ATI (ATI) 10-K 25 Feb 10 2009 FY Annual report Financial data

Document and Entity Information

Document and Entity Information (USD $)
	12 Months Ended Dec. 31, 2009	Feb. 12, 2010	Jun. 30, 2009
Document and Entity Information Abstract
Document Type	10-K
Document Period End Date	2009-12-31
Amendment Flag	false
Entity Registrant Name	ALLEGHENY TECHNOLOGIES INCORPORATED
Entity Central Index Key	0001018963
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Well Known Seasoned Issuer	Yes
Entity Common Stock Shares Outstanding		98,198,719
Entity Public Float			$3,390,000,000

CONSOLIDATED STATEMENTS OF INCO

CONSOLIDATED STATEMENTS OF INCOME (USD $)
In Millions	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
CONSOLIDATED STATEMENTS OF INCOME
Sales	3054.9	5309.7	5452.5
Costs and expenses:
Cost of sales	2646.5	4157.8	4003.1
Selling and administrative expenses	315.7	282.7	296.7
Income before interest, other income and income taxes	92.7	869.2	1152.7
Interest expense, net	19.3	3.5	4.8
Debt extinguishment costs	-9.2	0	0
Other income, net	0.7	2	6.2
Income before income tax provision	64.9	867.7	1154.1
Income tax provision	26.9	294.2	400.2
Net income	38	573.5	753.9
Less: Net income attributable to noncontrolling interests	6.3	7.6	6.8
Net income attributable to ATI	31.7	565.9	747.1
Basic net income attributable to ATI per common share	0.33	5.71	7.35
Diluted net income attributable to ATI per common share	0.32	5.67	7.26

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS (USD $)
In Millions	Dec. 31, 2009	Dec. 31, 2008
Current Assets:
Cash and cash equivalents	708.8	469.9
Accounts receivable, net	392	530.5
Inventories, net	825.5	887.6
Prepaid expenses and other current assets	71.3	41.4
Total Current Assets	1997.6	1929.4
Property, plant and equipment, net	1907.9	1633.6
Cost in excess of net assets acquired	207.8	190.9
Deferred income taxes	63.1	281.6
Other assets	169.6	134.9
Total Assets	4,346	4170.4
Current Liabilities:
Accounts payable	308.6	278.5
Accrued liabilities	258.8	322
Deferred income taxes	23.7	78.2
Short-term debt and current portion of long-term debt	33.5	15.2
Total Current Liabilities	624.6	693.9
Long-term debt	1037.6	494.6
Accrued postretirement benefits	424.3	446.9
Pension liabilities	50.6	378.2
Other long-term liabilities	119.3	127.8
Total Liabilities	2256.4	2141.4
ATI Stockholders' Equity:
Preferred stock, par value $0.10: authorized-50,000,000 shares; issued-none	0	0
Common stock, par value $0.10: authorized-500,000,000 shares; issued-102,404,256 shares at December 31, 2009 and December 31, 2008; outstanding- 98,070,474 shares at December 31, 2009 and 97,330,969 shares at December 31, 2008	10.2	10.2
Additional paid-in capital	653.6	651.8
Retained earnings	2230.5	2286.7
Treasury stock: 4,333,782 shares at December 31, 2009 and 5,073,287 shares at December 31, 2008	208.6	244.8
Accumulated other comprehensive loss, net of tax	-673.5	-746.5
Total ATI stockholders' equity	2012.2	1957.4
Noncontrolling interests
Noncontrolling interests	77.4	71.6
Total Stockholders' Equity	2089.6	2,029
Total Liabilities and Equity	$4,346	4170.4

1_Consolidated Balance Sheets

Consolidated Balance Sheets (USD $)
	Dec. 31, 2009	Dec. 31, 2008
Consolidated Balance Sheets
Preferred stock, par value	0.1	0.1
Preferred stock, authorized	50,000,000	50,000,000
Preferred stock, issued	0	0
Common stock, par value	0.1	0.1
Common stock, authorized	500,000,000	500,000,000
Common stock, issued	102,404,256	102,404,256
Common stock, oustanding	98,070,474	97,330,969
Treasury Stock	4,333,782	5,073,287

CONSOLIDATED STATEMENT OF CASH

CONSOLIDATED STATEMENT OF CASH FLOWS (USD $)
In Millions	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Operating Activities:
Net income	$38	573.5	753.9
Depreciation and amortization	132.6	118.8	102.9
Deferred taxes	123.6	129	55.5
Inventories	67.8	28.6	-117.4
Accounts receivable	141.4	121.7	-41.3
Accounts payable	30.1	-109.9	33.3
Retirement benefits	-280.6	-52.9	-102.4
Accrued income taxes	-26.6	-6.9	-5.3
Accrued liabilities and other	-7.8	-47.4	22.3
Cash provided by operating activities	218.5	754.5	701.5
Investing Activities:
Purchases of property, plant and equipment	-415.4	-515.7	-447.4
Purchases of businesses and investments in ventures	-38.9	0	-9.7
Asset disposals and other	0.6	1.8	5.4
Cash used in investing activities	-453.7	-513.9	-451.7
Financing Activities:
Issuances of long-term debt	752.5	0	0
Payments on long-term debt and capital leases	-194.6	-14.8	-15.3
Net borrowings under credit facilities	5.8	-3.1	-8.6
Debt issuance costs	-18.1	0	0
Dividends paid to shareholders	-70.6	-71.4	-58.1
Dividends paid to noncontrolling interests	-0.8	0	0
Shares repurchased for income tax withholding on share-based compensation	-1.4	-15.8	-50.1
Exercises of stock options	0.8	1	5.5
Taxes on share-based compensation	-0.5	11.6	-50.7
Purchase of treasury stock	0	-278.3	-61.2
Contributions from noncontrolling interests	0	0	8.3
Cash provided by (used in) financing activities	474.1	(394)	-128.8
Increase (decrease) in cash and cash equivalents
Increase (decrease) in cash and cash equivalents	238.9	-153.4	121
Cash and cash equivalents at beginning of period	469.9	623.3	502.3
Cash and cash equivalents at end of period	708.8	469.9	623.3

STATEMENTS OF CHANGES IN CONSOL

STATEMENTS OF CHANGES IN CONSOLIDATED STOCKHOLDERS EQUITY (USD $)
In Millions	Common Stock	Additional Paid-In Capital	Retained Earnings	Treasury Stock	Accumulated Other Comprehensive Income (Loss)	Comprehensive Income (Loss)	Noncontrolling Interests	Total
Total Stockholders' Equity at Dec. 31, 2006	10.1	$637	1166.6	$0	-311.2	$0	37.9	1540.4
Net income			747.1			747.1	6.8	753.9
Other comprehensive income (loss) net of tax:
Pension plans and other postretirement benefits					71.4	71.4	0	71.4
Foreign currency translation gains (losses)					20.3	20.3	4.2	24.5
Unrealized gains (losses) on derivatives					-16.9	-16.9	0	-16.9
Change in unrealized gains on securities					-0.8	-0.8		-0.8
Comprehensive income (loss)			747.1		74	821.1	11	832.1
Purchase of treasury stock				-61.2				-61.2
Cumulative effect of change in accounting principle			-5.6					-5.6
Cash dividends on common stock			-58.1					-58.1
Contributions from noncontrolling interests							8.3	8.3
Employee Stock Plans	0.1	56.7	-19.3	-14.2				23.3
Total Stockholders' Equity at Dec. 31, 2007	10.2	693.7	1830.7	-75.4	-237.2		57.2	2279.2
Net income			565.9			565.9	7.6	573.5
Other comprehensive income (loss) net of tax:
Pension plans and other postretirement benefits					-426.1	-426.1	0	-426.1
Foreign currency translation gains (losses)					-69.3	-69.3	6.8	-62.5
Unrealized gains (losses) on derivatives					-15.1	-15.1	0	-15.1
Comprehensive income (loss)			565.9		-510.5	55.4	14.4	69.8
Purchase of treasury stock				-278.3				-278.3
Contribution of stock to pension plan			-37.2	72.4				35.2
Effect of changing the measurement date for pension plans and other postretirement benefits, net of tax					1.2			1.2
Cash dividends on common stock			-71.4					-71.4
Employee Stock Plans	0	-41.9	-1.3	36.5				-6.7
Total Stockholders' Equity at Dec. 31, 2008	10.2	651.8	2286.7	-244.8	-746.5		71.6	2,029
Net income			31.7			31.7	6.3	38
Other comprehensive income (loss) net of tax:
Pension plans and other postretirement benefits					19.9	19.9	0	19.9
Foreign currency translation gains (losses)					21.9	21.9	0.3	22.2
Unrealized gains (losses) on derivatives					31.2	31.2	0	31.2
Comprehensive income (loss)			31.7		73	104.7	6.6	111.3
Cash dividends on common stock			-70.6					-70.6
Cash dividends paid to noncontrolling interests							-0.8	-0.8
Employee Stock Plans	0	1.8	-17.3	36.2				20.7
Total Stockholders' Equity at Dec. 31, 2009	10.2	653.6	2230.5	-208.6	-673.5		77.4	2089.6

2_STATEMENTS OF CHANGES IN CONS

STATEMENTS OF CHANGES IN CONSOLIDATED EQUITY Parentheticals (USD $)
	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
STATEMENTS OF CHANGES IN CONSOLIDATED EQUITY
Cash dividends on common stock per share	0.72	0.72	0.57

Summary of Significant Accounti

Summary of Significant Accounting Policies
	12 Months Ended Dec. 31, 2009
Notes To Consolidated Financial Statements Abstract
Summary of Significant Accounting Policies	Note 1. Summary of Significant Accounting Policies Principles of ConsolidationThe consolidated financial statements include the accounts of Allegheny Technologies Incorporated and its subsidiaries, including the Chinese joint venture known as Shanghai STAL Precision Stainless Steel Company Limited (STAL), in which the Company has a 60% interest. The remaining 40% interest in STAL is owned by Baosteel Group, a state authorized investment company whose equity securities are publicly traded in the Peoples Republic of China. The financial results of STAL are consolidated into the Companys operating results and financial position, with the 40% interest of our minority partner recognized in the consolidated statement of income as net income attributable to noncontrolling interests and as equity attributable to the noncontrolling interest within total stockholders equity. Investments in which the Company exercises significant influence, but which it does not control (generally a 20% to 50% ownership interest), including ATIs 50% interest in the industrial titanium joint venture known as Uniti LLC (Uniti), are accounted for under the equity method of accounting. Significant intercompany accounts and transactions have been eliminated. Unless the context requires otherwise, Allegheny Technologies, ATI and the Company refer to Allegheny Technologies Incorporated and its subsidiaries. In preparing the financial statements for the year ended December 31, 2009, the Company has evaluated subsequent events through the date of issue, which was February 25, 2010.Use of EstimatesThe preparation of consolidated financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities at the date of the financial statements, as well as the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. Management believes that the estimates are reasonable.Cash Equivalents and InvestmentsCash equivalents are highly liquid investments valued at cost, which approximates fair value, acquired with an original maturity of three months or less.Accounts ReceivableAccounts receivable are presented net of a reserve for doubtful accounts of $6.5 million at December 31, 2009 and $6.3 million at December 31, 2008. The Company markets its products to a diverse customer base, principally throughout the United States. Trade credit is extended based upon evaluations of each customers ability to perform its obligations, which are updated periodically. Accounts receivable reserves are determined based upon an aging of accounts and a review for collectibility of specific accounts. No single customer accounted for more than 10% of sales for all years presented. Accounts receivable from Uniti were $2.9 million at December 31, 2009.InventoriesInventories are stated at the lower of cost (last-in, first-out (LIFO), first-in, first-out (FIFO), and average cost methods) or market, less progress payments. Costs include direct material, direct labor and applicable manufacturing and engineering overhead, and

Inventories

Inventories
	12 Months Ended Dec. 31, 2009
Notes To Consolidated Financial Statements Abstract
Inventories	Note 2. Inventories Inventories at December 31, 2009 and 2008 were as follows (in millions): 2009 2008 Raw materials and supplies $ 158.3 $ 163.6 Work-in-process 673.9 772.6 Finished goods 96.1 164.9 Total inventories at current cost 928.3 1,101.1 Less allowances to reduce current cost values to LIFO basis (102.8) (205.6) Progress payments - (7.9) Total inventories, net $ 825.5 $ 887.6 Inventories, before progress payments, determined on the last-in, first-out (LIFO) method were $660.1 million at December 31, 2009, and $677.3 million at December 31, 2008. The remainder of the inventory was determined using the first-in, first-out (FIFO) and average cost methods, and these inventory values do not differ materially from current cost. The effect of using the LIFO methodology to value inventory, rather than FIFO, decreased cost of sales in 2009, 2008 and 2007 by $102.8 million, $169.0 million, and $92.1 million, respectively.During 2009, 2008, and 2007, inventory usage resulted in liquidations of LIFO inventory quantities. These inventories were carried at differing costs prevailing in prior years as compared with the cost of current manufacturing cost and purchases. The effect of these LIFO liquidations was to increase cost of sales by $1.8 million in 2009, decrease cost of sales by $3.7 million in 2008 and $35.2 million in 2007.

Property, Plant, and Equipment

Property, Plant, and Equipment
	12 Months Ended Dec. 31, 2009
Notes To Consolidated Financial Statements Abstract
Property, Plant and Equipment	Note 3. Property, Plant and Equipment Property, plant and equipment at December 31, 2009 and 2008 was as follows: (In millions) 2009 2008 Land $ 24.8 $ 23.1 Buildings 590.6 310.9 Equipment and leasehold improvements 2,607.8 2,508.5 3,223.2 2,842.5 Accumulated depreciation and amortization (1,315.3) (1,208.9) Total property, plant and equipment, net $ 1,907.9 $ 1,633.6 Construction in progress at December 31, 2009 and 2008 was $270.6 million and $597.2 million, respectively. Depreciation and amortization for the years ended December 31, 2009, 2008 and 2007 was as follows: (In millions) 2009 2008 2007 Depreciation of property, plant and equipment $ 118.1 $ 104.0 $ 87.2 Software and other amortization 14.5 14.8 15.7 Total depreciation and amortization $ 132.6 $ 118.8 $ 102.9

Asset Retirement Obligations

Asset Retirement Obligations
	12 Months Ended Dec. 31, 2009
Notes To Consolidated Financial Statements Abstract
Asset Retirement Obligations	Note 4. 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 (ARO) 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 31, 2009, the Company had recognized AROs of $14.7 million related to landfill closures, 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 31, 2009 and 2008 were as follows: (in millions) 2009 2008 Balance at beginning of year $ 11.8 $ 6.0 Accretion expense 2.2 2.4 Payments (1.5) (0.7) Liabilities incurred 2.2 4.1 Balance at end of year $ 14.7 $ 11.8

Supplemental Financial Statemen

Supplemental Financial Statement Information
	12 Months Ended Dec. 31, 2009
Notes To Consolidated Financial Statements Abstract
Supplemental Financial Statement Information	Note 5. Supplemental Financial Statement Information Cash and cash equivalents at December 31, 2009 and December 31, 2008 were as follows: (in millions) 2009 2008 Cash $ 245.1 $ 166.3 Other short-term investments 463.7 303.6 Total cash and cash equivalents $ 708.8 $ 469.9 Accounts receivable are presented net of a reserve for doubtful accounts of $6.5 million at December 31, 2009, and $6.3 million at December 31, 2008. During 2009, the Company recognized expense of $1.7 million to increase the reserve for doubtful accounts and wrote off $1.5 million of uncollectible accounts, which reduced the reserve. During 2008, the Company recognized expense of $2.1 million to increase the reserve for doubtful accounts and wrote off $2.1 million of uncollectible accounts, which decreased the reserve. During 2007, the Company recognized expense of $1.0 million to increase the reserve for doubtful accounts and wrote off $0.4 million of uncollectible accounts, which decreased the reserve.Accrued liabilities included salaries and wages of $49.8 million and $87.8 million at December 31, 2009 and 2008, respectively. Other income (expense) for the years ended December 31, 2009, 2008, and 2007 was as follows: (In millions) 2009 2008 2007 Rent, royalty income and other income $ 0.9 $ 1.6 $ 1.3 Net gains (losses) on property and investments (0.2) 0.1 2.5 Other - 0.3 2.4 Total other income $ 0.7 $ 2.0 $ 6.2

Debt

Debt
	12 Months Ended Dec. 31, 2009
Notes To Consolidated Financial Statements Abstract
Debt	Note 6. Debt Debt at December 31, 2009 and December 31, 2008 was as follows: (In millions) 2009 2008 Allegheny Technologies $402.5 million 4.25% Convertible Notes due 2014 $ 402.5 $ - Allegheny Technologies $350 million 9.375% Notes due 2019 350.0 - Allegheny Technologies $300 million 8.375% Notes due 2011, net (a) 117.9 304.2 Allegheny Ludlum 6.95% debentures due 2025 150.0 150.0 Domestic Bank Group $400 million unsecured credit agreement - - Promissory note for JL asset acquisition 20.5 30.7 Foreign credit agreements 22.1 15.6 Industrial revenue bonds, due through 2020, and other 8.1 9.3 Total short-term and long-term debt 1,071.1 509.8 Short-term debt and current portion of long-term debt (33.5) (15.2) Total long-term debt $ 1,037.6 $ 494.6 Includes fair value adjustments for settled interest rate swap contracts of $1.8 million at December 31, 2009 and $6.7 million at December 31, 2008. Interest expense was $21.4 million in 2009, $13.3 million in 2008, and $30.8 million in 2007. Interest expense was reduced by $39.0 million, $25.0 million, and $9.8 million, in 2009, 2008, and 2007, respectively, from interest capitalization on capital projects. Interest and commitment fees paid were $58.1 million in 2009, $39.4 million in 2008, and $42.9 million in 2007. Net interest expense includes interest income of $2.1 million in 2009, $9.8 million in 2008, and $26.0 million in 2007.Scheduled maturities of borrowings during the next five years are $33.5 million in 2010, $128.0 million in 2011, $1.0 million in 2012, $1.1 million in 2013, and $403.6 million in 2014. The promissory note for the JL asset acquisition bears interest at a floating rate capped at 6%, payable in installments with a final maturity of July 1, 2011, and is secured by the property, plant and equipment acquired.Convertible NotesIn June2009, the Company issued and sold $402.5 million in aggregate principal amount of 4.25% Convertible Senior Notes due 2014 (the Convertible Notes). Interest is payable semi-annually on June1 and December1 of each year. Net proceeds of $390.2 million from the sale of the Convertible Notes were used to make a $350 million voluntary cash contribution to the Companys U.S. defined benefit pension plan, and the balance was used for general corporate purposes including funding of contributions to trusts established to fund retiree medical benefits. The Convertible Notes are unsecured and unsubordinated obligations of the Company and rank equally with all of its existing and future senior unsecured debt. The underwriting fees and other third-party expenses for the issuance of the Convertible Notes were $12.3 million and are being amortized to interest expense over the 5-year term of the Convertible Notes.The Company does not have the right to redeem the Convertible Notes prior to the stated maturity date. Holders of the Convertible Notes have the option to convert their notes into shares of ATI common stock at any time prior to the close of business on the second scheduled trading day immediately preceding the stated maturity date (June 1, 2014). The initial conversion r

Derivative Financial Instrument

Derivative Financial Instruments and Hedging
	12 Months Ended Dec. 31, 2009
Notes To Consolidated Financial Statements Abstract
Derivative Financial Instruments and Hedging	Note 7. Derivative Financial Instruments and HedgingAs 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 all of these contracts as hedges. In general, hedge effectiveness is determined by examining the relationship between offsetting changes in fair value or cash flows attributable to the item being hedged, and the financial instrument being used for the hedge. Effectiveness is measured utilizing regression analysis and other techniques to determine whether the change in the fair market value or cash flows of the derivative exceeds the change in fair value or cash flow of the hedged item. Calculated ineffectiveness, if any, is immediately recognized on the statement of operations. 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. Generally under these contracts, which are 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 ATIs products are sold utilizing raw material surcharges and index mechanisms. However, as of December 31, 2009, the Company had entered into financial hedging arrangements primarily at the request of its customers, related to firm orders, for approximately 10% of the Companys estimated total annual nickel requirements in 2010. A minor amount of nickel hedges extend into 2012. At December 31, 2009, the outstanding financial derivatives used to hedge the Companys exposure to natural gas cost volatility represented approximately 50% of its forecasted requirements through 2011.While the majority of the Companys 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. The forward contracts are denominated in the same foreign currencies in which export sales are denominated. These contracts are designated as hedges of the variability in cash flows of a portion of the forecasted future export sales transactions which otherwise would expose the Company to foreign currency risk. At December 31, 2009, the outstanding financial derivatives used to hedge the Companys exposure to foreign currency, primarily euros, represented approximately 5% of the Companys forecasted total international sales through 2011. In addition, the Company may also designate cash balances held in foreign currencies as hedges of fo

Fair Value of Financial Instrum

Fair Value of Financial Instruments
	12 Months Ended Dec. 31, 2009
Notes To Consolidated Financial Statements Abstract
Fair Value of Financial Instruments	Note 8. Fair Value of Financial Instruments The estimated fair value of financial instruments at December 31, 2009 and 2008 was as follows: 2009 2008 Carrying Estimated Carrying Estimated (In millions) Amount Fair Value Amount Fair Value Cash and cash equivalents $ 708.8 $ 708.8 $ 469.9 $ 469.9 Derivative financial instruments: Assets 23.4 23.4 17.2 17.2 Liabilities 17.7 17.7 62.5 62.5 Debt: Allegheny Technologies $402.5 million 4.25% Convertible Notes due 2014 402.5 561.5 - - Allegheny Technologies $350 million 9.375% Notes due 2019 350.0 404.6 - - Allegheny Technologies $300 million 8.375% Notes due 2011, net (a) 117.9 129.3 304.2 306.6 Allegheny Ludlum 6.95% debentures due 2025 150.0 139.4 150.0 144.3 Promissory note for JL asset acquisition 20.5 20.5 30.7 30.7 Foreign credit agreements 22.1 22.1 15.6 15.6 Industrial revenue bonds, due through 2020, and other 8.1 8.1 9.3 9.3 (a)Includes fair value adjustments for settled interest rate swap contracts of $1.8 million at December 31, 2009, and $6.7 million at December 31, 2008.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 following methods and assumptions were used by the Company in estimating the fair value of its financial instruments:Cash and cash equivalents: Cash fair value was determined using Level 1 information. Cash equivalent fair value was determined using Level 2 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 Companys credit risk. Short-term and long-term debt: The fair values of the Allegheny Technologies 4.25% Convertible Notes, the Allegheny Technologies 9.375% Notes,

Pension Plans and Other Postret

Pension Plans and Other Postretirement Benefits
	12 Months Ended Dec. 31, 2009
Notes To Consolidated Financial Statements Abstract
Pension Plans and Other Postretirement Benefits	Note 9. Pension Plans and Other Postretirement BenefitsThe Company has defined benefit pension plans and defined contribution plans covering substantially all employees. Benefits under the defined benefit pension plans are generally based on years of service and/or final average pay. The Company funds the U.S. pension plans in accordance with the Employee Retirement Income Security Act of 1974, as amended, and the Internal Revenue Code. The Company also sponsors several postretirement plans covering certain salaried and hourly employees. The plans provide health care and life insurance benefits for eligible retirees. In most plans, Company contributions towards premiums are capped based on the cost as of a certain date, thereby creating a defined contribution. For the non-collectively bargained plans, the Company maintains the right to amend or terminate the plans at its discretion.The components of pension (income) expense and components of other postretirement benefit expense for the Companys defined benefit plans included the following: Pension Benefits Other Postretirement Benefits (in millions) 2009 2008 2007 2009 2008 2007 Service cost - benefits earned during the year $ 23.3 $ 28.2 $ 27.5 $ 2.9 $ 3.1 $ 3.0 Interest cost on benefits earned in prior years 138.6 130.6 127.5 32.5 31.6 31.0 Expected return on plan assets (156.4) (200.9) (186.7) (1.5) (5.6) (7.3) Amortization of prior service cost (credit) 16.6 16.8 17.6 (19.2) (21.3) (22.6) Amortization of net actuarial loss 76.5 13.1 31.2 6.4 5.1 9.1 Total retirement benefit expense (income) $ 98.6 $ (12.2) $ 17.1 $ 21.1 $ 12.9 $ 13.2 Other postretirement benefit costs for a defined contribution plan were $2.2 million and $7.7 million for the years ended December 31, 2009 and 2008, respectively. As discussed in Note 13, Business Segments, ATIs retirement benefit expense for determining segment operating profit includes both pension expense and other postretirement benefit expenses. Actuarial assumptions used to develop the components of defined benefit pension expense (income) and other postretirement benefit expense were as follows: Pension Benefits Other Postretirement Benefits 2009 2008 2007 2009 2008 2007 Discount rate 6.85 -7.5% (a) 6.25% 5.8% 6.85% 6.25% 5.8% Rate of increase in future compensation levels 3% - 4.5% 3% - 4.5% 3% - 4.5% - - - Expected long-term rate of return on assets 8.75% 8.75% 8.75% 8.3% 9.0% 9.0% (a) The 2009 expense for the U.S. qualified defined benefit plan initially used a 6.85% discount rate. This plan was remeasured in the second quarter 2009 upon the Company's $350 million voluntary cash contribution, and a 7.5% discount rate was used to determine expense for this plan for the remainder of the year. 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 2009 2008 2009 2008 Discount rate 6.2% 6.85% 6.2% 6.85% Rate of increase in future compensation le

Accumulated Other Comprehensive

Accumulated Other Comprehensive Income (Loss)
	12 Months Ended Dec. 31, 2009
Notes To Consolidated Financial Statements Abstract
Accumulated Other Comprehensive Income (Loss)	Note 10. Accumulated Other Comprehensive Income (Loss) The components of accumulated other comprehensive income (loss), net of tax, at December 31, 2009 and 2008 were as follows: (in millions) 2009 2008 Attributable to ATI Pension plans and other postretirement benefits $ (679.7) $ (699.6) Foreign currency translation 2.7 (19.2) Derivative financial instruments 3.5 (27.7) Accumulated other comprehensive income (loss) attributable to ATI $ (673.5) $ (746.5) Attributable to noncontrolling interests Foreign currency translation $ 12.8 $ 12.5 Accumulated other comprehensive income attributable to noncontrolling interests $ 12.8 $ 12.5 Other comprehensive income (loss) amounts are net of applicable income tax expense (benefit) for each year presented. 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.

Stockholders' Equity

Stockholders' Equity
	1/1/2009 - 12/31/2009
Notes To Consolidated Financial Statements Abstract
Stockholders' Equity	Note 11. Stockholders EquityPreferred StockAuthorized 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 31, 2009, there were no shares of preferred stock issued.Common StockOn November 1, 2007, the Companys Board of Directors approved a share repurchase program of $500 million. As of December 31, 2009, 6,837,000 shares had been purchased in open market transactions under this program at a cost of $339.5 million. There were no share repurchases under this program in 2009. Per share amounts reflect the effect of the shares repurchased on a weighted average basis for the periods presented.Share-based CompensationThe Company sponsors three principal share-based incentive compensation programs. During 2007, the Company adopted the Allegheny Technologies Incorporated 2007 Incentive Plan (the Incentive Plan). Awards earned under share-based incentive compensation programs are generally paid with shares held in treasury, if sufficient treasury shares are held, and any additional required share payments are made with newly issued shares. At December 31, 2009, approximately 0.4 million shares of common stock were available for future awards under the Incentive Plan. The general terms of each arrangement granted under the Incentive Plan, and predecessor plans, the method of estimating fair value for each arrangement, and award activity is reported below.Stock option awards: The Company ceased granting stock options to employees in 2003, and to non-employee directors in 2006. As of December 31, 2009, there were no unvested stock option awards.Stock option transactions under the Companys plans for the years ended December 31, 2009, 2008, and 2007 are summarized as follows: 2009 2008 2007 (shares in thousands) Number of shares Weighted Average Exercise Price Number of shares Weighted Average Exercise Price Number of shares Weighted Average Exercise Price Outstanding, beginning of year 823 $ 9.96 897 $ 11.43 1,324 $ 11.65 Granted - - - - - - Exercised (76) 11.43 (31) 9.69 (378) 0.59 Cancelled (46) 21.99 (43) 40.67 (49) 23.90 Outstanding at end of year 701 $ 9.01 823 $ 9.96 897 $ 11.43 Exercisable at end of year 701 $ 9.01 823 $ 9.96 897 $ 11.43 Options outstanding at December 31, 2009 were as follows: (shares in thousands, life in years) Options Outstanding and Exercisable Range of Exercise Prices Number of Shares Weighted Average Remaining Contractual Life Weighted Average Exercise Price $ 3.63 - $ 7.00 308 3.1 $ 4.19 7.01 - 10.00 200 2.8 7.26 10.01 - 15.00 49 2.4 12.61 15.01 - 20.00 130 1.5 17.52 20.01 - 30.00 7 4.6 24.52 30.01 - 72.46 7 6.3 72.46 701 2.7 $ 9.01 Nonvested stock awards: Awards of nonvested stock are granted to employees, with either performance and/or service conditions. Awards of nonvested stock are also granted to non-employee directors, with service conditions. For nonvested stock awarded in 2009, 2008 and 2007, nonvested shares participate in cash dividends during the restriction period. In April 2009, the

Income Taxes

Income Taxes
	12 Months Ended Dec. 31, 2009
Notes To Consolidated Financial Statements Abstract
Income Taxes	Note 12. Income Taxes The income tax provision (benefit) was as follows: (in millions) 2009 2008 2007 Current: Federal $ (91.3) $ 142.5 $ 292.0 State (2.8) 14.0 46.7 Foreign (1.8) 8.9 5.3 Total (95.9) 165.4 344.0 Deferred: Federal 115.5 114.0 67.2 State 3.8 12.6 (16.4) Foreign 3.5 2.2 5.4 Total 122.8 128.8 56.2 Income tax provision $ 26.9 $ 294.2 $ 400.2 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: Income Tax Provision (Benefit) (in millions) 2009 2008 2007 Taxes computed at the federal rate $ 22.7 $ 301.0 $ 401.6 State and local income taxes, net of federal tax benefit (0.6) 26.7 31.3 Valuation allowance 5.7 - (23.1) Adjustment to prior years' taxes (3.0) (11.9) (0.5) Manufacturing deduction - (11.3) (16.5) Other 2.1 (10.3) 7.4 Income tax provision: $ 26.9 $ 294.2 $ 400.2 In general, the Company is responsible for filing consolidated U.S. Federal, foreign and combined, unitary or separate state income tax returns. The Company is responsible for paying the taxes relating to such returns, including any subsequent adjustments resulting from the redetermination of such tax liability by the applicable taxing authorities. No provision has been made for U.S. Federal, state or additional foreign taxes related to undistributed earnings of foreign subsidiaries which have been permanently re-invested.Income before income taxes for the Companys U.S. and non-U.S. operations was as follows: (in millions) 2009 2008 2007 U.S. $ 57.9 $ 815.4 $ 1,109.1 Non-U.S. 7.0 52.3 45.0 Income before income taxes $ 64.9 $ 867.7 $ 1,154.1 Income taxes paid and amounts received as refunds were as follows: (in millions) 2009 2008 2007 Income taxes paid $ 45.0 $ 213.5 $ 306.3 Income tax refunds received (124.3) (34.2) (19.1) Income taxes paid (received), net $ (79.3) $ 179.3 $ 287.2 Deferred income taxes result from temporary differences in the recognition of income and expense for financial and income tax reporting purposes, and differences between the fair value of assets acquired in business combinations accounted for as purchases for financial reporting purposes and their corresponding tax bases. Deferred income taxes represent future tax benefits or costs to be recognized when those temporary differences reverse. The categories of assets and liabilities that have resulted in differences in the timing of the recognition of income and expense at December 31, 2009 and 2008 were as follows: (in millions) 2009 2008 Deferred income tax assets Postretirement benefits other than pensions $ 188.2 $ 188.2 State net operating loss tax carryovers 27.9 24.9 Deferred compensation and other benefit plans 15.7 34.2 Self insurance reserves 14.3 12.3 Pension 13.4 144.9 Other items 107.1 92.0 Gross deferred income tax assets 366.6 496.5 Valuation allowance for deferred tax assets (19.9) (14.2) Total deferred income tax assets 346.7 482.3 Deferred income

Business Segments

Business Segments
	12 Months Ended Dec. 31, 2009
Notes To Consolidated Financial Statements Abstract
Business Segments	Note 13. Business Segments The Company operates in three business segments: High Performance Metals, Flat-Rolled Products and Engineered Products. The High Performance Metals segment produces, converts and distributes a wide range of high performance alloys, including titanium and titanium-based alloys, nickel- and cobalt-based alloys and superalloys, exotic alloys such as zirconium, hafnium, niobium, nickel-titanium, and their related alloys, advanced powder alloys, and other specialty metals, primarily in long product forms such as ingot, billet, bar, shapes and rectangles, rod, wire, seamless tube, and castings. The companies in this segment include ATI Allvac, ATI Allvac Ltd (U.K.), ATI Wah Chang, and ATI Powder Metals. The Flat-Rolled Products segment produces, converts and distributes stainless steel, nickel-based alloys, specialty alloys, and titanium and titanium-based alloys in a variety of product forms, including plate, sheet, engineered strip and Precision Rolled Strip products as well as grain-oriented electrical steel sheet. The companies in this segment include ATI Allegheny Ludlum, STAL, in which the Company has a 60% ownership interest, and ATIs 50% interest in Uniti, which is accounted for under the equity method. Sales to Uniti, which are included in ATIs consolidated statements of income, were $80.5 million in 2009, $199.1 million in 2008, and $117.3 million in 2007. ATIs share of Unitis income (loss) was $(2.7) million in 2009, $11.3 million in 2008, and $21.9 million in 2007, which is included in the Flat-Rolled Products segments operating profit, and within cost of sales in the consolidated statements of income. The remaining 50% interest in Uniti is held by VSMPO, a Russian producer of titanium, aluminum, and specialty steel products.The Engineered Products segments principal business produces tungsten powder, tungsten heavy alloys, tungsten carbide materials and carbide cutting tools. This segment also produces carbon alloy steel impression die forgings and large grey and ductile iron castings, and performs precision metals processing services. The companies in this segment are ATI Metalworking Products, ATI Portland Forge, ATI Casting Service and ATI Rome Metals.Intersegment sales are generally recorded at full cost or market. Common services are allocated on the basis of estimated utilization. (in millions) 2009 2008 2007 Total sales: High Performance Metals $ 1,357.4 $ 2,134.4 $ 2,255.9 Flat-Rolled Products 1,564.9 2,968.4 3,016.0 Engineered Products 268.8 506.8 460.6 Total sales 3,191.1 5,609.6 5,732.5 Intersegment sales: High Performance Metals 57.4 189.5 188.3 Flat-Rolled Products 48.8 59.3 64.1 Engineered Products 30.0 51.1 27.6 Total intersegment sales 136.2 299.9 280.0 Sales to external customers High Performance Metals 1,300.0 1,944.9 2,067.6 Flat-Rolled Products 1,516.1 2,909.1 2,951.9 Engineered Products 238.8 455.7 433.0 Total sales to external customers $ 3,054.9 $ 5,309.7 $ 5,452.5 Total direct international sales were $950.4 million in 2009, $1,493.4 million in 2008, and $1,465.5 million in 2007.

Per Share Information

Per Share Information
	12 Months Ended Dec. 31, 2009
Notes To Consolidated Financial Statements Abstract
Per Share Information	Note 14. 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) Years ended December 31, 2009 2008 2007 Numerator: Numerator for basic and diluted net income per common share - net income attributable to ATI $ 31.7 $ 565.9 $ 747.1 Denominator: Denominator for basic net income per common share - weighted average shares 97.21 99.13 101.69 Effect of dilutive securities: Option equivalents 0.38 0.45 0.58 Contingently issuable shares 0.54 0.26 0.69 Denominator for diluted net income per common share - adjusted weighted average shares and assumed conversions 98.13 99.84 102.96 Basic net income attributable to ATI per common share $ 0.33 $ 5.71 $ 7.35 Diluted net income attributable to ATI per common share $ 0.32 $ 5.67 $ 7.26 Common stock that would be issuable upon the assumed conversion of the 2014 Convertible Notes and therefore, from the denominator for diluted earnings per share for the year ended December 31, 2009 were 5.7 million. Weighted average shares issuable upon the exercise of stock options which were anti-dilutive, and thus not included in the calculation, were immaterial to all periods presented.

Financial Information for Subsi

Financial Information for Subsidiary and Guarantor Parent
	12 Months Ended Dec. 31, 2009
Notes To Consolidated Financial Statements Abstract
Financial Information for Subsidiary and Guarantor Parent	Note 15. Financial Information for Subsidiary and Guarantor Parent The payment obligations under the $150 million 6.95% debentures due 2025 issued by Allegheny Ludlum Corporation (the Subsidiary) are fully and unconditionally guaranteed by Allegheny Technologies Incorporated (the Guarantor Parent). In accordance with positions established by the Securities and Exchange Commission, the following financial information sets forth separately financial information with respect to the Subsidiary, the non-guarantor subsidiaries and the Guarantor Parent. The principal elimination entries eliminate investments in subsidiaries and certain intercompany balances and transactions. Investments in subsidiaries, which are eliminated in consolidation, are included in other assets on the balance sheets. Allegheny Technologies is the plan sponsor for the U.S. qualified defined benefit pension plan (the Plan) which covers certain current and former employees of the Subsidiary and the non-guarantor subsidiaries. As a result, the balance sheets presented for the Subsidiary and the non-guarantor subsidiaries do not include any Plan assets or liabilities, or the related deferred taxes. The Plan assets, liabilities and related deferred taxes and pension income or expense are recognized by the Guarantor Parent. Management and royalty fees charged to the Subsidiary and to the non-guarantor subsidiaries by the Guarantor Parent have been excluded solely for purposes of this presentation.Cash flows related to intercompany activity between the Guarantor Parent, the Subsidiary, and the non-guarantor subsidiaries are presented as financing activities on the condensed statements of cash flows. Allegheny Technologies Incorporated Financial Information for Subsidiary and Guarantor Parent Balance Sheets December 31, 2009 Guarantor Non-guarantor (In millions) Parent Subsidiary Subsidiaries Eliminations Consolidated Assets: Cash and cash equivalents $ 7.0 $ 472.2 $ 229.6 $ - $ 708.8 Accounts receivable, net 0.2 156.1 235.7 - 392.0 Inventories, net - 159.9 665.6 - 825.5 Prepaid expenses and other current assets 16.3 7.6 47.4 - 71.3 Total current assets 23.5 795.8 1,178.3 - 1,997.6 Property, plant and equipment, net 3.6 429.7 1,474.6 - 1,907.9 Cost in excess of net assets acquired - 112.1 95.7 - 207.8 Deferred income taxes 63.1 - - - 63.1 Investments in subsidiaries and other assets 3,969.0 1,422.5 999.5 (6,221.4) 169.6 Total assets $ 4,059.2 $ 2,760.1 $ 3,748.1 $ (6,221.4) $ 4,346.0 Liabilities and stockholders equity: Accounts payable $ 4.5 $ 135.4 $ 168.7 $ - $ 308.6 Accrued liabilities 1,013.4 54.5 696.6 (1,505.7) 258.8 Deferred income taxes 23.7 - - - 23.7 Short-term debt and current portion of long-term debt - 10.5 23.0 - 33.5 Total current liabilities 1,041.6 200.4 888.3 (1,505.7) 624.6 Long-term debt 870.4 361.3 5.9 (200.0) 1,037.6 Accrued postretirement benefits - 257.6 166.7 - 424.3 Pension liabilities 12.0 5.0 33.6 - 50.6 Other long-term liabilities 45.6 22.6 51.1 - 119.3 To

Commitments and Contingencies

Commitments and Contingencies
	12 Months Ended Dec. 31, 2009
Notes To Consolidated Financial Statements Abstract
Commitments and Contingencies	Note 16. Commitments and Contingencies Rental expense under operating leases was $21.2 million in 2009, $21.0 million in 2008, and $19.1 million in 2007. Future minimum rental commitments under operating leases with non-cancelable terms of more than one year at December 31, 2009, were as follows: $17.4 million in 2010, $14.1 million in 2011, $11.4 million in 2012, $7.5 million in 2013, $3.3 million in 2014 and $17.8 million thereafter. Future minimum payments under capital leases for long-lived assets are $0.2 million in 2010. Commitments for expenditures on property, plant and equipment at December 31, 2009 were approximately $38 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 Companys 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 Companys 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 expects that it will adjust its accruals to reflect new information as appropriate. Future adjustments could have a material adverse effect on the Companys results of operations in a given period, but the Company cannot reliably predict the amounts of such future adjustments.Based on currently available information, the Company does not believe that there is a reasonable possibility that a loss exceeding the amount already accrued for any of the sites with which the Company is currently associated (either individually or in the aggregate) will be an amount that would be material to a decision to buy or sell the Companys securities. Future developments, administrative actions or liabilities relating to environmental matters, however, could have a material adverse effect on the Companys financial condition or results of operations.At December 31, 2009, the Companys reserves for environmental remediation obligations totaled approximately $18 million, of which $8 million was included in other current liabilities. The reserve includes estimated probable future costs of $6 million for federal Superfund and comparable state-managed sites; $6 million for formerly owned or op

Selected Quarterly Financial Da

Selected Quarterly Financial Data
	12 Months Ended Dec. 31, 2009
Notes To Consolidated Financial Statements Abstract
Selected Quarterly Financial Data	Note 17. Selected Quarterly Financial Data (Unaudited) Quarter Ended (In millions except share and per share amounts) March 31 June 30 September 30 December 31 2009 - Sales $ 831.6 $ 710.0 $ 697.6 $ 815.7 Gross Profit 80.7 75.2 94.1 158.4 Net income (loss) attributable to ATI 5.9 (13.4) 1.4 37.8 Basic net income (loss) per common share $ 0.06 $ (0.14) $ 0.01 $ 0.39 Diluted net income (loss) per common share $ 0.06 $ (0.14) $ 0.01 $ 0.36 Average shares outstanding 97,596,689 98,033,663 98,074,186 98,075,587 2008 - Sales $ 1,343.4 $ 1,461.2 $ 1,392.4 $ 1,112.7 Gross Profit 290.6 332.3 306.6 222.4 Net income attributable to ATI 142.0 168.9 144.1 110.9 Basic net income per common share $ 1.41 $ 1.68 $ 1.46 $ 1.16 Diluted net income per common share $ 1.40 $ 1.66 $ 1.45 $ 1.15 Average shares outstanding 101,128,727 101,082,861 99,361,186 96,313,733 The 2009 second quarter includes $17.0 million in after-tax effects related to several proactive liability management actions including the issuance of $350 million of 9.375% 10-year Senior Notes and $402.5 million of 4.25% 5-year Convertible Senior Notes with the stated intent of repurchasing the existing $300 million of 8.375% Notes due in 2011 and improving the funded position of the Companys U.S. defined benefit pension plan. As a result of the tender offer, in June 2009 the Company retired $183.3 million of the outstanding 8.375% Notes which resulted in a charge of $9.2 million pre-tax, or $5.5 million after-tax, being recognized in the 2009 second quarter. In addition, the Company made a $350 million voluntary cash contribution to its domestic pension plan to significantly improve the plans funded position. The second quarter 2009 tax provision included an unfavorable discrete tax charge of $11.5 million, primarily associated with the tax consequences of the $350 million voluntary second quarter 2009 pension contribution. As a result of the $350 million voluntary pension contribution, which was designated to pertain to the 2008 tax year, the company received a U.S. Federal tax refund of $108.5 million in the second quarter 2009.