8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 4, 2020

Allegheny Technologies Incorporated

(Exact name of registrant as specified in its charter)

Delaware	1-12001	25-1792394
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1000 Six PPG Place, Pittsburgh, Pennsylvania	15222-5479
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (412) 394-2800

N/A

(Former name or former address, if changed since last report).

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communication pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communication pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.10 per share	ATI	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Item 7.01. Regulation FD Disclosure.

On February 4, 2020, Allegheny Technologies Incorporated posted certain presentation materials to its website in conjunction with its previously announced and webcast quarterly earnings conference call, which are included as Exhibit 99.1 to this Current Report on Form 8-K.

The information disclosed under this Item 7.01, including Exhibit 99.1 hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 and shall not be deemed incorporated by reference into any filing made under the Securities Act of 1933, except as expressly set forth by specific reference in such filing.

Item 9.01. Exhibit

(d)	Exhibit 99.1	Slide Presentation.
	104	Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

ALLEGHENY TECHNOLOGIES INCORPORATED
By:	/s/ Donald P. Newman
	Donald P. Newman
	Senior Vice President, Finance and
	Chief Financial Officer

Dated: February 4, 2020

EX-99.1

Fourth Quarter and Full Year 2019 Earnings Presentation Feb. 4, 2020 Exhibit 99.1

This presentation contains forward-looking statements. Actual results may differ materially from results anticipated in the forward-looking statements due to various known and unknown risks, many of which we are unable to predict or control. These and additional risk factors are described from time to time in the Company’s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2018. Forward Looking Statements

Five Strategic Imperatives Drive Our Focus Execute aerospace production ramp Sustainable profitability in Flat Rolled Products Continue to improve the balance sheet Create the foundation for future competitiveness and growth Expand our competitive moat

$M (excl. EPS) Q4 2018 Q4 2019 % Chg. FY 2018 FY 2019 % Chg. Revenue $1,037.9 $1,018.6 (2%) $4,046.6 $4,122.5 +2% Revenue (ex. divestitures) $989.9 $1,018.6 +3% $3,863.8 $4,027.2 +4% Segment Operating Profit $87.3 $105.3 +21% $413.2 $380.7 (8%) Net Income* $41.1 $56.5 +37% $222.4 $257.6 +16% Net Income* (ex. special items) $41.1 $50.2 +22% $207.7 $165.1 (21%) EPS $0.30 $0.41 +37% $1.61 $1.85 +15% EPS (ex. special items) $0.30 $0.36 +20% $1.51 $1.21 (20%) *Attributable to ATI note: see appendix for reconciliation of non-GAAP financial measures 2019 Highlights Fourth Quarter vs. Prior Year Strong EPS growth driven by improved segment operating results Expansion across all HPMC product lines led by forgings Revenue growth (ex. divestitures) due to Aerospace & Defense increases in both operating segments Full Year vs. Prior Year Solid revenue growth in Aerospace & Defense; declines in non-strategic end-markets Operating profit growth in HPMC segment, offset by FRP segment decline vs. strong prior year Increased retirement benefit expense of $36M primarily due to poor 2018 pension asset returns No material impact from 737 MAX grounding Accretive non-core asset sales aided net income improvement

Segment ($M) Q4 ‘18 Q4 ‘19 ‘19 O/(U) ‘18 FY ‘18 FY ‘19 ‘19 O/(U) ‘18 Revenue $596.1 $602.8 +1% $2,334.2 $2,398.1 +3% Revenue (ex. divestitures) $548.1 $602.8 +10% $2,151.4 $2,302.8 +7% Segment Operating Profit $76.0 $92.8 +22% $335.4 $343.1 +2% % of Revenue 12.7% 15.4% +270 b.p. 14.4% 14.3% (10 b.p.) High Performance Materials & Components Fourth Quarter vs. Prior Year Double-digit revenue growth (excl. divestitures) Defense and airframe sales increases; tempered by flat jet engine product sales Operating profit expansion Operating profit margin expansion led by profitable revenue growth and prior portfolio divestitures Increased operating rates across multiple facilities due to volume growth Full Year vs. Prior Year Solid revenue growth (ex. divestitures) in a challenging industry environment Aerospace & Defense +9%; aggregate improvement in all other markets of +1% Operating profit improvement YOY margin expansion rate improved in H2’19

2019 Full Year Revenue Other Gov’t & Defense High Performance Materials & Components Revenue by Market (excluding divestitures) 2019 YOY Revenue Change by Market Jet Engine -1% Medical -6% Airframe +21% Energy +19% Gov’t & Defense +31% Aerospace & Defense +9% HPMC Segment +7% Airframe Aerospace & Defense Jet Engine YOY Next generation: 51% of 2019 jet engine product sales Temporary demand decline due to 3rd party billet supply issues and customer management actions Airframe YOY Continued strong demand in Q4 up 14%; building on prior year growth Government & Defense YOY Growth across product lines; led by naval materials and military aerospace note: see appendix for reconciliation of non-GAAP financial measures

Fourth Quarter vs. Prior Year Revenue declined 6% Growth in Aero & Defense offset by continued soft standard value product demand Decline in Oil & Gas due to large pipeline project in prior year period Operating profit improved by 11% Positive raw material benefits; reduced A & T Stainless JV loss Lower raw material prices for Q1 ‘20 Source: ATImetals.com Segment ($M) Q4 ‘18 Q4 ‘19 ‘19 O/(U) ‘18 FY ‘18 FY ‘19 ‘19 O/(U) ‘18 Revenue $441.8 $415.8 (6%) $1,712.4 $1,724.4 +1% Segment Operating Profit $11.3 $12.5 +11% $77.8 $37.6 (52%) % of Revenue 2.6% 3.0% +40 b.p. 4.5% 2.2% (230 b.p.) Flat Rolled Products Full Year vs. Prior Year Revenue increased 1% Strong growth in several core markets Market-driven declines for standard value products Solid profitability for the 3rd straight year Weak Q1’19 results offset by solid H2’19 operating profit Cost inefficiencies due to low standard value product demand

2019 Full Year Revenue by Market Oil & Gas Automotive Other Flat Rolled Products Revenue by Market & Product 2019 YOY Revenue Change by Market Oil & Gas -5% Const. & Mining -1% Automotive -9% Energy +25% Aero & Defense +30% Electronics +6% Food Equip & Appl. -16% Strong growth in key markets; Soft std. value market demand 2019 YOY Revenue Change by Product Precision & Eng. Strip -4% Standard Value Stainless -9% Nickel & Spec. Alloys +12% Titanium Products +21% High-value product sales up 5% YOY 2019 Full Year Revenue by Product

Free Cash Flow Balance Sheet and Cash Flow note: see appendix for reconciliation of non-GAAP financial measures Q4 and FY 2019 results Strong liquidity with $491 million cash on hand and ~$450 million of undrawn revolver capacity at year end Cash from operations of $240 million in Q4 2019 Managed working capital: 30% of sales, lower by ~160 b.p. YOY Capital expenditures of $70 million (2019 FY: $168 million) Reduced debt outstanding by $150 million; lowered annual interest expense by $9 million Redeemed $500 million of 5.95% debt due Jan. 2021 Issued $350 million of 5.875% debt due Jan. 2027 No scheduled maturities until 2022 Year-end free cash flow and cash balance negatively impacted by early redemption of 2021 debt $ millions Financial Update Significant YOY increase driven by portfolio actions and ongoing managed working capital improvements +59%

2020 Outlook Full Year 2020 EPS1 FCF2 $0.75 - $0.90 $135M - $165M EPS1: $0.12 - $0.16 Q1 2020 737 MAX production restart in Q2 Nickel prices in expected range ($6.00/lb. - $6.50/lb.) Minimal global impact from the Coronavirus epidemic Effective tax rate 23% - 25% in 2020 Key Outlook Assumptions Key Drivers Aerospace & Defense growth beyond 737 MAX Emergent demand fulfillment across 2020 Continued managed working capital discipline Benefits realized from: Cost containment actions Lower retirement benefit expense Interest savings Active management of working capital 1 excluding special items 2 see appendix for reconciliation of non-GAAP financial measures

Category 2020 Expected Impact 2019 Actual U.S. Pension trust contribution ~$130 $145 Retirement benefit expense ~$60 $88 Capital expenditures $200 - $210 $168 Managed working capital ~30.0% sales 30.0% sales Interest expense $86 - $90 $99 Effective book tax rate 23% - 25% 5.5% Cash tax rate 5% - 7% ~2% Diluted average share count (Q1) ~147 million shares 146.5 million shares Impact of 2022 convertible notes $2.4 (after-tax) quarterly interest expense addback to EPS numerator when using diluted average share count $ millions unless otherwise stated 2020 Financial Assumptions Comments Lower pension contribution in 2020 due to strong 2019 return on pension assets Capital expenditure increase to support long-term profitable share gains and volume growth Increases offset by managed working capital improvements in cash flow Interest expense reduced due to $150M debt reduction in Q4 ‘19 Normalized book tax rate post year-end 2019 tax valuation allowance release

Fourth Quarter and Full Year 2019 Earnings Presentation Q & A

Additional Materials Appendix

Non-GAAP Financial Measures

Non-GAAP Financial Measures

Non-GAAP Financial Measures Free Cash Flow For the Years Ended December 31, ($ in millions) 2015 2016 2017 2018 2019 Cash provided by (used in) operating activities $ 131.4 $ (43.7) $ 22.4 $ 392.8 $ 230.1 Cash (used in) provided by investing activities (145.1) (200.0) (119.6) (145.1) 81.7 Add back: cash contributions to ATI Pension Plan 0.3 115.0 135.0 40.4 145.0 Free Cash Flow as defined $ (13.4) $ (128.7) $ 37.8 $ 288.1 $ 456.8 Free cash flow as defined by ATI includes the total of cash provided by (used in) operating activities and investing activities as presented on the consolidated statements of cash flows, adjusted to exclude cash contributions to the Company’s U.S. qualified defined benefit pension plans.

Non-GAAP Financial Measures Free Cash Flow For the Years Ended December 31, ($ in millions) 2015 2016 2017 2018 2019 Cash provided by (used in) operating activities $ 131.4 $ (43.7) $ 22.4 $ 392.8 $ 230.1 Cash (used in) provided by investing activities (145.1) (200.0) (119.6) (145.1) 81.7 Add back: cash contributions to ATI Pension Plan 0.3 115.0 135.0 40.4 145.0 Free Cash Flow as defined $ (13.4) $ (128.7) $ 37.8 $ 288.1 $ 456.8 Free cash flow as defined by ATI includes the total of cash provided by (used in) operating activities and investing activities as presented on the consolidated statements of cash flows, adjusted to exclude cash contributions to the Company’s U.S. qualified defined benefit pension plans.

Non-GAAP Financial Measures Free Cash Flow For the Years Ended December 31, ($ in millions) 2015 2016 2017 2018 2019 Cash provided by (used in) operating activities $ 131.4 $ (43.7) $ 22.4 $ 392.8 $ 230.1 Cash (used in) provided by investing activities (145.1) (200.0) (119.6) (145.1) 81.7 Add back: cash contributions to ATI Pension Plan 0.3 115.0 135.0 40.4 145.0 Free Cash Flow as defined $ (13.4) $ (128.7) $ 37.8 $ 288.1 $ 456.8 Free cash flow as defined by ATI includes the total of cash provided by (used in) operating activities and investing activities as presented on the consolidated statements of cash flows, adjusted to exclude cash contributions to the Company’s U.S. qualified defined benefit pension plans.

XML

Document and Entity Information	Feb. 04, 2020
Cover [Abstract]
Entity Registrant Name	ALLEGHENY TECHNOLOGIES INC
Amendment Flag	false
Entity Central Index Key	0001018963
Document Type	8-K
Document Period End Date	Feb. 04, 2020
Entity Incorporation State Country Code	DE
Entity File Number	1-12001
Entity Tax Identification Number	25-1792394
Entity Address, Address Line One	1000 Six PPG Place
Entity Address, City or Town	Pittsburgh
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	15222-5479
City Area Code	(412)
Local Phone Number	394-2800
Written Communications	false
Soliciting Material	false
Pre Commencement Tender Offer	false
Pre Commencement Issuer Tender Offer	false
Security 12b Title	Common Stock, par value $0.10 per share
Trading Symbol	ATI
Security Exchange Name	NYSE
Entity Emerging Growth Company	false