully repaid on their December 15, 2025 due date. The repayment was funded through available cash on hand, and there was no default or adverse impact on the Company’s financial 58 covenants. The transaction resulted in a reduction of long-term debt on the balance sheet, and the Company remains in compliance with all applicable debt agreements. Interest expense was $ 110.7 million in fiscal year 2025, $ 124.2 million in fiscal year 2024, and $ 105.8 million in fiscal year 2023. Interest expense was reduced by $ 10.6 million, $ 11.8 million, and $ 13.5 million, in fiscal years 2025, 2024, and 2023, respectively, from interest capitalization on capital projects. Interest and commitment fees paid were $ 117.8 million in fiscal year 2025, $ 131.4 million in fiscal year 2024, and $ 114.7 million in fiscal year 2023. Net interest expense includes interest income of $ 12.1 million in fiscal year 2025, $ 16.0 million in fiscal year 2024, and $ 13.0 million in fiscal year 2023. Scheduled principal payments during the next five fiscal years are $ 31.6 million in 2026, $ 378.6 million in 2027, $ 23.6 million in 2028, $ 343.7 million in 2029, and $ 633.4 million in 2030. See Note 11, Leases, for the portion of these scheduled principal payments that are related to finance leases. 2030 Senior Notes In August 2023, ATI issued $ 425.0 million aggregate principal amount of 7.25 % Senior Notes due 2030 (2030 Notes). Interest on the 2030 Notes is payable semi-annually in arrears at a rate of 7.25 % per year. The 2030 Notes will mature on August 15, 2030. Net proceeds were $ 418.8 million from this issuance, of which $ 222 million was used to fund ATI’s U.S. qualified defined benefit pension plan in order to facilitate a pension derisking strategy (see Note 14), and the remaining proceeds were used for liquidity and general corporate purposes. Underwriting fees and other third-party expenses for the issuance of the 2030 Notes were $ 6.2 million, and are being amortized to interest expense over the 7-year term of the 2030 Notes. The 2030 Notes are unsecured and unsubordinated obligations of the Company and equally ranked with all of its existing and future senior unsecured debt. The 2030 Notes restrict the Company’s ability to create certain liens, to enter into sale leaseback transactions, guarantee indebtedness and to consolidate or merge all, or substantially all, of its assets. The Company has the option to redeem the 2030 Notes, as a whole or in part, at any time or from time to time, on at least 15 days, but not more than 60 days, prior notice to the holders of the Notes at redemption prices specified in the 2030 Notes. The 2030 Notes are subject to repurchase upon the occurrence of a change in control repurchase event (as defined in the 2030 Notes) at a repurchase price in cash equal to 101 % of the aggregate principal amount of the Notes repurchased, plus any accrued and unpaid interest on the 2030 Notes repurchased. 2025 Convertible Notes 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. 59 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 and December 31, 2023. Interest expense on the 2025 Convertible Notes was as follows: Fiscal Year (in millions) 2024 2023 Contractual coupon rate $ 7.2 $ 10.2 Amortization of debt issuance costs 1.3 1.9 Total interest expense $ 8.5 $ 12.1 Credit Agreements On June 13, 2025, the Company amended its Asset Based Lending (ABL) credit facility, which is collateralized by the accounts receivable and inventory of the Company’s operations. This amendment extended the ABL Facility through June 2030. The amended ABL credit facility includes a $ 600 million revolving credit facility, a letter of credit sub-facility of up to $ 200 million, a $ 200 million term loan (Term Loan), and a swing loan facility of up to $ 60 million. Additionally, the amendment gives the Company the ability, through June 13, 2026 and as long as no default or event of default has occurred and is continuing, to borrow an additional term loan of up to $ 100 million in total, using one or two draws (the Delayed Draw Term Loan). The Term Loan and any Delayed-Draw Loan each bear interest at a rate of 2.0 % above adjusted 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 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 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 28, 2025. Additionally, the Company must demonstrate minimum liquidity specified by the facility during the 90-day period immediately preceding the stated maturity date of the 5.875 % Senior Notes due 2027 and the 4.875 % Notes due 2029. Costs associated with entering into the June 2025 ABL amendment were $ 2.8 million, and are being amortized to interest expense over the extended term of the facility ending June 2030, along with $ 1.9 million of unamortized deferred costs previously recorded for the ABL. The ABL, as amended, also contains customary affirmative and negative covenants for credit facilities of this type, including limitations on the Company’s ability to incur additional indebtedness or liens or to enter into investments, mergers and acquisitions, dispositions of assets and transactions with affiliates, some of which are more restrictive, at any time during the term of the ABL when the Company’s fixed charge coverage ratio is less than 1.00 :1.00 and its undrawn availability under the revolving portion of the ABL is less than the greater of (a) $ 120 million or (b) 20 % of the sum of the maximum loan amount under the revolving credit portion of the ABL and the outstanding ABL Term Loan balance. As of December 28, 2025, there were no outstanding borrowings under the revolving portion of the ABL, and $ 29.3 million was utilized to support the issuance of letters of credit. There were average revolving credit borrowings of $ 2.6 million bearing an average annual interest rate of 6.5 % under the ABL during fiscal year 2025. 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 $ 73 million based on December 28, 2025 foreign exchange rates, none of which was drawn as of December 28, 2025 or December 29, 2024. The Company has no off-balance sheet financing relationships as defined in Item 303(a)(4) of SEC Regulation S-K, with variable interest entities, structured finance entities, or any other unconsolidated entities. At December 28, 2025, the Company had not guaranteed any third-party indebtedness. 60 Note 11. Leases The following represents the components of lease cost and other information for both operating and financing leases for the fiscal years 2025, 2024 and 2023: ($ in millions) Fiscal Year 2025 2024 2023 Lease Cost Finance Lease Cost: Amortization of right of use asset $ 17.6 $ 14.1 $ 10.9 Interest on lease liabilities 6.7 6.3 4.6 Operating lease cost 21.3 17.0 17.6 Short-term lease cost 5.8 6.3 4.5 Variable lease cost 0.6 0.7 1.0 Sublease income ( 1.9 ) ( 1.2 ) ( 0.4 ) Total lease cost $ 50.1 $ 43.2 $ 38.2 Other information Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from finance leases $ 6.6 $ 6.1 $ 4.6 Operating cash flows from operating leases $ 22.3 $ 18.8 $ 16.8 Financing cash flows from finance leases $ 32.3 $ 29.1 $ 24.9 Right of use assets obtained in exchange for new finance lease liabilities $ 26.7 $ 31.6 $ 54.6 Right of use assets obtained in exchange for new operating lease liabilities $ 39.7 $ 12.1 $ 25.8 Weighted average remaining lease term - finance leases 4 years 4 years 4 years Weighted average remaining lease term - operating leases 6 years 7 years 7 years Weighted average discount rate - finance leases 6.3 % 6.3 % 5.4 % Weighted average discount rate - operating leases 6.9 % 7.0 % 7.1 % The following table reconciles future minimum undiscounted rental commitments for operating leases to the operating lease liabilities recorded on the consolidated balance sheet as of December 28, 2025 (in millions): Fiscal Year December 28, 2025 2026 $ 22.3 2027 18.9 2028 16.5 2029 14.4 2030 10.2 2031 and thereafter 28.1 Total undiscounted lease payments $ 110.4 Present value adjustment ( 21.4 ) Operating lease liabilities $ 89.0 61 The following table reconciles future minimum undiscounted rental commitments for finance leases to the finance lease liabilities recorded on the consolidated balance sheet as of December 28, 2025 (in millions): Fiscal Year December 28, 2025 2026 $ 36.2 2027 32.4 2028 25.9 2029 19.7 2030 8.5 2031 and thereafter 0.1 Total undiscounted lease payments $ 122.8 Present value adjustment ( 12.4 ) Finance lease liabilities $ 110.4 The Company has agreed to enter into certain finance lease contracts with lenders for progress payments on machinery and equipment that is being constructed at the request and specification of the Company. As of December 28, 2025, the lenders had made $ 38.0 million of progress payments on behalf of the Company, and $ 34.3 million of progress payments are scheduled to be paid. Upon payment of the final progress payments by the lenders, finance leases will commence, and $ 72.3 million, discounted using the applicable discount rates at lease inceptions, of ROU assets and lease liabilities will be recognized by the Company. The Company received payments payments of $ 9.7 million and $ 2.8 million, respectively, as proceeds on the sale of ongoing construction in progress projects that were converted to leases, for the fiscal years ended December 29, 2024 and December 31, 2023. There were no such payments in the fiscal year ended 2025. These payments are presented as investing activities on the consolidated statements of cash flows. Note 12. Derivative Financial Instruments and Hedging As part of its risk management strategy, the Company, from time-to-time, utilizes derivative financial instruments to manage its exposure to changes in raw material prices, energy costs, foreign currencies, and interest rates. In accordance with applicable accounting standards, the Company accounts for most of these contracts as hedges. The Company sometimes uses futures and swap contracts to manage exposure to changes in prices for forecasted purchases of raw materials, such as nickel, and natural gas. Under these contracts, which are generally accounted for as cash flow hedges, the price of the item being hedged is fixed at the time that the contract is entered into and the Company is obligated to make or receive a payment equal to the net change between this fixed price and the market price at the date the contract matures. The majority of ATI’s products are sold utilizing raw material surcharges and index mechanisms. However, as of December 28, 2025, the Company had entered into financial hedging arrangements primarily at the request of its customers, related to firm orders, for an aggregate notional amount of approximately 2 million pounds of nickel with hedge dates through fiscal year 2027. The aggregate notional amount hedged is less than 5 % of a single year’s estimated nickel raw material purchase requirements. These derivative instruments are used to hedge the variability of a selling price that is based on the London Metals Exchange (LME) index for nickel, as well as to hedge the variability of the purchase cost of nickel based on this LME index. Any gain or loss associated with these hedging arrangements is included in sales or cost of sales, depending on whether the underlying risk being hedged was the variable selling price or the variable raw material cost, respectively. At December 28, 2025, the outstanding financial derivatives used to hedge the Company’s exposure to energy cost volatility included natural gas cost hedges. At December 28, 2025, the company hedged approximately 65 % of the Company’s annual forecasted domestic requirements for natural gas for fiscal year 2026 and approximately 25 % for fiscal year 2027. While the majority of the Company’s direct export sales are transacted in U.S. dollars, foreign currency exchange contracts are used, from time-to-time, to limit transactional exposure to changes in currency exchange rates for those transactions denominated in a non-U.S. currency. The Company sometimes purchases foreign currency forward contracts that permit it to sell specified amounts of foreign currencies expected to be received from its export sales for pre-established U.S. dollar amounts at specified dates. In addition, the Company may also hedge forecasted capital expenditures and designate cash balances held in foreign currencies as hedges of forecasted foreign currency transactions. At December 28, 2025, the Company had no significant outstanding foreign currency forward contracts. The Company may enter into derivative interest rate contracts to maintain a reasonable balance between fixed- and floating-rate debt. 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 28, 2025. 62 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. The counterparties to the Company’s derivative contracts were substantial and creditworthy commercial banks that are recognized market makers. The Company controls its credit exposure by diversifying across multiple counterparties and by monitoring credit ratings and credit default swap spreads of its counterparties. The Company also enters into master netting agreements with counterparties when possible. The fair values of the Company’s derivative financial instruments are presented below, representing the gross amounts recognized which are not offset by counterparty or by type of item hedged. 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 28, 2025 December 29, 2024 Asset derivatives Balance sheet location Derivatives designated as hedging instruments: Foreign exchange contracts Prepaid expenses and other current assets $ 0.1 $ 0.2 Natural gas contracts Prepaid expenses and other current assets 1.0 0.8 Nickel and other raw material contracts Prepaid expenses and other current assets 0.6 — Natural gas contracts Other assets 0.1 0.9 Total derivatives designated as hedging instruments 1.8 1.9 Total asset derivatives $ 1.8 $ 1.9 Liability derivatives Balance sheet location Derivatives designated as hedging instruments: Natural gas contracts Other current liabilities $ 1.3 $ 1.7 Nickel and other raw material contracts Other current liabilities 0.1 4.2 Natural gas contracts Other long-term liabilities 0.4 0.1 Total derivatives designated as hedging instruments 1.8 6.0 Total liability derivatives $ 1.8 $ 6.0 Assuming market prices remain constant with those at December 28, 2025, a pre-tax loss of $ 0.3 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 28, 2025 or December 29, 2024. The cash flow impact for all derivative financial instruments is reported in cash flows provided by operating activities on the consolidated statement of cash flows. The Company did not use net investment hedges for the periods presented. The effects of derivative instruments in the tables below are presented net of related income taxes, excluding any impacts of changes to income tax valuation allowances affecting results of operations or other comprehensive income, when applicable. 63 Activity with regard to derivatives designated as cash flow hedges for the fiscal years ended December 28, 2025 and December 29, 2024 were as follows (in millions): Derivatives in Cash Flow Hedging Relationships Amount of Gain (Loss) Recognized in OCI on Derivatives Amount of Gain (Loss) Reclassified from Accumulated OCI into Income (a) Fiscal Year 2025 2024 2025 2024 Nickel and other raw material contracts $ ( 0.3 ) $ ( 3.7 ) $ ( 3.9 ) $ ( 3.7 ) Natural gas contracts ( 0.7 ) ( 1.1 ) ( 0.3 ) ( 6.1 ) Foreign exchange contracts — 0.3 0.1 0.2 Interest rate swap — — — 1.2 Total $ ( 1.0 ) $ ( 4.5 ) $ ( 4.1 ) $ ( 8.4 ) (a) The gains (losses) reclassified from accumulated OCI into income related to the derivatives, with the exception of the interest rate swap, are presented in sales and cost of sales in the same period or periods in which the hedged item affects earnings. The gains (losses) reclassified from accumulated OCI into income on the interest rate swap are presented in interest expense in the same period as the interest expense on the ABL Term Loan is recognized in earnings. The disclosures of gains or losses presented above for nickel and other raw material contracts and foreign currency contracts do not take into account the anticipated underlying transactions. 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 $ 2.6 million of income and $ 2.2 million of expense, net, for settled foreign currency forward contracts that were not designated as hedges during the fiscal year ended December 28, 2025 and December 29, 2024, respectively, which offset foreign currency gains/losses in the relevant currency. We have no significant outstanding hedges that are not designated as of December 28, 2025. Note 13. Fair Value of Financial Instruments The estimated fair value of financial instruments at December 28, 2025 was as follows: Fair Value Measurements at Reporting Date Using (In millions) Total Carrying Amount Total Estimated Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Cash and cash equivalents $ 416.7 $ 416.7 $ 416.7 $ — Derivative financial instruments: Assets 1.8 1.8 — 1.8 Liabilities 1.8 1.8 — 1.8 Debt (a) 1,761.0 1,787.9 1,476.9 311.0 64 The estimated fair value of financial instruments at December 29, 2024 was as follows: Fair Value Measurements at Reporting Date Using (In millions) Total Carrying Amount Total Estimated Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Cash and cash equivalents $ 721.2 $ 721.2 $ 721.2 $ — Derivative financial instruments: Assets 1.9 1.9 — 1.9 Liabilities 6.0 6.0 — 6.0 Debt (a) 1,909.5 1,889.7 1,580.2 309.5 (a) The total carrying amount for debt excludes debt issuance costs related to the recognized debt liability which is presented in the consolidated balance sheets as a direct reduction from the carrying amount of the debt liability. In accordance with accounting standards, fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Accounting standards established three levels of a fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 2 – Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. The availability of observable market data is monitored to assess the appropriate classification of financial instruments within the fair value hierarchy. Changes in economic conditions or model-based valuation techniques may require the transfer of financial instruments from one fair value level to another. In such instances, the transfer is reported at the beginning of the reporting period. The following methods and assumptions were used by the Company in estimating the fair value of its financial instruments: Cash and cash equivalents: Fair values were determined using Level 1 information. Derivative financial instruments: Fair values for derivatives were measured using exchange-traded prices for the hedged items. The fair value was determined using Level 2 information, including consideration of counterparty risk and the Company’s credit risk. Short-term and long-term debt: 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. Note 14. Retirement Benefits The Company has defined contribution retirement plans or defined benefit pension plans covering substantially all employees. Company contributions to defined contribution retirement plans are generally based on a percentage of eligible pay or based on hours worked. Benefits under the defined benefit pension plans are generally based on years of service and/or final average pay. The Company also sponsors several postretirement plans covering certain collectively-bargained salaried and hourly employees. The plans provide health care and life insurance benefits for eligible retirees. 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. 65 ATI instituted several initiatives over a multi-year period as part of its retirement benefit liability derisking strategy. Future benefit accruals for all participants in the U.S. defined benefit pension plans other than those subject to a CBA were frozen at the end of fiscal year 2014, and subsequently CBAs were negotiated to close these plans to new entrants. As a result of these actions, the Company has completely closed all defined benefit pension plans to new entrants, and has substantially limited the number of employees still accruing benefit service to less than 700 participants. Additionally, all of ATI’s remaining collectively-bargained, capped defined benefit retiree health care plans are closed to new entrants. These liability management actions have transitioned ATI’s retirement benefit and other postretirement benefit programs largely to a defined contribution structure. From fiscal years 2013 to 2022, five annuity buyouts of retired participants and two voluntary cash out programs of deferred participants helped to reduce the total participants in ATI’s U.S. qualified defined benefit pension plans by more than 60 %. During the fourth quarter of fiscal year 2023, the Company purchased group annuity contracts from an insurer covering approximately 85 % of the Company’s U.S. qualified defined benefit pension plan obligations. Under these contracts, the Company transferred the pension obligations and associated assets for approximately 8,200 plan participants to the selected insurance company. To facilitate this pension derisking strategy, the Company completed a voluntary cash out for term vested employees and contributed $ 222 million to its pension plan in the third quarter of fiscal year 2023, to fully fund remaining pension liabilities ahead of this annuity transaction. After these actions, the Company’s U.S. qualified defined benefit pension plan includes approximately 2,000 participants. Costs for defined contribution retirement plans were $ 46.7 million in fiscal year 2025, $ 42.5 million in fiscal year 2024, and $ 38.8 million in fiscal year 2023. Company contributions to these defined contribution plans are funded with cash. 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 28, 2025, December 29, 2024, and December 31, 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 Fiscal Year (In millions) 2025 2024 2023 2025 2024 2023 Service cost - benefits earned during the year $ 5.3 $ 5.8 $ 6.0 $ 0.4 $ 0.5 $ 0.6 Interest cost on benefits earned in prior years 17.4 16.4 79.7 9.9 10.2 10.9 Expected return on plan assets ( 15.9 ) ( 16.4 ) ( 84.8 ) — — — Amortization of prior service cost (credit) 0.4 0.3 0.3 ( 0.9 ) ( 0.8 ) ( 0.9 ) Amortization of net actuarial loss — — — 5.1 5.2 6.0 Recognized actuarial loss (gain) - mark to market 18.6 14.1 26.8 — — — Settlement loss — — 41.7 — — — Total retirement benefit expense (income) $ 25.8 $ 20.2 $ 69.7 $ 14.5 $ 15.1 $ 16.6 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 $ 18.6 million, $ 14.1 million and $ 26.8 million in fiscal years 2025, 2024 and 2023, respectively, within nonoperating retirement benefit income/expense on the consolidated statements of operations. On October 17, 2023, the Company completed a voluntary cash out for term vested employees and an annuity buyout related to approximately 8,200 U.S. qualified defined benefit pension plan participants. As a result of the annuity buyout, ATI recognized a $ 41.7 million pretax settlement loss, which is recorded in nonoperating retirement benefit income/expense on the consolidated statement of operations. 66 Actuarial assumptions used to develop the components of defined benefit pension expense and other postretirement benefit expense were as follows: Pension Benefits Other Postretirement Benefits Fiscal Year 2025 2024 2023 2025 2024 2023 Discount rate (a) 5.85 % 5.60 % 5.55 % - 6.40 % 5.60 % 5.40 % 5.45 % Rate of increase in future compensation levels 5.00 % 3.00 % 3.00 % — % — % — % Weighted average expected long-term rate of return on assets (a) 5.80 % 5.80 % 5.80 % - 6.57 % — % — % — % (a) Pension expense for fiscal year 2023 was initially measured at a 5.55 % discount rate and 6.57 % weighted average expected long-term rate of return on assets. The U.S. qualified pension plans were remeasured using a 6.40 % weighted average discount rate and 5.80 % weighted average expected long-term rate of return on assets as of October 17, 2023, following the annuity buyout of retirees. Actuarial assumptions used for the valuation of defined benefit pension and other postretirement benefit obligations at the end of the respective periods were as follows: Pension Benefits Other Postretirement Benefits Fiscal Year 2025 2024 2025 2024 Discount rate 5.90 % 5.85 % 5.30 % 5.60 % Rate of increase in future compensation levels 4.00 % - 10.00 % 3.00 % - 5.00 % — — A reconciliation of the funded status for the Company’s defined benefit pension and other postretirement benefit plans at December 28, 2025 and December 29, 2024 was as follows: Pension Benefits Other Postretirement Benefits Fiscal Year (In millions) 2025 2024 2025 2024 Change in benefit obligations: Benefit obligation at beginning of fiscal year $ 305.6 $ 298.4 $ 189.2 $ 201.6 Service cost 5.3 5.8 0.4 0.5 Interest cost 17.4 16.4 9.9 10.2 Benefits paid ( 12.8 ) ( 3.5 ) ( 24.1 ) ( 25.4 ) Net actuarial (gains) losses – discount rate change ( 2.0 ) ( 9.7 ) 3.5 ( 2.5 ) – other 19.5 ( 1.8 ) 3.3 4.8 Benefit obligation at end of fiscal year $ 333.0 $ 305.6 $ 182.2 $ 189.2 Actuarial effects of changes in discount rates are separately identified in the preceding table. Pension Benefits Other Postretirement Benefits Fiscal Year (In millions) 2025 2024 2025 2024 Change in plan assets: Fair value of plan assets at beginning of fiscal year $ 279.8 $ 289.1 $ — $ — Actual returns on plan assets and plan expenses 14.8 ( 9.1 ) — — Employer contributions 5.1 3.3 — — Benefits paid ( 12.8 ) ( 3.5 ) — — Fair value of plan assets at end of fiscal year $ 286.9 $ 279.8 $ — $ — 67 Assets (liabilities) recognized in the consolidated balance sheets: Pension Benefits Other Postretirement Benefits Fiscal Year 2025 2024 2025 2024 Noncurrent assets $ — $ 16.6 $ — $ — Current liabilities ( 4.8 ) ( 5.2 ) ( 23.7 ) ( 24.9 ) Noncurrent liabilities ( 41.4 ) ( 37.2 ) ( 158.5 ) ( 164.3 ) Total amount recognized $ ( 46.2 ) $ ( 25.8 ) $ ( 182.2 ) $ ( 189.2 ) Changes to accumulated other comprehensive loss related to pension and other postretirement benefit plans in fiscal years 2025 and 2024 were as follows: Pension Benefits Other Postretirement Benefits Fiscal Year (In millions) 2025 2024 2025 2024 Beginning of year accumulated other comprehensive loss $ ( 7.1 ) $ ( 7.4 ) $ ( 52.3 ) $ ( 54.5 ) Amortization of net actuarial loss — — 5.1 5.2 Amortization of prior service cost (credit) 0.4 0.3 ( 0.9 ) ( 0.8 ) Settlement loss — — — — Remeasurements — — ( 6.7 ) ( 2.2 ) End of year accumulated other comprehensive loss $ ( 6.7 ) $ ( 7.1 ) $ ( 54.8 ) $ ( 52.3 ) Net change in accumulated other comprehensive loss $ 0.4 $ 0.3 $ ( 2.5 ) $ 2.2 Amounts included in accumulated other comprehensive loss at December 28, 2025 and December 29, 2024 were as follows: Pension Benefits Other Postretirement Benefits Fiscal Year (In millions) 2025 2024 2025 2024 Prior service (cost) credit $ ( 6.7 ) $ ( 7.1 ) $ — $ 0.8 Net actuarial loss — — ( 54.8 ) ( 53.1 ) Accumulated other comprehensive loss ( 6.7 ) ( 7.1 ) ( 54.8 ) ( 52.3 ) Deferred tax effect 1.8 1.9 27.5 27.0 Accumulated other comprehensive loss, net of tax $ ( 4.9 ) $ ( 5.2 ) $ ( 27.3 ) $ ( 25.3 ) Amounts in accumulated other comprehensive loss presented above do not include any effects of deferred tax asset valuation allowances. See Note 15 for further discussion on deferred tax asset valuation allowances. Retirement benefit expense for fiscal year 2026 for defined benefit plans is estimated to be approximately $ 23 million, comprised of $ 9 million for pension expense and $ 14 million of expense for other postretirement benefits. For other postretirement benefits, the net actuarial loss is recognized in the consolidated statement of operations using a corridor method. For both pension and other postretirement benefits, prior service cost (credit) amortization is recognized in level amounts over the expected service of the active membership as of the amendment effective date. Amounts in accumulated other comprehensive loss that are expected to be recognized as components of net periodic benefit cost in fiscal year 2026 are: (In millions) Pension Benefits Other Postretirement Benefits Total Amortization of prior service cost (credit) $ 0.4 $ ( 0.3 ) $ 0.1 Amortization of net actuarial loss — 5.2 5.2 Amortization of accumulated other comprehensive loss $ 0.4 $ 4.9 $ 5.3 The accumulated benefit obligation for all defined benefit pension plans was $ 310.3 million and $ 292.3 million at December 28, 2025 and December 29, 2024, respectively. Additional information for pension plans with accumulated benefit obligations and projected benefit obligations in excess of plan assets: 68 Pension Benefits Fiscal Year (In millions) 2025 2024 Projected benefit obligation $ 39.0 $ 42.4 Accumulated benefit obligation $ 39.0 $ 42.4 Fair value of plan assets $ — $ — Cash contributions to ATI’s U.S. qualified defined benefit pension plans were $ 272 million in fiscal year 2023. There were no cash contributions in fiscal year 2025 or 2024. The Company funds the U.S. defined benefit pension plans in accordance with the Employee Retirement Income Security Act of 1974, as amended, and the Internal Revenue Code. The Company has a required cash contribution of $ 4 million to its U.S. qualified defined benefit pension plan in fiscal year 2026. In addition, for fiscal year 2026, the Company expects approximately $ 5 million of payments for U.S. nonqualified pension benefits. The following table summarizes expected benefit payments from the Company’s various pension and other postretirement defined benefit plans through fiscal year 2035, and also includes estimated Medicare Part D subsidies projected to be received during this period based on currently available information. Pension benefit payments for the U.S. qualified defined benefit pension plan are made from pension plan assets. (In millions) Fiscal Year Pension Benefits Other Postretirement Benefits Medicare Part D Subsidy 2026 $ 16.4 $ 23.7 $ — 2027 17.8 22.3 — 2028 18.7 20.8 — 2029 19.3 19.4 — 2030 20.2 17.8 — 2031-2035 113.1 69.0 — The annual assumed rate of increase in the per capita cost of covered benefits (the health care cost trend rate) for health care plans was 8.5 % in 2026 and is assumed to gradually decrease to 4.0 % in the year 2051 and remain at that level thereafter. Assumed health care cost trend rates can have a significant effect on the amounts reported for the health care plans, however, the Company’s contributions for most of its retiree health plans are capped based on a fixed premium amount, which limits the impact of future health care cost increases. The fair values of the Company’s pension plan assets are determined using net asset value (NAV) as a practical expedient, or by information categorized in the fair value hierarchy level based on the inputs used to determine fair value, as further discussed in Note 13. The fair values at December 28, 2025 were as follows: (In millions) Quoted Prices in Active Markets for Identical Assets Significant Observable Inputs Significant Unobservable Inputs Asset category Total NAV (Level 1) (Level 2) (Level 3) Equity securities: U.S. equities $ 0.1 $ — $ 0.1 $ — $ — Fixed income and cash equivalents 206.2 1.0 205.2 — — Private equity 68.2 68.2 — — — Alternative investments- hedge funds, real estate and other 12.4 12.4 — — — Total assets $ 286.9 $ 81.6 $ 205.3 $ — $ — 69 The fair values of the Company’s pension plan assets at December 29, 2024 were as follows: (In millions) Quoted Prices in Active Markets for Identical Assets Significant Observable Inputs Significant Unobservable Inputs Asset category Total NAV (Level 1) (Level 2) (Level 3) Equity securities: U.S. equities $ 0.1 $ — $ 0.1 $ — $ — Fixed income and cash equivalents 199.2 5.3 193.9 — — Private equity 60.8 60.8 — — — Alternative investments- hedge funds, real estate and other 19.7 19.7 — — — Total assets $ 279.8 $ 85.8 $ 194.0 $ — $ — A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Investments in U.S. equities and Fixed Income are predominantly held in common/collective trust funds and registered investment companies. Some of these investments are publicly traded securities and are classified as Level 1, while others are public investment vehicles valued using the NAV provided by the administrator of the fund. The NAV is based on the value of the underlying assets owned by the fund, minus its liabilities, and then divided by the number of shares outstanding. These investments are not classified in the fair value hierarchy. Private equity investments include both Direct Funds and Fund-of-Funds. Direct Funds are investments in Limited Partnership (LP) interests. Fund-of-Funds are investments in private equity funds that invest in other private equity funds or LPs. Fair value of these investments is determined utilizing net asset values, and are not classified in the fair value hierarchy. Alternative investments include hedge fund and real estate investments that are made as a limited partner in funds managed by a general partner. 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 and other significant events. For fiscal year 2026, the expected long-term rate of return on defined benefit pension assets is 5.80 %. In developing expected long-term rate of return assumptions, the Company evaluated input from its third party pension plan asset managers and actuaries, including reviews of their asset class return expectations and long-term inflation assumptions. An expected long-term rate of return is based on expected asset allocations within ranges for each investment category and projected annual compound returns. The Company’s actual, weighted average returns on pension assets for the last five fiscal years have been 5.9 % for 2025, ( 2.7 )% for 2024, 2.0 % for 2023, ( 14.5 )% for 2022, and 12.4 % for 2021. The ATI Pension Plan (the Plan), the Company’s remaining U.S. qualified defined benefit pension plan, continues to invest in a diversified portfolio consisting of an array of asset classes that attempts to maintain the Plan’s funded status while maximizing returns and minimizing volatility. These asset classes may include U.S. domestic equities, non-U.S. developed market equities, emerging market equities, hedge funds, private equity, traditional fixed income consisting of long government/credit and alternative credit, and real estate. The Company continually monitors the investment results of these asset classes and its fund managers, and explores other potential asset classes for possible future investment. The ability to redeem investments at year-end are based on the type of investment and the agreements with fund managers. Generally, the Company’s fixed income and equity investments are readily redeemable with limited restrictions. The ability to redeem investments in hedge funds can vary significantly. Managers may require longer notice periods and may limit the amount able to be redeemed in a period (e.g., month or quarter) to a percent of the overall investment. Investments in private equity are not redeemable at ATI’s option. Distributions are based on the sale of the underlying investments in the fund, subject to the terms in each fund agreement. The target asset allocations for ATI Pension Plan for fiscal year 2026, by major investment category, are: Asset category Target asset allocation range Equities 0 % - 20 % Fixed income and cash equivalents 50 % - 100 % Private equity and other 0 % - 40 % 70 As of December 28, 2025, the Company’s pension plan had outstanding commitments to invest up to $ 29 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. The Company contributes to several multiemployer defined benefit pension plans under collective bargaining agreements that cover certain of its union-represented employees. The risks of participating in such plans are different from the risks of single-employer plans, in the following respects: a. Assets contributed to a multiemployer plan by one employer may be used to provide benefits to employees of other participating employers. b. If a participating employer ceases to contribute to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers. c. If the Company ceases to have an obligation to contribute to the multiemployer plan in which it had been a contributing employer, it may be required to pay to the plan an amount based on the underfunded status of the plan and on the history of the Company’s participation in the plan prior to the cessation of its obligation to contribute. The amount that an employer that has ceased to have an obligation to contribute to a multiemployer plan is required to pay to the plan is referred to as a withdrawal liability. The Company’s participation in multiemployer plans for the fiscal years ended December 28, 2025, December 29, 2024 and December 31, 2023 is reported in the following table. Pension Protection Act Zone Status (1) FIP / RP Status Pending / Implemented (2) in millions Expiration Dates of Collective Bargaining Agreements EIN / Pension Plan Number Company Contributions Surcharge Imposed (3) Fiscal Year Fiscal Year Pension Fund 2025 2024 2025 2024 2023 Steelworkers Western Independent Shops Pension Plan 90-0169564 / 001 Green Green N/A $ 1.3 $ 1.1 $ 0.7 No 2/28/2031 Boilermakers-Blacksmiths National Pension Trust 48-6168020 / 001 Red Red Yes 3.1 2.7 2.6 No 9/30/2026 IAM National Pension Fund 51-6031295 / 002 Red Red Yes 2.3 2.1 1.9 Yes Various between 2026-2029 (4) Total contributions $ 6.7 $ 5.9 $ 5.2 (1) The most recent Pension Protection Act Zone Status is based on information provided to ATI and other participating employers by each plan, as certified by the plan’s actuary. A plan in the “deep red” zone had been determined to be in “critical and declining status”, based on criteria established by the Internal Revenue Code (Code), and is in critical status (as defined by the “red” zone) and is projected to become insolvent (run out of money to pay benefits) within 15 years (or within 20 years if a special rule applies). A plan in the “red” zone had been determined to be in “critical status”, based on criteria established by the Code, and is generally less than 65% funded. A plan in the “yellow” zone has been determined to be in “endangered status”, based on criteria established under the Code, and is generally less than 80% funded. A plan in the “green” zone has been determined to be neither in “critical status” nor in “endangered status”, and is generally at least 80% funded. Additionally, a plan may voluntarily place itself into a rehabilitation plan. 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. Annually in April of each year from 2020 through 2025, 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, 2025. A contribution surcharge was imposed as of June 1, 2019 in addition to the contribution rate specified in the applicable collective bargaining agreements. The contribution surcharge remains in effect, and ends when an employer begins contributing under a collective bargaining agreement that includes terms consistent with the rehabilitation plan. In April 2019, the Company received notifications from the Boilermakers-Blacksmiths National Pension Trust (Blacksmiths Trust) that it was certified by its actuary as being in “red” zone status for the plan year beginning January 71 1, 2019. A rehabilitation plan was adopted for the Blacksmiths Trust, and the Company and the Blacksmiths union agreed to adopt the rehabilitation plan in 2019 prior to a contribution surcharge being imposed. In April 2020 and 2021, the funding status improved for the Blacksmiths Trust as it was certified by its actuary as being in the “yellow” zone for the plan years beginning January 1, 2020 and 2021. In April 2022, the funding status further improved to being in the “green” zone for the plan year beginning January 1, 2022. In April 2023, the Blacksmiths Trust was certified by its actuary as being in “red” zone status for the plan years beginning January 1, 2023, and in April 2024 and April 2025, the Blacksmiths Trust was certified by its actuary as being in “red” zone status for the plan years ending December 31, 2023 and December 31, 2024, respectively. A rehabilitation plan has been adopted for the Blacksmiths Trust, and the Company and the Blacksmiths union agreed to adopt the rehabilitation plan in 2023 prior to a contribution surcharge being imposed. (2) The “FIP / RP Status Pending / Implemented” column indicates whether a Funding Improvement Plan, as required under the Code by plans in the “yellow” zone, or a Rehabilitation Plan, as required under the Code to be adopted by plans in the “red” or “deep red” zones, is pending or has been implemented as of the end of the plan year that ended in 2025. (3) The “Surcharge Imposed” column indicates whether ATI’s contribution rate for 2025 included an amount in addition to the contribution rate specified in the applicable collective bargaining agreement, as imposed by a plan in “critical status” or “critical and declining status”, in accordance with the requirements of the Code. (4) The Company is party to six separate bargaining agreements that require contributions to this plan. Expiration dates of these collective bargaining agreements range between April 26, 2026 and March 31, 2029. 72 Note 15. Accumulated Other Comprehensive Income (Loss) The changes in AOCI by component, net of tax, for the fiscal years ended December 28, 2025, December 29, 2024 and December 31, 2023 were as follows (in millions): Post- retirement benefit plans Currency translation adjustment Derivatives Deferred Tax Asset Valuation Allowance Revised Total Balance, January 1, 2023 $ ( 34.7 ) $ ( 70.1 ) $ 13.5 $ 23.9 $ ( 67.4 ) OCI before reclassifications ( 2.9 ) 1.7 ( 21.8 ) — ( 23.0 ) Amounts reclassified from AOCI (a) 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, 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 (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 ) Balance, December 29, 2024 ( 30.5 ) ( 79.8 ) ( 2.5 ) 23.3 ( 89.5 ) OCI before reclassifications ( 5.2 ) 22.6 ( 1.0 ) — 16.4 Amounts reclassified from AOCI (a) 3.5 (c) 5.1 (d) 4.1 (e) — 12.7 Net current-period OCI ( 1.7 ) 27.7 3.1 — 29.1 Balance, December 28, 2025 $ ( 32.2 ) $ ( 52.1 ) $ 0.6 $ 23.3 $ ( 60.4 ) Attributable to noncontrolling interests: Balance, January 1, 2023 $ — $ 7.7 $ — $ — $ 7.7 OCI before reclassifications — ( 0.4 ) — — ( 0.4 ) Amounts reclassified from AOCI — (b) — — — — Net current-period OCI — ( 0.4 ) — — ( 0.4 ) Balance, December 31, 2023 — 7.3 — — 7.3 OCI before reclassifications — ( 1.6 ) — — ( 1.6 ) Amounts reclassified from AOCI — (b) — — — — Net current-period OCI — ( 1.6 ) — — ( 1.6 ) Balance, December 29, 2024 — 5.7 — — 5.7 OCI before reclassifications — 6.3 — — 6.3 Amounts reclassified from AOCI — (b) — — — — Net current-period OCI — 6.3 — — 6.3 Balance, December 28, 2025 $ — $ 12.0 $ — $ — $ 12.0 (a) Amounts were included in net periodic benefit cost for pension and other postretirement benefit plans (see Note 14). (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 Birmingham, U.K. and Dusseldorf, Germany 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. Income tax expense (benefit) on OCI items is recorded as a change in a deferred tax asset or liability. Amounts recognized in OCI include the impact of any deferred tax asset valuation allowances, when applicable. Foreign currency translation adjustments, including those pertaining to noncontrolling interests, are generally not adjusted for income taxes as they relate to indefinite investments in non-U.S. subsidiaries. 73 Reclassifications out of AOCI for the fiscal years ended December 28, 2025, December 29, 2024 and December 31, 2023 were as follows: Amount reclassified from AOCI (d) Fiscal year ended Details about AOCI Components (In millions) December 28, 2025 December 29, 2024 December 31, 2023 Affected line item in the consolidated statement of operations Postretirement benefit plans Revised Prior service credit $ 0.5 (a) $ 0.5 (a) $ 0.6 (a) Actuarial losses ( 5.1 ) (a) ( 5.2 ) (a) ( 6.0 ) (a) Settlement loss — (a) — (a) ( 1.1 ) (a) ( 4.6 ) (d) ( 4.7 ) (d) ( 6.5 ) (d) Total before tax ( 1.1 ) ( 1.1 ) ( 1.4 ) Tax benefit (e) $ ( 3.5 ) $ ( 3.6 ) $ ( 5.1 ) Net of tax Currency translation adjustment ( 5.1 ) (b, d) — (d) — (d) Derivatives Nickel and other raw material contracts $ ( 5.1 ) (c) $ ( 4.8 ) (c) $ 3.3 (c) Natural gas contracts ( 0.4 ) (c) ( 8.0 ) (c) ( 7.5 ) (c) Foreign exchange contracts 0.2 (c) 0.2 (c) 0.3 (c) Interest rate swap — (c) 1.6 (c) 1.4 (c) ( 5.3 ) (d) ( 11.0 ) (d) ( 2.5 ) (d) Total before tax ( 1.2 ) ( 2.6 ) ( 0.6 ) Tax benefit (e) $ ( 4.1 ) $ ( 8.4 ) $ ( 1.9 ) Net of tax (a) Amounts are included in nonoperating retirement benefit expense (see Note 14). (b) A mounts in 2025 were included in loss on asset sales and sales of businesses, net, as part of the loss on sale of the Birmingham, U.K. and Dusseldorf, Germany 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. Amounts related to the interest rate swap are included in interest expense in the same period as the interest expense on the ABL Term Loan is recognized in earnings (see Note 12). (d) For pretax items, positive amounts are income and negative amounts are expense in terms of the impact to net income. Tax effects are presented in conformity with ATI’s presentation in the consolidated statements of operations. (e) These amounts exclude the impact of any deferred tax asset valuation allowances, when applicable, including recognition of stranded balances (see Note 17 for further explanation). Note 16. Stockholders’ Equity Preferred Stock Authorized preferred stock may be issued in one or more series, with designations, powers and preferences as shall be designated by the Board of Directors. At December 28, 2025, there were no shares of preferred stock issued. Dividends 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 74 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 credit facility. Share-based Compensation In May 2022, the Company’s stockholders approved the ATI Inc. 2022 Incentive Plan (the “2022 Incentive Plan”). Following adoption, all new share-based compensation awards are being made under the 2022 Incentive Plan. Shares previously remaining available for grant under prior incentive plans, or which become available for award due to the forfeiture or cancellation of prior awards under those prior plans, are available for award under the 2022 Incentive Plan. Outstanding grants previously made under prior incentive plans remain in effect in accordance with relevant terms. Awards earned under the Company’s share-based incentive compensation programs are paid with shares held in treasury or newly issued shares depending on the level of treasury shares held. At December 28, 2025, 5.2 million shares of common stock were available for future awards under the 2022 Incentive Plan. The general terms of each arrangement granted under the 2022 Incentive Plan, and predecessor plans, the method of estimating fair value for each arrangement, and award activity are reported below. The Company’s share-based incentive compensation program consists of both service-based and performance/market-based awards. These awards convey participants the right to receive shares of ATI common stock if the service conditions, and performance or market requirements, of the awards are attained. Service-based awards: Restricted share units (RSUs) are rights to receive shares of Company stock when the award vests. The RSUs generally vest over three years based on employment service, with one-third of the award vesting on each of the first, second and third anniversaries of the grant date. RSU awards to non-employee directors vest in one year . No dividends are accumulated or paid on the RSUs. The fair value of the RSU award is measured based on the stock price at the grant date. Compensation expense related to RSU awards was $ 16.2 million in fiscal year 2025, $ 16.3 million in fiscal year 2024, and $ 14.5 million in fiscal year 2023. Approximately $ 8.6 million of unrecognized fair value compensation expense relating to restricted stock units is expected to be recognized through fiscal year 2028, with $ 6.6 million expected to be recognized in fiscal year 2026, including estimates of service period forfeitures. Activity under the Company’s RSU awards for the fiscal years ended December 28, 2025, December 29, 2024, and December 31, 2023 was as follows: Fiscal Year (Shares in thousands, $ in millions) 2025 2024 2023 Number of shares/units Weighted Average Grant Date Fair Value Number of shares/units Weighted Average Grant Date Fair Value Number of shares Weighted Average Grant Date Fair Value Nonvested, beginning of fiscal year 861 $ 31.0 1,220 $ 28.0 1,479 $ 26.0 Granted 272 16.0 465 21.8 512 16.0 Vested ( 454 ) ( 14.0 ) ( 717 ) ( 15.3 ) ( 729 ) ( 13.1 ) Forfeited ( 41 ) ( 1.9 ) ( 107 ) ( 3.5 ) ( 42 ) ( 0.9 ) Nonvested, end of fiscal year 638 $ 31.1 861 $ 31.0 1,220 $ 28.0 Market condition awards: Beginning in fiscal year 2021, the Company awarded performance stock units (PSUs) with market requirements. Generally, these PSUs are issued at a target number of share units, and the number of shares ultimately awarded is based on the Company's total shareholder return (TSR), which represents the measured return of the Company’s stock price (including assumed dividend reinvestment, if any) compared to the TSR (including assumed dividend reinvestment, if any) of a group of industry peers. These PSU awards are accounted for as a market condition plan with service vesting requirements, with expense recognized over the service period without regard to the level of TSR attainment or shares awarded. The actual number of 75 shares awarded at the end of the measurement period may range from a minimum of zero to a maximum of two times target. 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, 2024 and 2025 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. The fair value for this award was determined by using Monte Carlo simulations of stock price correlation, projected dividend yields and other variables over the three-year time horizon matching the TSR measurement period. In fiscal year 2025, the Company awarded a new one-time grant of PSUs with market requirements, called the Enterprise Value Acceleration award (EVA). The EVA 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 EVA award are four years for one half of the award and five years for the remaining half. The EVA award is accounted for as a market condition plan with service vesting requirements, with expense recognized over the service periods without regard to the level of absolute return attainment or shares awarded. The actual number of EVA shares awarded at the end of the measurement period may range from a minimum of zero to a maximum of three times target. The fair value for this award was determined by using Monte Carlo simulations of stock price correlation, projected dividend yields and other variables over the four-year time horizon matching the EVA measurement period. In fiscal year 2022, the Company awarded a new one-time grant of PSUs with market requirements, called the Breakout Performance Award (BPA). In fiscal year 2025, 229,299 shares were issued due to retirement vesting. 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. The BPA award is accounted for as a market condition plan with service vesting requirements, with expense recognized over the service periods without regard to the level of absolute return attainment or shares awarded. The actual number of BPA shares awarded at the end of the measurement period may range from a minimum of zero to a maximum of three times target. The fair value for this award was determined by using Monte Carlo simulations of stock price correlation, projected dividend yields and other variables over the four-year time horizon matching the BPA measurement period. At December 28, 2025, a maximum of 3.7 million shares have been reserved for issuance for all PSU awards. The Company recognized $ 12.8 million, $ 17.8 million and $ 14.6 million of compensation expense in fiscal years 2025, 2024 and 2023, respectively, for all PSU awards. Forfeited share units in fiscal years 2025, 2024 and 2023 were 7,400 , 183,418 , and 19,863 , respectively, with a weighted average grant date fair value of $ 0.3 million, $ 5.1 million, and $ 0.5 million, respectively. The fair value of each PSU award, the target share units awarded and projected future compensation expense to be recognized for these awards, including actual and estimated forfeitures at December 28, 2025 was as follows: (Shares in thousands, $ in millions) PSU Award Performance Period Award Fair Value December 28, 2025 Unrecognized Compensation Expense Compensation Expense Expected to be Recognized in the next 12 months Target Share Units Fiscal Year 2023-2025 $ 12.6 — — 330 Fiscal Year 2024-2026 $ 13.6 2.7 2.7 262 Fiscal Year 2025-2027 $ 9.6 6.4 3.0 138 Fiscal Year 2022-2025 BPA $ 20.3 1.6 1.6 857 Fiscal Year 2025-2029 EVA $ 28.2 28.2 5.7 161 Total $ 38.9 $ 13.0 In fiscal year 2025, the 2023 PSU awards vested with relative TSR attainment of 195.6 %, resulting in the issuance of 574,396 shares in the first quarter of 2026. In addition, in fiscal year 2025, the first half of the 2022 BPA awards vested with TSR attainment at the maximum level, resulting in the issuance of 807,289 shares in the first quarter of 2026. In fiscal year 2024, the fiscal year 2022 PSU awards vested with relative 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 relative TSR attainment of 198.5 %, resulting in the issuance of 848,194 shares in the first quarter of fiscal year 2024. 76 Note 17. Income Taxes Income (loss) before income taxes for the Company’s U.S. and non-U.S. operations was as follows: Fiscal Year (In millions) 2025 2024 2023 U.S. $ 470.6 $ 421.1 $ 258.2 Non-U.S. 51.7 65.0 37.0 Income before income taxes $ 522.3 $ 486.1 $ 295.2 The income tax provision (benefit) was as follows: Fiscal Year (In millions) 2025 2024 2023 Current: Federal $ 28.8 $ ( 0.3 ) $ 3.0 State 8.5 6.9 0.5 Foreign 6.6 7.0 7.8 Total 43.9 13.6 11.3 Deferred: Federal 56.3 84.5 ( 96.1 ) State 2.7 4.3 ( 42.5 ) Foreign 0.8 1.0 ( 0.9 ) Total 59.8 89.8 ( 139.5 ) Income tax provision (benefit) $ 103.7 $ 103.4 $ ( 128.2 ) The following is a reconciliation of income taxes computed at the statutory U.S. Federal income tax rate to the actual effective income tax provision (benefit): Fiscal Year (In millions) 2025 2024 2023 Income before income taxes $ 522.3 $ 486.1 $ 295.2 Taxes computed at the federal rate 109.7 21.0 % 102.0 21.0 % 62.0 21.0 % State and local income taxes, net of federal tax benefit (1) 9.3 1.8 % 9.3 1.9 % ( 32.4 ) ( 11.0 ) % Foreign tax effects China Preferential tax rate ( 4.1 ) ( 0.8 ) % ( 4.1 ) ( 0.8 ) % ( 3.6 ) ( 1.2 ) % Other 3.0 0.6 % 1.7 0.3 % 1.7 0.6 % Other foreign jurisdictions ( 1.6 ) ( 0.3 ) % ( 1.0 ) ( 0.2 ) % 5.2 1.8 % Effect of changes in tax laws enacted in the period — — % — — % — — % Effect of cross-border tax laws Global Intangible Low-Taxed Income (GILTI) 1.0 0.2 % 3.3 0.7 % 5.0 1.7 % Foreign-Derived Intangible Income (FDII) ( 6.8 ) ( 1.3 ) % ( 0.9 ) ( 0.2 ) % — — % Tax credits ( 6.1 ) ( 1.2 ) % ( 7.1 ) ( 1.5 ) % ( 4.8 ) ( 1.6 ) % Change in valuation allowance ( 2.9 ) ( 0.6 ) % — — % ( 162.0 ) ( 54.9 ) % Nontaxable or nondeductible items 2.2 0.4 % ( 1.5 ) ( 0.3 ) % 0.8 0.3 % Changes in unrecognized tax benefits ( 2.9 ) ( 0.6 ) % ( 1.0 ) ( 0.2 ) % 0.3 0.1 % Other adjustments 2.9 0.6 % 2.7 0.6 % ( 0.4 ) ( 0.1 ) % Income tax provision (benefit) $ 103.7 19.9 % $ 103.4 21.3 % $ ( 128.2 ) ( 43.4 ) % 77 (1) State taxes in California, Connecticut, Illinois, Massachusetts, New Jersey, Pennsylvania and Wisconsin made up the majority (greater than 50%) of the tax effect in this category. The Company has elected to recognize GILTI liabilities as an element of income tax expense in the period incurred. Total credits 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. While the AMPC is an above the line credit and refundable, if tax is due, the credit is first applied against the current tax liability. As a result, it has been considered associated with income taxes paid in the table below. In fiscal year 2025, the income tax provision of $ 103.7 million includes discrete tax benefits of $ 6.0 million, which primarily related to share-based compensation, release of uncertain tax positions, and the release of valuation allowances. These were offset by unfavorable return to provision adjustments from the 2024 federal and state tax returns. 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 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. In fiscal year 2023, ATI recorded a tax benefit associated with the release of 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. The Company recognizes deferred tax assets to the extent it believes these deferred tax assets are more likely than not to be realized. Valuation allowances are established when it is estimated that it is more likely than not the tax benefit of the deferred tax asset will not be realized. In making such determination, the Company considers 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. 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. The Company also maintained valuation allowances on deferred tax amounts recorded in AOCI in fiscal years 2025, 2024 and 2023 of $ 23.3 million, $ 23.3 million, and $ 24.1 million, respectively (see Note 15). 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 28, 2025 and December 29, 2024 were as follows: 78 Fiscal Year (In millions) 2025 2024 Deferred income tax assets Net operating loss carryovers 52.9 73.4 Post retirement benefits other than pension 44.5 45.2 Employee compensation and benefits 35.8 29.0 Inventory valuation 26.5 24.3 Federal and state tax credits 21.5 44.0 Operating lease liability 19.9 14.8 Deferred revenue 18.6 20.5 Research and development 12.5 25.7 Other items - assets 26.6 44.5 Gross deferred income tax assets 258.8 321.4 Valuation allowance for deferred tax assets ( 49.8 ) ( 57.7 ) Total deferred income tax assets 209.0 263.7 Deferred income tax liabilities Basis of property, plant and equipment 187.8 180.5 Operating lease right of use assets 18.7 13.8 Amortization of intangibles 11.8 13.4 Other items - liabilities 12.3 14.2 Total deferred tax liabilities 230.6 221.9 Net deferred tax (liability) asset $ ( 21.6 ) $ 41.8 The Company’s valuation allowance for deferred taxes was $ 49.8 million at December 28, 2025, $ 57.7 million at December 29, 2024. The reduction in the valuation allowance in fiscal year 2025 was primarily due to a state valuation allowance release and and foreign tax restructuring activities. 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 Company has recorded $ 6.7 million of foreign withholding taxes on earnings expected to be repatriated to the U.S. The Company does not intend to distribute previously taxed earnings resulting from the one-time transition tax under the Tax Act, and has not recorded any deferred taxes related to such amounts. The remaining excess of the amount for financial reporting over the tax basis of investments in foreign subsidiaries is indefinitely reinvested, and the determination of any deferred tax liability on this amount is not practicable. The following summarizes the carryforward periods for the tax attributes related to NOLs and credits by jurisdiction. ($ in millions, U.S. and U.K. 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 U.S. Foreign Tax Credit $ 13 10 years $ 13 $ — State NOL $ 64 Various $ 9 $ 55 State NOL $ 1 Indefinite State Credits $ 8 Various $ 3 $ 5 U.K. NOL $ 8 Indefinite Poland Economic Zone Credit $ 2 7 years $ 2 79 Income taxes paid and amounts received as refunds were as follows: Fiscal Year (In millions) 2025 2024 2023 Federal $ 52.3 $ 1.5 $ 1.1 State 8.9 6.4 3.8 Foreign 15.5 7.1 10.9 Income taxes paid, net $ 76.7 $ 15.0 $ 15.8 Income taxes paid (net of refunds) exceeded 5 percent of total income taxes paid (net of refunds) in the following jurisdictions: Fiscal Year (In millions) 2025 2024 2023 State California * $ 2.5 * Illinois * $ 1.0 $ 1.2 Massachusetts * $ 1.3 * Pennsylvania * * $ 0.9 Foreign China $ 7.7 $ 4.3 $ 7.6 Germany * $ 1.4 * Japan * * $ 2.2 * Jurisdiction was below the reporting threshold for the period presented. 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 28, 2025, December 29, 2024 and December 31, 2023 were as follows: Fiscal Year (In millions) 2025 2024 2023 Balance at beginning of fiscal year $ 7.8 $ 8.9 $ 9.1 Increases in prior period tax positions 0.4 — 1.2 Decreases in prior period tax positions ( 2.8 ) ( 0.9 ) — Settlements — ( 0.2 ) — Expiration of the statute of limitations ( 0.7 ) — ( 1.4 ) Balance at end of fiscal year $ 4.7 $ 7.8 $ 8.9 For fiscal years ended December 28, 2025, December 29, 2024 and December 31, 2023, the liability includes $ 4.1 million, $ 6.9 million and $ 7.2 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 $ 0.6 million. 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 2025, 2024 and 2023 were not significant. At December 28, 2025 and December 29, 2024, the accrued liabilities for interest and penalties related to unrecognized tax benefits were $ 0.4 million and $ 0.8 million, respectively. The Company, and/or one of its subsidiaries, files income tax returns in the U.S. federal jurisdiction and in various state and foreign jurisdictions. A summary of tax years that remain subject to examination, by major tax jurisdiction, is as follows: 80 Jurisdiction Earliest Year Open to Examination U.S. Federal 2025 States: California 2021 Connecticut 2022 Illinois 2022 Massachusetts 2022 New Jersey 2021 Pennsylvania 2021 Wisconsin 2021 Foreign: China 2022 Poland 2019 Note 18. Business Segments The Company operates under two business segments: High Performance Materials & Components (HPMC) and Advanced Alloys & Solutions (AA&S). HPMC is comprised of the Specialty Materials and Forged Products businesses, as well as the ATI Europe distribution operations thru 2024. Approximately 92 % of its revenue is derived from the aerospace & defense markets including nearly 68 % of its revenue from products for commercial jet engines and 11 % from defense products. HPMC produces a wide range of high performance materials, components, and advanced metallic powder alloys. 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. AA&S segment includes the Specialty Alloys & Components business, the Specialty Rolled Products business, and the 60 %-owned STAL PRS joint venture. See Note 7 for further information regarding the joint venture. AA&S produces nickel-based alloys, titanium and titanium-based alloys, and specialty alloys in a variety of forms including plate and sheet products. The major end markets for our flat rolled products are aerospace & defense, specialty and conventional energy, automotive, medical and electronics markets. 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. 81 Fiscal Year 2025 Fiscal Year 2024 Fiscal Year 2023 HPMC AA&S Total HPMC AA&S Total HPMC AA&S Total Sales to external customers $ 2,441.7 $ 2,145.7 $ 4,587.4 $ 2,278.5 $ 2,083.6 $ 4,362.1 $ 2,120.2 $ 2,053.5 $ 4,173.7 Intersegment sales 222.7 200.5 423.2 247.7 275.1 522.8 181.8 283.4 465.2 Total sales 2,664.4 2,346.2 5,010.6 2,526.2 2,358.7 4,884.9 2,302.0 2,336.9 4,638.9 Reconciliation of sales Elimination of intersegment sales ( 423.2 ) ( 522.8 ) ( 465.2 ) Total consolidated sales $ 4,587.4 $ 4,362.1 $ 4,173.7 Less (1) : Allocated corporate overhead 65.2 67.3 65.7 65.4 60.1 58.6 Other segment items (2) 2,023.4 1,929.9 1,999.1 1,972.4 1,808.3 2,001.7 Segment EBITDA 575.8 349.0 924.8 461.4 320.9 782.3 433.6 276.6 710.2 Reconciliation of segment EBITDA Corporate expenses ( 67.8 ) ( 64.0 ) ( 62.3 ) Closed operations and other income (expenses) 2.3 10.8 ( 13.3 ) Depreciation & amortization ( 168.1 ) ( 151.5 ) ( 146.1 ) Interest expense, net ( 98.6 ) ( 108.2 ) ( 92.8 ) Restructuring and other charges (See Note 19) ( 48.8 ) ( 22.1 ) ( 31.4 ) Retirement benefit settlement loss (See Note 14) — — ( 41.7 ) Pension remeasurement loss (See Note 14) ( 18.6 ) ( 14.1 ) ( 26.8 ) Gain (loss) on sales of business, net ( 2.9 ) 52.9 ( 0.6 ) Income before taxes $ 522.3 $ 486.1 $ 295.2 (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) 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 $ 1,947.6 million in fiscal year 2025, $ 1,836.9 million in fiscal year 2024, and $ 1,922.9 million in fiscal year 2023. Of these amounts, sales by operations in the U.S. to customers in other countries were $ 1,562.5 million in fiscal year 2025, $ 1,425.4 million in fiscal year 2024, and $ 1,498.7 million in fiscal year 2023. Beginning in 2020, the U.S. government enacted various relief packages in response to the COVID-19 pandemic, including refundable employee retention tax credits. The Company applied for these employee retention tax credits and deferred recognition of a portion of the tax credits pending the completion of any potential audit or examination, or the expiration of the related statute of limitations. During fiscal year ended December 28, 2025, the Company recognized a benefit of $ 7.2 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 28, 2025, the Company recognized $ 4.4 million of the benefit in the HPMC segment and $ 2.8 million in the AA&S segment. See Note 21 for further explanation. In addition, results for the fiscal year 82 ended December 29, 2024 include $ 16.7 million related to this government sponsored COVID relief in Segment EBITDA. Results for the fiscal year ended January 1, 2023 include $ 34.0 million related to this government sponsored COVID relief in Segment EBITDA. 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, 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 2025 includes an $ 10.5 million gain on the sale of certain oil and gas rights, included within other income, net, on the consolidated statement of operations, and unfavorable foreign currency transaction impacts as compared to the prior year. 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. 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. Net loss on sales of businesses for fiscal year 2025 relate to the divestiture of certain immaterial, non-core operations. These include an $ 0.8 million gain on the sale of the Company’s East Hartford, CT operations within the Forged Products business unit, and a $ 3.7 million loss on the sale of our European operations in Birmingham, UK and Düsseldorf, Germany, which were part of the HPMC segment. Proceeds, net of transaction costs of $ 19.3 million and $ 5.0 million, respectively, were received during fiscal year 2025 and are reported as investing activities in the consolidated statements of cash flows, with additional proceeds of approximately $ 4.9 million related to the European divestitures expected to be received within the next twelve months. 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 and $ 2.5 million of proceeds, net of transaction costs, were received in 2024 and 2025, respectively, and are 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. See Note 6 for further explanation regarding the sale of business transactions in fiscal years 2025 and 2024. 83 Certain additional information regarding the Company’s business segments is presented below: Fiscal Year (In millions) 2025 2024 2023 Depreciation and amortization: High Performance Materials & Components $ 84.2 $ 71.6 $ 71.1 Advanced Alloys & Solutions 77.4 73.2 67.9 Other 6.5 6.7 7.1 Total depreciation and amortization $ 168.1 $ 151.5 $ 146.1 Capital expenditures: High Performance Materials & Components $ 157.4 $ 132.0 $ 100.4 Advanced Alloys & Solutions 117.9 103.6 97.2 Corporate 5.3 3.5 3.1 Total capital expenditures $ 280.6 $ 239.1 $ 200.7 Fiscal Year Identifiable assets: 2025 2024 2023 High Performance Materials & Components $ 2,368.6 $ 2,225.9 $ 1,990.9 Advanced Alloys & Solutions 2,249.1 2,207.8 1,996.7 Corporate: Deferred Taxes 33.5 46.5 135.7 Cash and cash equivalents and other 448.4 750.4 861.8 Total assets $ 5,099.6 $ 5,230.6 $ 4,985.1 Fiscal Year Fiscal Year Fiscal Year ($ in millions) 2025 Percent of total 2024 Percent of total 2023 Percent of total Total assets: United States $ 4,544.4 89 % $ 4,666.3 89 % $ 4,463.7 90 % China 321.8 6 % 310.3 6 % 295.8 6 % Other 233.4 5 % 254.0 5 % 225.6 4 % Total Assets $ 5,099.6 100 % $ 5,230.6 100 % $ 4,985.1 100 % Note 19. Restructuring and other charges For the fiscal year ended December 28, 2025, restructuring and other charges were $ 48.8 million and include $ 25.8 million of start-up and transaction-related costs, $ 17.1 million of transformation-related costs, and $ 7.8 million of losses on the sale of customer accounts receivable, partially offset by credits of $ 1.9 million due to a reduction in severance-related reserves for approximately 45 employees for a previous restructuring in the AA&S segment. These costs were recorded in the consolidated statement of operations based on the nature of the charge, with $ 23.6 million recorded as cost of sales, $ 27.1 million recorded as selling and administrative expense and $ 1.9 million as restructuring credits on the consolidated statement of operations . For the fiscal year ended December 29, 2024, restructuring and other charges were $ 22.1 million and include $ 13.4 million of start-up costs and transaction-related costs, $ 4.6 million of charges associated with the Company’s European restructuring, and $ 4.1 million of severance-related restructuring charges for approximately 100 employees primarily related to cost reduction actions in our domestic operation. 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. 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. 84 Restructuring reserves for severance cost activity is as follows: Severance and Employee Benefit Costs December 28, 2025 December 29, 2024 December 31, 2023 Beginning of fiscal year balance $ 9.0 $ 15.2 $ 9.8 Additions/(Adjustments) ( 1.9 ) 4.1 7.7 Divestitures ( 0.5 ) ( 3.5 ) — Payments ( 6.2 ) ( 6.8 ) ( 2.3 ) End of fiscal year balance $ 0.4 $ 9.0 $ 15.2 During fiscal year 2025, the Company derecognized $ 0.5 million of restructuring reserves in connection with the sale of non-core operations in Birmingham, UK and Dusseldorf, Germany (see Note 6 for further explanation). During fiscal year 2024, the Company derecognized $ 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 $ 0.4 million restructuring reserve balance at December 28, 2025 is recorded in other current liabilities on the December 28, 2025 consolidated balance sheet. All of the $ 9 million restructuring reserve balance at December 29, 2024, is recorded in other current liabilities on the December 29, 2024 consolidated balance sheet. Note 20. Per Share Information The following table sets forth the computation of basic and diluted net income per common share: (In millions, except per share amounts) Fiscal Year 2025 2024 2023 Numerator: Numerator for basic net income per common share - Net income attributable to ATI $ 404.3 $ 367.8 $ 410.8 Effect of dilutive securities: 3.5 % Convertible Senior Notes due 2025 — 5.9 10.6 Numerator for diluted net income per common share - Net income attributable to ATI after assumed conversions $ 404.3 $ 373.7 $ 421.4 Denominator: Denominator for basic net income per common share—weighted average shares 138.6 130.4 128.1 Effect of dilutive securities: Share-based compensation 3.2 3.2 3.1 3.5 % Convertible Senior Notes due 2025 — 13.0 18.8 Denominator for diluted net income per common share—adjusted weighted average shares and assumed conversions 141.8 146.6 150.0 Basic net income attributable to ATI per common share $ 2.92 $ 2.82 $ 3.21 Diluted net income attributable to ATI per common share $ 2.85 $ 2.55 $ 2.81 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 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 2025, 2024 and 2023. Periodically, the Company’s Board of Directors authorizes the repurchase of ATI common stock (the “Share Repurchase Programs”). The current Share Repurchase Program of $ 700 million was announced in September 2024 and does 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. Repurchases under the Share Repurchase Program are made in the open market, within the pricing and volume requirements of SEC Rule 10b-18, or in privately negotiated transactions, with the 85 amount and timing of repurchases depending on market conditions and corporate needs. In fiscal years 2025, 2024 and 2023, ATI used $ 470.0 million, $ 260.0 million and $ 85.2 million, respectively, to repurchase 6.4 million, 5.3 million and 2.0 million shares, respectively, of its common stock under the Share Repurchase Program. At December 29, 2025, the Company had utilized $ 580 million of the $ 700 million 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 2025, the cost of share repurchase of $ 474.2 million differs 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. Note 21. Commitments and Contingencies Future minimum rental commitments under leases are disclosed in Note 11. Commitments for expenditures on property, plant and equipment at December 28, 2025 were approximately $ 247.4 million. 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 is currently involved in the investigation and remediation of a number of its current and former sites, as well as third party sites. Environmental liabilities are recorded when the Company’s liability is probable and the costs are reasonably estimable. In many cases, however, the Company is not able to determine whether it is liable or, if liability is probable, to reasonably estimate the loss or range of loss. Estimates of the Company’s liability remain subject to additional uncertainties, including the nature and extent of site contamination, available remediation alternatives, the extent of corrective actions that may be required, and the number, participation, and financial condition of other potentially responsible parties (PRPs). The Company adjusts its accruals to reflect new information as appropriate. Future adjustments could have a material adverse effect on the Company’s consolidated results of operations in a given period, but the Company cannot reliably predict the amounts of such future adjustments. At December 28, 2025, the Company’s reserves for environmental remediation obligations totaled approximately $ 15.0 million, of which $ 7.0 million was included in other current liabilities . The reserve includes estimated probable future costs of $ 2.0 million for federal Superfund and comparable state-managed sites; $ 7.0 million for formerly owned or operated sites for which the Company has remediation or indemnification obligations; and $ 6.0 million for owned or controlled sites at which Company operations have been or plan to be discontinued. The Company continues to evaluate whether it may be able to recover a portion of future costs for environmental liabilities from third parties and to pursue such recoveries where appropriate. Based on currently available information, it is reasonably possible that the costs for active matters may exceed the Company’s recorded reserves by as much as $ 16.0 million. Future investigation or remediation activities may result in the discovery of additional hazardous materials, potentially higher levels of contamination than discovered during prior investigation, and may impact costs associated with the success or lack thereof in remedial solutions. Therefore, future developments, administrative actions or liabilities relating to environmental matters could have a material adverse effect on the Company’s consolidated financial condition or results of operations. The timing of expenditures depends on a number of factors that vary by site. The Company expects that it will expend present accruals over many years and that remediation of all sites with which it has been identified will be completed within thirty years . 86 A number of other lawsuits, claims and proceedings have been or may be asserted against the Company relating to the conduct of its currently and formerly owned businesses, including those pertaining to product liability, environmental, health and safety matters and occupational disease (including as each relates to alleged asbestos exposure), as well as patent infringement, commercial, government contracting, construction, employment, employee and retiree benefits, taxes, environmental, and stockholder and corporate governance matters. 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 28, 2025, the Company recognized a benefit of $ 7.2 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 28, 2025, the Company has approximately $ 5.0 million of remaining deferred retention tax credits, of which the statute of limitations expires in 2028. 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. ATI Inc. and State Street Global Advisors Trust Co. (Case No. 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. We filed a Motion to Dismiss the consolidated claims in January 2025. Following an August 2025 hearing on the Motion to Dismiss, the magistrate judge covering the Motion issued a report recommending that all the plaintiffs’ claims be dismissed for lack of standing. The recommendation remains subject to review and disposition by the presiding judge. We dispute and intend 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. Note 22. Subsequent Event On February 18, 2026, ATI's Board of Directors of ATI authorized additional share repurchase of up to $ 500 million, which is in addition to the existing share repurchase authorization of approximately $ 120.0 million. Repurchases under the program may be made in the open market or in privately negotiated transactions, with the amount and timing of repurchases depending on market conditions and corporate needs. Open market repurchases will be structured to occur within the pricing and volume requirements of SEC Rule 10b-18. The stock repurchase program does not obligate the Company to repurchase any specific number of shares, and it may be modified, suspended, or terminated at any time by the Board of Directors without prior notice. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Not applicable.