[January 23, 2018] |
|
ATI Announces Fourth Quarter and Full Year 2017 Results
Allegheny Technologies Incorporated (NYSE: ATI) reported fourth quarter
2017 results, with sales of $910 million and net income attributable to
ATI of $1.7 million, or $0.01 per share. Adjusted fourth quarter 2017
net income attributable to ATI was $34.6 million, or $0.27 per share,
excluding a debt extinguishment charge of $37.0 million, net of tax, or
$(0.29) per share, for the full redemption of the $350 million, 9.375%
Senior Notes due 2019, and $4.1 million of tax benefits from the 2017
Tax Cuts and Jobs Act legislation.
For full year 2017, sales increased 13%, to $3.5 billion, and segment
operating profit was $283.4 million, or 8.0% of sales. For the full year
2017 the company reported a net loss attributable to ATI of $91.9
million, or $(0.83) per share. Adjusted net income attributable to ATI
was $54.6 million, or $0.48 per share, excluding goodwill impairment and
debt extinguishment charges, and tax legislation benefits.
"Fourth quarter results represented a solid finish to a year of
strategic accomplishments for ATI," said Rich Harshman, Chairman,
President and Chief Executive Officer. "We achieved fourth quarter
profitability despite a $37 million debt extinguishment charge. Adjusted
fourth quarter results were $0.27 per share, with improved year over
year performance in both business segments. Continued strong sales of
next-generation jet engine products, which were up 26% versus the prior
year quarter, drove fourth quarter High Performance Materials &
Components (HPMC) segment operating profit margins to 12.7% of sales.
HPMC segment sales of our specialty materials, including powders,
continued to meet our growth expectations. Our titanium castings
business continues to improve and we are working diligently to meet
elevated customer demand levels. We expect the titanium castings
business to be near break-even for 2018, and return to profitability in
2019.
"Our Flat Rolled Products (FRP) segment performed solidly in the fourth
quarter, generating over $22 million of segment operating profit, or
nearly 6% of sales. This was our best quarter in the FRP segment in the
last five years. As expected, the third quarter's significantly negative
out-of-phase raw material surcharge condition proved to be temporary.
Fourth quarter FRP results benefitted from a stronger mix of high-value
products, including higher project-related demand, improved raw material
surcharges, and positive impacts from cost reductions.
"2017 was a year of important milestones in our ongoing journey to
deliver sustainable long-term profitable growth. In the HPMC segment,
our next-generation, differentiated jet engine product mix continued to
improve, with sales of these products up 35% compared to 2016, and our
airframe titanium product shipments remained strong. We signed strategic
long-term agreements that are expected to drive HPMC's growth trajectory
for the next several years, including a long-term agreement with Pratt &
Whitney to supply isothermal forgings and powder alloys for
next-generation jet engines. In addition, we formed Next Gen Alloys, a
joint venture with GE Aviation to develop a new meltless titanium alloy
powder manufacturing technology. Finally, we continued to develop our
advanced powder production capabilities. Our nickel-based powder alloy
expansion in North Carolina was completed and is expected to be
commercially qualified in early 2018, and we recently announced plans
for a titanium powder expansion to be located on the same site.
"In 2017, our FRP segment made significant progress in achieving
sustainable profitability. We took important steps toward improving the
capacity utilization of our Hot-Rolling and Processing Facility, most
notably with the announced Allegheny & Tsingshan Stainless joint venture
to manufacture 60" wide stainless sheet, which is expected to be formed
in early 2018."
-
ATI's sales to the key global markets of aerospace and defense, oil &
gas, automotive, medical and electrical energy represented 79% of ATI
sales for 2017:
-
Sales to the aerospace and defense markets were $1.7 billion and
represented 49% of ATI sales: 27% commercial jet engine, 14%
commercial airframe, 8% government aero/defense.
-
Sales to the oil & gas market were $418 million and represented
12% of ATI sales.
-
Sales to the automotive market were $274 million and represented
8% of ATI sales.
-
Sales to the electrical energy market were $192 million and
represented 5% of ATI sales.
-
Sales to the medical market were $183 million and represented 5%
of ATI sales.
-
Direct international sales represented 41% of ATI's 2017 sales.
"As of December 31, 2017, cash on hand was $142 million and available
additional liquidity under our asset-based lending (ABL) credit facility
was approximately $305 million, with no borrowings under the revolving
credit portion. We generated $76 million of cash flow from operations in
the fourth quarter, including a $30 million investment in managed
working capital, primarily attributable to large pipeline project
orders, which will be delivered to our customers in early 2018, along
with initial materials received to support the proposed Allegheny &
Tsingshan Stainless joint venture. Capital expenditures for 2017 were
$123 million, including $37 million in the fourth quarter."
Strategy and Outlook
"Looking ahead to 2018, we expect continued revenue growth and operating
margin improvement in our HPMC segment resulting from ongoing aerospace
market demand growth and improved asset utilization," Harshman said. "We
remain confident in the continuation of our customers' elevated order
patterns stemming from increasing jet engine build rates over the next
several years. Our focus continues to be on operational execution,
continuous improvement initiatives, and on meeting the aerospace
production ramp requirements. In addition, we anticipate that the 2017
financial challenges experienced in our castings business and expenses
associated with the start-up and qualification of our new nickel alloys
powder facility will provide meaningful profit improvement opportunities
in 2018.
"In 2018, we expect the FRP segment to build on the operational
improvements and product mix benefits achieved in 2017, and to improve
operating margins year over year. However, first quarter results are
expected to be negatively impacted by approximately $10 million,
compared to fourth quarter 2017, due to required accounting changes on
retirement benefit cost capitalization in inventory, as well as lower
ferrochrome surcharges. We expect the production ramp-up of the planned
Allegheny & Tsingshan Stainless joint venture to meaningfully benefit
second half 2018 FRP results.
"Looking forward, we will be relentless in our drive to enhance ATI's
technology leadership in differentiated specialty materials and
components, generate healthy cash flow from operations, improve our
competitive cost position, and strengthen our balance sheet," concluded
Harshman.
The company expects 2018 consolidated capital expenditures to range
between $100 million to $125 million, reflecting continued strategic
investments in capacity to support business growth requirements. This
consolidated capital expenditure range includes Next Gen Alloys, with
approximately half of the total expected $25 million capital expenditure
in 2018 funded by GE. Projected capital expenditures for 2018 also
include $22 million related to the completion of the 60%-owned STAL
joint venture expansion project in China, which is funded entirely
through joint venture cash and operations. Following the common stock
offering and redemption of our 2019 Senior Notes, we expect 2018
interest expense to be lower by approximately $32 million versus 2017.
Defined benefit pension and postretirement benefit plan expenses for
2018 are expected to be lower by approximately $19 million compared to
2017.
Fourth Quarter and Full Year 2017 Financial Results
-
Sales for the fourth quarter 2017 were $909.9 million, a 5%
increase compared to the third quarter 2017 and a 14% increase
compared to the fourth quarter 2016. Sales for the full year 2017
increased 13% to $3.53 billion, compared to $3.13 billion for 2016.
Compared to the full year 2016, sales increased 7% in the HPMC segment
and 21% in the FRP segment. HPMC sales in 2017 reflect stronger demand
for nickel-based and specialty alloy products and components. FRP
sales in 2017 include a stronger mix of high-value products,
particularly nickel-based alloys.
-
Net income attributable to ATI for the fourth quarter 2017 was
$1.7 million, or $0.01 per share, and adjusted net income of $34.6
million, or $0.27 per share, excluding the debt extinguishment charge
and tax legislation benefits. This compares to the third quarter 2017
net loss attributable to ATI of $121.2 million, or $(1.12) per share,
and an adjusted loss of $7.6 million, or $(0.07) per share, excluding
a $113.6 million goodwill impairment charge, net of tax, and fourth
quarter 2016 net income attributable to ATI of $9.9 million, or $0.09
per share, and an adjusted net loss attributable to ATI of $3.9
million, or $(0.04) per share. For the full year 2017, the net loss
attributable to ATI was $91.9 million, or $(0.83) per share, and on an
adjusted basis was net income attributable to ATI of $54.6 million, or
$0.48 per share, excluding the above-mentioned goodwill impairment and
debt extinguishment charges, and tax legislation benefits. Results
include impacts from income taxes which differ from a standard tax
rate, primarily related to impacts of income tax valuation allowances,
as well as non-deductible goodwill for the third quarter 2017.
Quarterly Results
|
|
Three Months Ended
|
|
|
Dec. 31,
|
|
Sept. 30,
|
|
Dec 31,
|
|
|
2017
|
|
2017
|
|
2016
|
|
|
In Millions
|
Sales
|
|
$
|
909.9
|
|
|
$
|
869.1
|
|
|
$
|
796.1
|
|
|
|
|
|
|
|
|
Income (loss) attributable to ATI
|
|
$
|
1.7
|
|
|
$
|
(121.2
|
)
|
|
$
|
9.9
|
|
Adjusted for special items:
|
|
|
|
|
|
|
Debt extinguishment charge, net of tax
|
|
|
37.0
|
|
|
|
-
|
|
|
|
-
|
|
Goodwill impairment, net of tax
|
|
|
-
|
|
|
|
113.6
|
|
|
|
-
|
|
Restructuring and other charges, net of tax
|
|
|
-
|
|
|
|
-
|
|
|
|
18.6
|
|
Income tax items including valuation allowances
|
|
|
(4.1
|
)
|
|
|
-
|
|
|
|
(32.4
|
)
|
Income (loss) attributable to ATI before special items
|
|
$
|
34.6
|
|
|
$
|
(7.6
|
)
|
|
$
|
(3.9
|
)
|
|
|
|
|
|
|
|
|
|
Per Diluted Share
|
Income (loss) attributable to ATI
|
|
$
|
0.01
|
|
|
$
|
(1.12
|
)
|
|
$
|
0.09
|
|
Adjusted for special items:
|
|
|
|
|
|
|
Debt extinguishment charge, net of tax
|
|
|
0.29
|
|
|
|
-
|
|
|
|
-
|
|
Goodwill impairment, net of tax
|
|
|
-
|
|
|
|
1.05
|
|
|
|
-
|
|
Restructuring and other charges, net of tax
|
|
|
-
|
|
|
|
-
|
|
|
|
0.17
|
|
Income tax items including valuation allowances
|
|
|
(0.03
|
)
|
|
|
-
|
|
|
|
(0.30
|
)
|
Income (loss) attributable to ATI before special items
|
|
$
|
0.27
|
|
|
$
|
(0.07
|
)
|
|
$
|
(0.04
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
Cash on hand at December 31, 2017 was $141.6 million, with
$76.2 million provided by operations in the fourth quarter 2017. For
the full year 2017, cash provided by operations was $22.4 million,
including a $135.0 million contribution to the ATI Pension Plan, or
$157.4 million excluding the pension contribution. Cash used in
investing activities was $119.6 million, with $122.7 million for
capital expenditures slightly offset by cash proceeds from sales of
miscellaneous assets.
-
We de-levered the balance sheet in the fourth quarter 2017
through a common stock offering. In November 2017, we issued 17
million shares of common stock at $24.00 per share before expenses,
and received $397.8 million, net of transaction costs. Proceeds from
the stock offering were used to redeem all $350 million aggregate
principal amount of our 9.375% Senior Notes due 2019, resulting in a
$37.0 million debt extinguishment charge, which included a $35.8
million cash payment as a make-whole provision on the early
extinguishment of debt, and a $1.2 million charge for
previously-unrecognized debt issue costs. For the full year 2017, cash
provided by financing activities including these actions was $9.2
million.
High Performance Materials & Components Segment Market
Conditions
-
Aerospace and defense sales in the fourth quarter 2017 were $399.0
million, 2% higher than the third quarter 2017, and represented 77% of
total segment sales. Compared to the third quarter, commercial
aerospace sales were flat and government aero/defense sales were 17%
higher. Sales to other key end markets were comparable to the third
quarter, as total HPMC fourth quarter sales increased 1% over the
third quarter 2017. Sales of our nickel-based and specialty alloys
were 12% higher, while sales of other products were lower, compared to
the third quarter 2017. Direct international sales represented 47% of
total segment sales for the fourth quarter 2017.
Fourth quarter 2017 compared to fourth quarter 2016
-
Sales were $517.7 million, a 9% increase compared to the fourth
quarter 2016, primarily due to higher sales of nickel-based and
specialty alloys and forged and cast components. Sales to the
commercial aerospace market, which represented 63% of fourth quarter
2017 sales, were 8% higher than the fourth quarter 2016, including a
10% increase in sales to the commercial jet engine market.
Construction and mining market sales were 65% higher, and sales to the
oil & gas market improved 37% in the fourth quarter 2017, both from
low prior year demand levels. Sales to the medical market were 16%
lower primarily due to increased competition in MRI end uses.
-
Segment operating profit improved to $65.8 million, or 12.7% of sales,
compared to $53.8 million, or 11.3% of sales for the fourth quarter
2016. This operating profit improvement reflects higher productivity
from increasing aerospace and defense sales, an improved product mix
of next-generation nickel alloys and forgings for the aero engine
market, and the benefits from the 2016 titanium operations
restructuring activities, including idling the Rowley, UT titanium
sponge operations.
Flat Rolled Products Segment Market Conditions
-
In the fourth quarter 2017, market conditions improved significantly
in the oil & gas market, including project-based demand for chemical
and hydrocarbon processing applications. Sales to the oil & gas market
were $114.3 million, a 36% increase compared to the third quarter
2017. Sales were higher to the automotive and consumer durables
markets, and were stable in aerospace and defense and construction and
mining markets. Sales increased 18% for high-value products compared
to the third quarter 2017. Sales of standard grade stainless sheet and
plate products decreased 5% on lower shipment volumes, as customers
managed year-end inventory levels. Direct international sales
increased to 39% of total fourth quarter 2017 segment sales, largely
due to international oil & gas projects.
Fourth quarter 2017 compared to fourth quarter 2016
-
Sales were $392.2 million, a $73.3 million, or 23%, increase compared
to the prior year period, due to higher shipment volume for high-value
products, and slightly higher selling prices for both high-value and
standard stainless products. Sales to the oil & gas market were $44.3
million higher, representing 60% of the total sales increase.
-
Segment operating profit was $22.4 million, or 5.7% of sales, compared
to a fourth quarter 2016 segment operating loss of $0.8 million, or
(0.3%) of sales. 2017 results were favorably impacted by an improved
product mix, particularly for nickel-alloy and titanium products, and
more stable raw material prices. 2017 results also reflect the
benefits of cost reductions and significant restructuring actions
implemented over the last few years.
Corporate Expenses
-
Corporate expenses decreased $1.2 million compared to the third
quarter 2017, due primarily to lower incentive compensation costs. For
the full year 2017, corporate expenses were $7.1 million higher than
2016, primarily due to higher incentive compensation costs as well as
start-up and research and development costs for Next Gen Alloys.
Closed Operations and Other Expenses
-
Closed operations and other expenses in the fourth quarter 2017 were
$5.6 million, which was $6.6 million lower than the third quarter
2017, and included a $3.7 million benefit for reductions in
liabilities for legacy employee benefit programs, and lower costs of
closed facilities. For the full year 2017, closed operations and other
expenses were comparable to the prior year, as lower closed facility
costs, benefit program changes, and higher royalty income were offset
by increased foreign currency exchange losses and other legacy costs
of closed operations, compared to prior year amounts.
Income Taxes
-
ATI continues to maintain income tax valuation allowances on its U.S.
federal and state deferred tax assets. As a result, the remeasurement
of our deferred tax assets and liabilities due to lower enacted tax
rates in the Tax Cuts and Jobs Act did not have a significant impact
on fourth quarter results. A $4.1 million tax benefit was recognized
on the remeasurement of certain tax attributes, mainly
indefinite-lived deferred tax liabilities.
-
ATI does not expect to pay any significant U.S. federal or state
income taxes for the next few years due to net operating loss
carryforwards. Tax law changes in the Tax Cuts and Jobs Act related to
a liability for foreign earnings are expected to be offset with these
net operating loss carryforwards or other tax attributes.
Allegheny Technologies will conduct a conference call with investors and
analysts on Tuesday, January 23, 2018, at 8:30 a.m. ET to discuss the
financial results. The conference call will be broadcast, and
accompanying presentation slides will be available, at ATImetals.com.
To access the broadcast, click on "Conference Call". Replay of the
conference call will be available on the Allegheny Technologies website.
This news release contains "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. Certain
statements in this news release relate to future events and expectations
and, as such, constitute forward-looking statements. Forward-looking
statements, which may contain such words as "anticipates," "believes,"
"estimates," "expects," "would," "should," "will," "will likely result,"
"forecast," "outlook," "projects," and similar expressions, are based on
management's current expectations and include known and unknown risks,
uncertainties and other factors, many of which we are unable to predict
or control. Our performance or achievements may differ materially from
those expressed or implied in any forward-looking statements due to the
following factors, among others: (a) material adverse changes in
economic or industry conditions generally, including global supply and
demand conditions and prices for our specialty metals; (b) material
adverse changes in the markets we serve; (c) our inability to achieve
the level of cost savings, productivity improvements, synergies, growth
or other benefits anticipated by management from strategic investments
and the integration of acquired businesses; (d) volatility in the price
and availability of the raw materials that are critical to the
manufacture of our products; (e) declines in the value of our defined
benefit pension plan assets or unfavorable changes in laws or
regulations that govern pension plan funding; (f) labor disputes or work
stoppages; (g) equipment outages and (h) other risk factors summarized
in our Annual Report on Form 10-K for the year ended December 31, 2016,
and in other reports filed with the Securities and Exchange Commission.
We assume no duty to update our forward-looking statements.
Creating Value Thru Relentless Innovation™
ATI is a global manufacturer of technically advanced specialty materials
and complex components. With revenue of $3.5 billion for the twelve
month period ended December 31, 2017, our largest market is aerospace &
defense, particularly jet engines. We also have a strong presence in the
oil & gas, electrical energy, medical, automotive, and other industrial
markets. ATI is a market leader in manufacturing differentiated
specialty alloys and forgings that require our unique manufacturing and
precision machining capabilities and our innovative new product
development competence. We are a leader in producing powders for use in
next-generation jet engine forgings and 3D-printed aerospace products.
ATIMetals.com
|
|
|
|
|
Allegheny Technologies Incorporated and Subsidiaries
|
Consolidated Statements of Operations
|
(Unaudited, dollars in millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Fiscal Year Ended
|
|
|
|
December 31
|
|
September 30
|
|
December 31
|
|
|
December 31
|
|
December 31
|
|
|
|
2017
|
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
$
|
909.9
|
|
|
$
|
869.1
|
|
|
$
|
796.1
|
|
|
|
$
|
3,525.1
|
|
|
$
|
3,134.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
|
779.3
|
|
|
|
775.8
|
|
|
|
698.8
|
|
|
|
|
3,076.1
|
|
|
|
2,972.1
|
|
Gross profit
|
|
|
130.6
|
|
|
|
93.3
|
|
|
|
97.3
|
|
|
|
|
449.0
|
|
|
|
162.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and administrative expenses
|
|
|
61.9
|
|
|
|
66.2
|
|
|
|
65.3
|
|
|
|
|
254.3
|
|
|
|
247.7
|
|
Impairment of goodwill
|
|
|
-
|
|
|
|
114.4
|
|
|
|
-
|
|
|
|
|
114.4
|
|
|
|
-
|
|
Restructuring charges
|
|
|
-
|
|
|
|
-
|
|
|
|
28.6
|
|
|
|
|
-
|
|
|
|
527.2
|
|
Operating income (loss)
|
|
|
68.7
|
|
|
|
(87.3
|
)
|
|
|
3.4
|
|
|
|
|
80.3
|
|
|
|
(612.4
|
)
|
Interest expense, net
|
|
|
(31.6
|
)
|
|
|
(34.2
|
)
|
|
|
(32.8
|
)
|
|
|
|
(133.8
|
)
|
|
|
(124.0
|
)
|
Debt extinguishment charge
|
|
|
(37.0
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
(37.0
|
)
|
|
|
-
|
|
Other income, net
|
|
|
0.3
|
|
|
|
0.2
|
|
|
|
0.6
|
|
|
|
|
4.0
|
|
|
|
2.4
|
|
Income (loss) before income taxes
|
|
|
0.4
|
|
|
|
(121.3
|
)
|
|
|
(28.8
|
)
|
|
|
|
(86.5
|
)
|
|
|
(734.0
|
)
|
Income tax benefit
|
|
|
(4.8
|
)
|
|
|
(1.9
|
)
|
|
|
(42.5
|
)
|
|
|
|
(6.8
|
)
|
|
|
(106.9
|
)
|
Net income (loss)
|
|
$
|
5.2
|
|
|
$
|
(119.4
|
)
|
|
$
|
13.7
|
|
|
|
$
|
(79.7
|
)
|
|
$
|
(627.1
|
)
|
Less: Net income attributable to noncontrolling interests
|
|
|
3.5
|
|
|
|
1.8
|
|
|
|
3.8
|
|
|
|
|
12.2
|
|
|
|
13.8
|
|
Net income (loss) attributable to ATI
|
|
$
|
1.7
|
|
|
$
|
(121.2
|
)
|
|
$
|
9.9
|
|
|
|
$
|
(91.9
|
)
|
|
$
|
(640.9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income (loss) attributable to ATI per common share
|
|
$
|
0.01
|
|
|
$
|
(1.12
|
)
|
|
$
|
0.09
|
|
|
|
$
|
(0.83
|
)
|
|
$
|
(5.97
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income (loss) attributable to ATI per common share
|
|
$
|
0.01
|
|
|
$
|
(1.12
|
)
|
|
$
|
0.09
|
|
|
|
$
|
(0.83
|
)
|
|
$
|
(5.97
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares
|
|
|
|
|
|
|
|
|
|
|
|
|
outstanding -- basic (millions)
|
|
|
117.5
|
|
|
|
107.7
|
|
|
|
107.3
|
|
|
|
|
110.1
|
|
|
|
107.3
|
|
Weighted average common shares
|
|
|
|
|
|
|
|
|
|
|
|
|
outstanding -- diluted (millions)
|
|
|
118.6
|
|
|
|
107.7
|
|
|
|
108.7
|
|
|
|
|
110.1
|
|
|
|
107.3
|
|
Actual common shares outstanding--
|
|
|
|
|
|
|
|
|
|
|
|
|
end of period (millions)
|
|
|
125.9
|
|
|
|
108.9
|
|
|
|
108.9
|
|
|
|
|
125.9
|
|
|
|
108.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allegheny Technologies Incorporated and Subsidiaries
|
Sales and Operating Profit by Business Segment
|
(Unaudited, dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Fiscal Year Ended
|
|
|
December 31
|
|
September 30
|
|
December 31
|
|
|
December 31
|
|
December 31
|
|
|
2017
|
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
Sales:
|
|
|
|
|
|
|
|
|
|
|
|
High Performance Materials & Components
|
|
$
|
517.7
|
|
|
$
|
512.9
|
|
|
$
|
477.2
|
|
|
|
$
|
2,067.4
|
|
|
$
|
1,930.4
|
|
Flat Rolled Products
|
|
|
392.2
|
|
|
|
356.2
|
|
|
|
318.9
|
|
|
|
|
1,457.7
|
|
|
|
1,204.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total External Sales
|
|
$
|
909.9
|
|
|
$
|
869.1
|
|
|
$
|
796.1
|
|
|
|
$
|
3,525.1
|
|
|
$
|
3,134.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Profit (Loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High Performance Materials & Components
|
|
$
|
65.8
|
|
|
$
|
61.7
|
|
|
$
|
53.8
|
|
|
|
$
|
246.4
|
|
|
$
|
168.7
|
|
% of Sales
|
|
|
12.7
|
%
|
|
|
12.0
|
%
|
|
|
11.3
|
%
|
|
|
|
11.9
|
%
|
|
|
8.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Flat Rolled Products
|
|
|
22.4
|
|
|
|
(7.3
|
)
|
|
|
(0.8
|
)
|
|
|
|
37.0
|
|
|
|
(163.0
|
)
|
% of Sales
|
|
|
5.7
|
%
|
|
|
-2.0
|
%
|
|
|
-0.3
|
%
|
|
|
|
2.5
|
%
|
|
|
-13.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Profit
|
|
|
88.2
|
|
|
|
54.4
|
|
|
|
53.0
|
|
|
|
|
283.4
|
|
|
|
5.7
|
|
% of Sales
|
|
|
9.7
|
%
|
|
|
6.3
|
%
|
|
|
6.7
|
%
|
|
|
|
8.0
|
%
|
|
|
0.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIFO and net realizable value reserves
|
|
|
-
|
|
|
|
(0.1
|
)
|
|
|
0.4
|
|
|
|
|
(0.2
|
)
|
|
|
0.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate expenses
|
|
|
(13.6
|
)
|
|
|
(14.8
|
)
|
|
|
(10.8
|
)
|
|
|
|
(50.5
|
)
|
|
|
(43.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Closed operations and other expenses
|
|
|
(5.6
|
)
|
|
|
(12.2
|
)
|
|
|
(10.0
|
)
|
|
|
|
(34.0
|
)
|
|
|
(34.6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment of goodwill
|
|
|
-
|
|
|
|
(114.4
|
)
|
|
|
-
|
|
|
|
|
(114.4
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring and other charges
|
|
|
-
|
|
|
|
-
|
|
|
|
(28.6
|
)
|
|
|
|
-
|
|
|
|
(538.5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt extinguishment charge
|
|
|
(37.0
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
(37.0
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
(31.6
|
)
|
|
|
(34.2
|
)
|
|
|
(32.8
|
)
|
|
|
|
(133.8
|
)
|
|
|
(124.0
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes
|
|
$
|
0.4
|
|
|
$
|
(121.3
|
)
|
|
$
|
(28.8
|
)
|
|
|
$
|
(86.5
|
)
|
|
$
|
(734.0
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allegheny Technologies Incorporated and Subsidiaries
|
Condensed Consolidated Balance Sheets
|
(Unaudited, dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2017
|
|
|
2016
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets:
|
|
|
|
|
|
Cash and cash equivalents
|
|
$ 141.6
|
|
|
$ 229.6
|
Accounts receivable, net of allowances for
|
|
|
|
|
|
doubtful accounts
|
|
545.3
|
|
|
452.1
|
Inventories, net
|
|
1,176.1
|
|
|
1,037.0
|
Prepaid expenses and other current assets
|
|
52.7
|
|
|
47.8
|
Total Current Assets
|
|
1,915.7
|
|
|
1,766.5
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
2,495.7
|
|
|
2,498.9
|
Goodwill
|
|
531.4
|
|
|
641.9
|
Other assets
|
|
242.6
|
|
|
262.7
|
|
|
|
|
|
|
|
Total Assets
|
|
$ 5,185.4
|
|
|
$ 5,170.0
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities:
|
|
|
|
|
|
Accounts payable
|
|
$ 420.1
|
|
|
$ 294.3
|
Accrued liabilities
|
|
282.4
|
|
|
309.3
|
Short term debt and current
|
|
|
|
|
|
portion of long-term debt
|
|
10.1
|
|
|
105.1
|
Total Current Liabilities
|
|
712.6
|
|
|
708.7
|
|
|
|
|
|
|
|
Long-term debt
|
|
1,530.6
|
|
|
1,771.9
|
Accrued postretirement benefits
|
|
317.8
|
|
|
317.7
|
Pension liabilities
|
|
697.0
|
|
|
827.9
|
Deferred income taxes
|
|
9.7
|
|
|
15.6
|
Other long-term liabilities
|
|
73.2
|
|
|
83.4
|
Total Liabilities
|
|
3,340.9
|
|
|
3,725.2
|
|
|
|
|
|
|
|
Total ATI stockholders' equity
|
|
1,739.4
|
|
|
1,355.2
|
Noncontrolling interests
|
|
105.1
|
|
|
89.6
|
Total Equity
|
|
1,844.5
|
|
|
1,444.8
|
|
|
|
|
|
|
|
Total Liabilities and Equity
|
|
$ 5,185.4
|
|
|
$ 5,170.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allegheny Technologies Incorporated and Subsidiaries
|
Condensed Consolidated Statements of Cash Flows
|
(Unaudited, dollars in millions)
|
|
|
|
|
Fiscal Year Ended
|
|
|
|
|
December 31
|
|
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
Operating Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
$
|
(79.7
|
)
|
|
|
$
|
(627.1
|
)
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
160.8
|
|
|
|
|
170.3
|
|
|
Impairment of goodwill
|
|
|
|
114.4
|
|
|
|
|
-
|
|
|
Non-cash restructuring and other charges
|
|
|
|
-
|
|
|
|
|
471.3
|
|
|
Debt extinguishment charge
|
|
|
|
37.0
|
|
|
|
|
-
|
|
|
Deferred taxes
|
|
|
|
(1.4
|
)
|
|
|
|
(119.8
|
)
|
|
Change in managed working capital
|
|
|
|
(111.8
|
)
|
|
|
|
91.7
|
|
|
Change in retirement benefits (a)
|
|
|
|
(110.3
|
)
|
|
|
|
(80.0
|
)
|
|
Accrued liabilities and other
|
|
|
|
13.4
|
|
|
|
|
49.9
|
|
Cash provided by (used in) operating activities
|
|
|
|
22.4
|
|
|
|
|
(43.7
|
)
|
Investing Activities:
|
|
|
|
|
|
|
|
Purchases of property, plant and equipment
|
|
|
|
(122.7
|
)
|
|
|
|
(202.2
|
)
|
|
Asset disposals and other
|
|
|
|
3.1
|
|
|
|
|
2.2
|
|
Cash used in investing activities
|
|
|
|
(119.6
|
)
|
|
|
|
(200.0
|
)
|
Financing Activities:
|
|
|
|
|
|
|
|
Borrowings on long-term debt
|
|
|
|
8.5
|
|
|
|
|
387.5
|
|
|
Payments on long-term debt and capital leases
|
|
|
|
(353.0
|
)
|
|
|
|
(2.7
|
)
|
|
Net borrowings under credit facilities
|
|
|
|
1.6
|
|
|
|
|
3.1
|
|
|
Debt issuance costs
|
|
|
|
(0.8
|
)
|
|
|
|
(10.4
|
)
|
|
Debt extinguishment charge
|
|
|
|
(35.8
|
)
|
|
|
|
-
|
|
|
Issuance of common stock
|
|
|
|
397.8
|
|
|
|
|
-
|
|
|
Dividends paid to shareholders
|
|
|
|
-
|
|
|
|
|
(25.8
|
)
|
|
Dividends paid to noncontrolling interests
|
|
|
|
(8.0
|
)
|
|
|
|
(16.0
|
)
|
|
Sale (purchase) of noncontrolling interests
|
|
|
|
3.7
|
|
|
|
|
(12.2
|
)
|
|
Taxes on share-based compensation and other
|
|
|
|
(4.8
|
)
|
|
|
|
-
|
|
Cash provided by financing activities
|
|
|
|
9.2
|
|
|
|
|
323.5
|
|
Increase (decrease) in cash and cash equivalents
|
|
|
|
(88.0
|
)
|
|
|
|
79.8
|
|
Cash and cash equivalents at beginning of period
|
|
|
|
229.6
|
|
|
|
|
149.8
|
|
Cash and cash equivalents at end of period
|
|
|
$
|
141.6
|
|
|
|
$
|
229.6
|
|
(a) Includes $(135) million contribution to the U.S. defined benefit
pension plan in 2017 and $(115) million contribution to the U.S. defined
benefit pension plan in 2016.
|
|
|
|
|
|
|
|
|
|
Allegheny Technologies Incorporated and Subsidiaries
|
Selected Financial Data
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Fiscal Year Ended
|
|
|
December 31
|
|
September 30
|
|
December 31
|
|
|
December 31
|
|
December 31
|
|
|
2017
|
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
Percentage of Total ATI Sales
|
|
|
|
|
|
|
|
|
|
|
|
High-Value Products
|
|
|
|
|
|
|
|
|
|
|
|
Nickel-based alloys and specialty alloys
|
|
|
31
|
%
|
|
|
28
|
%
|
|
|
26
|
%
|
|
|
|
28
|
%
|
|
|
27
|
%
|
Precision forgings, castings and components
|
|
|
18
|
%
|
|
|
19
|
%
|
|
|
18
|
%
|
|
|
|
18
|
%
|
|
|
18
|
%
|
Titanium and titanium-based alloys
|
|
|
16
|
%
|
|
|
17
|
%
|
|
|
18
|
%
|
|
|
|
17
|
%
|
|
|
19
|
%
|
Precision and engineered strip
|
|
|
14
|
%
|
|
|
14
|
%
|
|
|
14
|
%
|
|
|
|
14
|
%
|
|
|
13
|
%
|
Zirconium and related alloys
|
|
|
5
|
%
|
|
|
6
|
%
|
|
|
8
|
%
|
|
|
|
6
|
%
|
|
|
8
|
%
|
Total High-Value Products, excluding GOES
|
|
|
84
|
%
|
|
|
84
|
%
|
|
|
84
|
%
|
|
|
|
83
|
%
|
|
|
85
|
%
|
Grain-oriented electrical steel (GOES)
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
|
0
|
%
|
|
|
1
|
%
|
Total High-Value Products, including GOES
|
|
|
84
|
%
|
|
|
84
|
%
|
|
|
84
|
%
|
|
|
|
83
|
%
|
|
|
86
|
%
|
Standard Products
|
|
|
|
|
|
|
|
|
|
|
|
Stainless steel sheet
|
|
|
8
|
%
|
|
|
9
|
%
|
|
|
10
|
%
|
|
|
|
9
|
%
|
|
|
7
|
%
|
Specialty stainless sheet
|
|
|
4
|
%
|
|
|
4
|
%
|
|
|
4
|
%
|
|
|
|
4
|
%
|
|
|
4
|
%
|
Stainless steel plate and other
|
|
|
4
|
%
|
|
|
3
|
%
|
|
|
2
|
%
|
|
|
|
4
|
%
|
|
|
3
|
%
|
Total Standard Products
|
|
|
16
|
%
|
|
|
16
|
%
|
|
|
16
|
%
|
|
|
|
17
|
%
|
|
|
14
|
%
|
Grand Total
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Fiscal Year Ended
|
|
|
December 31
|
|
September 30
|
|
December 31
|
|
|
December 31
|
|
December 31
|
Shipment Volume:
|
|
2017
|
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
Flat Rolled Products (000's lbs.)
|
|
|
|
|
|
|
|
|
|
|
|
High value*
|
|
|
90,332
|
|
|
|
83,637
|
|
|
|
75,708
|
|
|
|
|
323,391
|
|
|
|
293,589
|
|
Standard
|
|
|
100,973
|
|
|
|
115,907
|
|
|
|
112,164
|
|
|
|
|
446,542
|
|
|
|
385,010
|
|
Flat Rolled Products total
|
|
|
191,305
|
|
|
|
199,544
|
|
|
|
187,872
|
|
|
|
|
769,933
|
|
|
|
678,599
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Selling Prices:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Flat Rolled Products (per lb.)
|
|
|
|
|
|
|
|
|
|
|
|
High value*
|
|
$
|
2.94
|
|
|
$
|
2.69
|
|
|
$
|
2.54
|
|
|
|
$
|
2.81
|
|
|
$
|
2.59
|
|
Standard
|
|
$
|
1.23
|
|
|
$
|
1.13
|
|
|
$
|
1.11
|
|
|
|
$
|
1.21
|
|
|
$
|
1.06
|
|
Flat Rolled Products combined average
|
|
$
|
2.04
|
|
|
$
|
1.78
|
|
|
$
|
1.68
|
|
|
|
$
|
1.88
|
|
|
$
|
1.72
|
|
* High value products exclude GOES for the quarter and twelve months
ended December 31, 2016.
|
|
|
|
|
|
|
|
|
|
|
|
Allegheny Technologies Incorporated and Subsidiaries
|
Computation of Basic and Diluted Earnings Per Share Attributable
to ATI
|
(Unaudited, in millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Fiscal Year Ended
|
|
|
|
December 31
|
|
September 30
|
|
December 31
|
|
|
December 31
|
|
December 31
|
|
|
|
2017
|
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Numerator for Basic net income (loss) per common share -
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to ATI
|
|
$
|
1.7
|
|
$
|
(121.2
|
)
|
|
$
|
9.9
|
|
|
$
|
(91.9
|
)
|
|
$
|
(640.9
|
)
|
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
4.75% Convertible Senior Notes due 2022
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Numerator for Diluted net income (loss) per common share -
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to ATI after assumed conversions
|
|
$
|
1.7
|
|
$
|
(121.2
|
)
|
|
$
|
9.9
|
|
|
$
|
(91.9
|
)
|
|
$
|
(640.9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator for Basic net income (loss) per common share -
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding
|
|
|
117.5
|
|
|
107.7
|
|
|
|
107.3
|
|
|
|
110.1
|
|
|
|
107.3
|
|
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based compensation
|
|
|
1.1
|
|
|
-
|
|
|
|
1.4
|
|
|
|
-
|
|
|
|
-
|
|
|
4.75% Convertible Senior Notes due 2022
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Denominator for Diluted net income (loss) per common share -
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted weighted average shares assuming conversions
|
|
|
118.6
|
|
|
107.7
|
|
|
|
108.7
|
|
|
|
110.1
|
|
|
|
107.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income (loss) attributable to ATI per common share
|
|
$
|
0.01
|
|
$
|
(1.12
|
)
|
|
$
|
0.09
|
|
|
$
|
(0.83
|
)
|
|
$
|
(5.97
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income (loss) attributable to ATI per common share
|
|
$
|
0.01
|
|
$
|
(1.12
|
)
|
|
$
|
0.09
|
|
|
$
|
(0.83
|
)
|
|
$
|
(5.97
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allegheny Technologies Incorporated and Subsidiaries
|
Other Financial Information
|
Managed Working Capital
|
(Unaudited, dollars in millions)
|
|
|
|
|
|
|
|
|
December 31
|
|
December 31
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
Accounts receivable
|
|
$
|
545.3
|
|
|
|
$
|
452.1
|
|
Inventory
|
|
|
1,176.1
|
|
|
|
|
1,037.0
|
|
Accounts payable
|
|
|
(420.1
|
)
|
|
|
|
(294.3
|
)
|
Subtotal
|
|
|
1,301.3
|
|
|
|
|
1,194.8
|
|
|
|
|
|
|
|
Allowance for doubtful accounts
|
|
|
5.9
|
|
|
|
|
7.3
|
|
LIFO reserve
|
|
|
(43.1
|
)
|
|
|
|
(97.3
|
)
|
Inventory reserves
|
|
|
121.5
|
|
|
|
|
169.0
|
|
Managed working capital
|
|
$
|
1,385.6
|
|
|
|
$
|
1,273.8
|
|
|
|
|
|
|
|
Annualized prior 3 months
|
|
|
|
|
|
sales
|
|
$
|
3,639.5
|
|
|
|
$
|
3,184.2
|
|
|
|
|
|
|
|
Managed working capital as a
|
|
|
|
|
|
% of annualized sales
|
|
|
38.1
|
%
|
|
|
|
40.0
|
%
|
|
|
|
|
|
|
December 31, 2017 change in managed
|
|
|
|
|
|
working capital
|
|
$
|
111.8
|
|
|
|
|
As part of managing the liquidity in our business, we focus on
controlling managed working capital, which is defined as gross accounts
receivable and gross inventories, less accounts payable. In measuring
performance in controlling this managed working capital, we exclude the
effects of LIFO and other inventory valuation reserves and reserves for
uncollectible accounts receivable which, due to their nature, are
managed separately.
|
|
|
|
Allegheny Technologies Incorporated and Subsidiaries
|
Other Financial Information
|
Debt to Capital
|
(Unaudited, dollars in millions)
|
|
|
|
|
|
|
|
|
December 31
|
|
|
December 31
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
Total debt (a)
|
|
$
|
1,553.8
|
|
|
|
$
|
1,894.1
|
|
Less: Cash
|
|
|
(141.6
|
)
|
|
|
|
(229.6
|
)
|
Net debt
|
|
$
|
1,412.2
|
|
|
|
$
|
1,664.5
|
|
|
|
|
|
|
|
Net debt
|
|
$
|
1,412.2
|
|
|
|
$
|
1,664.5
|
|
Total ATI stockholders' equity
|
|
|
1,739.4
|
|
|
|
|
1,355.2
|
|
Net ATI capital
|
|
$
|
3,151.6
|
|
|
|
$
|
3,019.7
|
|
|
|
|
|
|
|
Net debt to ATI capital
|
|
|
44.8
|
%
|
|
|
|
55.1
|
%
|
|
|
|
|
|
|
Total debt (a)
|
|
$
|
1,553.8
|
|
|
|
$
|
1,894.1
|
|
Total ATI stockholders' equity
|
|
|
1,739.4
|
|
|
|
|
1,355.2
|
|
Total ATI capital
|
|
$
|
3,293.2
|
|
|
|
$
|
3,249.3
|
|
|
|
|
|
|
|
Total debt to total ATI capital
|
|
|
47.2
|
%
|
|
|
|
58.3
|
%
|
(a) Excludes debt issuance costs.
In managing the overall capital structure of the Company, some of the
measures that we focus on are net debt to net capitalization, which is
the percentage of debt, net of cash that may be available to reduce
borrowings, to the total invested and borrowed capital of ATI (excluding
noncontrolling interest), and total debt to total ATI capitalization,
which excludes cash balances.
Allegheny Technologies Incorporated and Subsidiaries Non-GAAP
Financial Measures (Unaudited, dollars in millions, except
per share amounts)
The Company reports its financial results in accordance with accounting
principles generally accepted in the United States of America ("GAAP").
However, management believes that certain non-GAAP financial measures,
used in managing the business, may provide users of this financial
information with additional meaningful comparisons between current
results and results in prior periods. Non-GAAP financial measures should
be viewed in addition to, and not as an alternative for, the Company's
reported results prepared in accordance with GAAP. The following table
provides the calculation of the non-GAAP financial measures discussed in
the Company's press release dated January 23, 2018:
|
|
Three Months Ended
|
|
|
Fiscal Year Ended
|
|
|
December 31
|
|
September 30
|
|
December 31
|
|
|
December 31
|
|
|
2017
|
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) attributable to ATI
|
|
$
|
1.7
|
|
|
$
|
(121.2
|
)
|
|
$
|
9.9
|
|
|
|
$
|
(91.9
|
)
|
|
$
|
(640.9
|
)
|
Adjust for special items:
|
|
|
|
|
|
|
|
|
|
|
|
Debt extinguishment charge, net of tax (a)
|
|
$
|
37.0
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
37.0
|
|
|
|
-
|
|
Impairment of goodwill, net of tax (b)
|
|
|
-
|
|
|
|
113.6
|
|
|
|
-
|
|
|
|
|
113.6
|
|
|
|
-
|
|
Restructuring and other charges, net of tax (c)
|
|
|
-
|
|
|
|
-
|
|
|
|
18.6
|
|
|
|
|
-
|
|
|
|
354.8
|
|
Rowley excess operating costs, net of tax (d)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
19.3
|
|
Work stoppage and return-to-work costs (e)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
28.1
|
|
Income tax items including valuation allowances (f)
|
|
|
(4.1
|
)
|
|
|
-
|
|
|
|
(32.4
|
)
|
|
|
|
(4.1
|
)
|
|
|
141.3
|
|
Income (loss) attributable to ATI excluding special items
|
|
$
|
34.6
|
|
|
$
|
(7.6
|
)
|
|
$
|
(3.9
|
)
|
|
|
$
|
54.6
|
|
|
$
|
(97.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Diluted Share *
|
|
|
Per Diluted Share *
|
Income (loss) attributable to ATI
|
|
$
|
0.01
|
|
|
$
|
(1.12
|
)
|
|
$
|
0.09
|
|
|
|
$
|
(0.83
|
)
|
|
$
|
(5.97
|
)
|
Adjust for special items:
|
|
|
|
|
|
|
|
|
|
|
|
Debt extinguishment charge, net of tax (a)
|
|
$
|
0.29
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
0.29
|
|
|
|
-
|
|
Impairment of goodwill, net of tax (b)
|
|
|
-
|
|
|
|
1.05
|
|
|
|
-
|
|
|
|
|
1.05
|
|
|
|
-
|
|
Restructuring and other charges, net of tax (c)
|
|
|
-
|
|
|
|
-
|
|
|
|
0.17
|
|
|
|
|
-
|
|
|
|
3.30
|
|
Rowley excess operating costs, net of tax (d)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
0.18
|
|
Work stoppage and return-to-work costs (e)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
0.27
|
|
Income tax items including valuation allowances (f)
|
|
|
(0.03
|
)
|
|
|
-
|
|
|
|
(0.30
|
)
|
|
|
|
(0.03
|
)
|
|
|
1.31
|
|
Income (loss) attributable to ATI excluding special items
|
|
$
|
0.27
|
|
|
$
|
(0.07
|
)
|
|
$
|
(0.04
|
)
|
|
|
$
|
0.48
|
|
|
$
|
(0.91
|
)
|
* Presentation of adjusted results per diluted share includes the
effects of convertible debt, if dilutive.
(a) Fourth quarter and fiscal year ended December 31, 2017 results
include a debt extinguishment charge of $37.0 after-tax, or $(0.29) per
share, for the full redemption of the $350, 9.375% Senior Notes due 2019.
(b) During the third quarter of 2017, the Company performed an interim
goodwill impairment analysis, as required by accounting standards, for
our Cast Products business and determined that all goodwill assigned to
this business unit was impaired. As a result, the Company recorded a
$114.4 pre-tax non-cash goodwill impairment charge ($113.6 after-tax),
or $(1.05) per share.
(c) For the three months ended December 31, 2016, $28.6 of pre-tax
restructuring charges ($18.6 after-tax at a standard 35% tax rate), or
$(0.17) per share, including $13.0 for additional HPMC segment titanium
operations closure-related actions at the Rowley, UT, Frackville, PA and
Albany, OR titanium operations, and $15.6 for FRP closure-related costs
at the Midland and Bagdad, PA facilities and for additional FRP
severance charges for salaried workforce reductions. These restructuring
charges, which are excluded from business segment results, include
contractual obligations, closure costs, severance and supplemental
unemployment benefits. FRP restructuring costs also include $3.4 of
special termination benefits for pension and other postretirement
benefit plans.
In addition to the amounts for the three months ended December 31, 2016
above, the twelve months ended December 31, 2016 includes $471.3 of
pre-tax asset impairment charges ($310.3 after-tax), or $(2.89) per
share, and $28.6 of pre-tax shutdown, idling and employee benefit costs
($18.8 after-tax), or $(0.18) per share for the Rowley, UT facility,
which are excluded from HPMC segment results. The remaining $7.1
after-tax, or $(0.06) per share, includes additional charges for
severance actions.
(d) During the third quarter of 2016, the Company indefinitely idled its
titanium sponge production facility in Rowley, UT. These amounts
represent the above-market production costs and other operating expenses
for this facility for the period indicated, net of expected ongoing
carrying costs, and have been adjusted out of the Company's GAAP amounts
to provide Company results that are more representative of the future,
which exclude these costs.
(e) For the first six months of fiscal year 2016, the Company incurred
costs associated with the work stoppage and return-to-work of
USW-represented employees including reduced operating efficiencies,
out-of-phase raw material costs, and provisions of the new labor
agreements.
(f) Amounts for the three months and fiscal year ended December 31, 2017
include $4.1 of tax benefits, or $0.03 per share, from the 2017 Tax Cuts
and Jobs Act legislation. Amounts for the three months ended December
31, 2016 include $32.4, or $0.30 per share, of above-normal income tax
benefits compared to those that would apply at a standard 35% tax rate,
primarily related to income tax valuation allowance changes. Amounts for
the fiscal year ended December 31, 2016 include $141.3 or $(1.31) per
share, of below-normal income tax benefits on the $734.0 pretax loss due
primarily to valuation allowances recorded on U.S. federal deferred tax
assets.
View source version on businesswire.com: http://www.businesswire.com/news/home/20180123005778/en/
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