Exhibit 99.1
Allegheny Technologies Announces Strong Profitable Growth
in Third Quarter 2006
PITTSBURGH--(BUSINESS WIRE)--Oct. 25, 2006--Allegheny Technologies
Incorporated (NYSE:ATI):
- -- Sales increased 50% to $1.29 billion
- -- Net income increased 83% to $161.9 million, or $1.58 per share
- -- Segment operating profit increased 117% to $290.8 million, or 22.6% of
sales:
-- High Performance Metals: 38.0% of sales
-- Flat-Rolled Products: 14.5% of sales
-- Engineered Products: 11.8% of sales
- -- Results include LIFO inventory valuation reserve charge of $54 million and
one-time $4 million tax benefit
- -- Year-to-date gross cost reductions of $96.0 million
- -- Annualized return on capital employed of 35%
- -- Annualized return on stockholders' equity of 53%
- -- Net debt to total capitalization improved to 10.8%
- -- Cash on hand was $406 million
Allegheny Technologies Incorporated (NYSE:ATI) reported net income for the
third quarter 2006 of $161.9 million, or $1.58 per share, on sales of $1.29
billion. Income before tax for the third quarter 2006 was $246.4 million.
In the third quarter 2005, ATI reported net income of $88.3 million, or
$0.87 per share, on sales of $861.7 million. Income before tax in the third
quarter 2005 was $87.0 million.
For the nine months ended September 30, 2006, income before tax was $610.1
million, and net income was $404.8 million, or $3.96 per share, on sales of
$3.54 billion. For the nine months ended September 30, 2005, income before tax
was $245.0 million, and net income was $241.0 million, or $2.40 per share, on
sales of $2.65 billion.
"The velocity of change was apparent in the third quarter as ATI continued
to demonstrate strong profitable growth results and future earnings power," said
L. Patrick Hassey, Chairman, President and Chief Executive Officer. "Most of our
major markets remained strong and total operating margins continued to expand.
"Sales grew by 50% compared to the third quarter 2005 and were 6% higher
than the second quarter 2006. Net income was $161.9 million, or $1.58 per share.
"Segment operating profit reached 22.6% of sales as operational execution
continued to improve. Operating profit in our High Performance Metals segment
was 38% of sales. In our Flat-Rolled Products segment, operating profit improved
to 14.5% of sales. Operating profit in our Engineered Products segment was
nearly 12% of sales. These outstanding results were accomplished notwithstanding
a LIFO inventory valuation reserve charge of $54 million. Volatility in the cost
of certain raw materials, particularly nickel, nickel-bearing scrap, and
titanium alloy scrap, has the potential to drive LIFO charges in the fourth
quarter 2006 to a similar level as in the third quarter.
"Our key growth markets, namely aerospace and defense, chemical process
industry, oil and gas, electrical energy, and medical, remain strong,
representing 63% of ATI's year-to-date 2006 sales. Aerospace and defense was the
largest of our markets at 30% of year-to-date 2006 sales.
"Cash on hand at the end of the third quarter was $406 million. Cash flow
from operations for the first nine months was $179 million even as we invested
$488 million in managed working capital due to significantly higher levels of
sales. As a result of our focus on operational execution and lean manufacturing,
managed working capital improved to 29% of annualized sales, compared to over
30% at year end 2005.
"Our self-funded growth strategy continued on track. Capital investments
for the first nine months of 2006 totaled $160 million, 78% of which were
directed towards increasing our high-value products capabilities.
"Key financial ratios remained very strong. Annualized return on capital
employed was 35%, annualized return on stockholders' equity was 53%, and net
debt to total capitalization improved to less than 11%.
"We remain focused on reducing costs and achieved gross cost reductions of
$33.7 million in the third quarter 2006, bringing year-to-date cost reductions
to $96.0 million. ATI will again exceed its yearly cost reduction goal, which
was originally set at $100 million for 2006.
"In summary, during the third quarter 2006 our major markets remained
strong and total operating margins continued to improve. We are in the process
of securing additional long-term supply agreements for our titanium and
nickel-based superalloy products to profitably grow ATI's participation in the
robust jet engine and airframe markets, and the strong defense and medical
markets.
"Looking ahead, our business remains strong with significant opportunities
for profitable growth. We expect to see continued strong growth opportunities
for our specialty metals from our key markets, namely aerospace and defense,
chemical process industry, oil and gas, electrical energy, and medical. Our
strategic capital investments and strong financial position have ATI
well-positioned to achieve continued profitable growth in 2007 and beyond."
Three Months Ended Nine Months Ended
September 30 September 30
In Millions
--------------------------------------
2006 2005 2006 2005
---------- ------- --------- ---------
Sales $1,288.4 $861.7 $3,539.7 $2,645.5
Net income $161.9 $88.3 $404.8 $241.0
Per Diluted Share
--------------------------------------
Net income $1.58 $0.87 $3.96 $2.40
Third Quarter 2006 Financial Highlights
-- Sales were $1.29 billion, 50% higher than the third quarter 2005.
Compared to the third quarter 2005, sales increased 40% in the High
Performance Metals segment, 66% in the Flat-Rolled Products segment,
and 7% in the Engineered Products segment.
-- Segment operating profit was $290.8 million, an increase of $156.8
million, or 117%, compared to the third quarter 2005, and 15% higher
than the second quarter 2006, as a result of improved performance
across our High Performance Metals and Flat-Rolled Products business
segments. Third quarter 2006 results included a LIFO inventory
valuation reserve charge of $54.0 million, due primarily to higher
nickel, nickel-bearing scrap, and titanium scrap raw material costs.
The LIFO inventory valuation reserve charge was $12.1 million in the
third quarter 2005 and $45.5 million in the second quarter 2006.
-- Net income was $161.9 million, or $1.58 per share, compared to $88.3
million, or $0.87 per share, in the third quarter 2005. Results for
the third quarter 2006 included a provision for income taxes of $84.5
million, or 34.3% of income before tax, which included a $4.2 million
one-time benefit associated with adjustments to prior years' tax
accruals. The third quarter 2005 benefit for income taxes was $1.3
million, principally related to an audit settlement of prior years'
taxes and a benefit from a reduction in the valuation allowance
associated with deferred tax assets.
-- Cash flow from operations for the 2006 first nine months was $179.1
million as improved operating earnings more than offset a further
investment of $488.4 million in managed working capital.
-- Cash on hand was $405.9 million at the end of the third quarter 2006.
-- Gross cost reductions, before the effects of inflation, totaled $96.0
million company-wide for the first nine months of 2006.
High Performance Metals Segment
Market Conditions
-- Demand for our titanium alloys, nickel-based alloys and superalloys,
and vacuum-melted specialty alloys was robust from the aerospace and
defense market and strong from the medical, and oil and gas markets.
Demand was strong for our exotic alloys from the global chemical
process industry, aerospace and defense, and electrical energy
markets.
Third quarter 2006 compared to third quarter 2005
-- Sales increased 40% to $455.0 million. Shipments increased 7% for
titanium and titanium alloys, 9% for nickel-based and specialty
alloys, and 11% for exotic alloys. Average selling prices increased
42% for titanium and titanium alloys and 26% for nickel-based and
specialty alloys, but declined 5% for exotic alloys primarily due to
product mix.
-- Segment operating profit reached $173.0 million, or 38.0% of sales, a
$85.1 million increase compared to the third quarter 2005. The
significant increase in operating profit primarily resulted from
increased shipments, higher selling prices for most products, and the
benefits of gross cost reductions. In addition, raw material cost
inflation and higher inventory levels resulted in a LIFO inventory
valuation reserve charge of $11.6 million in the third quarter 2006,
compared to a $12.9 million charge in the third quarter 2005, and a
$18.5 million charge in the second quarter 2006.
-- Results benefited from $7.2 million of gross cost reductions.
Flat-Rolled Products Segment
Market Conditions
-- Demand was strong for our stainless products from the chemical process
industry, oil and gas, and electrical energy markets and from service
center customers. Demand was also strong for our specialty stainless,
grain-oriented silicon, and nickel-based alloy products from the
chemical process industry, oil and gas, electrical energy, and
aerospace and defense markets.
Third quarter 2006 compared to third quarter 2005
-- Sales were $728.7 million, 66% higher than the third quarter 2005, as
a result of a 42% increase in pounds shipped, higher base-selling
prices for many products and improved product mix. Average transaction
prices, which include surcharges, were 17% higher.
-- Segment operating profit increased to $105.4 million, or 14.5% of
sales, primarily as a result of increased shipments, improved product
mix, higher selling prices, and the benefits of gross cost reductions.
This was accomplished in spite of a significantly higher LIFO
inventory valuation reserve charge due primarily to higher nickel and
nickel-bearing scrap raw material costs. Third quarter 2006 results
included a LIFO inventory valuation reserve charge of $42.2 million,
compared to income of $3.2 million in the third quarter 2005, and a
$27.0 million charge in the second quarter 2006.
-- Results benefited from $24.8 million in gross cost reductions.
Engineered Products Segment
Market Conditions
-- Demand for our tungsten and tungsten carbide products was strong from
the oil and gas, mining, and power generation markets, while demand
was seasonally lower from the automotive market. Demand was strong for
our forged products from the Class 8 truck, construction and mining,
and oil and gas markets. Demand for our cast products was strong from
the wind energy, and oil and gas markets. Demand remained very strong
for our titanium precision metal processing conversion services.
Third quarter 2006 compared to third quarter 2005
-- Sales increased to $104.7 million, 7% higher than the third quarter
2005, due to increased volume and higher selling prices.
-- Segment operating profit was $12.4 million, or 11.8% of sales, which
was comparable to the same period of 2005 as higher raw material costs
offset the benefit of increased sales. Raw material cost inflation
resulted in a LIFO inventory valuation reserve charge of $0.2 million
in the third quarter 2006, compared to a $2.4 million charge in the
third quarter 2005. There was no LIFO inventory reserve valuation
change in the second quarter 2006.
-- Results benefited from $1.7 million of gross cost reductions.
Retirement Benefit Expense
-- Retirement benefit expense was $20.5 million in the third quarter
2006, compared to $19.9 million in the third quarter 2005.
-- For the third quarter 2006, retirement benefit expense included in
cost of sales was $13.9 million and in selling and administrative
expenses was $6.6 million. For the third quarter 2005, the amount of
retirement benefit expense included in cost of sales was $14.1
million, and the amount included in selling and administrative
expenses was $5.8 million.
-- ATI is not required to make cash contributions to its U.S. defined
benefit pension plan for 2006. However in order to improve the plan's
funded position, we are considering making a voluntary cash
contribution to this defined benefit pension plan of approximately
$100 million in the fourth quarter 2006.
Other Expenses
-- Selling and administrative expenses as a percentage of sales declined
to 5.7% in the 2006 third quarter from 7.5% in the same period of
2005.
-- Corporate expenses for the third quarter 2006 were $15.1 million,
compared to $13.8 million in the year-ago period. This increase was
due to expenses associated with annual and long-term performance-based
incentive compensation programs.
-- Third quarter 2006 interest expense, net of interest income, decreased
to $4.3 million from $9.9 million in the year-ago period primarily due
to increased interest income resulting from higher cash balances and
capitalization of interest costs on strategic capital projects,
partially offset by higher interest rates on floating rate debt.
Income Taxes
Results for the third quarter 2006 included a provision for income taxes of
$84.5 million, or 34.3% of income before tax, for U.S. Federal, foreign and
state income taxes. The third quarter 2006 benefited from a favorable $4.2
million adjustment of prior years' taxes. The third quarter 2005 included a tax
benefit of $1.3 million, which principally related to a $4.0 million favorable
adjustment to prior years' taxes resulting from settlement of open audit years,
partially offset by foreign and state income taxes. Prior to the fourth quarter
2005, we maintained a valuation allowance for a major portion of our U.S.
Federal deferred tax assets and certain state deferred tax assets in accordance
with SFAS No. 109, "Accounting for Income Taxes", due to uncertainty regarding
full utilization of our net deferred tax asset, including the 2003 and 2004
unutilized net operating losses. In 2005, we generated taxable income which
exceeded the 2003 and 2004 net operating losses, allowing us to fully realize
these U.S. Federal tax benefits. This realization of tax benefits, together with
our improved profitability, required us to eliminate the remaining valuation
allowance for U.S. Federal income taxes in the fourth quarter 2005 in accordance
with SFAS No. 109.
Cash Flow, Working Capital and Debt
-- Cash on hand was $405.9 million at the end of the third quarter 2006,
an increase of $43.2 million from year end 2005, and a $92.7 million
increase from the second quarter 2006.
-- Cash flow from operations during the 2006 first nine months was $179.1
million as significantly improved operating earnings were partially
offset by a further investment of $488.4 million in managed working
capital and payment of previously accrued litigation costs of $37.5
million.
-- The investment in managed working capital resulted from a $188.7
million increase in accounts receivable, which reflects the
significantly higher level of sales in the third quarter 2006 compared
to the fourth quarter 2005, and a $564.7 million increase in inventory
mostly as a result of increased operating volumes and higher raw
material costs, partially offset by a $265.0 million increase in
accounts payable. Most of the increase in raw material costs is
expected to be recovered through surcharge and index pricing
mechanisms.
-- At September 30, 2006, managed working capital improved to 29.0% of
annualized sales, compared to 30.3% of annualized sales at year-end
2005. We define managed working capital as accounts receivable plus
gross inventories less accounts payable.
-- Cash used in investing activities was $157.9 million in the 2006 first
nine months and consisted primarily of capital expenditures.
-- Cash provided by financing activities was $22.0 million in the 2006
first nine months as $28.2 million of proceeds received from the
exercise of stock options and tax benefits on share-based compensation
of $30.0 million more than offset dividend payments of $30.0 million
and a reduction in borrowings of $6.2 million.
-- Net debt as a percentage of total capitalization improved to 10.8% at
the end of the third quarter 2006, compared to 19.8% at the end of
2005.
-- There were no borrowings outstanding during the 2006 first nine months
or all of 2005 under ATI's $325 million secured domestic borrowing
facility, although a portion of the letters of credit capacity was
utilized during both periods.
Allegheny Technologies will conduct a conference call with investors and
analysts on October 25, 2006, at 1 p.m. ET to discuss the financial results. The
conference call will be broadcast live on www.alleghenytechnologies.com. To
access the broadcast, click on "Conference Call". In addition, the conference
call will be available through the CCBN website, located at www.ccbn.com.
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
materially differ 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,
construction and mining, automotive, electrical energy, chemical process
industry, oil and gas, and other markets; (c) our inability to achieve the level
of cost savings, productivity improvements, synergies, growth or other benefits
anticipated by management, including those anticipated from strategic
investments and the integration of acquired businesses, whether due to
significant increases in energy, raw materials or employee benefits costs, 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,
2005, 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(TM)
Allegheny Technologies Incorporated is one of the largest and most
diversified specialty metals producers in the world with revenues of $4.4
billion during the most recent four quarters ending September 30, 2006. ATI has
approximately 9,300 full-time employees world-wide who use innovative
technologies to offer growing global markets a wide range of specialty metals
solutions. Our major markets are aerospace and defense, chemical process
industry/oil and gas, 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,
stainless and specialty steels, zirconium, hafnium, and niobium, tungsten
materials, grain-oriented silicon electrical steel and tool steels, and forgings
and castings. The Allegheny Technologies website is
www.alleghenytechnologies.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
------------------ -------------------
2006 2005 2006 2005
--------- -------- --------- ---------
Sales $1,288.4 $861.7 $3,539.7 $2,645.5
Costs and expenses:
Cost of sales 963.5 698.8 2,687.0 2,169.6
Selling and administrative
expenses 72.8 64.4 221.1 196.6
--------- -------- --------- ---------
Income before interest, other
income (expense) and income
taxes 252.1 98.5 631.6 279.3
Interest expense, net (4.3) (9.9) (17.6) (30.9)
Other income (expense), net (1.4) (1.6) (3.9) (3.4)
--------- -------- --------- ---------
Income before income tax
provision 246.4 87.0 610.1 245.0
Income tax provision (benefit) 84.5 (1.3) 205.3 4.0
--------- -------- --------- ---------
Net income $161.9 $88.3 $404.8 $241.0
========= ======== ========= =========
Basic net income per common
share $1.62 $0.91 $4.07 $2.51
========= ======== ========= =========
Diluted net income per common
share $1.58 $0.87 $3.96 $2.40
========= ======== ========= =========
Weighted average common shares
outstanding -- basic
(millions) 100.1 96.5 99.5 95.9
Weighted average common shares
outstanding -- diluted
(millions) 102.6 101.4 102.3 100.5
Actual common shares
outstanding-- end of period
(millions) 100.7 97.6 100.7 97.6
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
------------------ -------------------
2006 2005 2006 2005
--------- -------- --------- ---------
Sales:
High Performance Metals $455.0 $324.6 $1,317.3 $888.9
Flat-Rolled Products 728.7 439.0 1,896.7 1,465.7
Engineered Products 104.7 98.1 325.7 290.9
--------- -------- --------- ---------
Total External Sales $1,288.4 $861.7 $3,539.7 $2,645.5
========= ======== ========= =========
Operating Profit:
High Performance Metals $173.0 $87.9 $470.9 $228.0
% of Sales 38.0% 27.1% 35.7% 25.6%
Flat-Rolled Products 105.4 33.4 235.7 126.0
% of Sales 14.5% 7.6% 12.4% 8.6%
Engineered Products 12.4 12.7 45.2 35.7
% of Sales 11.8% 12.9% 13.9% 12.3%
--------- -------- --------- ---------
Operating Profit 290.8 134.0 751.8 389.7
% of Sales 22.6% 15.6% 21.2% 14.7%
Corporate expenses (15.1) (13.8) (47.0) (35.7)
Interest expense, net (4.3) (9.9) (17.6) (30.9)
Other expenses, net of gains on
asset sales (4.5) (3.4) (15.7) (18.0)
Retirement benefit expense (20.5) (19.9) (61.4) (60.1)
--------- -------- --------- ---------
Income before income taxes
$246.4 $87.0 $610.1 $245.0
========= ======== ========= =========
Allegheny Technologies Incorporated and Subsidiaries
Consolidated Balance Sheets
(Current period unaudited--Dollars in millions)
September 30, December 31,
2006 2005
------------- ------------
ASSETS
Current Assets:
Cash and cash equivalents $405.9 $362.7
Accounts receivable, net of allowances for
doubtful accounts of $7.3 and $8.1 at
September 30, 2006 and December 31, 2005,
respectively 631.5 442.1
Inventories, net 1,044.3 607.1
Deferred income taxes 2.1 22.8
Prepaid expenses and other current assets 48.7 49.3
------------- ------------
Total current assets 2,132.5 1,484.0
Property, plant and equipment, net 813.7 704.9
Cost in excess of net assets acquired 206.1 199.7
Deferred income taxes 176.5 155.3
Deferred pension asset 100.6 100.6
Other assets 94.0 87.1
------------- ------------
Total Assets $3,523.4 $2,731.6
============= ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $578.6 $312.9
Accrued liabilities 239.7 216.1
Accrued income taxes 38.7 18.5
Short term debt and current portion of long-
term debt 24.3 13.4
------------- ------------
Total current liabilities 881.3 560.9
Long-term debt 530.5 547.0
Accrued postretirement benefits 457.1 461.5
Pension liabilities 288.0 242.9
Other long-term liabilities 132.1 119.4
------------- ------------
Total liabilities 2,289.0 1,931.7
------------- ------------
Total stockholders' equity 1,234.4 799.9
------------- ------------
Total Liabilities and Stockholders' Equity $3,523.4 $2,731.6
============= ============
Allegheny Technologies Incorporated and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited--Dollars in millions)
Nine Months Ended
September 30
-----------------
2006 2005
--------- -------
Operating Activities:
Net income $404.8 $241.0
Depreciation and amortization 60.4 55.7
Change in pension assets/liabilities 43.8 43.4
Change in managed working capital (488.4) (220.5)
Accrued liabilities and other 158.5 76.0
--------- -------
Cash provided by operating activities 179.1 195.6
--------- -------
Investing Activities:
Purchases of property, plant and equipment (159.7) (41.2)
Asset disposals and other 1.8 (3.3)
Acquisition of business - (18.3)
--------- -------
Cash used in investing activities (157.9) (62.8)
--------- -------
Financing Activities:
Net decrease in debt (6.2) (14.4)
Dividends paid (30.0) (17.4)
Exercises of stock options 28.2 19.9
Tax benefits on share-based compensation 30.0 -
--------- -------
Cash provided by (used in) financing activities 22.0 (11.9)
--------- -------
Increase in cash and cash equivalents 43.2 120.9
Cash and cash equivalents at beginning of period 362.7 250.8
--------- -------
Cash and cash equivalents at end of period $405.9 $371.7
========= =======
Allegheny Technologies Incorporated and Subsidiaries
Selected Financial Data
(Unaudited)
Three Months Ended Nine Months Ended
September 30 September 30
------------------ -------------------
Volume: 2006 2005 2006 2005
--------- -------- ---------- --------
High Performance Metals
(000's lbs.)
Nickel-based and specialty
alloys 10,441 9,621 32,581 29,836
Titanium mill products 6,618 6,169 19,744 18,610
Exotic alloys 1,009 908 3,214 3,090
Flat-Rolled Products (000's
lbs.)
High value 123,784 123,174 382,447 372,642
Commodity 236,902 131,218 670,595 523,560
--------- -------- ---------- --------
Flat-Rolled Products total 360,686 254,392 1,053,042 896,202
Average Prices:
High Performance Metals (per
lb.)
Nickel-based and specialty
alloys $14.81 $11.71 $13.84 $10.91
Titanium mill products $36.09 $25.49 $33.94 $21.20
Exotic alloys $41.26 $43.49 $40.35 $40.70
Flat-Rolled Products (per
lb.)
High value $2.56 $2.18 $2.38 $2.14
Commodity $1.71 $1.27 $1.45 $1.26
Flat-Rolled Products combined
average $2.00 $1.71 $1.79 $1.63
Volume and Average Price data for Flat-Rolled Products includes the
classification of grain-oriented silicon electrical steel and tool steel as
high-value products for all periods presented.
Allegheny Technologies Incorporated and Subsidiaries
Other Financial Information
Managed Working Capital
(Unaudited - Dollars in millions)
September 30, 2006
September 30, December 31, Change in Managed
2006 2005 Working Capital
------------- ------------ ------------------
Accounts receivable $631.5 $442.1
Inventory 1,044.3 607.1
Accounts payable (578.6) (312.9)
------------- ------------
Subtotal 1,097.2 736.3
Allowance for doubtful
accounts 7.3 8.1
LIFO reserve 376.1 269.7
Corporate and other 55.8 33.9
------------- ------------
Managed working capital $1,536.4 $1,048.0 $488.4
============= ============ ==================
Annualized prior 2 months
sales $5,295.0 $3,461.1
============= ============
Managed working capital
as a % of annualized
sales 29.0% 30.3%
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
Net Debt to Capital
(Unaudited - Dollars in millions)
September 30, December 31,
2006 2005
------------- ------------
Total debt $554.8 $560.4
Less: Cash (405.9) (362.7)
------------- ------------
Net debt $148.9 $197.7
Net debt $148.9 $197.7
Stockholders' equity 1,234.4 799.9
------------- ------------
Total capital $1,383.3 $997.6
Net debt to capital ratio 10.8% 19.8%
============= ============
In managing the overall capital structure of the Company, one of the
measures on which we focus is net debt to total capitalization, which is the
percentage of debt to the total invested and borrowed capital of the Company. In
determining this measure, debt and total capitalization are net of cash on hand
which may be available to reduce borrowings.
CONTACT: Allegheny Technologies Incorporated
Dan L. Greenfield, 412-394-3004