Document and Entity Information
Document and Entity Information (USD $) | |||
3 Months Ended
Mar. 31, 2010 | Apr. 30, 2010
| Jun. 30, 2009
| |
Document And Entity Information Abstract | |||
Document Type | 10-Q | ||
Document Period End Date | 2010-03-31 | ||
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 | 98,550,032 | ||
Document Fiscal Year Focus | 2,010 | ||
Document Fiscal Period Focus | Q1 | ||
Entity Public Float | $3,390,000,000 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | ||
In Millions | Mar. 31, 2010
| Dec. 31, 2009
|
Current Assets: | ||
Cash and cash equivalents | 563.5 | 708.8 |
Accounts receivable, net of allowances for doubtful accounts of $6.4 and $6.5 at March 31, 2010 and December 31, 2009, respectively | 472.6 | 392 |
Inventories, net | 971.1 | 825.5 |
Prepaid expenses and other current assets | 83.1 | 71.3 |
Total Current Assets | 2090.3 | 1997.6 |
Property, plant and equipment, net | 1921.3 | 1907.9 |
Cost in excess of net assets acquired | 203.9 | 207.8 |
Deferred income taxes | 11.8 | 63.1 |
Other assets | 175.7 | 169.6 |
Total Assets | 4,403 | 4,346 |
Current Liabilities: | ||
Accounts payable | 396.7 | 308.6 |
Accrued liabilities | 254.3 | 258.8 |
Deferred income taxes | 8.9 | 23.7 |
Short term debt and current portion of long-term debt | 32.1 | 33.5 |
Total Current Liabilities | 692 | 624.6 |
Long-term debt | 1032.3 | 1037.6 |
Accrued postretirement benefits | 415.9 | 424.3 |
Pension liabilities | 43.8 | 50.6 |
Other long-term liabilities | 120.5 | 119.3 |
Total Liabilities | 2304.5 | 2256.4 |
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 March 31, 2010 and December 31, 2009; outstanding- 98,550,032 shares at March 31, 2010 and 98,070,474 shares at December 31, 2009 | 10.2 | 10.2 |
Additional paid-in capital | 640.7 | 653.6 |
Retained earnings | 2227.2 | 2230.5 |
Treasury stock: 3,854,224 shares at March 31, 2010 and 4,333,782 shares at December 31, 2009 | 185.2 | 208.6 |
Accumulated other comprehensive loss, net of tax | -673.4 | -673.5 |
Total ATI stockholders' equity | 2019.5 | 2012.2 |
Noncontrolling interests | ||
Noncontrolling interests | 79 | 77.4 |
Total Stockholders' Equity | 2098.5 | 2089.6 |
Total Liabilities and Equity | $4,403 | $4,346 |
1_CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | ||
In Millions, except Share data | Mar. 31, 2010
| Dec. 31, 2009
|
Consolidated Balance Sheets | ||
Allowances for Doubtful Accounts | 6.4 | 6.5 |
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 | 98,550,032 | 98,070,474 |
Treasury Stock | 3,854,224 | 4,333,782 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | ||
In Millions | 3 Months Ended
Mar. 31, 2010 | 3 Months Ended
Mar. 31, 2009 |
CONSOLIDATED STATEMENTS OF OPERATIONS | ||
Sales | 899.4 | 831.6 |
Costs and expenses: | ||
Cost of sales | 778 | 750.9 |
Selling and administrative expenses | 74.2 | 80.8 |
Income (loss) before interest, other income and income taxes | 47.2 | -0.1 |
Interest expense, net | 14.6 | -0.1 |
Other income, net | 0.4 | 0.3 |
Income before income tax provision (benefit) | 33 | 0.3 |
Income tax provision (benefit) | 13.2 | (5) |
Net income (loss) | 19.8 | 5.3 |
Less: Net income (loss) attributable to noncontrolling interests | 1.6 | -0.6 |
Net income (loss) attributable to ATI | 18.2 | 5.9 |
Basic net income (loss) attributable to ATI per common share | 0.19 | 0.06 |
Diluted net income (loss) attributable to ATI per common share | 0.18 | 0.06 |
Dividends declared per common share | 0.18 | 0.18 |
CONSOLIDATED STATEMENT OF CASH
CONSOLIDATED STATEMENT OF CASH FLOWS (USD $) | ||
In Millions | 3 Months Ended
Mar. 31, 2010 | 3 Months Ended
Mar. 31, 2009 |
Operating Activities: | ||
Net income (loss) | 19.8 | 5.3 |
Depreciation and amortization | 34.6 | 32.3 |
Deferred taxes | 24.8 | -38.5 |
Inventories | -145.6 | 141.3 |
Accounts receivable | -80.5 | 81.7 |
Accounts payable | 88.1 | -45.9 |
Retirement benefits | 5.6 | 29.5 |
Accrued income taxes | 2 | -5.9 |
Accrued liabilities and other | -20.8 | -30.9 |
Cash provided by (used in) operating activities | (72) | 168.9 |
Investing Activities: | ||
Purchases of property, plant and equipment | -51.2 | -108.6 |
Asset disposals and other | 0.6 | -0.6 |
Cash provided by (used in) investing activities | -50.6 | -109.2 |
Financing Activities: | ||
Payments on long-term debt and capital leases | -5.2 | -5.2 |
Net borrowings under credit facilities | (1) | -0.4 |
Dividends paid to shareholders | -17.7 | -17.6 |
Shares repurchased for income tax withholding on share-based compensation | -0.7 | -0.7 |
Exercises of stock options | 0.8 | 0 |
Taxes on share-based compensation | -1.1 | -0.3 |
Cash provided by (used in) financing activities | -22.7 | -23.6 |
Increase (decrease) in cash and cash equivalents | ||
Increase (decrease) in cash and cash equivalents | -145.3 | 36.1 |
Cash and cash equivalents at beginning of period | 708.8 | 469.9 |
Cash and cash equivalents at end of period | 563.5 | $506 |
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)
| Non-controlling Interests
| Total
|
Total Stockholders' Equity at Dec. 31, 2008 | 10.2 | 651.8 | 2286.7 | -244.8 | -746.5 | 71.6 | $2,029 | |
Net income (loss) | 5.9 | 5.9 | -0.6 | 5.3 | ||||
Other comprehensive income (loss) net of tax: | ||||||||
Pension plans and other postretirment benefits | 0.2 | 0.2 | 0.2 | |||||
Foreign currency translation gains (losses) | (6) | (6) | 0.3 | -5.7 | ||||
Unrealized gains (losses) on derivatives | 5.1 | 5.1 | 5.1 | |||||
Comprehensive income (loss) | 5.9 | -0.7 | 5.2 | -0.3 | 4.9 | |||
Cash dividends on common stock | -17.6 | -17.6 | ||||||
Employee Stock Plans | -12.4 | -14.7 | 33.1 | 6 | ||||
Total Stockholders' Equity at Mar. 31, 2009 | 10.2 | 639.4 | 2260.3 | -211.7 | -747.2 | 71.3 | 2022.3 | |
Total Stockholders' Equity at Dec. 31, 2009 | 10.2 | 653.6 | 2230.5 | -208.6 | -673.5 | 77.4 | 2089.6 | |
Net income (loss) | 18.2 | 18.2 | 1.6 | 19.8 | ||||
Other comprehensive income (loss) net of tax: | ||||||||
Pension plans and other postretirment benefits | 13.1 | 13.1 | 13.1 | |||||
Foreign currency translation gains (losses) | (20) | (20) | (20) | |||||
Unrealized gains (losses) on derivatives | 7 | 7 | 7 | |||||
Comprehensive income (loss) | 18.2 | 0.1 | 18.3 | 1.6 | 19.9 | |||
Cash dividends on common stock | -17.7 | -17.7 | ||||||
Employee Stock Plans | -12.9 | -3.8 | 23.4 | 6.7 | ||||
Total Stockholders' Equity at Mar. 31, 2010 | 10.2 | 640.7 | 2227.2 | -185.2 | -673.4 | $79 | 2098.5 |
2_STATEMENTS OF CHANGES IN CONS
STATEMENTS OF CHANGES IN CONSOLIDATED STOCKHOLDERS EQUITY | ||
3 Months Ended
Mar. 31, 2010 | 3 Months Ended
Mar. 31, 2009 | |
STATEMENTS OF CHANGES IN CONSOLIDATED EQUITY | ||
Cash dividends on common stock per share | 0.18 | 0.18 |
Accounting Policies
Accounting Policies | |
3 Months Ended
Mar. 31, 2010 | |
Significant Accounting Policies Abstract | |
Accounting Policies | Note 1. Accounting Policies The interim consolidated financial statements include the accounts of Allegheny Technologies Incorporated and its subsidiaries. Unless the context requires otherwise, "Allegheny Technologies", "ATI" and "the Company" refer to Allegheny Technologies Incorporated and its subsidiaries. These unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Article10 of Regulation S-X. Accordingly, they do not include all of the information and note disclosures required by U.S. generally accepted accounting principles for complete financial statements. In management's opinion, all adjustments (which include only normal recurring adjustments) considered necessary for a fair presentation have been included. These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's 2009 Annual Report on Form 10-K. The results of operations for these interim periods are not necessarily indicative of the operating results for any future period. The December 31, 2009 financial information has been derived from the Company's audited financial statements. New Accounting Pronouncements Adopted In January 2010, the FASB issued changes to disclosure requirements for fair value measurements, including the amount of transfers between Level 1 and 2 of the fair value hierarchy, the reasons for transfers in or out of Level 3 of the fair value hierarchy and activity for recurring Level 3 measures. In addition, the changes clarify certain disclosure requirements related to the level at which fair value disclosures should be disaggregated with separate disclosures of purchases, sales, issuances and settlements, and the requirement to provide disclosures about valuation techniques and inputs used in determining the fair value of assets or liabilities classified as Levels 2 or 3. The Company adopted the disclosure changes effective January 1, 2010, except for the disaggregated Level 3 rollforward disclosures, which will be effective for fiscal year 2011. |
Inventories
Inventories | |
3 Months Ended
Mar. 31, 2010 | |
Inventory Disclosure Abstract | |
Inventories | Note 2. Inventories Inventories at March 31, 2010 and December 31, 2009 were as follows (in millions): March 31, December 31, 2010 2009 Raw materials and supplies $ 184.4 $ 158.3 Work-in-process 799.5 673.9 Finished goods 91.5 96.1 Total inventories at current cost 1,075.4 928.3 Less allowances to reduce current cost values to LIFO basis (102.9) (102.8) Progress payments (1.4) - Total inventories, net $ 971.1 $ 825.5 Inventories 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. Most of the Company's inventory is valued utilizing the LIFO costing methodology. Inventory of the Company's non-U.S. operations is valued using average cost or FIFO methods. The effect of using the LIFO methodology to value inventory, rather than FIFO, had no effect for the first three months of 2010 compared to a decrease to cost of sales of $27.5 million for the first three months of 2009. |
Property Plant And Equipment
Property Plant And Equipment | |
3 Months Ended
Mar. 31, 2010 | |
Property Plant And Equipment Disclosure Abstract | |
Property Plant and Equipment | Note 3. Property, Plant and Equipment Property, plant and equipment at March 31, 2010 and December 31, 2009 was as follows (in millions): March 31, December 31, 2010 2009 Land $ 24.5 $ 24.8 Buildings 607.7 590.6 Equipment and leasehold improvements 2,625.1 2,607.8 3,257.3 3,223.2 Accumulated depreciation and amortization (1,336.0) (1,315.3) Total property, plant and equipment, net $ 1,921.3 $ 1,907.9 |
Debt
Debt | |
3 Months Ended
Mar. 31, 2010 | |
Debt Disclosure Abstract | |
Debt | Note 4. Debt Debt at March 31, 2010 and December 31, 2009 was as follows (in millions): March 31, December 31, 2010 2009 Allegheny Technologies 4.25% Convertible Notes due 2014 $ 402.5 $ 402.5 Allegheny Technologies 9.375% Notes due 2019 350.0 350.0 Allegheny Technologies 8.375% Notes due 2011, net (a) 117.8 117.9 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 15.4 20.5 Foreign credit agreements 20.7 22.1 Industrial revenue bonds, due through 2020, and other 8.0 8.1 Total short-term and long-term debt 1,064.4 1,071.1 Short-term debt and current portion of long-term debt (32.1) (33.5) Total long-term debt $ 1,032.3 $ 1,037.6 Includes fair value adjustments for settled interest rate swap contracts of $1.6 million at March 31, 2010 and $1.8 million at December 31, 2009. The Company did not borrow funds under its $400million senior unsecured domestic credit facility during the first three months of 2010, although approximately $10million has been utilized to support the issuance of letters of credit. The unsecured facility requires the Company to maintain a leverage ratio (consolidated total indebtedness net of cash on hand in excess of $50 million, divided by consolidated earnings before interest, taxes, depreciation and amortization, and non-cash pension expense) of not greater than 3.25, and maintain an interest coverage ratio (consolidated earnings before interest, taxes, and non-cash pension expense divided by interest expense) of not less than 2.0. For the twelve months ended March31, 2010, the leverage ratio was 1.70, and the interest coverage ratio was 5.59. The Company has an additional separate credit facility for the issuance of letters of credit. As of March 31, 2010, $30 million in letters of credit was outstanding under this facility. In addition, STAL, the Company's Chinese joint venture company in which ATI has a 60% interest, has a 205 million renminbi (approximately $30 million at March 31, 2010 exchange rates) revolving credit facility with a group of banks. This credit facility is supported solely by STAL's financial capability without any guarantees from the joint venture partners. As of March 31, 2010, there were no borrowings under this credit facility, although STAL had approximately $2 million in letters of credit outstanding. |
Derivative Financial Instrument
Derivative Financial Instruments and Hedging | |
3 Months Ended
Mar. 31, 2010 | |
Derivative Instruments And Hedging Activities Disclosure Abstract | |
Derivative Financial Instruments and Hedging | Note 5. Derivative Financial Instruments and Hedging As part of its risk management strategy, the Company, from time-to-time, utilizes derivative financial instruments to manage its exposure to changes in raw material prices, energy costs, foreign currencies, and interest rates. In accordance with applicable accounting standards, the Company accounts for most of these contracts as hedges. 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 income. The Company sometimes uses futures and swap contracts to manage exposure to changes in prices for forecasted purchases of raw materials, such as nickel, and natural gas. Under these contracts, which are generally accounted for as cash flow hedges, the price of the item being hedged is fixed at the time that the contract is entered into and the Company is obligated to make or receive a payment equal to the net change between this fixed price and the market price at the date the contract matures. The majority of ATI's products are sold utilizing raw material surcharges and index mechanisms. However, as of March 31, 2010, the Company had entered into financial hedging arrangements primarily at the request of its customers, related to firm orders, for approximately 6% of the Company's total annual nickel requirements in 2010. A minor amount of nickel hedges extend into 2014. At March 31, 2010, the outstanding financial derivatives used to hedge the Company's exposure to energy cost volatility included natural gas cost hedges for approximately 50% of its annual forecasted domestic requirements through 2011 and approximately 15% for 2012, and electricity hedges for Western Pennsylvania operations of approximately 35% of its forecasted on-peak and off-peak requirements for 2011 and approximately 20% for 2012. While the majority of the Company's direct export sales are transacted in U.S. dollars, foreign currency exchange contracts are used, from time-to-time, to limit transactional exposure to changes in currency exchange rates for those transactions denominated in a non-U.S. currency. The Company sometimes purchases foreign currency forward contracts that permit it to sell specified amounts of foreign currencies expected to be received from its export sales for pre-established U.S. dollar amounts at specified dates. 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. The Company may also enter into foreign currency forward contracts that are not designated a |
Fair Value Of Financial Instrum
Fair Value Of Financial Instruments | |
3 Months Ended
Mar. 31, 2010 | |
Fair Value Disclosures Abstract | |
Fair Value Of Financial Instruments | Note 6. Fair Value of Financial Instruments The estimated fair value of financial instruments at March 31, 2010 and December 31, 2009 was as follows: (In millions) March 31, 2010 December 31, 2009 Carrying Estimated Carrying Estimated Amount Fair Value Amount Fair Value Cash and cash equivalents $ 563.5 $ 563.5 $ 708.8 $ 708.8 Derivative financial instruments: Assets 46.3 46.3 23.4 23.4 Liabilities 25.4 25.4 17.7 17.7 Debt: Allegheny Technologies 4.25% Convertible Notes due 2014 402.5 594.9 402.5 561.5 Allegheny Technologies 9.375% Notes due 2019 350.0 411.7 350.0 404.6 Allegheny Technologies 8.375% Notes due 2011, net (a) 117.8 123.6 117.9 129.3 Allegheny Ludlum 6.95% debentures due 2025 150.0 143.2 150.0 139.4 Promissory note for JL asset acquisition 15.4 15.4 20.5 20.5 Foreign credit agreements 20.7 20.7 22.1 22.1 Industrial revenue bonds, due through 2020 and other 8.0 8.0 8.1 8.1 (a)Includes fair value adjustments for settled interest rate swap contracts of $1.6 million at March 31, 2010, and $1.8 million at December 31, 2009. 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 Company's credit risk. Short-term and long-term debt: The fair values of the Allegheny Technologies 4.25% Convertible Notes, the Allegheny Tec |
Pension Plans and Other Postret
Pension Plans and Other Postretirement Benefits | |
3 Months Ended
Mar. 31, 2010 | |
Pension And Other Postretirement Benefits Disclosure Abstract | |
Pension Plans and Other Postretirement Benefits | Note 7. Pension Plans and Other Postretirement Benefits The 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. For the three month periods ended March 31, 2010 and 2009, the components of pension (income) expense and components of other postretirement benefit expense for the Company's defined benefit plans included the following (in millions): Three Months Ended March 31, 2010 2009 Pension Benefits: Service cost - benefits earned during the year $ 7.6 $ 6.1 Interest cost on benefits earned in prior years 33.0 34.4 Expected return on plan assets (45.4) (34.7) Amortization of prior service cost 3.4 4.1 Amortization of net actuarial loss 19.3 21.6 Total pension expense $ 17.9 $ 31.5 Three Months Ended March 31, 2010 2009 Other Postretirement Benefits: Service cost - benefits earned during the year $ 0.8 $ 0.7 Interest cost on benefits earned in prior years 7.2 8.2 Expected return on plan assets (0.4) (0.4) Amortization of prior service credit (4.5) (4.8) Amortization of net actuarial loss 1.5 1.6 Total other postretirement benefit expense $ 4.6 $ 5.3 Total retirement benefit expense defined benefit plans $ 22.5 $ 36.8 Other postretirement benefit costs for a defined contribution plan were $0.5 million for the three months ended March 31, 2009. |
Income Taxes
Income Taxes | |
3 Months Ended
Mar. 31, 2010 | |
Income Tax Disclosure Abstract | |
Income Taxes | Note 8. Income Taxes Results for the first quarter 2010 included a provision for income taxes of $13.2 million, or 40% of income before tax, compared to an income tax benefit of $5.0 million for the comparable 2009 period. The first quarter 2010 included a non-recurring tax charge of $5.3 million associated with the impact of the recently-enacted Patient Protection and Affordable Care Act. This 2010 first quarter tax charge was partially offset by discrete net tax benefits of $3.7 million associated with adjustment of taxes paid in prior years, the settlement of uncertain income tax positions, and other changes. As a result of the settlements of uncertain income tax positions, the liability for unrecognized income tax benefits was reduced by $15.9 million, including $4.2 million related to interest and penalties, and deferred taxes increased $11.7 million. The 2009 first quarter benefited from a lower income tax provision due primarily to $5.1 million of discrete adjustments associated with prior years' taxes. |
Business Segments
Business Segments | |
3 Months Ended
Mar. 31, 2010 | |
Segment Reporting Disclosure Abstract | |
Business Segments | Note 9. Business Segments Following is certain financial information with respect to the Company's business segments for the periods indicated (in millions): Three Months Ended March 31, 2010 2009 Total sales: High Performance Metals $ 315.7 $ 407.0 Flat-Rolled Products 520.9 387.0 Engineered Products 89.9 75.6 926.5 869.6 Intersegment sales: High Performance Metals 13.4 19.1 Flat-Rolled Products 4.3 8.8 Engineered Products 9.4 10.1 27.1 38.0 Sales to external customers: High Performance Metals 302.3 387.9 Flat-Rolled Products 516.6 378.2 Engineered Products 80.5 65.5 $ 899.4 $ 831.6 Operating Profit (Loss): High Performance Metals $ 55.0 $ 54.3 Flat-Rolled Products 31.4 7.7 Engineered Products 1.8 (6.1) Total operating profit 88.2 55.9 Corporate expenses (12.3) (14.4) Interest (expense) income, net (14.6) 0.1 Other expense, net of gains on asset sales (5.8) (4.0) Retirement benefit expense (22.5) (37.3) Income before income taxes $ 33.0 $ 0.3 Retirement benefit expense represents defined benefit plan pension expense, and other postretirement benefit expense for both defined benefit and defined contribution plans. Operating profit with respect to the Company's business segments excludes any retirement benefit expense. Corporate expenses for the three months ended March 31, 2010 were $12.3 million, compared to $14.4 million for the three months ended March 31, 2009. This decrease is due primarily to lower expenses associated with long-term performance-based incentive compensation programs. Other expense, net of gains on asset sales, primarily includes charges incurred in connection with closed operations and other non-operating income or expense. These items are presented primarily in selling and administrative expenses and in other expense in the statement of operations. These items resulted in net charges of $5.8 million for the three months ended March 31, 2010 and $4.0 million for the three months ended March 31, 2009. This increase was primarily related to greater expenses at closed operations and foreign currency losses. |
Per Share Information
Per Share Information | |
3 Months Ended
Mar. 31, 2010 | |
Earnings Per Share Disclosures Abstract | |
Per Share Information | Note 10. 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): Three Months Ended March 31, 2010 2009 Numerator for basic and diluted net income per common share - net income attributable to ATI $ 18.2 $ 5.9 Denominator: Denominator for basic net income per common share-weighted average shares 97.4 97.2 Effect of dilutive securities: Share-based compensation 1.3 0.6 Denominator for diluted net income per common share adjusted weighted average shares and assumed conversions 98.7 97.8 Basic net income attributable to ATI per common share $ 0.19 $ 0.06 Diluted net income attributable to ATI per common share $ 0.18 $ 0.06 Common stock that would be issuable upon the assumed conversion of the 2014 Convertible Notes and other option equivalents and contingently issuable shares were excluded from the computation of contingently issuable shares, and therefore, from the denominator for diluted earnings per share for the three months ended March 31, 2010, if the effect of inclusion would have been anti-dilutive. Excluded shares for the three months ended March 31, 2010 were 9.6 million. |
Financial Information for Subsi
Financial Information for Subsidiary and Guarantor Parent | |
3 Months Ended
Mar. 31, 2010 | |
Schedule Of Condensed Financial Statements Disclosure Abstract | |
Financial Information for Subsidiary and Guarantor Parent | Note 11. 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 March 31, 2010 Guarantor Non-guarantor (In millions) Parent Subsidiary Subsidiaries Eliminations Consolidated Assets: Cash and cash equivalents $ 5.6 $ 317.6 $ 240.3 $ - $ 563.5 Accounts receivable, net 0.4 217.7 254.5 - 472.6 Inventories, net - 280.4 690.7 - 971.1 Prepaid expenses and other current assets 14.9 11.6 56.6 - 83.1 Total current assets 20.9 827.3 1,242.1 - 2,090.3 Property, plant and equipment, net 3.4 432.1 1,485.8 - 1,921.3 Cost in excess of net assets acquired - 112.1 91.8 - 203.9 Deferred income taxes 11.8 - - - 11.8 Investments in subsidiaries and other assets 3,941.5 1,474.6 1,007.7 (6,248.1) 175.7 Total assets $ 3,977.6 $ 2,846.1 $ 3,827.4 $ (6,248.1) $ 4,403.0 Liabilities and stockholders equity: Accounts payable $ 2.8 $ 224.7 $ 169.2 $ - $ 396.7 Accrued liabilities 955.4 61.3 712.7 (1,475.1) 254.3 Deferred income taxes 8.9 - - - 8.9 Short-term debt and current portion of long-term debt - 10.5 21.6 - 32.1 Total current liabilities 967.1 296.5 903.5 (1,475.1) 692.0 Long-term debt 870.3 356.1 5.9 (200.0) 1,032.3 Accrued postretirement benefits - 249.6 166.3 - 415.9 Pension liabili |
Commitments and Contingencies
Commitments and Contingencies | |
3 Months Ended
Mar. 31, 2010 | |
Commitments And Contingencies Disclosure Abstract | |
Commitments and Contingencies | Note 12. Commitments and Contingencies The Company is subject to various domestic and international environmental laws and regulations that govern the discharge of pollutants and disposal of wastes, and which may require that it investigate and remediate the effects of the release or disposal of materials at sites associated with past and present operations. The Company could incur substantial cleanup costs, fines, and civil or criminal sanctions, third party property damage or personal injury claims as a result of violations or liabilities under these laws or noncompliance with environmental permits required at its facilities. The Company is currently involved in the investigation and remediation of a number of its current and former sites, as well as third party sites. Environmental liabilities are recorded when the Company's liability is probable and the costs are reasonably estimable. In many cases, however, the Company is not able to determine whether it is liable or, if liability is probable, to reasonably estimate the loss or range of loss. Estimates of the Company's liability remain subject to additional uncertainties, including the nature and extent of site contamination, available remediation alternatives, the extent of corrective actions that may be required, and the number, participation, and financial condition of other potentially responsible parties ("PRPs"). The Company expects that it will adjust its accruals to reflect new information as appropriate. Future adjustments could have a material adverse effect on the Company's 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 Company's securities. Future developments, administrative actions or liabilities relating to environmental matters, however, could have a material adverse effect on the Company's financial condition or results of operations. At March 31, 2010, the Company's reserves for environmental remediation obligations totaled approximately $18 million, of which $7 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; $7 million for formerly owned or operated sites for which the Company has remediation or indemnification obligations; $3 million for owned or controlled sites at which Company operations have been discontinued; and $2 million for sites utilized by the Company in its ongoing operations. The Company continues to evaluate whether it may be able to recover a portion of future costs for environmental liabilities from third parties. The timing of expenditures depends on a number of factors that vary by site. The Company expects that it will expend present accruals over many years and that remediation of all sites with which |