Financial Information for Subsidiary and Guarantor Parent

The payment obligations under the $150.0 million 6.95% Debentures due 2025 issued by Allegheny Ludlum, LLC (formerly known as Allegheny Ludlum Corporation) (the “Subsidiary”) are fully and unconditionally guaranteed by ATI (the “Guarantor Parent”). In accordance with positions established by the U.S. 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.

ATI is the plan sponsor for the ATI Pension Plan, the U.S. qualified defined benefit pension 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 ATI Pension Plan assets or liabilities, or the related deferred taxes. The ATI Pension 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.

Allegheny Technologies Incorporated

Financial Information for Subsidiary and Guarantor Parent

Balance Sheets

December 31, 2017



(In millions)	Guarantor Parent		Subsidiary			Non-guarantor Subsidiaries		Eliminations			Consolidated
Assets:
Cash and cash equivalents	$	2.1	$	13.5		$	126.0	$	—		$	141.6
Accounts receivable, net	0.2		141.6			403.5		—			545.3
Intercompany notes receivable	—		—			3,505.6		(3,505.6		)	—
Inventories, net	—		207.9			968.2		—			1,176.1
Prepaid expenses and other current assets	6.6		4.5			41.6		—			52.7
Total current assets	8.9		367.5			5,044.9		(3,505.6		)	1,915.7
Property, plant and equipment, net	0.9		1,581.6			913.2		—			2,495.7
Goodwill	—		—			531.4		—			531.4
Intercompany notes receivable	—		—			200.0		(200.0		)	—
Investments in subsidiaries	5,645.6		37.7			—		(5,683.3		)	—
Other assets	25.4		18.0			199.2		—			242.6
Total assets	$	5,680.8	$	2,004.8		$	6,888.7	$	(9,388.9	)	$	5,185.4
Liabilities and stockholders’ equity:
Accounts payable	$	3.0	$	180.3		$	236.8	$	—		$	420.1
Accrued liabilities	54.1		88.5			139.8		—			282.4
Intercompany notes payable	1,836.5		1,669.1			—		(3,505.6		)	—
Short-term debt and current portion of long-term debt	0.3		0.6			9.2		—			10.1
Total current liabilities	1,893.9		1,938.5			385.8		(3,505.6		)	712.6
Long-term debt	1,275.7		150.7			104.2		—			1,530.6
Intercompany notes payable	—		200.0			—		(200.0		)	—
Accrued postretirement benefits	—		250.2			67.6		—			317.8
Pension liabilities	644.3		4.4			48.3		—			697.0
Deferred income taxes	9.7		—			—		—			9.7
Other long-term liabilities	12.7		17.2			43.3		—			73.2
Total liabilities	3,836.3		2,561.0			649.2		(3,705.6		)	3,340.9
Total stockholders’ equity (deficit)	1,844.5		(556.2		)	6,239.5		(5,683.3		)	1,844.5
Total liabilities and stockholders’ equity	$	5,680.8	$	2,004.8		$	6,888.7	$	(9,388.9	)	$	5,185.4

Allegheny Technologies Incorporated

Financial Information for Subsidiary and Guarantor Parent

Statements of Operations

For the year ended December 31, 2017



(In millions)	Guarantor Parent			Subsidiary			Non-guarantor Subsidiaries		Eliminations			Consolidated
Sales	$	—		$	1,178.9		$	2,346.2	$	—		$	3,525.1
Cost of sales	42.4			1,103.5			1,930.2		—			3,076.1
Gross profit (loss)	(42.4		)	75.4			416.0		—			449.0
Selling and administrative expenses	91.0			37.6			125.7		—			254.3
Impairment of goodwill	—			—			114.4		—			114.4
Operating income (loss)	(133.4		)	37.8			175.9		—			80.3
Interest income (expense), net	(155.8		)	(90.0		)	112.0		—			(133.8		)
Debt extinguishment charge	(37.0		)	—			—		—			(37.0		)
Other income (expense) including equity in income of unconsolidated subsidiaries	239.7			1.6			2.4		(239.7		)	4.0
Income (loss) before income taxes	(86.5		)	(50.6		)	290.3		(239.7		)	(86.5		)
Income tax provision (benefit)	(6.8		)	(16.6		)	131.4		(114.8		)	(6.8		)
Net income (loss)	(79.7		)	(34.0		)	158.9		(124.9		)	(79.7		)
Less: Net income attributable to noncontrolling interest	—			—			12.2		—			12.2
Net income (loss) attributable to ATI	$	(79.7	)	$	(34.0	)	$	146.7	$	(124.9	)	$	(91.9	)

Allegheny Technologies Incorporated

Financial Information for Subsidiary and Guarantor Parent

Statements of Comprehensive Income (Loss)

For the year ended December 31, 2017



(In millions)	Guarantor Parent			Subsidiary			Non-guarantor Subsidiaries			Eliminations			Consolidated
Net income (loss)	$	(79.7	)	$	(34.0	)	$	158.9		$	(124.9	)	$	(79.7	)
Other comprehensive income (loss)
Currency translation adjustment arising during the period	39.1			—			39.1			(39.1		)	39.1
Net derivative gain on hedge transactions	7.1			—			—			—			7.1
Pension and postretirement benefits	27.3			(5.8		)	(10.7		)	16.5			27.3
Other comprehensive income (loss), net of tax	73.5			(5.8		)	28.4			(22.6		)	73.5
Comprehensive income (loss)	(6.2		)	(39.8		)	187.3			(147.5		)	(6.2		)
Less: Comprehensive income attributable to noncontrolling interest	—			—			19.8			—			19.8
Comprehensive income (loss) attributable to ATI	$	(6.2	)	$	(39.8	)	$	167.5		$	(147.5	)	$	(26.0	)

Condensed Statements of Cash Flows

For the year ended December 31, 2017



(In millions)	Guarantor Parent			Subsidiary			Non-guarantor Subsidiaries			Eliminations			Consolidated
Cash flows provided by (used in) operating activities	$	(78.8	)	$	(101.5	)	$	214.7		$	(12.0	)	$	22.4
Investing Activities:
Purchases of property, plant and equipment	(0.9		)	(38.5		)	(83.3		)	—			(122.7		)
Net receipts (payments) on intercompany activity	—			—			(223.9		)	223.9			—
Asset disposals and other	—			0.1			3.0			—			3.1
Cash flows provided by (used in) investing activities	(0.9		)	(38.4		)	(304.2		)	223.9			(119.6		)
Financing Activities:
Borrowings on long-term debt	—			—			8.5			—			8.5
Payments on long-term debt and capital leases	(350.4		)	(0.3		)	(2.3		)	—			(353.0		)
Net borrowings under credit facilities	—			—			1.6			—			1.6
Debt issuance costs	—			—			(0.8		)	—			(0.8		)
Debt extinguishment charge	(35.8		)	—			—			—			(35.8		)
Net receipts (payments) on intercompany activity	72.7			151.2			—			(223.9		)	—
Issuance of common stock	397.8			—			—			—			397.8
Dividends paid to stockholders	—			—			(12.0		)	12.0			—
Dividends paid to noncontrolling interests	—			—			(8.0		)	—			(8.0		)
Sale to noncontrolling interests	—			—			3.7			—			3.7
Shares repurchased for income tax withholding on share-based compensation and other	(4.8		)	—			—			—			(4.8		)
Cash flows provided by (used in) financing activities	79.5			150.9			(9.3		)	(211.9		)	9.2
Increase (decrease) in cash and cash equivalents	$	(0.2	)	$	11.0		$	(98.8	)	$	—		$	(88.0	)

Allegheny Technologies Incorporated

Financial Information for Subsidiary and Guarantor Parent

Balance Sheets

December 31, 2016



(In millions)	Guarantor Parent		Subsidiary			Non-guarantor Subsidiaries		Eliminations			Consolidated
Assets:
Cash and cash equivalents	$	2.3	$	2.5		$	224.8	$	—		$	229.6
Accounts receivable, net	0.1		107.8			344.2		—			452.1
Intercompany notes receivable	—		—			2,892.9		(2,892.9		)	—
Inventories, net	—		106.7			930.3		—			1,037.0
Prepaid expenses and other current assets	6.6		5.2			36.0		—			47.8
Total current assets	9.0		222.2			4,428.2		(2,892.9		)	1,766.5
Property, plant and equipment, net	1.3		1,583.6			914.0		—			2,498.9
Goodwill	—		—			641.9		—			641.9
Intercompany notes receivable	—		—			200.0		(200.0		)	—
Investments in subsidiaries	5,241.2		37.7			—		(5,278.9		)	—
Other assets	23.0		25.5			214.2		—			262.7
Total assets	$	5,274.5	$	1,869.0		$	6,398.3	$	(8,371.8	)	$	5,170.0
Liabilities and stockholders’ equity:
Accounts payable	$	3.1	$	97.4		$	193.8	$	—		$	294.3
Accrued liabilities	54.6		83.3			171.4		—			309.3
Intercompany notes payable	1,341.1		1,551.8			—		(2,892.9		)	—
Short-term debt and current portion of long-term debt	0.4		0.3			104.4		—			105.1
Total current liabilities	1,399.2		1,732.8			469.6		(2,892.9		)	708.7
Long-term debt	1,621.7		150.0			0.2		—			1,771.9
Intercompany notes payable	—		200.0			—		(200.0		)	—
Accrued postretirement benefits	—		244.0			73.7		—			317.7
Pension liabilities	778.5		5.2			44.2		—			827.9
Deferred income taxes	15.6		—			—		—			15.6
Other long-term liabilities	14.7		18.1			50.6		—			83.4
Total liabilities	3,829.7		2,350.1			638.3		(3,092.9		)	3,725.2
Total stockholders’ equity (deficit)	1,444.8		(481.1		)	5,760.0		(5,278.9		)	1,444.8
Total liabilities and stockholders’ equity	$	5,274.5	$	1,869.0		$	6,398.3	$	(8,371.8	)	$	5,170.0

Allegheny Technologies Incorporated

Financial Information for Subsidiary and Guarantor Parent

Statements of Operations

For the year ended December 31, 2016



(In millions)	Guarantor Parent			Subsidiary			Non-guarantor Subsidiaries			Eliminations		Consolidated
Sales	$	—		$	983.6		$	2,151.0		$	—	$	3,134.6
Cost of sales	53.4			1,102.0			1,816.7			—		2,972.1
Gross profit (loss)	(53.4		)	(118.4		)	334.3			—		162.5
Selling and administrative expenses	89.9			32.3			125.5			—		247.7
Restructuring charges	—			25.1			502.1			—		527.2
Operating loss	(143.3		)	(175.8		)	(293.3		)	—		(612.4		)
Interest income (expense), net	(138.3		)	(70.7		)	85.0			—		(124.0		)
Other income (expense) including equity in income of unconsolidated subsidiaries	(452.4		)	1.0			1.4			452.4		2.4
Income (loss) before income taxes	(734.0		)	(245.5		)	(206.9		)	452.4		(734.0		)
Income tax provision (benefit)	(106.9		)	(85.5		)	(66.7		)	152.2		(106.9		)
Net income (loss)	(627.1		)	(160.0		)	(140.2		)	300.2		(627.1		)
Less: Net income attributable to noncontrolling interest	—			—			13.8			—		13.8
Net income (loss) attributable to ATI	$	(627.1	)	$	(160.0	)	$	(154.0	)	$	300.2	$	(640.9	)

Allegheny Technologies Incorporated

Financial Information for Subsidiary and Guarantor Parent

Statements of Comprehensive Income (Loss)

For the year ended December 31, 2016



(In millions)	Guarantor Parent			Subsidiary			Non-guarantor Subsidiaries			Eliminations			Consolidated
Net income (loss)	$	(627.1	)	$	(160.0	)	$	(140.2	)	$	300.2		$	(627.1	)
Other comprehensive income (loss)
Currency translation adjustment arising during the period	(47.1		)	—			(47.1		)	47.1			(47.1		)
Net derivative gain on hedge transactions	19.6			—			—			—			19.6
Pension and postretirement benefits	(61.4		)	17.2			1.8			(19.0		)	(61.4		)
Other comprehensive income (loss), net of tax	(88.9		)	17.2			(45.3		)	28.1			(88.9		)
Comprehensive income (loss)	(716.0		)	(142.8		)	(185.5		)	328.3			(716.0		)
Less: Comprehensive income attributable to noncontrolling interest	—			—			4.1			—			4.1
Comprehensive income (loss) attributable to ATI	$	(716.0	)	$	(142.8	)	$	(189.6	)	$	328.3		$	(720.1	)

Condensed Statements of Cash Flows

For the year ended December 31, 2016



(In millions)	Guarantor Parent			Subsidiary			Non-guarantor Subsidiaries			Eliminations			Consolidated
Cash flows provided by (used in) operating activities	$	(78.5	)	$	(232.3	)	$	291.1		$	(24.0	)	$	(43.7	)
Investing Activities:
Purchases of property, plant and equipment	(0.5		)	(98.7		)	(103.0		)	—			(202.2		)
Net receipts (payments) on intercompany activity	—			—			(160.0		)	160.0			—
Asset disposals and other	—			0.2			2.0			—			2.2
Cash flows provided by (used in) investing activities	(0.5		)	(98.5		)	(261.0		)	160.0			(200.0		)
Financing Activities:
Borrowings on long-term debt	287.5			—			100.0			—			387.5
Payments on long-term debt and capital leases	(0.7		)	(0.2		)	(1.8		)	—			(2.7		)
Net borrowings under credit facilities	—			—			3.1			—			3.1
Debt issuance costs	(9.4		)	—			(1.0		)	—			(10.4		)
Net receipts (payments) on intercompany acivity	(170.7		)	330.7			—			(160.0		)	—
Dividends paid to stockholders	(25.8		)	—			(24.0		)	24.0			(25.8		)
Dividends paid to noncontrolling interests	—			—			(16.0		)	—			(16.0		)
Acquisition of noncontrolling interests	—			—			(12.2		)	—			(12.2		)
Cash flows provided by (used in) financing activities	80.9			330.5			48.1			(136.0		)	323.5
Increase (decrease) in cash and cash equivalents	$	1.9		$	(0.3	)	$	78.2		$	—		$	79.8

Allegheny Technologies Incorporated

Financial Information for Subsidiary and Guarantor Parent

Statements of Operations

For the year ended December 31, 2015



(In millions)	Guarantor Parent			Subsidiary			Non-guarantor Subsidiaries		Eliminations		Consolidated
Sales	$	—		$	1,453.2		$	2,266.4	$	—	$	3,719.6
Cost of sales	27.3			1,643.2			1,988.8		—		3,659.3
Gross profit (loss)	(27.3		)	(190.0		)	277.6		—		60.3
Selling and administrative expenses	88.2			29.4			121.2		—		238.8
Impairment of goodwill	—			126.6			—		—		126.6
Restructuring charges	1.6			58.0			4.7		—		64.3
Operating income (loss)	(117.1		)	(404.0		)	151.7		—		(369.4		)
Interest income (expense), net	(117.3		)	(50.9		)	58.0		—		(110.2		)
Other income (expense) including equity in income of unconsolidated subsidiaries	(243.6		)	1.1			0.8		243.3		1.6
Income (loss) before income taxes	(478.0		)	(453.8		)	210.5		243.3		(478.0		)
Income tax provision (benefit)	(112.1		)	(165.7		)	51.6		114.1		(112.1		)
Net income (loss)	(365.9		)	(288.1		)	158.9		129.2		(365.9		)
Less: Net income attributable to noncontrolling interest	—			—			12.0		—		12.0
Net income (loss) attributable to ATI	$	(365.9	)	$	(288.1	)	$	146.9	$	129.2	$	(377.9	)

Allegheny Technologies Incorporated

Financial Information for Subsidiary and Guarantor Parent

Statements of Comprehensive Income (Loss)

For the year ended December 31, 2015



(In millions)	Guarantor Parent			Subsidiary			Non-guarantor Subsidiaries			Eliminations			Consolidated
Net income (loss)	$	(365.9	)	$	(288.1	)	$	158.9		$	129.2		$	(365.9	)
Other comprehensive income (loss)
Currency translation adjustment arising during the period	(37.0		)	—			(37.0		)	37.0			(37.0		)
Net derivative loss on hedge transactions	(32.0		)	—			—			—			(32.0		)
Pension and postretirement benefits	(19.7		)	29.8			3.1			(32.9		)	(19.7		)
Other comprehensive income (loss), net of tax	(88.7		)	29.8			(33.9		)	4.1			(88.7		)
Comprehensive income (loss)	(454.6		)	(258.3		)	125.0			133.3			(454.6		)
Less: Comprehensive income attributable to noncontrolling interest	—			—			6.4			—			6.4
Comprehensive income (loss) attributable to ATI	$	(454.6	)	$	(258.3	)	$	118.6		$	133.3		$	(461.0	)

Condensed Statements of Cash Flows

For the year ended December 31, 2015



(In millions)	Guarantor Parent			Subsidiary			Non-guarantor Subsidiaries			Eliminations			Consolidated
Cash flows provided by (used in) operating activities	$	(70.0	)	$	(134.8	)	$	360.2		$	(24.0	)	$	131.4
Investing Activities:
Purchases of property, plant and equipment	(0.6		)	(66.9		)	(77.0		)	—			(144.5		)
Net receipts (payments) on intercompany activity	—			—			(327.9		)	327.9			—
Purchases of businesses, net of cash acquired	—			—			(0.5		)	—			(0.5		)
Asset disposals and other	—			0.2			(0.3		)	—			(0.1		)
Cash flows provided by (used in) investing activities	(0.6		)	(66.7		)	(405.7		)	327.9			(145.1		)
Financing Activities:
Payments on long-terms debt and capital leases	(0.6		)	(0.1		)	(22.9		)	—			(23.6		)
Net receipts (payments) on intercompany activity	137.3			190.6			—			(327.9		)	—
Dividends paid to stockholders	(66.5		)	—			(24.0		)	24.0			(66.5		)
Dividends paid to noncontrolling interests	—			—			(16.0		)	—			(16.0		)
Other	(1.4		)	—			1.5			—			0.1
Cash flows provided by (used in) financing activities	68.8			190.5			(61.4		)	(303.9		)	(106.0		)
Increase (decrease) in cash and cash equivalents	$	(1.8	)	$	(11.0	)	$	(106.9	)	$	—		$	(119.7	)