Allegheny Technologies Announces Third Quarter 2012 Results

  Allegheny Technologies Announces Third Quarter 2012 Results

Third Quarter 2012 Results

  *Sales were $1.22 billion
  *Net income attributable to ATI was $35.3 million, or $0.32 per share
  *Segment operating profit was $119.5 million, or 9.8% of sales
  *Gross cost reductions of $87.0 million year to date
  *Cash on hand increased $70.7 million during the quarter to $281.0 million
  *Net debt to total capitalization declined to 31.2%

Business Wire

PITTSBURGH -- October 24, 2012

Allegheny Technologies Incorporated (NYSE: ATI) reported net income for the
third quarter 2012 of $35.3 million, or $0.32 per share, on sales of $1.22
billion. In the third quarter 2011, ATI reported net income of $62.3 million,
or $0.56 per share, on sales of $1.35 billion.

For the nine months ended September 30, 2012, net income was $147.9 million,
or $1.32 per share, on sales of $3.93 billion. For the nine months ended
September 30, 2011, net income was $182.6 million, or $1.68 per share, on
sales of $3.93 billion.

“Continuing uncertainty regarding global economic conditions impacted our
third quarter 2012 results,” said Rich Harshman, Chairman, President and Chief
Executive Officer. “We are seeing conservative inventory management throughout
the supply chains of most of our major end markets. These actions appear to be
driven by concerns about the U.S. election and resolution of the U.S. ‘fiscal
cliff’, and uncertain economic trends in China, Europe, and Japan.

“We believe that as these uncertainties begin to be resolved, demand will
improve for our GDP-sensitive products and strong secular growth trends will
resume in our key global markets. We are not waiting for resolution of these
macroeconomic issues. We continue to improve our cost structure and execute
our strategies to enhance our competitive position by completing our strategic
capital investments, introducing and qualifying innovative new products,
improving our position with existing customers, and growing our participation
at new customers.”

  *ATI’s sales to the key global markets of aerospace and defense, oil and
    gas/chemical process industry, electrical energy, and medical represented
    68% of ATI sales for the first nine months of 2012:

       *Sales to the aerospace and defense market were $1.25 billion and
         represented 32% of ATI sales.
       *Sales to the oil and gas/chemical process industry were $769 million
         and represented 20% of ATI sales.
       *Sales to the electrical energy market were $464 million and
         represented 12% of ATI sales.
       *Sales to the medical market were $166 million and represented 4% of
         ATI sales.

  *Direct international sales were $1.4 billion for the first nine months of
    2012 and represented nearly 36% of ATI sales.

“The current economic conditions have resulted in softening of demand from the
jet engine aftermarket and a cautious approach to managing inventory in the
supply chains of both airframe and jet engine OEMs,” said Mr. Harshman. “In
spite of these short-term headwinds, we see strong growth in demand for our
products from the commercial aerospace market over the next 3 to 5 years. OEM
backlogs remain at record levels and announced production rate ramps remain on
schedule. The new airframe designs and the new jet engines that meet the need
for improved energy and environmental efficiency are demand drivers for ATI’s
differentiated products.

“Although inventory is also being conservatively managed in the supply chain,
we continue to see long-term growth opportunities from the oil and
gas/chemical process industry markets. Our downhole oil and gas products
remain in high demand because directional and horizontal drilling rates are
holding up even as the total rig count is declining. In the third quarter
2012, we saw a pause in demand from oil and gas projects that use our
flat-rolled products. Inquiry activity for flowlines and vessels made of our
high-value flat-rolled products is beginning to increase for both new and
replacement projects. In the chemical process industry, demand for our
titanium products, while weak for the first nine months of 2012, is showing
signs of improvement which we expect will result in increased shipments to
this market in the first half of 2013. Our Uniti titanium joint venture
received the first phase of an order related to a major desalination project
but the related shipments for this phase and anticipated additional volume are
expected to occur mainly in 2013.

“Demand from the electrical energy market was essentially flat in the third
quarter compared to the second quarter 2012. On the power generation side,
demand for our zirconium products from the nuclear energy market remains at
low levels. Demand for industrial gas turbines was stable at relatively
moderate levels. On the power distribution side, demand for grain-oriented
electrical steel (GOES) continued to be impacted by the weak domestic housing
construction market. The domestic specialty metals industry association
recently confirmed that GOES imports into the U.S. market are surging, and
possible dumping and below-cost sales from producers in a number of foreign
countries have occurred in the United States.

“Demand remained strong from the medical market for our premium products for
both surgical implants and MRI superconducting magnets.

“We expect demand for standard stainless steel sheet and plate to continue at
low levels in the fourth quarter as a result of weak GDP growth in the U.S.
and aggressive inventory management actions throughout the supply chain. In
addition, base prices for most grades of standard stainless products are at
historically low levels due to weak demand and high levels of Asian imports.
We believe inventory levels of these products throughout the supply chains are
lean and base prices are at unsustainable levels. Therefore, our view is that
as global economic conditions begin to improve, both demand and base prices
will begin to improve.

“Our financial position remains solid with cash on hand of $281 million at the
end of the third quarter 2012. Cash provided by operations was $186 million in
the third quarter 2012. We have reduced our expected 2012 capital expenditures
to $410 million from our original $485 million plan. Our focus on improving
our cost structure continued as gross cost reductions before the effects of
inflation totaled $87 million during the first nine months 2012, which is on
track to exceed our full-year objective of at least $100 million in gross cost
reductions.”

Strategy and Outlook

“We remain focused on long-term value creation for our stockholders, through
the business cycles, while delivering superior value for our customers,” Mr.
Harshman said. “Our industry-leading specialty metals technologies,
diversified alloy systems and product forms, global and diversified market
focus, unsurpassed manufacturing capabilities, and integrated capabilities
from alloy development, to raw materials (titanium sponge), to melting and
hot-working, to finished value-added components and parts are unique in the
world. This strategy has ATI well-positioned to achieve significant revenue
and earnings growth over the next three to five years, as global economic
conditions improve.

“We expect business conditions in the fourth quarter 2012 to remain
challenging. Except for the U.S. election, meaningful progress on the primary
reasons for the current global economic uncertainty - the possible U.S.
‘fiscal cliff’, the euro-zone debt crisis, and slower growth in China - is not
expected until the first half of 2013. Therefore, we expect continued soft
demand and aggressive inventory management by most of our customers to persist
through the fourth quarter 2012. As a result, we now expect fourth quarter
results to be lower than the 2012 third quarter. For the full year, we expect
sales in the range of $5.0 to $5.1 billion and full-year segment operating
profit as a percent of sales of approximately 10.5%.”

              Three Months Ended                           Nine Months Ended
               September 30                                         September 30
               In Millions
               2012            2011                    2012          2011
                                                                                 
Sales          $1,220.5               $1,352.6                $3,930.4           $3,931.6
                                                                                 
Net income
attributable   $ 35.3                 $ 62.3                  $ 147.9            $ 182.6
to ATI
                                                                                 
               Per Diluted Share
                                                                                 
Net income
attributable   $ 0.32                 $ 0.56                  $ 1.32             $ 1.68
to ATI per
common share
                                                                                 

Third Quarter 2012 Financial Results Compared to Third Quarter 2011

  *Sales for the third quarter 2012 were $1.22 billion, compared to $1.35
    billion in the third quarter 2011. Compared to the third quarter 2011,
    sales increased 1% in the High Performance Metals segment. Raw material
    surcharges were lower due to declines in nickel raw material and titanium
    scrap costs. In the Flat-Rolled Products segment, sales declined 19%
    primarily due to lower raw material surcharges, lower base prices for
    standard stainless products, and reduced shipments of titanium products to
    the industrial markets due to project delays. Sales decreased 6% in the
    Engineered Products segment due to reduced demand for tungsten-based
    products and from the electrical energy market. For the first nine months
    of 2012, direct international sales increased $63.9 million, or 5%,
    compared to the prior year period, and represented 35.7% of total sales.
  *Third quarter 2012 segment operating profit was $119.5 million, or 9.8% of
    sales, compared to $161.8 million, or 12.0% of sales, for the comparable
    2011 period.
  *Net income attributable to ATI for the third quarter 2012 was $35.3
    million, or $0.32 per diluted share, compared to $62.3 million, or $0.56
    per diluted share in the third quarter 2011. Results for the third quarter
    2011 included acquisition related expenses of $8.3 million, net of tax,
    primarily related to inventory fair value adjustments. Excluding these
    items, 2011 third quarter net income was $70.6 million, or $0.63 per
    share.
  *Cash flow provided by operations for the first nine months of 2012 was
    $245.8 million and included an investment of $112.4 million in managed
    working capital.
  *Cash on hand at the end of the third quarter 2012 was $281.0 million, an
    increase of $70.7 million from June 30, 2012.
  *Gross cost reductions, before the effects of inflation, totaled $27.0
    million in the third quarter 2012, bringing gross cost reductions for the
    year to $87.0 million.

High Performance Metals Segment

Third Quarter 2012 Market Conditions

  *Customers remained cautious across most markets due to global economic
    uncertainty. Total mill product shipments of our nickel-based and
    specialty alloys, and titanium and titanium alloys were basically flat
    with the second quarter 2012 but with a less favorable product mix.
    Zirconium and related alloys shipments decreased 15% compared to the
    second quarter 2012 due primarily to reduced demand from the nuclear
    energy and chemical process industry markets. Compared to the second
    quarter 2012, average selling prices decreased 2% for nickel-based alloys
    and superalloys, primarily due to lower raw material surcharges, and
    increased 1% for specialty alloys as strong demand from the oil and gas
    markets offset lower raw material surcharges. Average selling prices for
    titanium alloys decreased 8% primarily due to lower raw material
    surcharges and product mix. Average selling prices for zirconium and
    related alloys increased 7% due to product mix.
  *Sales of high performance forgings and castings declined modestly
    primarily due to lower raw material surcharges and lower demand from the
    jet engine aftermarket and for construction and mining components.

Third quarter 2012 compared to third quarter 2011

  *Sales increased by 1% to $539.3 million.
  *Mill product shipments of nickel-based alloys and superalloys increased
    11% due to demand from the aerospace market. Mill product shipments of
    specialty alloys increased 66% due to strong demand from the oil and gas
    market. Shipments of titanium and titanium alloy mill products were 2%
    lower primarily due to reduced demand from the jet engine aftermarket.
    Zirconium and related alloys shipments declined 14% primarily due to
    reduced demand from the nuclear energy market and the chemical process
    industry. Average selling prices decreased 6% for nickel-based and
    superalloys primarily due to lower raw material surcharges, partially
    offset by a higher value-add product mix. Average selling prices decreased
    4% for specialty alloys due to lower raw material surcharges and a less
    favorable product mix. Average selling prices decreased 1% for titanium
    and titanium alloys due to raw material surcharges. Average selling prices
    increased 7% for zirconium and related alloys primarily due to product
    mix.
  *Sales for high performance forgings and castings were flat primarily due
    to better demand for airframe components and for construction and mining
    components, which was offset by lower raw material surcharges and lower
    demand from the jet engine aftermarket.
  *Segment operating profit decreased to $84.5 million, or 15.7% of total
    sales, including surcharges, compared to $95.7 million, or 17.9% of total
    sales, for the third quarter 2011. Segment operating profit was negatively
    impacted by a less favorable product mix and approximately $6 million of
    costs associated with adjusting production levels to expected lower demand
    from the nuclear energy market. Third quarter 2012 segment operating
    profit included a LIFO inventory valuation reserve benefit of $12.1
    million which was partially offset by higher costs for raw materials,
    primarily nickel, resulting from the misalignment of the raw material
    surcharge with raw material costs due to the long manufacturing cycle of
    certain products. The third quarter 2011 segment operating profit included
    a LIFO inventory valuation reserve charge of $4.2 million.
  *Gross cost reductions, before effects of inflation, during the first nine
    months of 2012 were $47.1 million in the High Performance Metals segment.

Flat-Rolled Products Segment

Market Conditions

  *Demand was soft from nearly all markets and base selling prices for most
    standard stainless products were at historically low levels. Compared to
    the second quarter 2012, shipments decreased 8% for high-value products,
    which includes industrial-grade titanium, nickel-based alloys, Precision
    Rolled Strip® products, and grain-oriented electrical steel. Shipments for
    standard stainless products (sheet and plate) decreased 13%. Direct
    international sales for the third quarter 2012 represented 32% of total
    segment sales. Third quarter 2012 Flat-Rolled Products segment titanium
    shipments, including Uniti joint venture conversion, were 2.6 million
    pounds, a 7% decrease compared to the second quarter 2012 and a 50%
    decrease from the third quarter 2011, primarily due to timing delays of
    certain large projects and lower overall demand from global industrial
    markets. Compared to the second quarter 2012, average selling prices for
    standard stainless products decreased 8%, and decreased 4% for high-value
    products, both primarily due to lower raw material surcharges and lower
    base prices.

Third quarter 2012 compared to third quarter 2011

  *Sales were $560.2 million, 18.8% lower than the prior year period,
    primarily due to lower raw material surcharges and reduced base prices for
    most products. Shipments of high-value products declined 3% compared to
    the third quarter 2011 as higher shipments of our nickel-based alloys,
    specialty alloys and Precision Rolled Strip® products were offset by
    reduced shipments of our grain-oriented electrical steel and titanium
    products. Shipments of standard stainless products increased 10%. Average
    selling prices, which include surcharges, for standard stainless products
    declined 21% due to lower base prices and lower raw material surcharges.
    Average selling prices for high-value products decreased 19% primarily due
    to product mix and lower raw material surcharges.
  *Segment operating profit declined to $26.2 million, or 4.7% of total
    sales, including surcharges, compared to $58.8 million, or 8.5% of total
    sales, in the third quarter 2011 primarily due to lower base prices for
    standard stainless and grain-oriented electrical steel products, and
    reduced shipments of certain high-value products due to delays of major
    project business. The third quarter 2012 included a LIFO inventory
    valuation reserve benefit of $8.8 million which was partially offset by
    higher costs for raw material, primarily nickel, which did not align with
    raw material surcharges. In the third quarter 2011, a LIFO inventory
    valuation reserve benefit of $24.0 million was recognized.
  *Gross cost reductions, before effects of inflation, during the first nine
    months of 2012 were $33.8 million in the Flat-Rolled Products segment.

Engineered Products Segment

Market Conditions

  *Demand was lower from the oil and gas, and cutting tool markets.

Third quarter 2012 compared to third quarter 2011

  *Sales were $121.0 million, a decrease of 5.7%, primarily as a result of
    weaker demand for tungsten-based products.
  *Segment operating profit improved to $8.8 million, or 7.3% of sales, in
    the third quarter 2012, compared to $7.3 million, or 5.7% of sales, in the
    third quarter 2011. Results for the third quarter 2012 included a LIFO
    inventory valuation reserve benefit of $1.2 million compared to a $7.3
    million LIFO inventory valuation reserve charge for the comparable 2011
    period.
  *Gross cost reductions, before effects of inflation, during the first nine
    months of 2012 were $6.1 million in the Engineered Products segment.

Other Expenses

  *Corporate expenses for the third quarter 2012 were $14.9 million, compared
    to $20.9 million in the year-ago period. The decrease in corporate
    expenses was primarily related to lower incentive compensation expenses
    associated with long-term performance plans.
  *Interest expense, net of interest income, was $17.2 million, compared to
    $23.4 million in the third quarter 2011. The decrease in interest expense
    was primarily due to lower debt levels and increased capitalized interest
    on major strategic capital projects. Capitalized interest reduced interest
    expense by $6.6 million for the third quarter 2012, compared to $3.1
    million for the comparable 2011 period.
  *Other expenses, which include expenses related to closed operations, for
    the third quarter 2012 were $2.7 million, compared to $2.9 million in the
    year-ago period.

Retirement Benefit Expense

  *Retirement benefit expense, which includes pension expense and other
    postretirement expense, increased to $30.6 million in the third quarter
    2012, compared to $19.2 million in the third quarter 2011. This increase
    was primarily due to the utilization of a lower discount rate to value
    retirement benefit obligations and lower than expected returns on plan
    assets.
  *For the third quarter 2012, retirement benefit expense of $22.4 million
    was included in cost of sales and $8.2 million was included in selling and
    administrative expenses. For the third quarter 2011, retirement benefit
    expense of $13.6 million was included in cost of sales and $5.6 million
    was included in selling and administrative expenses.

Income Taxes

  *The third quarter 2012 provision for income taxes was $16.8 million, or
    31.1% of income before tax, compared to the third quarter 2011 provision
    for income taxes of $31.2 million, or 32.7% of income before tax.

Cash Flow, Working Capital and Debt

  *Cash on hand was $281.0 million at September 30, 2012, an increase of
    $70.7 million from June 30, 2012 but a decrease of $99.6 million from
    year-end 2011.
  *Cash flow provided by operations in the third quarter 2012 was $186
    million. Cash flow provided by operations for the first nine months of
    2012 was $245.8 million and included an investment of $112.4 million in
    managed working capital.
  *The $112.4 million growth in managed working capital during the first nine
    months of 2012 resulted from a $25.1 million decrease in accounts
    receivable, a $54.2 million increase in inventory, and an $83.3 million
    decrease in accounts payable.
  *At September 30, 2012, managed working capital was 39.1% of annualized
    sales, compared to 37.8% of annualized sales at year-end 2011. We define
    managed working capital as accounts receivable plus gross inventories less
    accounts payable.
  *Cash used in investing activities was $244.1 million in the first nine
    months of 2012, including $245.6 million of capital expenditures, the
    majority of which was related to the construction of the new Flat-Rolled
    Products segment Hot-Rolling and Processing Facility (HRPF). Cash used in
    financing activities was $101.3 million in the first nine months of 2012
    and included dividend payments of $57.3 million, $27.0 million of net debt
    retirements, and $18.2 million of tax payments on share-based compensation
    associated with performance-based plans.
  *Total debt to total capital decreased to 35.9% at September 30, 2012,
    compared to 37.9% at the end of 2011. Net debt as a percentage of total
    capitalization decreased to 31.2% at the end of the third quarter 2012
    compared to 31.3% at the end of 2011.
  *There were no borrowings outstanding under ATI’s $400 million unsecured
    domestic credit facility, although a portion of the letters of credit
    capacity was utilized.

Allegheny Technologies will conduct a conference call with investors and
analysts on Wednesday, October 24, 2012, at 1:00 p.m. ET to discuss the
financial results. The conference call will be broadcast live on
www.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 include
those containing such words as “anticipates,” “believes,” “estimates,”
“expects,” “would,” “should,” “will,” “will likely result,” “forecast,”
“outlook,” “projects,” and similar expressions. Forward-looking statements 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, that may cause our actual results, performance or achievements to
differ materially from those expressed or implied in the forward-looking
statements. Important factors that could cause actual results to differ
materially from those in the forward-looking statements include: (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, including the aerospace and defense,
electrical energy, chemical process industry, oil and gas, medical,
automotive, construction and mining, and other markets; (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, whether due to significant
increases in energy, raw materials or employee benefits costs, the possibility
of project cost overruns or unanticipated costs and expenses, or other
factors; (d)volatility of prices and availability of supply 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)significant legal
proceedings or investigations adverse to us; and (g) other risk factors
summarized in our Annual Report on Form 10-K for the year ended December 31,
2011, and in other reports filed with the Securities and Exchange Commission.
We assume no duty to update our forward-looking statements.

Building the World’s Best Specialty Metals Company®

Allegheny Technologies Incorporated is one of the largest and most diversified
specialty metals producers in the world with revenues of approximately $5.2
billion for the last twelve months. ATI has approximately 11,300 full-time
employees world-wide who use innovative technologies to offer global markets a
wide range of specialty metals solutions. Our major markets are aerospace and
defense, oil and gas/chemical process industry, electrical energy, medical,
automotive, food equipment and appliance, machine and cutting tools, and
construction and mining. Our products include titanium and titanium alloys,
nickel-based alloys and superalloys, grain-oriented electrical steel,
stainless and specialty steels, zirconium, hafnium, and niobium, tungsten
materials, forgings, castings and fabrication and machining capabilities. The
ATI website is www.ATImetals.com.

Allegheny Technologies Incorporated and Subsidiaries
Consolidated Statements of Income
(Unaudited, dollars in millions, except per share amounts)
                                                             
                                                                   
                         Three Months Ended          Nine Months Ended
                         September 30                September 30
                         2012          2011          2012          2011
                                                                   
Sales                    $ 1,220.5     $ 1,352.6     $ 3,930.4     $ 3,931.6
Costs and expenses:
      Cost of sales        1,057.7       1,136.8       3,361.7       3,287.4
      Selling and
      administrative      91.7        96.7        285.8       284.7   
      expenses
Income before
interest, other income     71.1          119.1         282.9         359.5
and income taxes
Interest expense, net      (17.2   )     (23.4   )     (55.7   )     (70.1   )
Other income              0.2         (0.3    )    0.7         0.1     
(expense), net
Income before income       54.1          95.4          227.9         289.5
tax provision
Income tax provision      16.8        31.2        73.6        100.6   
                                                                   
Net income                 37.3          64.2          154.3         188.9
                                                                   
Less: Net income
attributable to           2.0         1.9         6.4         6.3     
noncontrolling
interests
                                                                   
Net income               $ 35.3       $ 62.3       $ 147.9      $ 182.6   
attributable to ATI
                                                                   
Basic net income
attributable to ATI      $ 0.33       $ 0.59       $ 1.39       $ 1.80    
per common share
                                                                   
Diluted net income
attributable to ATI      $ 0.32       $ 0.56       $ 1.32       $ 1.68    
per common share
                                                                   
Weighted average
common shares              106.2         105.1         106.1         101.6
outstanding -- basic
(millions)
                                                                   
Weighted average
common shares              116.7         116.4         116.6         112.9
outstanding -- diluted
(millions)
                                                                   
Actual common shares
outstanding -- end of      107.2         106.4         107.2         106.4
period (millions)
                                                                             

Allegheny Technologies Incorporated and Subsidiaries
Sales and Operating Profit by Business Segment
(Unaudited - Dollars in millions)
                                                              
                         Three Months Ended          Nine Months Ended
                         September 30                September 30
                         2012          2011          2012          2011
Sales:
High Performance         $ 539.3       $ 534.7       $ 1,686.8     $ 1,431.3
Metals
Flat-Rolled Products       560.2         689.6         1,853.6       2,127.5
Engineered Products       121.0       128.3       390.0       372.8   
                                                                   
Total External Sales     $ 1,220.5    $ 1,352.6    $ 3,930.4    $ 3,931.6 
                                                                   
Operating Profit:
                                                                   
High Performance         $ 84.5        $ 95.7        $ 290.8       $ 274.2
Metals
% of Sales                 15.7    %     17.9    %     17.2    %     19.2    %
                                                                   
Flat-Rolled Products       26.2          58.8          117.5         195.9
% of Sales                 4.7     %     8.5     %     6.3     %     9.2     %
                                                                   
Engineered Products        8.8           7.3           34.3          27.5
% of Sales                7.3     %    5.7     %    8.8     %    7.4     %
                                                                   
Operating Profit           119.5         161.8         442.6         497.6
% of Sales                 9.8     %     12.0    %     11.3    %     12.7    %
                                                                   
Corporate expenses         (14.9   )     (20.9   )     (52.4   )     (72.5   )
                                                                   
Interest expense, net      (17.2   )     (23.4   )     (55.7   )     (70.1   )
                                                                   
Closed company and         (2.7    )     (2.9    )     (14.8   )     (7.6    )
other expenses
                                                                   
Retirement benefit        (30.6   )    (19.2   )    (91.8   )    (57.9   )
expense
                                                                   
Income before income     $ 54.1       $ 95.4       $ 227.9      $ 289.5   
taxes
                                                                             

Allegheny Technologies Incorporated and Subsidiaries
Consolidated Balance Sheets
(Current period unaudited--Dollars in millions)
                                                              
                                                  September 30,   December 31,
                                                  2012            2011
ASSETS
                                                                  
Current Assets:
Cash and cash equivalents                         $   281.0       $   380.6
Accounts receivable, net of allowances for
doubtful accounts of $5.6 and $5.9 at                 685.7           709.1
September 30, 2012 and December 31, 2011,
respectively
Inventories, net                                      1,460.2         1,384.3
Prepaid expenses and other current assets            57.9           95.5
Total Current Assets                                  2,484.8         2,569.5
                                                                  
Property, plant and equipment, net                    2,482.3         2,368.8
Cost in excess of net assets acquired                 740.3           737.7
Other assets                                         371.4          370.9
                                                                  
Total Assets                                      $   6,078.8     $   6,046.9
                                                                  
LIABILITIES AND EQUITY
                                                                  
Current Liabilities:
Accounts payable                                  $   409.3       $   490.7
Accrued liabilities                                   336.7           320.3
Deferred income taxes                                 12.9            23.5
Short term debt and current portion of               16.8           27.3
long-term debt
Total Current Liabilities                             775.7           861.8
                                                                  
Long-term debt                                        1,462.5         1,482.0
Accrued postretirement benefits                       469.6           488.1
Pension liabilities                                   488.0           508.9
Deferred income taxes                                 21.8            9.8
Other long-term liabilities                          116.3          124.7
Total Liabilities                                    3,333.9        3,475.3
                                                                  
Total ATI stockholders' equity                        2,642.3         2,475.3
Noncontrolling interests                             102.6          96.3
Total Equity                                         2,744.9        2,571.6
                                                                  
Total Liabilities and Equity                      $   6,078.8     $   6,046.9
                                                                      

Allegheny Technologies Incorporated and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited - Dollars in millions)
                                                  Nine Months Ended
                                                     September 30
                                                     2012        2011
                                                                  
Operating Activities:
                                                                  
   Net income                                        $ 154.3      $ 188.9
                                                                  
   Depreciation and amortization                       145.1        127.2
   Deferred taxes                                      (32.9  )     30.1
   Change in managed working capital                   (112.4 )     (390.3 )
   Change in retirement benefits                       40.3         12.6
   Accrued liabilities and other                      51.4       139.0  
Cash provided by operating activities                 245.8      107.5  
Investing Activities:
   Purchases of property, plant and equipment          (245.6 )     (168.8 )
   Acquisition of business                             -            (349.2 )
   Asset disposals and other                          1.5        3.0    
Cash used in investing activities                     (244.1 )    (515.0 )
Financing Activities:
   Borrowings on long-term debt                        -            500.0
   Payments on long-term debt and capital leases       (16.7  )     (26.9  )
   Net repayments under credit facilities              (10.3  )     (2.0   )
   Debt issuance costs                                 -            (5.0   )
   Dividends paid to shareholders                      (57.3  )     (55.7  )
   Dividends paid to noncontrolling interests          -            (7.2   )
   Exercises of stock options                          1.2          1.4
   Taxes on share-based compensation and other        (18.2  )    2.1    
Cash provided by (used in) financing activities       (101.3 )    406.7  
Decrease in cash and cash equivalents                  (99.6  )     (0.8   )
Cash and cash equivalents at beginning of period      380.6      432.3  
Cash and cash equivalents at end of period           $ 281.0     $ 431.5  
                                                                           

Allegheny Technologies Incorporated and Subsidiaries
Selected Financial Data - Mill Products
(Unaudited)
                                                                
                                 Three Months Ended      Nine Months Ended
                                 September 30            September 30
                                 2012        2011        2012        2011
Mill Products Volume:
High Performance Metals (000's
lbs.)
Titanium                           6,614       6,773       20,195      20,830
Nickel-based and specialty         14,434      11,448      43,211      36,061
alloys
Zirconium and related alloys       843         976         2,759       3,046
                                                                     
Flat-Rolled Products (000's
lbs.)
High value                         118,907     122,504     368,204     374,316
Standard                          159,810    145,901    500,685    465,955
Flat-Rolled Products total         278,717     268,405     868,889     840,271
                                                                     
                                                                     
                                                                     
Mill Products Average Prices:
High Performance Metals (per
lb.)
Titanium                         $ 21.95     $ 22.13     $ 22.54     $ 21.49
Nickel-based and specialty       $ 14.68     $ 16.40     $ 15.01     $ 15.64
alloys
Zirconium and related alloys     $ 75.86     $ 70.77     $ 72.13     $ 66.06
                                                                     
Flat-Rolled Products (per lb.)
High value                       $ 2.79      $ 3.45      $ 2.97      $ 3.33
Standard                         $ 1.40      $ 1.78      $ 1.50      $ 1.86
Flat-Rolled Products combined    $ 1.99      $ 2.54      $ 2.12      $ 2.52
average
                                                                       

Mill Products volume and average price information includes shipments to ATI
Ladish for all periods presented. High Performance Metals mill product forms
include ingot, billet, bar, shapes and rectangles, rod, wire, and seamless
tubes.

Allegheny Technologies Incorporated and Subsidiaries
Computation of Basic and Diluted Earnings Per Share
(Unaudited, in millions, except per share amounts)
                                                                 
                                        Three Months Ended   Nine Months Ended
                                        September 30         September 30
                                        2012       2011      2012      2011
Numerator for Basic net income per
common share -
  Net income attributable to ATI        $  35.3    $ 62.3    $ 147.9   $ 182.6
Effect of dilutive securities:
  4.25% Convertible Notes due 2014        2.1      2.5      6.5      7.5
Numerator for Dilutive net income per
common share -
  Net income attributable to ATI        $  37.4    $ 64.8    $ 154.4   $ 190.1
  after assumed conversions
                                                                       
Denominator for Basic net income per
common share -
  Weighted average shares outstanding      106.2     105.1     106.1     101.6
Effect of dilutive securities:
  Share-based compensation                 0.9       1.7       0.9       1.7
  4.25% Convertible Notes due 2014        9.6      9.6      9.6      9.6
Denominator for Diluted net income
per common share -
  Adjusted weighted average assuming      116.7    116.4    116.6    112.9
  conversions
                                                                       
Basic net income attributable to ATI    $  0.33    $ 0.59    $ 1.39    $ 1.80
per common share
                                                                       
Diluted net income attributable to      $  0.32    $ 0.56    $ 1.32    $ 1.68
ATI per common share
                                                                         

Allegheny Technologies Incorporated and Subsidiaries
Other Financial Information
Managed Working Capital
(Unaudited - Dollars in millions)
                                                               
                                                  September 30,   December 31,
                                                  2012            2011
                                                                  
Accounts receivable                               $  685.7        $  709.1
Inventory                                            1,460.2         1,384.3
Accounts payable                                    (409.3   )     (490.7  )
Subtotal                                             1,736.6         1,602.7
                                                                  
Allowance for doubtful accounts                      5.6             5.9
LIFO reserve                                         124.5           153.7
Corporate and other                                 68.9          60.9    
Managed working capital                           $  1,935.6     $  1,823.2 
                                                                  
Annualized prior 2 months sales                   $  4,946.8     $  4,820.6 
                                                                  
Managed working capital as a % of annualized         39.1     %      37.8    %
sales
                                                                  
Year to date change in managed working capital    $  112.4
                                                                  

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
inventory valuation reserves, excess and obsolete inventory 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)
                                               
                                  September 30,   December 31,
                                  2012            2011
                                                  
Total debt                        $  1,479.3      $  1,509.3
Less: Cash                          (281.0   )     (380.6  )
Net debt                          $  1,198.3      $  1,128.7
                                                  
Net debt                          $  1,198.3      $  1,128.7
Total ATI stockholders' equity      2,642.3       2,475.3 
Net ATI capital                   $  3,840.6      $  3,604.0
                                                  
Net debt to ATI capital             31.2     %     31.3    %
                                                  
Total debt                        $  1,479.3      $  1,509.3
Total ATI stockholders' equity      2,642.3       2,475.3 
Total ATI capital                 $  4,121.6      $  3,984.6
                                                  
Total debt to total ATI capital     35.9     %     37.9    %
                                                             

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.

Contact:

Allegheny Technologies Incorporated
Dan L. Greenfield, 412-394-3004
 
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