QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of | (I.R.S. Employer | ||||||||||
incorporation or organization) | Identification No.) | ||||||||||
(Address of Principal Executive Offices) | (Zip Code) |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||
☒ | Accelerated filer | ☐ | |||||||||
Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
Emerging growth company |
Page No. | |||||
PART I. - FINANCIAL INFORMATION | |||||
Item 1. Financial Statements | |||||
Consolidated Balance Sheets | |||||
Consolidated Statements of Operations | |||||
Consolidated Statements of Comprehensive Income (Loss) | |||||
Consolidated Statements of Cash Flows | |||||
Statements of Changes in Consolidated Equity | |||||
Notes to Consolidated Financial Statements | |||||
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | |||||
Item 3. Quantitative and Qualitative Disclosures About Market Risk | |||||
Item 4. Controls and Procedures | |||||
PART II. - OTHER INFORMATION | |||||
Item 1. Legal Proceedings | |||||
Item 1A. Risk Factors | |||||
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | |||||
Item 6. Exhibits | |||||
SIGNATURES |
September 30, 2022 | December 31, 2021 | ||||||||||
ASSETS | |||||||||||
Current Assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable, net | |||||||||||
Short-term contract assets | |||||||||||
Inventories, net | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Total Current Assets | |||||||||||
Property, plant and equipment, net | |||||||||||
Goodwill | |||||||||||
Other assets | |||||||||||
Total Assets | $ | $ | |||||||||
LIABILITIES AND EQUITY | |||||||||||
Current Liabilities: | |||||||||||
Accounts payable | $ | $ | |||||||||
Short-term contract liabilities | |||||||||||
Short-term debt and current portion of long-term debt | |||||||||||
Other current liabilities | |||||||||||
Total Current Liabilities | |||||||||||
Long-term debt | |||||||||||
Accrued postretirement benefits | |||||||||||
Pension liabilities | |||||||||||
Other long-term liabilities | |||||||||||
Total Liabilities | |||||||||||
Equity: | |||||||||||
ATI Stockholders’ Equity: | |||||||||||
Preferred stock, par value $ | |||||||||||
Common stock, par value $ | |||||||||||
Additional paid-in capital | |||||||||||
Retained earnings | |||||||||||
Treasury stock: | ( | ( | |||||||||
Accumulated other comprehensive loss, net of tax | ( | ( | |||||||||
Total ATI stockholders’ equity | |||||||||||
Noncontrolling interests | |||||||||||
Total Equity | |||||||||||
Total Liabilities and Equity | $ | $ |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||
Sales | $ | $ | $ | $ | ||||||||||||||||||||||
Cost of sales | ||||||||||||||||||||||||||
Gross profit | ||||||||||||||||||||||||||
Selling and administrative expenses | ||||||||||||||||||||||||||
Restructuring credits | ( | ( | ( | ( | ||||||||||||||||||||||
Loss on asset sales and sales of businesses, net | ||||||||||||||||||||||||||
Operating income | ||||||||||||||||||||||||||
Nonoperating retirement benefit income (expense) | ( | ( | ||||||||||||||||||||||||
Interest expense, net | ( | ( | ( | ( | ||||||||||||||||||||||
Other income (expense), net | ( | ( | ||||||||||||||||||||||||
Income before income taxes | ||||||||||||||||||||||||||
Income tax provision | ||||||||||||||||||||||||||
Net income | ||||||||||||||||||||||||||
Less: Net income attributable to noncontrolling interests | ||||||||||||||||||||||||||
Net income (loss) attributable to ATI | $ | $ | $ | $ | ( | |||||||||||||||||||||
Basic net income (loss) attributable to ATI per common share | $ | $ | $ | $ | ( | |||||||||||||||||||||
Diluted net income (loss) attributable to ATI per common share | $ | $ | $ | $ | ( |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||
Net income | $ | $ | $ | $ | ||||||||||||||||||||||
Currency translation adjustment | ||||||||||||||||||||||||||
Unrealized net change arising during the period | ( | ( | ( | ( | ||||||||||||||||||||||
Reclassification adjustment included in net income | ||||||||||||||||||||||||||
Total | ( | ( | ( | ( | ||||||||||||||||||||||
Derivatives | ||||||||||||||||||||||||||
Net derivatives gain on hedge transactions | ||||||||||||||||||||||||||
Reclassification to net income of net realized gain | ( | ( | ( | ( | ||||||||||||||||||||||
Income taxes on derivative transactions | ||||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||
Postretirement benefit plans | ||||||||||||||||||||||||||
Actuarial loss | ||||||||||||||||||||||||||
Amortization of net actuarial loss | ||||||||||||||||||||||||||
Prior service cost | ||||||||||||||||||||||||||
Amortization to net income of net prior service credits | ( | ( | ( | ( | ||||||||||||||||||||||
Settlement loss (gain) included in net income | ( | ( | ||||||||||||||||||||||||
Income taxes on postretirement benefit plans | ( | ( | ||||||||||||||||||||||||
Total | ||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax | ( | |||||||||||||||||||||||||
Comprehensive income | ||||||||||||||||||||||||||
Less: Comprehensive income (loss) attributable to noncontrolling interests | ( | ( | ||||||||||||||||||||||||
Comprehensive income attributable to ATI | $ | $ | $ | $ | ||||||||||||||||||||||
Nine months ended September 30, | |||||||||||
2022 | 2021 | ||||||||||
Operating Activities: | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash used in operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Deferred taxes | |||||||||||
Net gains from disposal of property, plant and equipment | ( | ( | |||||||||
Loss (gain) on sales of businesses | ( | ||||||||||
Changes in operating assets and liabilities: | |||||||||||
Inventories | ( | ( | |||||||||
Accounts receivable | ( | ( | |||||||||
Accounts payable | |||||||||||
Retirement benefits | ( | ||||||||||
Accrued liabilities and other | ( | ( | |||||||||
Cash used in operating activities | ( | ( | |||||||||
Investing Activities: | |||||||||||
Purchases of property, plant and equipment | ( | ( | |||||||||
Proceeds from disposal of property, plant and equipment | |||||||||||
Proceeds (transaction costs) from sales of businesses, net | ( | ||||||||||
Other | ( | ||||||||||
Cash used in investing activities | ( | ( | |||||||||
Financing Activities: | |||||||||||
Borrowings on long-term debt | |||||||||||
Payments on long-term debt and finance leases | ( | ( | |||||||||
Net (payments) borrowings under credit facilities | ( | ||||||||||
Debt issuance costs | ( | ||||||||||
Purchase of treasury stock | ( | ||||||||||
Sale of noncontrolling interests | |||||||||||
Dividends paid to noncontrolling interests | ( | ||||||||||
Shares repurchased for income tax withholding on share-based compensation and other | ( | ( | |||||||||
Cash provided by (used in) financing activities | ( | ||||||||||
Increase (decrease) in cash and cash equivalents | ( | ||||||||||
Cash and cash equivalents at beginning of period | |||||||||||
Cash and cash equivalents at end of period | $ | $ |
ATI Stockholders | |||||||||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-In Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Non- controlling Interests | Total Equity | |||||||||||||||||||||||||||||||||||
Balance, June 30, 2021 | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||
Employee stock plans | ( | — | — | ||||||||||||||||||||||||||||||||||||||
Balance, September 30, 2021 | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||
Balance, June 30, 2022 | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | ( | ( | ( | ||||||||||||||||||||||||||||||||||
Purchase of treasury stock | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Employee stock plans | ( | — | — | ||||||||||||||||||||||||||||||||||||||
Balance, September 30, 2022 | $ | $ | $ | $ | ( | $ | ( | $ | $ |
ATI Stockholders | |||||||||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-In Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Non- controlling Interests | Total Equity | |||||||||||||||||||||||||||||||||||
Balance, December 31, 2020 | $ | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||
Net income (loss) | — | — | ( | — | — | ||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | ||||||||||||||||||||||||||||||||||||||
Cumulative effect of adoption of new accounting standard | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||
Employee stock plans | ( | — | — | ||||||||||||||||||||||||||||||||||||||
Balance, September 30, 2021 | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||
Balance, December 31, 2021 | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||
Purchase of treasury stock | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Conversion of convertible notes | ( | — | — | ||||||||||||||||||||||||||||||||||||||
Dividends paid to noncontrolling interest | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Sales of subsidiary shares to noncontrolling interest | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Employee stock plans | ( | — | — | ||||||||||||||||||||||||||||||||||||||
Balance, September 30, 2022 | $ | $ | $ | $ | ( | $ | ( | $ | $ |
(in millions) | Third quarter ended | |||||||||||||||||||||||||
September 30, 2022 | September 30, 2021 | |||||||||||||||||||||||||
HPMC | AA&S | Total | HPMC | AA&S | Total | |||||||||||||||||||||
Diversified Global Markets: | ||||||||||||||||||||||||||
Aerospace & Defense: | ||||||||||||||||||||||||||
Jet Engines- Commercial | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
Airframes- Commercial | ||||||||||||||||||||||||||
Defense | ||||||||||||||||||||||||||
Total Aerospace & Defense | ||||||||||||||||||||||||||
Energy: | ||||||||||||||||||||||||||
Oil & Gas | ||||||||||||||||||||||||||
Specialty Energy | ||||||||||||||||||||||||||
Total Energy | ||||||||||||||||||||||||||
Automotive | ||||||||||||||||||||||||||
Electronics | ||||||||||||||||||||||||||
Construction/Mining | ||||||||||||||||||||||||||
Medical | ||||||||||||||||||||||||||
Food Equipment & Appliances | ||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ |
(in millions) | Nine months ended | |||||||||||||||||||||||||
September 30, 2022 | September 30, 2021 | |||||||||||||||||||||||||
HPMC | AA&S | Total | HPMC | AA&S | Total | |||||||||||||||||||||
Diversified Global Markets: | ||||||||||||||||||||||||||
Aerospace & Defense: | ||||||||||||||||||||||||||
Jet Engines- Commercial | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
Airframes- Commercial | ||||||||||||||||||||||||||
Defense | ||||||||||||||||||||||||||
Total Aerospace & Defense | ||||||||||||||||||||||||||
Energy: | ||||||||||||||||||||||||||
Oil & Gas | ||||||||||||||||||||||||||
Specialty Energy | ||||||||||||||||||||||||||
Total Energy | ||||||||||||||||||||||||||
Automotive | ||||||||||||||||||||||||||
Electronics | ||||||||||||||||||||||||||
Food Equipment & Appliances | ||||||||||||||||||||||||||
Construction/Mining | ||||||||||||||||||||||||||
Medical | ||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ |
(in millions) | Third quarter ended | |||||||||||||||||||||||||
September 30, 2022 | September 30, 2021 | |||||||||||||||||||||||||
HPMC | AA&S | Total | HPMC | AA&S | Total | |||||||||||||||||||||
Primary Geographical Market: | ||||||||||||||||||||||||||
United States | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
Europe | ||||||||||||||||||||||||||
Asia | ||||||||||||||||||||||||||
Canada | ||||||||||||||||||||||||||
South America, Middle East and other | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ |
(in millions) | Nine months ended | |||||||||||||||||||||||||
September 30, 2022 | September 30, 2021 | |||||||||||||||||||||||||
HPMC | AA&S | Total | HPMC | AA&S | Total | |||||||||||||||||||||
Primary Geographical Market: | ||||||||||||||||||||||||||
United States | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
Europe | ||||||||||||||||||||||||||
Asia | ||||||||||||||||||||||||||
Canada | ||||||||||||||||||||||||||
South America, Middle East and other | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ |
Third quarter ended | ||||||||||||||||||||||||||
September 30, 2022 | September 30, 2021 | |||||||||||||||||||||||||
HPMC | AA&S | Total | HPMC | AA&S | Total | |||||||||||||||||||||
Diversified Products and Services: | ||||||||||||||||||||||||||
Nickel-based alloys and specialty alloys | % | % | % | % | % | % | ||||||||||||||||||||
Precision forgings, castings and components | % | % | % | % | % | % | ||||||||||||||||||||
Precision rolled strip products | % | % | % | % | % | % | ||||||||||||||||||||
Titanium and titanium-based alloys | % | % | % | % | % | % | ||||||||||||||||||||
Zirconium and related alloys | % | % | % | % | % | % | ||||||||||||||||||||
Total | % | % | % | % | % | % |
Nine months ended | ||||||||||||||||||||||||||
September 30, 2022 | September 30, 2021 | |||||||||||||||||||||||||
HPMC | AA&S | Total | HPMC | AA&S | Total | |||||||||||||||||||||
Diversified Products and Services: | ||||||||||||||||||||||||||
Nickel-based alloys and specialty alloys | % | % | % | % | % | % | ||||||||||||||||||||
Precision forgings, castings and components | % | % | % | % | % | % | ||||||||||||||||||||
Precision rolled strip products | % | % | % | % | % | % | ||||||||||||||||||||
Titanium and titanium-based alloys | % | % | % | % | % | % | ||||||||||||||||||||
Zirconium and related alloys | % | % | % | % | % | % | ||||||||||||||||||||
Total | % | % | % | % | % | % |
(in millions) | ||||||||
Accounts Receivable - Reserve for Doubtful Accounts | September 30, 2022 | September 30, 2021 | ||||||
Balance as of beginning of fiscal year | $ | $ | ||||||
Expense to increase the reserve | ||||||||
Write-off of uncollectible accounts | ( | ( | ||||||
Balance as of period end | $ | $ |
(in millions) | ||||||||
Contract Assets | ||||||||
Short-term | September 30, 2022 | September 30, 2021 | ||||||
Balance as of beginning of fiscal year | $ | $ | ||||||
Recognized in current year | ||||||||
Reclassified to accounts receivable | ( | ( | ||||||
Reclassification to/from long-term and contract liability | ( | |||||||
Balance as of period end | $ | $ | ||||||
(in millions) | ||||||||
Contract Liabilities | ||||||||
Short-term | September 30, 2022 | September 30, 2021 | ||||||
Balance as of beginning of fiscal year | $ | $ | ||||||
Recognized in current year | ||||||||
Amounts in beginning balance reclassified to revenue | ( | ( | ||||||
Current year amounts reclassified to revenue | ( | ( | ||||||
Divestiture | ( | |||||||
Other | ||||||||
Reclassification to/from long-term and contract asset | ( | |||||||
Balance as of period end | $ | $ | ||||||
Long-term (a) | September 30, 2022 | September 30, 2021 | ||||||
Balance as of beginning of fiscal year | $ | $ | ||||||
Recognized in current year | ||||||||
Reclassification to/from short-term | ( | ( | ||||||
Balance as of period end | $ | $ |
September 30, 2022 | December 31, 2021 | ||||||||||
Raw materials and supplies | $ | $ | |||||||||
Work-in-process | |||||||||||
Finished goods | |||||||||||
Total inventories at current cost | |||||||||||
Inventory valuation reserves | ( | ( | |||||||||
Total inventories, net | $ | $ |
September 30, 2022 | December 31, 2021 | ||||||||||
Land | $ | $ | |||||||||
Buildings | |||||||||||
Equipment and leasehold improvements | |||||||||||
Accumulated depreciation and amortization | ( | ( | |||||||||
Total property, plant and equipment, net | $ | $ |
(in millions) | Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||
Rent and royalty income | $ | $ | $ | $ | ||||||||||||||||
Gains from disposal of property, plant and equipment, net | ||||||||||||||||||||
Net equity income on joint ventures (See Note 6) | ||||||||||||||||||||
Gain from sale of business (See Note 5) | — | — | ||||||||||||||||||
Litigation reserve (see Note 16) | ( | ( | ||||||||||||||||||
Other | $ | $ | $ | $ | ||||||||||||||||
Total other income (expense), net | $ | ( | $ | $ | ( | $ |
Severance and Employee | |||||
Benefit Costs | |||||
Balance at December 31, 2021 | $ | ||||
Adjustments | ( | ||||
Payments | ( | ||||
Balance at September 30, 2022 | $ |
September 30, 2022 | December 31, 2021 | ||||||||||
Term Loan due 2027 | |||||||||||
U.S. revolving credit facility | |||||||||||
Foreign credit facilities | |||||||||||
Finance leases and other | |||||||||||
Debt issuance costs | ( | ( | |||||||||
Debt | |||||||||||
Short-term debt and current portion of long-term debt | |||||||||||
Long-term debt | $ | $ |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||
(in millions) | 2022 | 2021 | 2022 | 2021 | |||||||||||||
Contractual coupon rate | $ | $ | $ | $ | |||||||||||||
Amortization of debt issuance costs | |||||||||||||||||
Total interest expense | $ | $ | $ | $ |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
(in millions) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Contractual coupon rate | $ | $ | $ | $ | |||||||||||||||||||
Amortization of debt issuance costs | |||||||||||||||||||||||
Total interest expense | $ | $ | $ | $ |
(In millions) Asset derivatives | Balance sheet location | September 30, 2022 | December 31, 2021 | |||||||||||||||||
Derivatives designated as hedging instruments: | ||||||||||||||||||||
Interest rate swap | Prepaid expenses and other current assets | $ | $ | |||||||||||||||||
Foreign exchange contracts | Prepaid expenses and other current assets | |||||||||||||||||||
Nickel and other raw material contracts | Prepaid expenses and other current assets | |||||||||||||||||||
Natural gas contracts | Prepaid expenses and other current assets | |||||||||||||||||||
Interest rate swap | Other assets | |||||||||||||||||||
Nickel and other raw material contracts | Other assets | |||||||||||||||||||
Natural gas contracts | Other assets | |||||||||||||||||||
Total derivatives designated as hedging instruments | $ | $ | ||||||||||||||||||
Liability derivatives | Balance sheet location | |||||||||||||||||||
Derivatives designated as hedging instruments: | ||||||||||||||||||||
Interest rate swap | Other current liabilities | $ | $ | |||||||||||||||||
Natural gas contracts | Other current liabilities | |||||||||||||||||||
Nickel and other raw material contracts | Other current liabilities | |||||||||||||||||||
Interest rate swap | Other long-term liabilities | |||||||||||||||||||
Natural gas contracts | Other long-term liabilities | |||||||||||||||||||
Nickel and other raw material contracts | Other long-term liabilities | |||||||||||||||||||
Total derivatives designated as hedging instruments | $ | $ |
Amount of Gain (Loss) Recognized in OCI on Derivatives | Amount of Gain (Loss) Reclassified from Accumulated OCI into Income (a) | ||||||||||||||||||||||
Three months ended September 30, | Three months ended September 30, | ||||||||||||||||||||||
Derivatives in Cash Flow Hedging Relationships | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Nickel and other raw material contracts | $ | ( | $ | ( | $ | $ | |||||||||||||||||
Natural gas contracts | |||||||||||||||||||||||
Foreign exchange contracts | |||||||||||||||||||||||
Interest rate swap | ( | ( | |||||||||||||||||||||
Total | $ | $ | $ | $ |
Amount of Gain (Loss) Recognized in OCI on Derivatives | Amount of Gain (Loss) Reclassified from Accumulated OCI into Income (a) | ||||||||||||||||||||||
Nine months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
Derivatives in Cash Flow Hedging Relationships | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Nickel and other raw material contracts | $ | $ | $ | $ | |||||||||||||||||||
Natural gas contracts | |||||||||||||||||||||||
Foreign exchange contracts | |||||||||||||||||||||||
Interest rate swap | ( | ( | ( | ||||||||||||||||||||
Total | $ | $ | $ | $ |
Fair Value Measurements at Reporting Date Using | |||||||||||||||||||||||
(In millions) | Total Carrying Amount | Total Estimated Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Observable Inputs (Level 2) | |||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | |||||||||||||||||||
Derivative financial instruments: | |||||||||||||||||||||||
Assets | |||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||
Debt (a) |
Fair Value Measurements at Reporting Date Using | |||||||||||||||||||||||
(In millions) | Total Carrying Amount | Total Estimated Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Observable Inputs (Level 2) | |||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | |||||||||||||||||||
Derivative financial instruments: | |||||||||||||||||||||||
Assets | |||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||
Debt (a) |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||
Total sales: | ||||||||||||||||||||
High Performance Materials & Components | $ | $ | $ | $ | ||||||||||||||||
Advanced Alloys & Solutions | ||||||||||||||||||||
Intersegment sales: | ||||||||||||||||||||
High Performance Materials & Components | ||||||||||||||||||||
Advanced Alloys & Solutions | ||||||||||||||||||||
Sales to external customers: | ||||||||||||||||||||
High Performance Materials & Components | ||||||||||||||||||||
Advanced Alloys & Solutions | ||||||||||||||||||||
$ | $ | $ | $ |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||
EBITDA: | ||||||||||||||||||||
High Performance Materials & Components | $ | $ | $ | $ | ||||||||||||||||
Advanced Alloys & Solutions | ||||||||||||||||||||
Total segment EBITDA | ||||||||||||||||||||
Corporate expenses | ( | ( | ( | ( | ||||||||||||||||
Closed operations and other expense | ( | ( | ( | ( | ||||||||||||||||
Depreciation & amortization (a) | ( | ( | ( | ( | ||||||||||||||||
Interest expense, net | ( | ( | ( | ( | ||||||||||||||||
Restructuring and other credits (charges) | ( | ( | ||||||||||||||||||
Strike related costs | ( | ( | ||||||||||||||||||
Retirement benefit settlement gain (See Note 12) | ||||||||||||||||||||
Gain (loss) on asset sales and sales of businesses, net (See Note 5) | ( | |||||||||||||||||||
Income before income taxes | $ | $ | $ | $ |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||
High Performance Materials & Components | $ | $ | $ | $ | ||||||||||||||||
Advanced Alloys & Solutions | ||||||||||||||||||||
Other | ||||||||||||||||||||
$ | $ | $ | $ |
Pension Benefits | Other Postretirement Benefits | ||||||||||||||||||||||
Three months ended September 30, | Three months ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Service cost - benefits earned during the year | $ | $ | $ | $ | |||||||||||||||||||
Interest cost on benefits earned in prior years | |||||||||||||||||||||||
Expected return on plan assets | ( | ( | |||||||||||||||||||||
Amortization of prior service cost (credit) | ( | ( | |||||||||||||||||||||
Amortization of net actuarial loss | |||||||||||||||||||||||
Settlement gain | ( | ||||||||||||||||||||||
Total retirement benefit expense (income) | $ | $ | $ | $ | ( |
Pension Benefits | Other Postretirement Benefits | ||||||||||||||||||||||
Nine months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Service cost - benefits earned during the year | $ | $ | $ | $ | |||||||||||||||||||
Interest cost on benefits earned in prior years | |||||||||||||||||||||||
Expected return on plan assets | ( | ( | |||||||||||||||||||||
Amortization of prior service cost (credit) | ( | ( | |||||||||||||||||||||
Amortization of net actuarial loss | |||||||||||||||||||||||
Settlement loss (gain) | ( | ||||||||||||||||||||||
Total retirement benefit expense (income) | $ | $ | $ | $ | ( |
(In millions, except per share amounts) | Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||
Numerator: | ||||||||||||||||||||
Numerator for basic income (loss) per common share – | ||||||||||||||||||||
Net income (loss) attributable to ATI | $ | $ | $ | $ | ( | |||||||||||||||
Effect of dilutive securities: | ||||||||||||||||||||
Numerator for diluted net income (loss) per common share – | ||||||||||||||||||||
Net income (loss) attributable to ATI after assumed conversions | $ | $ | $ | $ | ( | |||||||||||||||
Denominator: | ||||||||||||||||||||
Denominator for basic net income (loss) per common share – weighted average shares | ||||||||||||||||||||
Effect of dilutive securities: | ||||||||||||||||||||
Share-based compensation | ||||||||||||||||||||
Denominator for diluted net income (loss) per common share – adjusted weighted average shares and assumed conversions | ||||||||||||||||||||
Basic net income (loss) attributable to ATI per common share | $ | $ | $ | $ | ( | |||||||||||||||
Diluted net income (loss) attributable to ATI per common share | $ | $ | $ | $ | ( |
Post- retirement benefit plans | Currency translation adjustment | Derivatives | Deferred Tax Asset Valuation Allowance | Total | |||||||||||||||||||||||||||||||||||||
Attributable to ATI: | |||||||||||||||||||||||||||||||||||||||||
Balance, June 30, 2022 | $ | ( | $ | ( | $ | $ | $ | ( | |||||||||||||||||||||||||||||||||
OCI before reclassifications | ( | ( | |||||||||||||||||||||||||||||||||||||||
Amounts reclassified from AOCI | (a) | (c) | (d) | ( | (e) | ||||||||||||||||||||||||||||||||||||
Net current-period OCI | ( | ( | |||||||||||||||||||||||||||||||||||||||
Balance, September 30, 2022 | $ | ( | $ | ( | $ | $ | $ | ( | |||||||||||||||||||||||||||||||||
Attributable to noncontrolling interests: | |||||||||||||||||||||||||||||||||||||||||
Balance, June 30, 2022 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||
OCI before reclassifications | ( | ( | |||||||||||||||||||||||||||||||||||||||
Amounts reclassified from AOCI | (c) | ||||||||||||||||||||||||||||||||||||||||
Net current-period OCI | ( | ( | |||||||||||||||||||||||||||||||||||||||
Balance, September 30, 2022 | $ | $ | $ | $ | $ |
Post- retirement benefit plans | Currency translation adjustment | Derivatives | Deferred Tax Asset Valuation Allowance | Total | |||||||||||||||||||||||||||||||||||||
Attributable to ATI: | |||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2021 | $ | ( | $ | ( | $ | $ | $ | ( | |||||||||||||||||||||||||||||||||
OCI before reclassifications | ( | ( | |||||||||||||||||||||||||||||||||||||||
Amounts reclassified from AOCI | (a) | (b) | (d) | ( | (e) | ||||||||||||||||||||||||||||||||||||
Net current-period OCI | ( | ||||||||||||||||||||||||||||||||||||||||
Balance, September 30, 2022 | $ | ( | $ | ( | $ | $ | $ | ( | |||||||||||||||||||||||||||||||||
Attributable to noncontrolling interests: | |||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2021 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||
OCI before reclassifications | ( | ( | |||||||||||||||||||||||||||||||||||||||
Amounts reclassified from AOCI | (c) | ||||||||||||||||||||||||||||||||||||||||
Net current-period OCI | ( | ( | |||||||||||||||||||||||||||||||||||||||
Balance, September 30, 2022 | $ | $ | $ | $ | $ |
Post- retirement benefit plans | Currency translation adjustment | Derivatives | Deferred Tax Asset Valuation Allowance | Total | |||||||||||||||||||||||||||||||||||||
Attributable to ATI: | |||||||||||||||||||||||||||||||||||||||||
Balance, June 30, 2021 | $ | ( | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||
OCI before reclassifications | ( | ||||||||||||||||||||||||||||||||||||||||
Amounts reclassified from AOCI | (a) | (b) | (c) | ( | (d) | ||||||||||||||||||||||||||||||||||||
Net current-period OCI | ( | ||||||||||||||||||||||||||||||||||||||||
Balance, September 30, 2021 | $ | ( | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||
Attributable to noncontrolling interests: | |||||||||||||||||||||||||||||||||||||||||
Balance, June 30, 2021 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||
OCI before reclassifications | ( | ( | |||||||||||||||||||||||||||||||||||||||
Amounts reclassified from AOCI | (b) | ||||||||||||||||||||||||||||||||||||||||
Net current-period OCI | ( | $ | ( | ||||||||||||||||||||||||||||||||||||||
Balance, September 30, 2021 | $ | $ | $ | $ | $ |
Post- retirement benefit plans | Currency translation adjustment | Derivatives | Deferred Tax Asset Valuation Allowance | Total | |||||||||||||||||||||||||||||||||||||
Attributable to ATI: | |||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2020 | $ | ( | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||
OCI before reclassifications | ( | ||||||||||||||||||||||||||||||||||||||||
Amounts reclassified from AOCI | (a) | (b) | (c) | ( | (d) | ||||||||||||||||||||||||||||||||||||
Net current-period OCI | ( | ||||||||||||||||||||||||||||||||||||||||
Balance, September 30, 2021 | $ | ( | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||
Attributable to noncontrolling interests: | |||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2020 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||
OCI before reclassifications | |||||||||||||||||||||||||||||||||||||||||
Amounts reclassified from AOCI | (b) | ||||||||||||||||||||||||||||||||||||||||
Net current-period OCI | $ | ||||||||||||||||||||||||||||||||||||||||
Balance, September 30, 2021 | $ | $ | $ | $ | $ |
Amounts reclassified out of AOCI | |||||||||||||||||||||||||||||
Details about AOCI Components (In millions) | Three months ended September 30, 2022 | Three months ended September 30, 2021 | Nine months ended September 30, 2022 | Nine months ended September 30, 2021 | Affected line item in the statements of operations | ||||||||||||||||||||||||
Postretirement benefit plans | |||||||||||||||||||||||||||||
Prior service credit | $ | $ | $ | $ | (a) | ||||||||||||||||||||||||
Actuarial losses | ( | ( | ( | ( | (a) | ||||||||||||||||||||||||
Settlement gain (loss) | ( | (b) | |||||||||||||||||||||||||||
( | ( | ( | ( | (d) | Total before tax | ||||||||||||||||||||||||
( | ( | ( | Tax expense (benefit) (e) | ||||||||||||||||||||||||||
$ | ( | $ | ( | $ | ( | $ | ( | Net of tax | |||||||||||||||||||||
Currency translation adjustment | $ | $ | $ | ( | $ | (b,d) | |||||||||||||||||||||||
Derivatives | |||||||||||||||||||||||||||||
Nickel and other raw material contracts | $ | $ | $ | $ | (c) | ||||||||||||||||||||||||
Natural gas contracts | (c) | ||||||||||||||||||||||||||||
Foreign exchange contracts | (c) | ||||||||||||||||||||||||||||
Interest rate swap | ( | ( | ( | (c) | |||||||||||||||||||||||||
(d) | Total before tax | ||||||||||||||||||||||||||||
Tax expense (e) | |||||||||||||||||||||||||||||
$ | $ | $ | $ | Net of tax | |||||||||||||||||||||||||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Three months ended | Three months ended | ||||||||||||||||||||||
Markets | September 30, 2022 | September 30, 2021 | |||||||||||||||||||||
Aerospace & Defense: | |||||||||||||||||||||||
Jet Engines- Commercial | $ | 312.6 | 30 | % | $ | 128.8 | 18 | % | |||||||||||||||
Airframes- Commercial | 131.4 | 13 | % | 71.3 | 10 | % | |||||||||||||||||
Defense | 86.1 | 8 | % | 82.8 | 11 | % | |||||||||||||||||
Total Aerospace & Defense | $ | 530.1 | 51 | % | $ | 282.9 | 39 | % | |||||||||||||||
Energy: | |||||||||||||||||||||||
Oil & Gas | 127.1 | 12 | % | 92.4 | 13 | % | |||||||||||||||||
Specialty Energy | 65.6 | 7 | % | 73.8 | 10 | % | |||||||||||||||||
Total Energy | 192.7 | 19 | % | 166.2 | 23 | % | |||||||||||||||||
Automotive | 69.6 | 7 | % | 78.3 | 11 | % | |||||||||||||||||
Electronics | 48.5 | 5 | % | 56.5 | 8 | % | |||||||||||||||||
Construction/Mining | 47.8 | 5 | % | 25.3 | 3 | % | |||||||||||||||||
Medical | 47.4 | 4 | % | 34.3 | 5 | % | |||||||||||||||||
Food Equipment & Appliances | 45.2 | 4 | % | 43.4 | 6 | % | |||||||||||||||||
Other | 50.7 | 5 | % | 38.8 | 5 | % | |||||||||||||||||
Total | $ | 1,032.0 | 100 | % | $ | 725.7 | 100 | % |
Nine months ended | Nine months ended | ||||||||||||||||||||||
Markets | September 30, 2022 | September 30, 2021 | |||||||||||||||||||||
Aerospace & Defense: | |||||||||||||||||||||||
Jet Engines- Commercial | $ | 757.9 | 27 | % | $ | 364.5 | 18 | % | |||||||||||||||
Airframes- Commercial | 331.2 | 12 | % | 183.9 | 9 | % | |||||||||||||||||
Defense | 244.2 | 9 | % | 269.9 | 13 | % | |||||||||||||||||
Total Aerospace & Defense | $ | 1,333.3 | 48 | % | $ | 818.3 | 40 | % | |||||||||||||||
Energy: | |||||||||||||||||||||||
Oil & Gas | 355.4 | 13 | % | 231.0 | 11 | % | |||||||||||||||||
Specialty Energy | 197.3 | 7 | % | 202.6 | 10 | % | |||||||||||||||||
Total Energy | 552.7 | 20 | % | 433.6 | 21 | % | |||||||||||||||||
Automotive | 236.1 | 8 | % | 237.8 | 12 | % | |||||||||||||||||
Electronics | 149.5 | 5 | % | 155.4 | 8 | % | |||||||||||||||||
Food Equipment & Appliances | 141.9 | 5 | % | 99.5 | 5 | % | |||||||||||||||||
Construction/Mining | 139.7 | 5 | % | 89.7 | 4 | % | |||||||||||||||||
Medical | 123.1 | 4 | % | 95.3 | 5 | % | |||||||||||||||||
Other | 149.3 | 5 | % | 104.8 | 5 | % | |||||||||||||||||
Total | $ | 2,825.6 | 100 | % | $ | 2,034.4 | 100 | % |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Nickel-based alloys and specialty alloys | 54 | % | 45 | % | 52 | % | 43 | % | |||||||||||||||
Precision forgings, castings and components | 15 | % | 15 | % | 15 | % | 16 | % | |||||||||||||||
Precision rolled strip products | 12 | % | 19 | % | 14 | % | 19 | % | |||||||||||||||
Titanium and titanium-based alloys | 11 | % | 12 | % | 11 | % | 12 | % | |||||||||||||||
Zirconium and related alloys | 8 | % | 9 | % | 8 | % | 10 | % | |||||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Sales: | |||||||||||||||||||||||
High Performance Materials & Components | $ | 457.6 | $ | 300.0 | $ | 1,195.3 | $ | 841.5 | |||||||||||||||
Advanced Alloys & Solutions | 574.4 | 425.7 | 1,630.3 | 1,192.9 | |||||||||||||||||||
Total external sales | $ | 1,032.0 | $ | 725.7 | $ | 2,825.6 | $ | 2,034.4 | |||||||||||||||
EBITDA: | |||||||||||||||||||||||
High Performance Materials & Components | $ | 85.8 | $ | 37.4 | $ | 214.2 | $ | 99.2 | |||||||||||||||
% of Sales | 18.8 | % | 12.5 | % | 17.9 | % | 11.8 | % | |||||||||||||||
Advanced Alloys & Solutions | 75.8 | 56.8 | 255.7 | 142.5 | |||||||||||||||||||
% of Sales | 13.2 | % | 13.3 | % | 15.7 | % | 11.9 | % | |||||||||||||||
Total segment EBITDA | $ | 161.6 | $ | 94.2 | $ | 469.9 | $ | 241.7 | |||||||||||||||
% of Sales | 15.7 | % | 13.0 | % | 16.6 | % | 11.9 | % | |||||||||||||||
Corporate expenses | (14.2) | (12.9) | (47.9) | (41.0) | |||||||||||||||||||
Closed operations and other expense | (6.3) | (1.4) | (12.8) | (4.5) | |||||||||||||||||||
ATI Adjusted EBITDA | 141.1 | 79.9 | 409.2 | 196.2 | |||||||||||||||||||
Depreciation & amortization | (35.6) | (35.6) | (107.1) | (108.0) | |||||||||||||||||||
Interest expense, net | (20.8) | (25.1) | (67.8) | (72.2) | |||||||||||||||||||
Restructuring and other credits (charges) | (17.3) | 2.3 | (23.5) | 8.5 | |||||||||||||||||||
Strike related costs | — | (22.9) | — | (63.2) | |||||||||||||||||||
Retirement benefit settlement gain | — | 64.9 | — | 64.9 | |||||||||||||||||||
Gain (loss) on asset sales and sales of businesses, net | — | 13.7 | (134.2) | 13.7 | |||||||||||||||||||
Income before income taxes | 67.4 | 77.2 | 76.6 | 39.9 | |||||||||||||||||||
Income tax provision | 3.0 | 22.0 | 11.3 | 31.5 | |||||||||||||||||||
Net income | 64.4 | 55.2 | 65.3 | 8.4 | |||||||||||||||||||
Less: Net income attributable to noncontrolling interests | 3.3 | 6.5 | 11.3 | 16.8 | |||||||||||||||||||
Net income (loss) attributable to ATI | $ | 61.1 | $ | 48.7 | $ | 54.0 | $ | (8.4) |
September 30, | December 31, | ||||||||||
(In millions) | 2022 | 2021 | |||||||||
Accounts receivable | $ | 678.1 | $ | 470.0 | |||||||
Short-term contract assets | 70.2 | 53.9 | |||||||||
Inventory | 1,216.9 | 1,046.3 | |||||||||
Accounts payable | (410.2) | (375.5) | |||||||||
Short-term contract liabilities | (120.7) | (116.2) | |||||||||
Subtotal | 1,434.3 | 1,078.5 | |||||||||
Allowance for doubtful accounts | 3.9 | 3.8 | |||||||||
Inventory valuation reserves | 69.4 | 65.4 | |||||||||
Managed working capital | $ | 1,507.6 | $ | 1,147.7 | |||||||
Annualized prior 3 months sales | $ | 4,128.0 | $ | 3,061.5 | |||||||
Managed working capital as a % of annualized sales | 36.5 | % | 37.5 | % |
Three months ended | Three months ended | ||||||||||||||||||||||
Markets | September 30, 2022 | September 30, 2021 | |||||||||||||||||||||
Aerospace & Defense: | |||||||||||||||||||||||
Jet Engines- Commercial | $ | 285.7 | 63 | % | $ | 120.4 | 40 | % | |||||||||||||||
Airframes- Commercial | 49.8 | 11 | % | 35.0 | 12 | % | |||||||||||||||||
Defense | 38.5 | 8 | % | 52.1 | 17 | % | |||||||||||||||||
Total Aerospace & Defense | 374.0 | 82 | % | 207.5 | 69 | % | |||||||||||||||||
Energy: | |||||||||||||||||||||||
Oil & Gas | 6.9 | 1 | % | 10.4 | 3 | % | |||||||||||||||||
Specialty Energy | 26.4 | 6 | % | 47.1 | 16 | % | |||||||||||||||||
Total Energy | 33.3 | 7 | % | 57.5 | 19 | % | |||||||||||||||||
Medical | 22.3 | 5 | % | 16.8 | 6 | % | |||||||||||||||||
Construction/Mining | 9.5 | 2 | % | 5.6 | 2 | % | |||||||||||||||||
Other | 18.5 | 4 | % | 12.6 | 4 | % | |||||||||||||||||
Total | $ | 457.6 | 100 | % | $ | 300.0 | 100 | % |
Three months ended September 30, | |||||||||||
2022 | 2021 | ||||||||||
Nickel-based alloys and specialty alloys | 52 | % | 46 | % | |||||||
Precision forgings, castings and components | 32 | % | 35 | % | |||||||
Titanium and titanium-based alloys | 16 | % | 19 | % | |||||||
Total | 100 | % | 100 | % |
Nine months ended | Nine months ended | ||||||||||||||||||||||
Markets | September 30, 2022 | September 30, 2021 | |||||||||||||||||||||
Aerospace & Defense: | |||||||||||||||||||||||
Jet Engines- Commercial | $ | 696.1 | 58 | % | $ | 338.3 | 40 | % | |||||||||||||||
Airframes- Commercial | 130.9 | 11 | % | 95.6 | 11 | % | |||||||||||||||||
Defense | 120.6 | 10 | % | 172.0 | 21 | % | |||||||||||||||||
Total Aerospace & Defense | 947.6 | 79 | % | 605.9 | 72 | % | |||||||||||||||||
Energy: | |||||||||||||||||||||||
Oil & Gas | 32.1 | 3 | % | 29.0 | 3 | % | |||||||||||||||||
Specialty Energy | 88.0 | 7 | % | 107.6 | 13 | % | |||||||||||||||||
Total Energy | 120.1 | 10 | % | 136.6 | 16 | % | |||||||||||||||||
Medical | 52.3 | 5 | % | 42.6 | 5 | % | |||||||||||||||||
Construction/Mining | 25.8 | 2 | % | 16.8 | 2 | % | |||||||||||||||||
Other | 49.5 | 4 | % | 39.6 | 5 | % | |||||||||||||||||
Total | $ | 1,195.3 | 100 | % | $ | 841.5 | 100 | % |
Nine months ended September 30, | |||||||||||
2022 | 2021 | ||||||||||
Nickel-based alloys and specialty alloys | 50 | % | 43 | % | |||||||
Precision forgings, castings and components | 34 | % | 37 | % | |||||||
Titanium and titanium-based alloys | 16 | % | 20 | % | |||||||
Total | 100 | % | 100 | % |
Three months ended | Three months ended | ||||||||||||||||||||||
Markets | September 30, 2022 | September 30, 2021 | |||||||||||||||||||||
Energy: | |||||||||||||||||||||||
Oil & Gas | $ | 120.2 | 21 | % | $ | 82.0 | 19 | % | |||||||||||||||
Specialty Energy | 39.2 | 7 | % | 26.7 | 6 | % | |||||||||||||||||
Total Energy | 159.4 | 28 | % | 108.7 | 25 | % | |||||||||||||||||
Aerospace & Defense: | |||||||||||||||||||||||
Jet Engines- Commercial | 26.9 | 5 | % | 8.4 | 2 | % | |||||||||||||||||
Airframes- Commercial | 81.6 | 14 | % | 36.3 | 9 | % | |||||||||||||||||
Defense | 47.6 | 8 | % | 30.7 | 7 | % | |||||||||||||||||
Total Aerospace & Defense | 156.1 | 27 | % | 75.4 | 18 | % | |||||||||||||||||
Automotive | 66.1 | 11 | % | 76.2 | 18 | % | |||||||||||||||||
Electronics | 47.8 | 8 | % | 56.1 | 13 | % | |||||||||||||||||
Food Equipment & Appliances | 45.0 | 8 | % | 43.4 | 10 | % | |||||||||||||||||
Construction/Mining | 38.3 | 7 | % | 19.7 | 5 | % | |||||||||||||||||
Other | 61.7 | 11 | % | 46.2 | 11 | % | |||||||||||||||||
Total | $ | 574.4 | 100 | % | $ | 425.7 | 100 | % |
Three months ended September 30, | |||||||||||
2022 | 2021 | ||||||||||
Nickel-based alloys and specialty alloys | 57 | % | 45 | % | |||||||
Precision rolled strip products | 22 | % | 33 | % | |||||||
Zirconium and related alloys | 14 | % | 15 | % | |||||||
Titanium and titanium-based alloys | 7 | % | 7 | % | |||||||
Total | 100 | % | 100 | % |
Nine months ended | Nine months ended | ||||||||||||||||||||||
Markets | September 30, 2022 | September 30, 2021 | |||||||||||||||||||||
Energy: | |||||||||||||||||||||||
Oil & Gas | 323.3 | 20 | % | 202.0 | 17 | % | |||||||||||||||||
Specialty Energy | 109.3 | 6 | % | 95.0 | 8 | % | |||||||||||||||||
Total Energy | 432.6 | 26 | % | 297.0 | 25 | % | |||||||||||||||||
Aerospace & Defense: | |||||||||||||||||||||||
Jet Engines- Commercial | 61.8 | 4 | % | 26.2 | 2 | % | |||||||||||||||||
Airframes- Commercial | 200.3 | 12 | % | 88.3 | 8 | % | |||||||||||||||||
Defense | 123.6 | 8 | % | 97.9 | 8 | % | |||||||||||||||||
Total Aerospace & Defense | 385.7 | 24 | % | 212.4 | 18 | % | |||||||||||||||||
Automotive | 227.4 | 14 | % | 232.3 | 20 | % | |||||||||||||||||
Electronics | 147.6 | 9 | % | 154.5 | 13 | % | |||||||||||||||||
Food Equipment & Appliances | 141.7 | 9 | % | 99.4 | 8 | % | |||||||||||||||||
Construction/Mining | 113.9 | 7 | % | 72.9 | 6 | % | |||||||||||||||||
Other | 181.4 | 11 | % | 124.4 | 10 | % | |||||||||||||||||
Total | $ | 1,630.3 | 100 | % | $ | 1,192.9 | 100 | % |
Nine months ended September 30, | |||||||||||
2022 | 2021 | ||||||||||
Nickel-based alloys and specialty alloys | 55 | % | 42 | % | |||||||
Precision rolled strip products | 25 | % | 34 | % | |||||||
Zirconium and related alloys | 14 | % | 17 | % | |||||||
Titanium and titanium-based alloys | 6 | % | 7 | % | |||||||
Total | 100 | % | 100 | % |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
High Performance Materials & Components | $ | 16.7 | $ | 18.2 | $ | 51.5 | $ | 57.0 | |||||||||||||||
Advanced Alloys & Solutions | 17.1 | 16.3 | 50.0 | 47.9 | |||||||||||||||||||
Other | 1.8 | 1.1 | 5.6 | 3.1 | |||||||||||||||||||
$ | 35.6 | $ | 35.6 | $ | 107.1 | $ | 108.0 |
Three months ended | Latest 12 months ended | Fiscal year ended | ||||||||||||||||||||||||
September 30, 2022 | September 30, 2021 | September 30, 2022 | December 31, 2021 | |||||||||||||||||||||||
Net income (loss) attributable to ATI | $ | 61.1 | $ | 48.7 | $ | 24.2 | $ | (38.2) | ||||||||||||||||||
Net income attributable to noncontrolling interests | 3.3 | 6.5 | 16.5 | 22.0 | ||||||||||||||||||||||
Net income (loss) | 64.4 | 55.2 | 40.7 | (16.2) | ||||||||||||||||||||||
Interest expense | 20.8 | 25.1 | 92.5 | 96.9 | ||||||||||||||||||||||
Depreciation and amortization | 35.6 | 35.6 | 143.0 | 143.9 | ||||||||||||||||||||||
Income tax provision | 3.0 | 22.0 | 6.6 | 26.8 | ||||||||||||||||||||||
Restructuring and other charges (credits) | 17.3 | (2.3) | 21.5 | (10.5) | ||||||||||||||||||||||
Strike related costs | — | 22.9 | — | 63.2 | ||||||||||||||||||||||
Retirement benefit settlement gain | — | (64.9) | — | (64.9) | ||||||||||||||||||||||
Debt extinguishment charge | — | — | 65.5 | 65.5 | ||||||||||||||||||||||
Loss (gain) on asset sales and sale of businesses, net | — | (13.7) | 134.1 | (13.8) | ||||||||||||||||||||||
Adjusted EBITDA | $ | 141.1 | $ | 79.9 | $ | 503.9 | $ | 290.9 | ||||||||||||||||||
Debt | $ | 1,729.3 | $ | 1,842.9 | ||||||||||||||||||||||
Add: Debt issuance costs | 18.0 | 20.8 | ||||||||||||||||||||||||
Total debt | 1,747.3 | 1,863.7 | ||||||||||||||||||||||||
Less: Cash | (329.1) | (687.7) | ||||||||||||||||||||||||
Net debt | $ | 1,418.2 | $ | 1,176.0 | ||||||||||||||||||||||
Total Debt to Adjusted EBITDA | 3.47 | 6.41 | ||||||||||||||||||||||||
Net Debt to Adjusted EBITDA | 2.81 | 4.04 |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
Item 4. | Controls and Procedures |
Item 1. | Legal Proceedings |
Item 1A. | Risk Factors |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Period | Total Number of Shares (or Units) Purchased (a) | Average Price Paid per Share (or Unit) (b) | Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs | ||||||||||||||||||||||
July 1-31, 2022 | — | $ | — | — | $ | 60,076,705 | ||||||||||||||||||||
August 1-31, 2022 | 2,463 | $ | 25.72 | — | $ | 60,076,705 | ||||||||||||||||||||
September 1-30, 2022 | 488,955 | $ | 30.69 | 488,955 | $ | 45,129,442 | ||||||||||||||||||||
Total | 491,418 | $ | 30.67 | 488,955 | $ | 45,129,442 |
Item 6. | Exhibits |
10.1 | ||||||||
10.2 | ||||||||
31.1 | ||||||||
31.2 | ||||||||
32.1 | ||||||||
101.INS | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document. | |||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. | |||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |||||||
104 | Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
Date: | November 3, 2022 | By | /s/ Donald P. Newman | ||||||||||||||
Donald P. Newman | |||||||||||||||||
Executive Vice President, Finance and Chief Financial Officer (Principal Financial and Accounting Officer) | |||||||||||||||||
BORROWERS: | |||||
WITNESS/ATTEST: /s/ Robert S. Wetherbee | OREGON METALLURGICAL, LLC, an Oregon limited liability company By: /s/ Donald P. Newman Name: Donald P. Newman Title: Executive Vice President | ||||
WITNESS/ATTEST: /s/ Robert S. Wetherbee | ALLEGHENY LUDLUM, LLC, a Pennsylvania limited liability company By: /s/ Donald P. Newman Name: Donald P. Newman Title: Executive Vice President | ||||
WITNESS/ATTEST: /s/ Robert S. Wetherbee | TDY INDUSTRIES, LLC, a California limited liability company By: /s/ Donald P. Newman Name: Donald P. Newman Title: Executive Vice President | ||||
WITNESS/ATTEST: /s/ Robert S. Wetherbee | INTERNATIONAL HEARTH MELTING, LLC, an Oregon limited liability company By: Oregon Metallurgical, LLC, its Managing Member By: /s/ Donald P. Newman Name: Donald P. Newman Title: Executive Vice President |
BORROWERS (Continued) | |||||
WITNESS/ATTEST: /s/ Robert S. Wetherbee | ATI PRECISION FINISHING, LLC, a Pennsylvania limited liability company By: /s/ Donald P. Newman Name: Donald P. Newman Title: Executive Vice President | ||||
WITNESS/ATTEST: /s/ Robert S. Wetherbee | TITANIUM WIRE CORPORATION, a Pennsylvania corporation By: /s/ Donald P. Newman Name: Donald P. Newman Title: Executive Vice President | ||||
/s/ Robert S. Wetherbee | ENVIRONMENTAL, INC., a California corporation By: /s/ Donald P. Newman Name: Donald P. Newman Title: Executive Vice President | ||||
WITNESS/ATTEST: /s/ Robert S. Wetherbee | ATI TITANIUM LLC, a Delaware limited liability company By: /s/ Donald P. Newman Name: Donald P. Newman Title: Executive Vice President |
BORROWERS (Continued) | |||||
WITNESS/ATTEST: /s/ Robert S. Wetherbee | ATI LADISH LLC, a Wisconsin limited liability company By: /s/ Donald P. Newman Name: Donald P. Newman Title: Executive Vice President | ||||
WITNESS/ATTEST: /s/ Robert S. Wetherbee | ATI LADISH MACHINING, INC., a Nevada corporation By: /s/ Donald P. Newman Name: Donald P. Newman Title: Executive Vice President | ||||
WITNESS/ATTEST: /s/ Robert S. Wetherbee | CHEN-TECH INDUSTRIES, INC., a Nevada corporation By: /s/ Donald P. Newman Name: Donald P. Newman Title: Executive Vice President | ||||
WITNESS/ATTEST: /s/ Robert S. Wetherbee | ATI SPECIALTY MATERIALS, LLC, a Pennsylvania limited liability company By: /s/ Donald P. Newman Name: Donald P. Newman Title: Executive Vice President | ||||
BORROWERS (Continued) | |||||
WITNESS/ATTEST: /s/ Robert S. Wetherbee | ATI SPECIALTY ALLOYS & COMPONENTS, LLC, a Delaware limited liability company By: /s/ Donald P. Newman Name: Donald P. Newman Title: Executive Vice President | ||||
WITNESS/ATTEST: /s/ Robert S. Wetherbee | ATI FLAT ROLLED PRODUCTS HOLDINGS, LLC, a Pennsylvania limited liability company By: /s/ Donald P. Newman Name: Donald P. Newman Title: Executive Vice President | ||||
WITNESS/ATTEST: /s/ Robert S. Wetherbee | ATI SALEM OPERATIONS LLC, a Delaware limited liability company By: /s/ Donald P. Newman Name: Donald P. Newman Title: Executive Vice President | ||||
GUARANTORS: | |||||
WITNESS/ATTEST: /s/ Robert S. Wetherbee | TDY HOLDINGS, LLC, a Delaware limited liability company By: /s/ Donald P. Newman Name: Donald P. Newman Title: Executive Vice President | ||||
WITNESS/ATTEST: /s/ Robert S. Wetherbee | ATI OPERATING HOLDINGS, LLC, a Delaware limited liability company By: /s/ Donald P. Newman Name: Donald P. Newman Title: President | ||||
WITNESS/ATTEST: _________________________ | ATI PROPERTIES LLC, a Delaware limited liability company By: /s/ Elliot S. Davis ____ Name: Elliot S. Davis Title: Vice President | ||||
WITNESS/ATTEST: /s/ Robert S. Wetherbee | ALC FUNDING, LLC, a Delaware limited liability company By: /s/ Donald P. Newman Name: Donald P. Newman Title: Executive Vice President | ||||
WITNESS/ATTEST: /s/ Robert S. Wetherbee | ATI INC., a Delaware corporation By: /s/ Donald P. Newman Name: Donald P. Newman Title: Executive Vice President, Finance, and Chief Financial Officer |
GUARANTORS (continued): | |||||
WITNESS/ATTEST: /s/ Robert S. Wetherbee | ATI CANADA HOLDINGS, INC., a Delaware corporation By: /s/ Donald P. Newman Name: Donald P. Newman Title: President | ||||
WITNESS/ATTEST: /s/ Robert S. Wetherbee | ALLEGHENY TECHNOLOGIES INTERNATIONAL, INC., a California corporation By: /s/ Donald P. Newman Name: Donald P. Newman Title: President | ||||
WITNESS/ATTEST: /s/ Robert S. Wetherbee | ATI ALLEGHENY LUDLUM, INC., a Massachusetts corporation By: /s/ Donald P. Newman Name: Donald P. Newman Title: Executive Vice President | ||||
WITNESS/ATTEST: /s/ Robert S. Wetherbee | TI OREGON, INC., an Oregon corporation By: /s/ Donald P. Newman Name: Donald P. Newman Title: Executive Vice President | ||||
GUARANTORS (Continued): | |||||
WITNESS/ATTEST: /s/ Robert S. Wetherbee | JESSOP STEEL, LLC, a Pennsylvania limited liability company By: /s/ Donald P. Newman Name: Donald P. Newman Title: Executive Vice President | ||||
WITNESS/ATTEST: /s/ Robert S. Wetherbee | JEWEL ACQUISITION, LLC, a Delaware limited liability company By: /s/ Donald P. Newman Name: Donald P. Newman Title: Executive Vice President | ||||
WITNESS/ATTEST: /s/ Robert S. Wetherbee | AII ACQUISITION, LLC, a Pennsylvania limited liability company By: /s/ Donald P. Newman Name: Donald P. Newman Title: President | ||||
WITNESS/ATTEST: /s/ Robert S. Wetherbee | ATI FRP PROPERTIES, LLC, a Delaware limited liability company By: /s/ Donald P. Newman Name: Donald P. Newman Title: Executive Vice President | ||||
LENDERs: | |||||
PNC BANK, NATIONAL ASSOCIATION, As Lender and as Agent | |||||
By: /s/ Douglas Hoffman _ Name: Douglas Hoffman Title: Senior Vice President The Tower at PNC Plaza, 14th Floor 300 Fifth Avenue Pittsburgh, PA 15222 Attention: Business Credit |
BANK OF AMERICA, N.A. | |||||
By: /s/ Christy Bowen _ Name: Christy Bowen Title: Senior Vice President Four Penn Center, 1600 JFK Blvd. Philadelphia, PA 19103 Attention: Christy Bowen |
CITIBANK, N.A. | |||||
By: /s/ Brendan MacKay _ Name: Brendan MacKay Title: Vice President & Director 390 Greenwich St. New York, NY 10013 Attention: Brendan MacKay |
JPMORGAN CHASE BANK, N.A. | |||||
By: /s/ James Shender _ Name: James Shender Title: Executive Director _ 383 Madison Avenue, Floor 24 New York, NY 10179 Attention: James Shender |
MUFG UNION BANK, N.A. | |||||
By: /s/ Thomas Kainamura _ Name: Thomas Kainamura Title: Director 445 South Figueroa Street Los Angeles, CA 90071 Attention: Thomas Kainamura |
WELLS FARGO BANK, NATIONAL ASSOCIATION | |||||
By: /s/ Peter Aziz _ Name: Peter Aziz Title: Director 1800 Century Park East, Suite 1100 Los Angeles, CA 90067 Attention: Peter Aziz |
HSBC Bank USA, N.A. | |||||
By: /s/ Jennifer Jordan _ Name: Jennifer Jordan Title: Vice President 452 Fifth Avenue New York, NY 10018 Attention: Chris Helmeci |
Goldman Sachs Bank USA | |||||
By: /s/ Andrew B. Vernon _ Name: Andrew B. Vernon Title: Authorized Signatory 200 West Street New York, NY 10282 Attention: Mahesh Mohan |
/s/ Robert S. Wetherbee | ||
Robert S. Wetherbee | ||
Board Chair, President and Chief Executive Officer |
/s/ Donald P. Newman | ||
Donald P. Newman | ||
Executive Vice President, Finance and Chief Financial Officer |
Date: | November 3, 2022 | /s/ Robert S. Wetherbee | |||||||||
Robert S. Wetherbee | |||||||||||
Board Chair, President and Chief Executive Officer | |||||||||||
Date: | November 3, 2022 | /s/ Donald P. Newman | |||||||||
Donald P. Newman | |||||||||||
Executive Vice President, Finance and Chief Financial Officer |
CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) - $ / shares |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (USD per share) | $ 0.10 | $ 0.10 |
Preferred stock, authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Common stock, par value (USD per share) | $ 0.10 | $ 0.10 |
Common stock, authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, issued (in shares) | 131,383,969 | 127,484,902 |
Common stock, outstanding (in shares) | 129,417,664 | 127,253,045 |
Treasury stock (in shares) | 1,966,305 | 231,857 |
Accounting Policies |
9 Months Ended |
---|---|
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Accounting Policies | Accounting Policies The interim consolidated financial statements include the accounts of ATI Inc. and its subsidiaries. Unless the context requires otherwise, “ATI” and “the Company” refer to ATI Inc. 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 Article 10 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 2021 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, 2021 financial information has been derived from the Company’s audited consolidated financial statements. New Accounting Pronouncements Adopted In November 2021, the Financial Accounting Standards Board (FASB) issued new accounting guidance related to disclosures about certain types of government assistance. This new guidance requires business entities that account for transactions with a government by analogizing to a grant or contribution accounting model to make certain annual disclosures. It requires disclosure of the nature and significant terms and considerations of the transactions, the accounting policies used and the effects of those transactions on an entity’s financial statements. This new guidance is effective for the Company in fiscal year 2022, with early adoption permitted. The Company adopted this new accounting guidance effective January 1, 2022. The adoption of these changes does not have an impact on the Company’s consolidated financial statements other than the annual disclosure requirements. Pending Accounting Pronouncements In September 2022, the FASB issued new accounting guidance related to disclosures about supplier finance programs. Supplier finance programs allow a buyer to offer its suppliers the option for access to payment in advance of an invoice due date, which is paid by a third-party finance provider or intermediary on the basis of invoices that the buyer has confirmed as valid. This new guidance requires a buyer in a supplier finance program to disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period, and potential magnitude, using both qualitative and quantitative information about its supplier finance programs. This new guidance, with the exception of disclosures on rollforward information, will be effective for the Company in fiscal year 2023, with early adoption permitted. The rollforward information disclosures are effective for the Company in fiscal year 2024, with early adoption permitted. The Company does not plan to early adopt this guidance. The adoption of these changes is not expected to have an impact on the Company’s consolidated financial statements other than disclosure requirements.
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Revenue from Contracts with Customers |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contracts with Customers | Revenue from Contracts with Customers Disaggregation of Revenue The Company operates in two business segments: High Performance Materials & Components (HPMC) and Advanced Alloys & Solutions (AA&S). Revenue is disaggregated within these two business segments by diversified global markets, primary geographical markets and diversified products. Comparative information of the Company’s overall revenues (in millions) by global and geographical markets for the third quarters and nine months ended September 30, 2022 and 2021 is included in the following tables.
Comparative information of the Company’s major products based on their percentages of sales is included in the following table. The Company no longer reports standard stainless product sales as a separate product category. Prior period information includes these sales within the nickel-based alloys and specialty alloys category. Hot-Rolling and Processing Facility (HRPF) conversion service sales in the AA&S segment are excluded from this presentation.
The Company maintained a backlog of confirmed orders totaling $2.7 billion and $1.7 billion at September 30, 2022 and 2021, respectively. Due to the structure of the Company’s long-term agreements, approximately 80% of this backlog at September 30, 2022 represented booked orders with performance obligations that will be satisfied within the next 12 months. The backlog does not reflect any elements of variable consideration. Contract balances As of September 30, 2022 and December 31, 2021, accounts receivable with customers were $682.0 million and $473.8 million, respectively. The following represents the rollforward of accounts receivable - reserve for doubtful accounts and contract assets and liabilities for the nine months ended September 30, 2022 and 2021:
(a) Long-term contract liabilities are included in Other long-term liabilities on the consolidated balance sheets. Contract costs for obtaining and fulfilling a contract were $5.1 million and $5.2 million as of September 30, 2022 and December 31, 2021, respectively, and are reported in other long-term assets on the consolidated balance sheet. Contract cost amortization expense for the three and nine months ended September 30, 2022 was $0.2 million and $0.7 million, respectively. Contract cost amortization for the three and nine months ended September 30, 2021 was $0.2 million and $0.7 million, respectively.
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Inventories |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories Inventories at September 30, 2022 and December 31, 2021 were as follows (in millions):
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Property Plant And Equipment |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property Plant and Equipment | Property, Plant and Equipment Property, plant and equipment at September 30, 2022 and December 31, 2021 was as follows (in millions):
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Divestitures |
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Sep. 30, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Divestitures | Divestitures As announced on March 3, 2022, ATI’s Board of Directors approved the divestiture of the Sheffield, UK operations, which included facilities for melting and re-melting, machining and bar mill operations, and was part of the Specialty Materials business in the HPMC segment. The Company’s Sheffield, UK operations were classified as held for sale as of March 31, 2022, and the terms of sale resulted in indicators of impairment in the long-lived assets of this disposal group. A $22.3 million long-lived asset impairment charge was recorded as part of the $25.1 million partial loss on sale of this business recorded in the first quarter 2022. This long-lived asset impairment charge was determined using the held for sale framework and represents Level 1 information in the fair value hierarchy. On May 12, 2022, the Company completed the sale of its Sheffield, UK operations and recognized an additional $115.9 million loss in the second quarter of 2022, bringing the total loss on sale to $141.0 million for the nine months ended September 30, 2022. The loss on sale is reported in loss on asset sales and sales of businesses, net, on the consolidated statement of operations and is excluded from HPMC segment results. The loss includes $55.6 million related to the UK defined benefit pension plan, of which $26.1 million was reported as a net pension asset but which was in a deficit funding position for UK statutory reporting purposes, and $29.5 million in accumulated other comprehensive loss on the consolidated ATI balance sheet. The loss also includes $20.0 million of cumulative translation adjustment foreign exchange losses since ATI’s acquisition of these operations in 1998. The Company paid transaction costs, net of proceeds received, of $2.8 million in the second quarter of 2022, which is reported as an investing activity on the consolidated statement of cash flows, and expects to receive an additional approximately $3 million cash consideration on the sale of this business by the end of fiscal year 2022. In 2021, the Sheffield operations had external sales of $36 million, with over 80% of its sales to energy markets, primarily oil & gas, and had a net loss before tax of $9 million. During the first quarter of 2022, the Company completed the sale of the small Pico Rivera, CA operations as part of the strategy to exit standard stainless products. The Company received cash proceeds of $6.2 million on the sale of these assets, which was primarily reported within operating activities on the consolidated statement of cash flows. The Company recognized a $6.8 million pretax gain on sale, including de-recognizing certain lease liabilities, in the first quarter of 2022, which is reported in loss on asset sales and sales of businesses, net, on the consolidated statement of operations and is excluded from AA&S segment results. On August 13, 2021, the Company completed the sale of its Flowform Products business for $55 million. Located in Billerica, MA, this operation used flowforming process technologies to produce thin-walled components in net or near-net shapes across multiple alloy systems for use in the aerospace & defense and energy markets. The Company received cash proceeds, net of transaction costs and net working capital adjustments, of $53 million on the sale of this business during the quarter ended September 30, 2021, which is reported as an investing activity on the consolidated statement of cash flows. With $12.2 million of goodwill allocated to this operation from ATI’s Forged Products reporting unit, the Company recognized a $13.7 million pre-tax gain in the quarter ended September 30, 2021, which is recorded in other income/expense, net, on the consolidated statement of operations and is excluded from HPMC segment results. This business was reported as part of the HPMC segment through the date of sale.
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Joint Ventures |
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Sep. 30, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Joint Ventures | Joint Ventures The financial results of majority-owned joint ventures are consolidated into the Company’s operating results and financial position, with the minority ownership interest recognized in the consolidated statements of operations as net income attributable to noncontrolling interests, and as equity attributable to the noncontrolling interests within total stockholders’ equity. Investments in which the Company exercises significant influence, but which it does not control (generally a 20% to 50% ownership interest), are accounted for under the equity method of accounting. Majority-Owned Joint Ventures STAL: The Company has a 60% interest in the Chinese joint venture known as STAL. The remaining 40% interest in STAL is owned by China Baowu Steel Group Corporation Limited, a state authorized investment company whose equity securities are publicly traded in the People’s Republic of China. STAL is part of ATI’s AA&S segment and manufactures Precision Rolled Strip stainless products mainly for the electronics and automotive markets located in Asia. Cash and cash equivalents held by STAL as of September 30, 2022 were $65.3 million. Next Gen Alloys LLC: The Company has a 51% interest in Next Gen Alloys LLC, a joint venture with GE Aviation for the development of a new meltless titanium alloy powder manufacturing technology. The titanium alloy powders are being developed for use in additive manufacturing applications, including 3D printing. Next Gen Alloys LLC funds its development activities through the sale of shares to the two joint venture partners, and in the first quarter of 2022 the Company received $0.9 million from sales of noncontrolling interests to its joint venture partner, which is reported as a financing activity on the consolidated statements of cash flows. Cash and cash equivalents held by this joint venture as of September 30, 2022 were $1.5 million. Equity Method Joint Ventures A&T Stainless: The Company has a 50% interest in A&T Stainless, a joint venture with an affiliate company of Tsingshan Group (Tsingshan) to produce 60-inch wide stainless sheet products for sale in North America. Tsingshan purchased its 50% joint venture interest in A&T Stainless in 2018 for $17.5 million, of which $12.0 million has been received by ATI through September 30, 2022. In October 2022, ATI received the remaining $5.5 million from Tsingshan. The A&T Stainless operations included the Company’s previously-idled direct roll and pickle (DRAP) facility in Midland, PA. ATI provided hot-rolling conversion services to A&T Stainless using the AA&S segment’s HRPF. ATI accounts for the A&T Stainless joint venture under the equity method of accounting. In March 2018, ATI filed for an exclusion from the Section 232 tariffs on behalf of A&T Stainless, which imports semi-finished stainless slab products from Indonesia. In April 2019, the Company learned that this exclusion request was denied by the United States Department of Commerce. ATI filed new requests on behalf of A&T Stainless for exclusion from the Section 232 tariffs in October 2019. These requests were denied by the United States Department of Commerce in the second quarter of 2020, and the 25% tariff remains in place. Due to repeated tariff exclusion denials, the DRAP facility was idled in an orderly shut down process that was completed in the third quarter of 2020. In April 2022, ATI and A&T Stainless entered into a settlement agreement with the United States pursuant to which the United States, without admitting liability, agreed to refund a substantial portion of the Section 232 tariffs previously paid by A&T Stainless. As a result of the settlement agreement, A&T Stainless recorded tariff refunds and accrued interest of approximately $19.7 million, which was recognized as income by the joint venture in the second quarter of 2022. ATI’s share of A&T Stainless results was a loss of $0.5 million for the three months ended September 30, 2022 and income of $8.7 million for the nine months ended September 30, 2022, which included ATI’s $9.9 million share of the tariff refund and accrued interest. ATI’s share of A&T Stainless results was income of $0.3 million for the three months ended September 30, 2021 and a net loss of $0.6 million for the nine months ended September 30, 2021. ATI’s share of A&T Stainless results is included within other income/expense, net, on the consolidated statements of operations and in the AA&S segment’s operating results. As of September 30, 2022 and December 31, 2021, ATI had net receivables for working capital advances and administrative services from A&T Stainless of $2.9 million. For the September 30, 2022 balance of net receivables, $0.5 million was reported in prepaid expenses and other current assets and $2.4 million in other long-term assets on the consolidated balance sheet, while for December 31, 2021, $0.7 million was reported in prepaid expenses and other current assets and $2.2 million in other long-term assets. Uniti: ATI has a 50% interest in the industrial titanium joint venture known as Uniti, with the remaining 50% interest held by VSMPO, a Russian producer of titanium, aluminum, and specialty steel products. Uniti is accounted for under the equity method of accounting. ATI’s share of Uniti’s income was $1.3 million and $2.5 million for the three and nine months ended September 30, 2022, respectively, and $0.1 million and $1.0 million for the three and nine months ended September 30, 2021, respectively, which is included in the AA&S segment’s operating results, and within other income/expense, net on the consolidated statements of operations. On March 9, 2022, the Company announced the termination of Uniti, LLC. The joint venture is expected to be dissolved in early 2023. No impairments were recorded as a result of the decision to terminate the Uniti joint venture.
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Supplemental Financial Statement Information - (Notes) |
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Supplemental Financial Statement Information | Supplemental Financial Statement Information Other income (expense), net for the three and nine months ended September 30, 2022 and 2021 was as follows:
Restructuring Restructuring charges for the third quarter and nine months ended September 30, 2022 were a credit of $2.6 million and $5.0 million, respectively, for a reduction in severance-related reserves related to approximately 60 and 110 employees, respectively, based on changes in planned operating rates and revised workforce reduction estimates. Restructuring charges for the third quarter ended September 30, 2021 were a net credit of $2.3 million for a reduction in severance-related reserves related to approximately 50 employees based on changes in planned operating rates and revised workforce reduction estimates. Restructuring charges for the nine months ended September 30, 2021 were a net credit of $8.5 million, reflecting a $9.2 million reduction in severance-related reserves related to approximately 250 employees based on changes in planned operating rates and revised workforce reduction estimates, partially offset by $0.7 million of other costs related to facility idlings. These amounts were presented as restructuring charges/credits in the consolidated statements of operations and are excluded from segment EBITDA. Restructuring reserves for severance cost activity is as follows:
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt Debt at September 30, 2022 and December 31, 2021 was as follows (in millions):
(a) The payment obligations of these debentures issued by Allegheny Ludlum, LLC are fully and unconditionally guaranteed by ATI. Revolving Credit Facility On September 9, 2022, the Company amended and restated its Asset Based Lending (ABL) Credit Facility, which is collateralized by the accounts receivable and inventory of the Company’s operations. As amended, the ABL facility also provides the Company with the option of including certain machinery and equipment as additional collateral for purposes of determining availability under the facility. This amendment and restatement extended the ABL facility through September 2027 and includes an increase of $100 million in the revolving credit facility, to $600 million. The ABL continues to include a letter of credit sub-facility of up to $200 million and a $200 million term loan (Term Loan), and with the amendment now includes a swing loan facility of up to $60 million. The Term Loan can be prepaid in increments of $25 million if certain minimum liquidity conditions are satisfied. In addition, as amended, the Company has the right to request an increase of up to $300 million in the maximum amount available under the revolving credit facility for the duration of the ABL. The Company has a $50 million floating-for-fixed interest rate swap which converts a portion of the Term Loan to a 4.21% fixed interest rate. The swap matures in June 2024. The ABL, as amended, has interest rates that are consistent with the previous facility, replacing LIBOR with Secured Overnight Financing Rate (SOFR) plus an applicable SOFR adjustment. The Term Loan, as amended, has an interest rate of 2.0% above adjusted SOFR. As amended, the applicable interest rate for revolving credit borrowings under the ABL facility includes interest rate spreads based on available borrowing capacity that range between 1.25% and 1.75% for SOFR-based borrowings and between 0.25% and 0.75% for base rate borrowings. The ABL facility contains a financial covenant whereby the Company must maintain a fixed charge coverage ratio of not less than 1.00:1.00 after an event of default has occurred and is continuing or if the undrawn availability under the ABL revolving credit portion of the facility is less than the greater of (i) 10% of the then applicable maximum loan amount under the revolving credit portion of the ABL and the outstanding Term Loan balance, or (ii) $60.0 million. The Company was in compliance with the fixed charge coverage ratio as of September 30, 2022. Additionally, the Company must demonstrate minimum liquidity specified by the facility during the 90-day period immediately preceding the stated maturity date of its 3.5% Convertible Senior Notes due 2025 and the 6.95% Debentures due 2025 issued by the Company’s wholly owned subsidiary, Allegheny Ludlum LLC. Costs associated with entering into the ABL amendment were $2.4 million, and are being amortized to interest expense over the extended term of the facility ending September 2027, along with $1.7 million of unamortized deferred costs previously recorded for the ABL. The ABL, as amended, also contains customary affirmative and negative covenants for credit facilities of this type, including limitations on the Company’s ability to incur additional indebtedness or liens or to enter into investments, mergers and acquisitions, dispositions of assets and transactions with affiliates, some of which are more restrictive, at any time during the term of the ABL when the Company’s fixed charge coverage ratio is less than 1.00:1.00 and its undrawn availability under the revolving portion of the ABL is less than the greater of (a) $120 million or (b) 20% of the sum of the maximum loan amount under the revolving credit portion of the ABL and the outstanding Term Loan balance. As of September 30, 2022, there were no outstanding borrowings under the revolving portion of the ABL facility, and $40.8 million was utilized to support the issuance of letters of credit. There were no revolving credit borrowings under the ABL facility during the first nine months of 2022 or 2021. The Company also has foreign credit facilities, primarily in China, that total $58 million based on September 30, 2022 foreign exchange rates, under which $8.5 million and $27.4 million was drawn as of September 30, 2022 and December 31, 2021, respectively. 2025 Convertible Notes As of September 30, 2022, the Company had $291.4 million aggregate principal amount of 3.5% Convertible Notes due 2025 (2025 Convertible Notes) outstanding, which mature on June 15, 2025. As of September 30, 2022 and December 31, 2021, the fair value of the 2025 Convertible Notes was $535 million and $379 million, respectively, based on the quoted market price, which is classified in Level 1 of the fair value hierarchy. The 2025 Convertible Notes have a 3.5% cash coupon rate that is payable semi-annually in arrears on each June 15 and December 15. Including amortization of deferred issuance costs, the effective interest rate is 4.2% for the third quarters and nine months ended September 30, 2022 and 2021. Remaining deferred issuance costs were $5.2 million and $6.5 million at September 30, 2022 and December 31, 2021, respectively. Interest expense on the 2025 Convertible Notes was as follows:
The Company does not have the right to redeem the 2025 Convertible Notes prior to June 15, 2023. On or after June 15, 2023 and prior to the 41st scheduled trading day immediately preceding the maturity date, the Company may redeem all or any portion of the 2025 Convertible Notes, at its option, at a redemption price equal to 100% of the principal amount thereof, plus any accrued and unpaid interest, if the last reported sale price of ATI’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on the trading day immediately preceding the date on which ATI provides written notice of redemption. The initial conversion rate for the 2025 Convertible Notes is 64.5745 shares of ATI common stock per $1,000 principal amount of the 2025 Convertible Notes, equivalent to an initial conversion price of approximately $15.49 per share (18.8 million shares). Prior to the close of business on the business day immediately preceding March 15, 2025, the 2025 Convertible Notes will be convertible at the option of the holders of 2025 Convertible Notes only upon the satisfaction of specified conditions and during certain periods. Thereafter, until the close of business on the second scheduled trading day immediately preceding the maturity date, the 2025 Convertible Notes will be convertible at the option of holders of 2025 Convertible Notes at any time regardless of these conditions. Conversions of the 2025 Convertible Notes may be settled in cash, shares of ATI’s common stock or a combination thereof, at ATI’s election. ATI entered into privately negotiated capped call transactions with certain of the initial purchasers of the 2025 Convertible Notes or their respective affiliates (collectively, the Counterparties). The capped call transactions are expected generally to reduce potential dilution to ATI’s common stock upon any conversion of the 2025 Convertible Notes and/or offset any cash payments ATI is required to make in excess of the principal amount of converted 2025 Convertible Notes, as the case may be, with such reduction and/or offset subject to a cap based on the cap price. The cap price of the capped call transactions initially is approximately $19.76 per share, and is subject to adjustments under the terms of the capped call transactions. 2022 Convertible Notes During the second quarter of 2022, $82.5 million of the 2022 Convertible Senior Notes were converted into 5.7 million shares of ATI common stock, with the remaining $1.7 million of outstanding principal balance paid in cash for notes that were not converted. The conversion rate for the 2022 Convertible Notes was 69.2042 shares of ATI common stock per $1,000 principal amount of the 2022 Convertible Notes, equivalent to a conversion price of $14.45 per share. As of December 31, 2021, the fair value of the 2022 Convertible Notes was $102 million based on the quoted market price, which is classified in Level 1 of the fair value hierarchy. Interest on the 2022 Convertible Notes at the 4.75% cash coupon rate was payable semi-annually in arrears on each January 1 and July 1. Including amortization of deferred issuance costs, the effective interest rate was 5.4% for the third quarter ended September 30, 2021 and nine months ended September 30, 2022 and 2021. Remaining deferred issuance costs were $0.3 million at December 31, 2021. Interest expense on the 2022 Convertible Notes was as follows:
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Derivative Financial Instruments and Hedging |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Financial Instruments and Hedging | 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. 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 September 30, 2022, the Company had entered into financial hedging arrangements, primarily at the request of its customers related to firm orders, for an aggregate notional amount of approximately 6 million pounds of nickel with hedge dates through 2024. The aggregate notional amount hedged is approximately 11% of a single year’s estimated nickel raw material purchase requirements. These derivative instruments are used to hedge the variability of a selling price that is based on the London Metals Exchange (LME) index for nickel, as well as to hedge the variability of the purchase cost of nickel based on this LME index. Any gain or loss associated with these hedging arrangements is included in sales or cost of sales, depending on whether the underlying risk being hedged was the variable selling price or the variable raw material cost, respectively. At September 30, 2022, the outstanding financial derivatives used to hedge the Company’s exposure to energy cost volatility included natural gas cost hedges. At September 30, 2022, the Company hedged approximately 75% of its forecasted domestic requirements for natural gas for the remainder of 2022, approximately 50% for 2023 and approximately 15% for 2024. 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, primarily euro. In addition, the Company may also hedge forecasted capital expenditures and designate cash balances held in foreign currencies as hedges of forecasted foreign currency transactions. At September 30, 2022, the Company had no significant outstanding foreign currency forward contracts. The Company may enter into derivative interest rate contracts to maintain a reasonable balance between fixed- and floating-rate debt. The Company has a $50 million floating-for-fixed interest rate swap which converts a portion of the Term Loan to a 4.21% fixed rate. The swap matures in June 2024. The Company designated the interest rate swap as a cash flow hedge of the Company’s exposure to the variability of the payment of interest on a portion of its Term Loan borrowings. The ineffectiveness at hedge inception, determined from the fair value of the swap immediately prior to its July 2019 amendment, was amortized to interest expense over the initial Term Loan swap maturity date of January 12, 2021. There are no credit risk-related contingent features in the Company’s derivative contracts, and the contracts contained no provisions under which the Company has posted, or would be required to post, collateral. The counterparties to the Company’s derivative contracts are substantial and creditworthy commercial banks that are recognized market makers. The Company controls its credit exposure by diversifying across multiple counterparties and by monitoring credit ratings and credit default swap spreads of its counterparties. The Company also enters into master netting agreements with counterparties when possible. The fair values of the Company’s derivative financial instruments are presented below, representing the gross amounts recognized which are not offset by counterparty or by type of item hedged. All fair values for these derivatives were measured using Level 2 information as defined by the accounting standard hierarchy, which includes quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs derived principally from or corroborated by observable market data.
For derivative financial instruments that are designated as cash flow hedges, the gain or loss on the derivative is reported as a component of other comprehensive income (OCI) and reclassified into earnings in the same period or periods during which the hedged item affects earnings. For derivative financial instruments that are designated as fair value hedges, changes in the fair value of these derivatives are recognized in current period results and are reported as changes within accrued liabilities and other on the consolidated statements of cash flows. There were no outstanding fair value hedges as of September 30, 2022. The Company did not use net investment hedges for the periods presented. The effects of derivative instruments in the tables below are presented net of related income taxes, excluding any impacts of changes to income tax valuation allowances affecting results of operations or other comprehensive income, when applicable (see Note 15 for further explanation). Assuming market prices remain constant with those at September 30, 2022, a pre-tax gain of $11.8 million is expected to be recognized over the next 12 months. Activity with regard to derivatives designated as cash flow hedges for the three and nine month periods ended September 30, 2022 and 2021 was as follows (in millions):
(a)The gains (losses) reclassified from accumulated OCI into income related to the derivatives, with the exception of the interest rate swap, are presented in sales and cost of sales in the same period or periods in which the hedged item affects earnings. The gains (losses) reclassified from accumulated OCI into income on the interest rate swap are presented in interest expense in the same period as the interest expense on the Term Loan is recognized in earnings. The disclosures of gains or losses presented above for nickel and other raw material contracts and foreign currency contracts do not take into account the anticipated underlying transactions. Since these derivative contracts represent hedges, the net effect of any gain or loss on results of operations may be fully or partially offset.
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Fair Value Of Financial Instruments |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Of Financial Instruments | Fair Value of Financial Instruments The estimated fair value of financial instruments at September 30, 2022 was as follows:
The estimated fair value of financial instruments at December 31, 2021 was as follows:
(a)The total carrying amount for debt for both periods excludes debt issuance costs related to the recognized debt liability which is presented in the consolidated balance sheet as a direct reduction from the carrying amount of the debt liability. 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 availability of observable market data is monitored to assess the appropriate classification of financial instruments within the fair value hierarchy. Changes in economic conditions or model-based valuation techniques may require the transfer of financial instruments from one fair value level to another. In such instances, the transfer is reported at the beginning of the reporting period. The following methods and assumptions were used by the Company in estimating the fair value of its financial instruments: Cash and cash equivalents: Fair value was determined using Level 1 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 Company’s publicly traded debt were based on Level 1 information. The fair values of the other short-term and long-term debt were determined using Level 2 information.
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Retirement Benefits |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits | Retirement Benefits The Company has defined contribution retirement plans or defined benefit pension plans covering substantially all employees. Company contributions to defined contribution retirement plans are generally based on a percentage of eligible pay or based on hours worked. 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 of 1986, as amended. The Company also sponsors several postretirement plans covering certain collectively-bargained salaried and hourly employees. The plans provide health care and life insurance benefits for eligible retirees. In most retiree health care plans, Company contributions towards premiums are capped based on the cost as of a certain date, thereby creating a defined contribution. All defined benefit pension and retiree health care plans are closed to new entrants. For the three month periods ended September 30, 2022 and 2021, the components of pension and other postretirement benefit expense (income) for the Company’s defined benefit plans included the following (in millions):
For the nine month periods ended September 30, 2022 and 2021, the components of pension and other postretirement benefit expense (income) for the Company’s defined benefit plans included the following (in millions):
On May 12, 2022, the Company completed the sale of its Sheffield, UK operations (see Note 5). As a result of this sale, ATI recognized a $29.5 million settlement loss in the second quarter of 2022, which is recorded in loss on asset sales and sales of businesses, net, on the consolidated statement of operations, related to the amount in accumulated other comprehensive loss for the UK defined benefit pension plan that transferred as part of the sale. On July 14, 2021, ATI announced that a new four-year labor agreement with the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied & Industrial Service Workers International Union, AFL-CIO, CLC (USW) was ratified. As a result of this new agreement, ATI recognized a $64.9 million pretax gain in the third quarter of 2021, which is recorded in nonoperating retirement benefit income/expense on the consolidated statement of operations, related to a plan termination that eliminated certain postretirement medical benefit liabilities, comprised of $43.0 million of long-term postretirement benefit liabilities as of July 2021 and $21.9 million of amounts recorded in accumulated other comprehensive income at that date. Discrete tax effects related to this event were $15.5 million of income tax expense (see Note 13 for further discussion).
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Income Taxes |
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Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income TaxesThe provision for income taxes for the third quarter and nine months ended September 30, 2022 was $3.0 million and $11.3 million, respectively. Tax expense in 2022 is mainly attributable to the Company’s foreign operations. The tax expense for the third quarter and nine months ended September 30, 2022 was based on an estimated annual effective tax rate calculation which included foreign, non-valuation allowance, operations combined with the U.S. jurisdiction. The provision for income taxes for the third quarter and nine months ended September 30, 2021 was $22.0 million and $31.5 million, respectively. The 2021 tax expense includes $15.5 million of discrete tax expense related to the postretirement medical benefits gain discussed in Note 12, in accordance with ATI’s accounting policy for recognizing deferred tax amounts stranded in accumulated other comprehensive income. The third quarter and nine months ended September 30, 2021 utilized an annual effective tax rate calculation for its foreign, non-valuation allowance operations, combined with actual year-to-date tax expense related to its U.S. jurisdiction. In the second quarter 2020, the Company entered into a three-year cumulative loss within the United States, limiting the Company’s ability to utilize future projections when analyzing the need for a deferred tax asset valuation allowance, therefore limiting sources of income as part of the analysis. ATI continues to maintain valuation allowances on its U.S. federal and state deferred tax assets, as well as for certain foreign jurisdictions. |
Business Segments |
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Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Segments | Business Segments The Company operates in two business segments: High Performance Materials & Components (HPMC) and Advanced Alloys & Solutions (AA&S). The measure of segment EBITDA categorically excludes income taxes, depreciation and amortization, corporate expenses, net interest expense, closed operations and other income (expense), charges for goodwill and asset impairments, restructuring and other credits/charges, strike related costs, debt extinguishment charges and gains or losses on asset sales and sales of businesses. Management believes segment EBITDA, as defined, provides an appropriate measure of controllable operating results at the business segment level. Following is certain financial information with respect to the Company’s business segments for the periods indicated (in millions):
a) The following is depreciation & amortization by each business segment:
Beginning in 2020, the U.S. government enacted various relief packages in response to the COVID-19 pandemic. Results for the nine months ended September 30, 2022 include $34.3 million related to this government sponsored COVID relief in segment EBITDA. HPMC segment nine month results include $27.5 million of benefits from the Aviation Manufacturing Jobs Protection Program and employee retention credits, and AA&S segment nine month results include $6.8 million in employee retention credits. Corporate expenses in the third quarter and nine months ended September 30, 2022 reflect business transformation initiatives and higher incentive compensation costs compared to the prior year period. Closed operations in the third quarter and nine months ended September 30, 2022 primarily relate to changes in foreign currency remeasurement impacts primarily related to ATI’s European Treasury Center operation and higher legal costs for closed facilities. Restructuring and other charges for the third quarter and nine months ended September 30, 2022 relate to $2.6 million and $5.0 million, respectively, of restructuring credits for a reduction in severance-related reserves (see Note 7). The third quarter and nine months ended September 30, 2022 also include a $19.9 million and $28.5 million charge, respectively, for a litigation reserve (see Note 16). Restructuring charges for the third quarter and nine months ended September 30, 2021 were a net credit of $2.3 million and $8.5 million, respectively, primarily related to lowered severance-related reserves based on changes in planned operating rates and revised workforce reduction estimates (see Note 7). During the third quarter of 2021, the Company recorded $22.9 million in strike related costs, of which $21.5 million were excluded from AA&S segment EBITDA and $1.4 million were excluded from HPMC segment EBITDA. During the first nine months of 2021, the Company recorded $63.2 million in strike related costs, of which $59.7 million were excluded from AA&S segment EBITDA and $3.5 million were excluded from HPMC segment EBITDA. These items primarily consisted of overhead costs recognized in the period due to below-normal operating rates, higher costs for outside conversion activities, and ongoing benefit costs for striking employees. Gain (loss) on asset sales and sales of businesses, net, for the nine months ended September 30, 2022 relate to a $141.0 million loss on the sale of the Company’s Sheffield, UK operations, partially offset by a $6.8 million gain from the sale of assets from the Pico Rivera, CA operations. Gain (loss) on asset sales and sales of businesses, net, for the third quarter and nine months ended September 30, 2022 relates to a $13.7 million gain on the sale of the Company’s Flowform Products operations.
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Per Share Information |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Per Share Information | Per Share Information The following table sets forth the computation of basic and diluted income (loss) per common share:
Common stock that would be issuable upon the assumed conversion of the 2025 Convertible Notes and other option equivalents and contingently issuable shares are excluded from the computation of contingently issuable shares, and therefore, from the denominator for diluted earnings per share, if the effect of inclusion is anti-dilutive. The 2022 Convertible Notes were converted as of June 30, 2022 (see Note 8 for further explanation). There were no anti-dilutive shares for the three months ended September 30, 2022, and 22.5 million anti-dilutive shares for the nine months ended September 30, 2022. There were no anti-dilutive shares for the three months ended September 30, 2021, and 25.6 million anti-dilutive shares for the nine months ended September 30, 2021. On February 2, 2022, the Company’s Board of Directors authorized the repurchase of up to $150 million of ATI stock. Repurchases under the program may be made in the open market or in privately negotiated transactions, with the amount and timing of repurchases depending on market conditions and corporate needs. Open market repurchases will be structured to occur within the pricing and volume requirements of SEC Rule 10b-18. The stock repurchase program does not obligate the Company to repurchase any specific number of shares and it may be modified, suspended, or terminated at any time by the Board of Directors without prior notice. In the three and nine months ended September 30, 2022, ATI used $15.0 million and $104.9 million, respectively, to repurchase 0.5 million and 4.0 million shares, respectively, of its common stock under this program.
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Accumulated Other Comprehensive Income (Loss) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) The changes in AOCI by component, net of tax, for the three month period ended September 30, 2022 were as follows (in millions):
The changes in AOCI by component, net of tax, for the nine month period ended September 30, 2022 were as follows (in millions):
(a)Amounts were included in net periodic benefit cost for pension and other postretirement benefit plans (see Note 12) and/or loss on asset sales and sales of businesses, net, as part of the loss on sale of the Sheffield, UK operations (see Note 5). (b)Amounts were included in loss on asset sales and sales of businesses, net, as part of the loss on sale of the Sheffield, UK operations (see Note 5). (c)No amounts were reclassified to earnings. (d)Amounts related to derivatives are included in sales, cost of goods sold or interest expense in the period or periods the hedged item affects earnings (see Note 9). (e)Represents the net change in deferred tax asset valuation allowances on changes in AOCI balances between the balance sheet dates. The changes in AOCI by component, net of tax, for the three month period ended September 30, 2021 were as follows (in millions):
The changes in AOCI by component, net of tax, for the nine month period ended September 30, 2021 were as follows (in millions):
(a)Amounts were included in net periodic benefit cost for pension and other postretirement benefit plans (see Note 12). (b)No amounts were reclassified to earnings. (c)Amounts related to derivatives are included in sales, cost of goods sold or interest expense in the period or periods the hedged item affects earnings (see Note 9). (d)Represents the net change in deferred tax asset valuation allowances on changes in AOCI balances between the balance sheet dates. Other comprehensive income (loss) amounts (OCI) reported above by category are net of applicable income tax expense (benefit) for each year presented. Income tax expense (benefit) on OCI items is recorded as a change in a deferred tax asset or liability. Amounts recognized in OCI include the impact of any deferred tax asset valuation allowances, when applicable. Foreign currency translation adjustments, including those pertaining to noncontrolling interests, are generally not adjusted for income taxes as they relate to indefinite investments in non-U.S. subsidiaries. Reclassifications out of AOCI for the three and nine month periods ended September 30, 2022 and 2021 were as follows:
(a)Amounts are reported in nonoperating retirement benefit expense (see Note 12). (b)Amounts in 2022 were included in loss on asset sales and sales of businesses, net, as part of the loss on sale of the Sheffield, UK operations (see Note 5). Amounts in 2021 are reported in nonoperating retirement benefit expense (see Note 12). (c)Amounts related to derivatives, with the exception of the interest rate swap, are included in sales or cost of goods sold in the period or periods the hedged item affects earnings. Amounts related to the interest rate swap are included in interest expense in the same period as the interest expense on the Term Loan is recognized in earnings (see Note 9). (d)For pretax items, positive amounts are income and negative amounts are expense in terms of the impact to net income. Tax effects are presented in conformity with ATI’s presentation in the consolidated statements of operations. (e)These amounts exclude the impact of any deferred tax asset valuation allowances, when applicable.
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Commitments and Contingencies |
9 Months Ended |
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Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 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 adjusts its accruals to reflect new information as appropriate. Future adjustments could have a material adverse effect on the Company’s consolidated results of operations in a given period, but the Company cannot reliably predict the amounts of such future adjustments. At September 30, 2022, the Company’s reserves for environmental remediation obligations totaled approximately $13 million, of which $6 million was included in other current liabilities. The reserve includes estimated probable future costs of $3 million for federal Superfund and comparable state-managed sites; $8 million for formerly owned or operated sites for which the Company has remediation or indemnification obligations; and $2 million for owned or controlled sites at which Company operations have been or plan to be discontinued. 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 it has been identified will be completed within thirty years. The Company continues to evaluate whether it may be able to recover a portion of past and future costs for environmental liabilities from third parties and to pursue such recoveries where appropriate. Based on currently available information, it is reasonably possible that costs for recorded matters may exceed the Company’s recorded reserves by as much as $16 million. Future investigation or remediation activities may result in the discovery of additional hazardous materials or potentially higher levels of contamination than discovered during prior investigation, and may impact costs associated with the success or lack thereof in remedial solutions. Therefore, future developments, administrative actions or liabilities relating to environmental matters could have a material adverse effect on the Company’s consolidated financial condition or results of operations and cash flows. A number of other lawsuits, claims and proceedings have been or may be asserted against the Company relating to the conduct of its currently and formerly owned businesses, including those pertaining to product liability, environmental, health and safety matters and occupational disease (including as each relates to alleged asbestos exposure), as well as patent infringement, commercial, government contracting, construction, employment, employee and retiree benefits, taxes, environmental, and stockholder and corporate governance matters. While the outcome of litigation cannot be predicted with certainty, and some of these lawsuits, claims or proceedings may be determined adversely to the Company, management does not believe that the disposition of any such pending matters is likely to have a material adverse effect on the Company’s financial condition or liquidity, although the resolution in any reporting period of one or more of these matters could have a material adverse effect on the Company’s consolidated results of operations for that period. ATI Titanium LLC (ATI Titanium), a subsidiary of ATI Inc., was party to a lawsuit captioned US Magnesium, LLC v. ATI Titanium LLC (Case No. 2:17-cv-00923-DB) and filed in federal district court in Salt Lake City, UT, pertaining to a Supply and Operating Agreement between US Magnesium LLC (USM) and ATI Titanium entered into in 2006 (the Supply Agreement). In 2016, ATI Titanium notified USM that it would suspend performance under the Supply Agreement in reliance on certain terms and conditions included in the Supply Agreement. USM subsequently filed a claim challenging ATI Titanium’s right to suspend performance under the Supply Agreement. ATI Titanium and USM reached a settlement for $28.5 million. The Company recorded a $28.5 million litigation reserve on this matter for the nine months ended September 2022, of which $19.9 million was recorded in the third quarter of 2022 and is reported within other (nonoperating) expense on the consolidated statement of operations. Based on the terms of the settlement, the Company expects to pay the $28.5 million in the fourth quarter of 2022.
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Accounting Policies (Policies) |
9 Months Ended |
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Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis Of Accounting | The interim consolidated financial statements include the accounts of ATI Inc. and its subsidiaries. Unless the context requires otherwise, “ATI” and “the Company” refer to ATI Inc. 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 Article 10 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 2021 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, 2021 financial information has been derived from the Company’s audited consolidated financial statements. |
New Accounting Pronouncements Adopted | New Accounting Pronouncements Adopted In November 2021, the Financial Accounting Standards Board (FASB) issued new accounting guidance related to disclosures about certain types of government assistance. This new guidance requires business entities that account for transactions with a government by analogizing to a grant or contribution accounting model to make certain annual disclosures. It requires disclosure of the nature and significant terms and considerations of the transactions, the accounting policies used and the effects of those transactions on an entity’s financial statements. This new guidance is effective for the Company in fiscal year 2022, with early adoption permitted. The Company adopted this new accounting guidance effective January 1, 2022. The adoption of these changes does not have an impact on the Company’s consolidated financial statements other than the annual disclosure requirements. Pending Accounting Pronouncements In September 2022, the FASB issued new accounting guidance related to disclosures about supplier finance programs. Supplier finance programs allow a buyer to offer its suppliers the option for access to payment in advance of an invoice due date, which is paid by a third-party finance provider or intermediary on the basis of invoices that the buyer has confirmed as valid. This new guidance requires a buyer in a supplier finance program to disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period, and potential magnitude, using both qualitative and quantitative information about its supplier finance programs. This new guidance, with the exception of disclosures on rollforward information, will be effective for the Company in fiscal year 2023, with early adoption permitted. The rollforward information disclosures are effective for the Company in fiscal year 2024, with early adoption permitted. The Company does not plan to early adopt this guidance. The adoption of these changes is not expected to have an impact on the Company’s consolidated financial statements other than disclosure requirements.
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Inventory | Inventories are stated at the lower of cost (first-in, first-out (FIFO) and average cost methods) or net realizable value. |
Derivatives | 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. 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 September 30, 2022, the Company had entered into financial hedging arrangements, primarily at the request of its customers related to firm orders, for an aggregate notional amount of approximately 6 million pounds of nickel with hedge dates through 2024. The aggregate notional amount hedged is approximately 11% of a single year’s estimated nickel raw material purchase requirements. These derivative instruments are used to hedge the variability of a selling price that is based on the London Metals Exchange (LME) index for nickel, as well as to hedge the variability of the purchase cost of nickel based on this LME index. Any gain or loss associated with these hedging arrangements is included in sales or cost of sales, depending on whether the underlying risk being hedged was the variable selling price or the variable raw material cost, respectively. At September 30, 2022, the outstanding financial derivatives used to hedge the Company’s exposure to energy cost volatility included natural gas cost hedges. At September 30, 2022, the Company hedged approximately 75% of its forecasted domestic requirements for natural gas for the remainder of 2022, approximately 50% for 2023 and approximately 15% for 2024. 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, primarily euro. In addition, the Company may also hedge forecasted capital expenditures and designate cash balances held in foreign currencies as hedges of forecasted foreign currency transactions. At September 30, 2022, the Company had no significant outstanding foreign currency forward contracts. The Company may enter into derivative interest rate contracts to maintain a reasonable balance between fixed- and floating-rate debt. The Company has a $50 million floating-for-fixed interest rate swap which converts a portion of the Term Loan to a 4.21% fixed rate. The swap matures in June 2024. The Company designated the interest rate swap as a cash flow hedge of the Company’s exposure to the variability of the payment of interest on a portion of its Term Loan borrowings. The ineffectiveness at hedge inception, determined from the fair value of the swap immediately prior to its July 2019 amendment, was amortized to interest expense over the initial Term Loan swap maturity date of January 12, 2021. There are no credit risk-related contingent features in the Company’s derivative contracts, and the contracts contained no provisions under which the Company has posted, or would be required to post, collateral. The counterparties to the Company’s derivative contracts are substantial and creditworthy commercial banks that are recognized market makers. The Company controls its credit exposure by diversifying across multiple counterparties and by monitoring credit ratings and credit default swap spreads of its counterparties. The Company also enters into master netting agreements with counterparties when possible. For derivative financial instruments that are designated as cash flow hedges, the gain or loss on the derivative is reported as a component of other comprehensive income (OCI) and reclassified into earnings in the same period or periods during which the hedged item affects earnings. For derivative financial instruments that are designated as fair value hedges, changes in the fair value of these derivatives are recognized in current period results and are reported as changes within accrued liabilities and other on the consolidated statements of cash flows. There were no outstanding fair value hedges as of September 30, 2022. The Company did not use net investment hedges for the periods presented. The effects of derivative instruments in the tables below are presented net of related income taxes, excluding any impacts of changes to income tax valuation allowances affecting results of operations or other comprehensive income, when applicable (see Note 15 for further explanation).
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Retirement Benefits | The Company has defined contribution retirement plans or defined benefit pension plans covering substantially all employees. Company contributions to defined contribution retirement plans are generally based on a percentage of eligible pay or based on hours worked. 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 of 1986, as amended. The Company also sponsors several postretirement plans covering certain collectively-bargained salaried and hourly employees. The plans provide health care and life insurance benefits for eligible retirees. In most retiree health care plans, Company contributions towards premiums are capped based on the cost as of a certain date, thereby creating a defined contribution. All defined benefit pension and retiree health care plans are closed to new entrants. |
Commitments And Contingencies | 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 adjusts its accruals to reflect new information as appropriate. Future adjustments could have a material adverse effect on the Company’s consolidated results of operations in a given period, but the Company cannot reliably predict the amounts of such future adjustments. |
Inventory (Policies) |
9 Months Ended |
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Sep. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventories are stated at the lower of cost (first-in, first-out (FIFO) and average cost methods) or net realizable value. |
Derivative Instruments and Hedging Activities (Policies) |
9 Months Ended |
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Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | 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. 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 September 30, 2022, the Company had entered into financial hedging arrangements, primarily at the request of its customers related to firm orders, for an aggregate notional amount of approximately 6 million pounds of nickel with hedge dates through 2024. The aggregate notional amount hedged is approximately 11% of a single year’s estimated nickel raw material purchase requirements. These derivative instruments are used to hedge the variability of a selling price that is based on the London Metals Exchange (LME) index for nickel, as well as to hedge the variability of the purchase cost of nickel based on this LME index. Any gain or loss associated with these hedging arrangements is included in sales or cost of sales, depending on whether the underlying risk being hedged was the variable selling price or the variable raw material cost, respectively. At September 30, 2022, the outstanding financial derivatives used to hedge the Company’s exposure to energy cost volatility included natural gas cost hedges. At September 30, 2022, the Company hedged approximately 75% of its forecasted domestic requirements for natural gas for the remainder of 2022, approximately 50% for 2023 and approximately 15% for 2024. 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, primarily euro. In addition, the Company may also hedge forecasted capital expenditures and designate cash balances held in foreign currencies as hedges of forecasted foreign currency transactions. At September 30, 2022, the Company had no significant outstanding foreign currency forward contracts. The Company may enter into derivative interest rate contracts to maintain a reasonable balance between fixed- and floating-rate debt. The Company has a $50 million floating-for-fixed interest rate swap which converts a portion of the Term Loan to a 4.21% fixed rate. The swap matures in June 2024. The Company designated the interest rate swap as a cash flow hedge of the Company’s exposure to the variability of the payment of interest on a portion of its Term Loan borrowings. The ineffectiveness at hedge inception, determined from the fair value of the swap immediately prior to its July 2019 amendment, was amortized to interest expense over the initial Term Loan swap maturity date of January 12, 2021. There are no credit risk-related contingent features in the Company’s derivative contracts, and the contracts contained no provisions under which the Company has posted, or would be required to post, collateral. The counterparties to the Company’s derivative contracts are substantial and creditworthy commercial banks that are recognized market makers. The Company controls its credit exposure by diversifying across multiple counterparties and by monitoring credit ratings and credit default swap spreads of its counterparties. The Company also enters into master netting agreements with counterparties when possible. For derivative financial instruments that are designated as cash flow hedges, the gain or loss on the derivative is reported as a component of other comprehensive income (OCI) and reclassified into earnings in the same period or periods during which the hedged item affects earnings. For derivative financial instruments that are designated as fair value hedges, changes in the fair value of these derivatives are recognized in current period results and are reported as changes within accrued liabilities and other on the consolidated statements of cash flows. There were no outstanding fair value hedges as of September 30, 2022. The Company did not use net investment hedges for the periods presented. The effects of derivative instruments in the tables below are presented net of related income taxes, excluding any impacts of changes to income tax valuation allowances affecting results of operations or other comprehensive income, when applicable (see Note 15 for further explanation).
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Compensation Related Costs, Retirement Benefits (Policies) |
9 Months Ended |
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Sep. 30, 2022 | |
Retirement Benefits [Abstract] | |
Retirement Benefits | The Company has defined contribution retirement plans or defined benefit pension plans covering substantially all employees. Company contributions to defined contribution retirement plans are generally based on a percentage of eligible pay or based on hours worked. 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 of 1986, as amended. The Company also sponsors several postretirement plans covering certain collectively-bargained salaried and hourly employees. The plans provide health care and life insurance benefits for eligible retirees. In most retiree health care plans, Company contributions towards premiums are capped based on the cost as of a certain date, thereby creating a defined contribution. All defined benefit pension and retiree health care plans are closed to new entrants. |
Commitment and Contingencies (Policies) |
9 Months Ended |
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Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments And Contingencies | 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 adjusts its accruals to reflect new information as appropriate. Future adjustments could have a material adverse effect on the Company’s consolidated results of operations in a given period, but the Company cannot reliably predict the amounts of such future adjustments. |
Revenue from Contracts with Customers (Tables) |
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Schedule of Disaggregation of Revenue | Comparative information of the Company’s overall revenues (in millions) by global and geographical markets for the third quarters and nine months ended September 30, 2022 and 2021 is included in the following tables.
Comparative information of the Company’s major products based on their percentages of sales is included in the following table. The Company no longer reports standard stainless product sales as a separate product category. Prior period information includes these sales within the nickel-based alloys and specialty alloys category. Hot-Rolling and Processing Facility (HRPF) conversion service sales in the AA&S segment are excluded from this presentation.
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Schedule of Accounts Receivable - Reserve for Doubtful Accounts |
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Schedule of Contract Assets and Liabilities |
(a) Long-term contract liabilities are included in Other long-term liabilities on the consolidated balance sheets.
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Inventories (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventories | Inventories at September 30, 2022 and December 31, 2021 were as follows (in millions):
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Property, Plant and Equipment (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property Plant And Equipment | Property, plant and equipment at September 30, 2022 and December 31, 2021 was as follows (in millions):
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Supplemental Financial Statement Information - (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Expense, Net | Other income (expense), net for the three and nine months ended September 30, 2022 and 2021 was as follows:
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Roll Forward of Restructuring Reserve Activity | Restructuring reserves for severance cost activity is as follows:
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Debt (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt Instruments | Debt at September 30, 2022 and December 31, 2021 was as follows (in millions):
(a) The payment obligations of these debentures issued by Allegheny Ludlum, LLC are fully and unconditionally guaranteed by ATI.
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Interest Income and Interest Expense Disclosure | Interest expense on the 2025 Convertible Notes was as follows:
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Derivative Financial Instruments and Hedging (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Derivative Instruments In Statement Of Financial Position Fair Value | The fair values of the Company’s derivative financial instruments are presented below, representing the gross amounts recognized which are not offset by counterparty or by type of item hedged. All fair values for these derivatives were measured using Level 2 information as defined by the accounting standard hierarchy, which includes quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs derived principally from or corroborated by observable market data.
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Schedule Of Derivative Instruments Gain Loss In Statement Of Financial Performance | Activity with regard to derivatives designated as cash flow hedges for the three and nine month periods ended September 30, 2022 and 2021 was as follows (in millions):
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Fair Value of Financial Instruments (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value By Balance Sheet Grouping | The estimated fair value of financial instruments at September 30, 2022 was as follows:
The estimated fair value of financial instruments at December 31, 2021 was as follows:
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Retirement Benefits (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Defined Benefit Plans Disclosures | For the three month periods ended September 30, 2022 and 2021, the components of pension and other postretirement benefit expense (income) for the Company’s defined benefit plans included the following (in millions):
For the nine month periods ended September 30, 2022 and 2021, the components of pension and other postretirement benefit expense (income) for the Company’s defined benefit plans included the following (in millions):
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Business Segments (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Segment Reporting Information By Segment | Following is certain financial information with respect to the Company’s business segments for the periods indicated (in millions):
a) The following is depreciation & amortization by each business segment:
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Per Share Information (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Earnings Per Share Diluted By Common Class | The following table sets forth the computation of basic and diluted income (loss) per common share:
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Accumulated Other Comprehensive Income (Loss) (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Accumulated Other Comprehensive Income Loss | The changes in AOCI by component, net of tax, for the three month period ended September 30, 2022 were as follows (in millions):
The changes in AOCI by component, net of tax, for the nine month period ended September 30, 2022 were as follows (in millions):
(a)Amounts were included in net periodic benefit cost for pension and other postretirement benefit plans (see Note 12) and/or loss on asset sales and sales of businesses, net, as part of the loss on sale of the Sheffield, UK operations (see Note 5). (b)Amounts were included in loss on asset sales and sales of businesses, net, as part of the loss on sale of the Sheffield, UK operations (see Note 5). (c)No amounts were reclassified to earnings. (d)Amounts related to derivatives are included in sales, cost of goods sold or interest expense in the period or periods the hedged item affects earnings (see Note 9). (e)Represents the net change in deferred tax asset valuation allowances on changes in AOCI balances between the balance sheet dates. The changes in AOCI by component, net of tax, for the three month period ended September 30, 2021 were as follows (in millions):
The changes in AOCI by component, net of tax, for the nine month period ended September 30, 2021 were as follows (in millions):
(a)Amounts were included in net periodic benefit cost for pension and other postretirement benefit plans (see Note 12). (b)No amounts were reclassified to earnings. (c)Amounts related to derivatives are included in sales, cost of goods sold or interest expense in the period or periods the hedged item affects earnings (see Note 9). (d)Represents the net change in deferred tax asset valuation allowances on changes in AOCI balances between the balance sheet dates.
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Reclassification out of Accumulated Other Comprehensive Income | Reclassifications out of AOCI for the three and nine month periods ended September 30, 2022 and 2021 were as follows:
(a)Amounts are reported in nonoperating retirement benefit expense (see Note 12). (b)Amounts in 2022 were included in loss on asset sales and sales of businesses, net, as part of the loss on sale of the Sheffield, UK operations (see Note 5). Amounts in 2021 are reported in nonoperating retirement benefit expense (see Note 12). (c)Amounts related to derivatives, with the exception of the interest rate swap, are included in sales or cost of goods sold in the period or periods the hedged item affects earnings. Amounts related to the interest rate swap are included in interest expense in the same period as the interest expense on the Term Loan is recognized in earnings (see Note 9). (d)For pretax items, positive amounts are income and negative amounts are expense in terms of the impact to net income. Tax effects are presented in conformity with ATI’s presentation in the consolidated statements of operations. (e)These amounts exclude the impact of any deferred tax asset valuation allowances, when applicable.
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Revenue from Contracts with Customers - Narrative (Details) |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Sep. 30, 2022
USD ($)
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Sep. 30, 2021
USD ($)
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Sep. 30, 2022
USD ($)
segment
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Sep. 30, 2021
USD ($)
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Dec. 31, 2021
USD ($)
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Dec. 31, 2020
USD ($)
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Revenue recognition [Line Items] | ||||||
Inventories, net | $ 1,216,900,000 | $ 1,216,900,000 | $ 1,046,300,000 | |||
Sales | 1,032,000,000 | $ 725,700,000 | 2,825,600,000 | $ 2,034,400,000 | ||
Cost of sales | 848,200,000 | 643,200,000 | 2,297,100,000 | 1,823,400,000 | ||
Short-term contract assets | 70,200,000 | 55,700,000 | 70,200,000 | 55,700,000 | 53,900,000 | $ 38,900,000 |
Other current liabilities | 263,000,000.0 | 263,000,000.0 | 233,400,000 | |||
Other long-term liabilities | 206,500,000 | 206,500,000 | 211,000,000.0 | |||
Short-term contract liabilities | 120,700,000 | 86,700,000 | 120,700,000 | 86,700,000 | 116,200,000 | 111,800,000 |
Long-term contract liabilities | 72,000,000.0 | 74,000,000.0 | $ 72,000,000.0 | 74,000,000.0 | 84,400,000 | $ 32,000,000.0 |
Number of business segments | segment | 2 | |||||
Confirmed order backlog | 2,700,000,000 | 1,700,000,000 | $ 2,700,000,000 | 1,700,000,000 | ||
Confirmed orders with current performance obligations | 0.80 | 0.80 | ||||
Accounts receivable with customers | 682,000,000 | 682,000,000 | 473,800,000 | |||
Contract costs for obtaining and fulfilling contracts | 5,100,000 | 5,100,000 | $ 5,200,000 | |||
Amortization of contract costs | $ 200,000 | $ 200,000 | $ 700,000 | $ 700,000 |
Revenue from Contracts with Customers - Accounts Receivable Reserve for Doubtful Accounts (Details) - USD ($) $ in Millions |
9 Months Ended | |
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Sep. 30, 2022 |
Sep. 30, 2021 |
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Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Balance as of beginning of fiscal year | $ 3.8 | $ 4.3 |
Expense to increase the reserve | 0.7 | 0.4 |
Write-off of uncollectible accounts | (0.6) | (0.6) |
Balance as of period end | $ 3.9 | $ 4.1 |
Inventories (Details) - USD ($) $ in Millions |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Inventory [Line Items] | ||
Raw materials and supplies | $ 195.6 | $ 160.3 |
Work-in-process | 988.0 | 829.6 |
Finished goods | 102.7 | 121.8 |
Total inventories at current cost | 1,286.3 | 1,111.7 |
Inventory valuation reserves | (69.4) | (65.4) |
Total inventories, net | $ 1,216.9 | $ 1,046.3 |
Property, Plant and Equipment (Details) - USD ($) $ in Millions |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Property, Plant and Equipment [Abstract] | ||
Land | $ 31.4 | $ 34.4 |
Buildings | 595.0 | 575.5 |
Equipment and leasehold improvements | 2,821.6 | 2,870.2 |
Property Plant And Equipment, gross | 3,448.0 | 3,480.1 |
Accumulated depreciation and amortization | (1,951.3) | (1,951.6) |
Total property, plant and equipment, net | 1,496.7 | $ 1,528.5 |
Construction in progress | $ 211.4 |
Supplemental Financial Statement Information - Schedule of Other Income, Net (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
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Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Disaggregation of Revenue [Line Items] | ||||
Rent and royalty income | $ 0.5 | $ 0.2 | $ 1.7 | $ 0.7 |
Gains from disposal of property, plant and equipment, net | 0.1 | 0.1 | 0.3 | 2.5 |
Income (loss) from equity investments | 0.8 | 0.4 | 11.2 | 0.4 |
Gain from sale of business | 13.7 | (141.0) | 13.7 | |
Litigation Reserve | (19.9) | 0.0 | (28.5) | 0.0 |
Other | 0.0 | 0.1 | 0.0 | 0.1 |
Other income (expense), net | $ (18.5) | $ 14.5 | $ (15.3) | $ 17.4 |
Supplemental Financial Statement Information - Narrative (Details) $ in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2022
USD ($)
segment
|
Sep. 30, 2021
USD ($)
segment
|
Sep. 30, 2022
USD ($)
segment
|
Sep. 30, 2021
USD ($)
segment
|
Dec. 31, 2021
USD ($)
|
|
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges (credits) | $ (2.6) | $ (2.3) | $ (5.0) | $ (8.5) | |
Number of positions with decreased severance-related reserve | segment | (60) | (50) | (110) | (250) | |
Restructuring reserve | $ 9.9 | $ 9.9 | $ 17.7 | ||
Employee Severance [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges (credits) | $ (9.2) | ||||
Facility idling | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges (credits) | $ 0.7 | ||||
Other Current Liabilities | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring reserve | 2.8 | 2.8 | |||
Other Noncurrent Liabilities | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring reserve | $ 7.1 | $ 7.1 |
Supplemental Financial Statement Information - Severance and Employee Benefit Costs Rollforward (Details) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022
USD ($)
segment
|
Sep. 30, 2021
USD ($)
segment
|
Sep. 30, 2022
USD ($)
segment
|
Sep. 30, 2021
USD ($)
segment
|
|
Other Income and Expenses [Abstract] | ||||
Number of positions with decreased severance-related reserve | segment | (60) | (50) | (110) | (250) |
Restructuring Reserve [Roll Forward] | ||||
Balance at December 31, 2021 | $ 17.7 | |||
Restructuring charges (credits) | $ (2.6) | $ (2.3) | (5.0) | $ (8.5) |
Payments | (2.8) | |||
Balance at September 30, 2022 | $ 9.9 | $ 9.9 |
Income Taxes - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Investments, Owned, Federal Income Tax Note [Line Items] | ||||
Income tax (provision) benefit | $ (3.0) | $ (22.0) | $ (11.3) | $ (31.5) |
Collective-Bargaining Arrangement, Other | ||||
Investments, Owned, Federal Income Tax Note [Line Items] | ||||
Income tax (provision) benefit | $ (15.5) |
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||
Beginning balance | $ (908.9) | $ (1,176.3) | $ (991.7) | $ (1,223.6) | ||||||||||||||||
OCI before reclassifications | (14.8) | 1.0 | (4.0) | 6.1 | ||||||||||||||||
Amounts reclassified from AOCI | 13.8 | 14.2 | 85.8 | 56.4 | ||||||||||||||||
Net current-period OCI | (1.0) | 15.2 | 81.8 | 62.5 | ||||||||||||||||
Ending balance | (909.9) | (1,161.1) | (909.9) | (1,161.1) | ||||||||||||||||
Increase (Decrease) in Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||||||||||||||||||||
Beginning balance | 17.0 | 23.7 | 26.0 | 21.2 | ||||||||||||||||
OCI before reclassifications | (9.4) | (0.8) | (18.4) | 1.7 | ||||||||||||||||
Amounts reclassified from AOCI | 0.0 | 0.0 | 0.0 | 0.0 | ||||||||||||||||
Net current-period OCI | (9.4) | (0.8) | (18.4) | 1.7 | ||||||||||||||||
Ending balance | 7.6 | 22.9 | 7.6 | 22.9 | ||||||||||||||||
Post- retirement benefit plans [Member] | ||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||
Beginning balance | (883.0) | (1,086.9) | (947.7) | (1,119.9) | ||||||||||||||||
OCI before reclassifications | 0.0 | 0.0 | 0.0 | 0.0 | ||||||||||||||||
Amounts reclassified from AOCI | 14.5 | [1] | 4.0 | [2] | 79.2 | [1] | 37.0 | [2] | ||||||||||||
Net current-period OCI | 14.5 | 4.0 | 79.2 | 37.0 | ||||||||||||||||
Ending balance | (868.5) | (1,082.9) | (868.5) | (1,082.9) | ||||||||||||||||
Increase (Decrease) in Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||||||||||||||||||||
Beginning balance | 0.0 | 0.0 | 0.0 | 0.0 | ||||||||||||||||
OCI before reclassifications | 0.0 | 0.0 | 0.0 | 0.0 | ||||||||||||||||
Amounts reclassified from AOCI | 0.0 | 0.0 | 0.0 | 0.0 | ||||||||||||||||
Net current-period OCI | 0.0 | 0.0 | 0.0 | 0.0 | ||||||||||||||||
Ending balance | 0.0 | 0.0 | 0.0 | 0.0 | ||||||||||||||||
Currency translation adjustment [Member] | ||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||
Beginning balance | (65.1) | (55.8) | (64.9) | (55.5) | ||||||||||||||||
OCI before reclassifications | (20.6) | (4.2) | (40.8) | (4.5) | ||||||||||||||||
Amounts reclassified from AOCI | 0.0 | [3] | 0.0 | [3] | 20.0 | [4] | 0.0 | [3] | ||||||||||||
Net current-period OCI | (20.6) | (4.2) | (20.8) | (4.5) | ||||||||||||||||
Ending balance | (85.7) | (60.0) | (85.7) | (60.0) | ||||||||||||||||
Increase (Decrease) in Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||||||||||||||||||||
Beginning balance | 17.0 | 23.7 | 26.0 | 21.2 | ||||||||||||||||
OCI before reclassifications | (9.4) | (0.8) | (18.4) | 1.7 | ||||||||||||||||
Amounts reclassified from AOCI | [3] | 0.0 | 0.0 | 0.0 | 0.0 | |||||||||||||||
Net current-period OCI | (9.4) | (0.8) | (18.4) | 1.7 | ||||||||||||||||
Ending balance | 7.6 | 22.9 | 7.6 | 22.9 | ||||||||||||||||
Derivatives [Member] | ||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||
Beginning balance | 16.8 | 5.1 | 5.1 | 2.1 | ||||||||||||||||
OCI before reclassifications | 5.8 | 5.2 | 36.8 | 10.6 | ||||||||||||||||
Amounts reclassified from AOCI | [5] | (5.4) | (2.3) | (24.7) | (4.7) | |||||||||||||||
Net current-period OCI | 0.4 | 2.9 | 12.1 | 5.9 | ||||||||||||||||
Ending balance | 17.2 | 8.0 | 17.2 | 8.0 | ||||||||||||||||
Increase (Decrease) in Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||||||||||||||||||||
Beginning balance | 0.0 | 0.0 | 0.0 | 0.0 | ||||||||||||||||
OCI before reclassifications | 0.0 | 0.0 | 0.0 | 0.0 | ||||||||||||||||
Amounts reclassified from AOCI | 0.0 | 0.0 | 0.0 | 0.0 | ||||||||||||||||
Net current-period OCI | 0.0 | 0.0 | 0.0 | 0.0 | ||||||||||||||||
Ending balance | 0.0 | 0.0 | 0.0 | 0.0 | ||||||||||||||||
Accumulated Deferred Tax Asset Valuation Allowance [Member] | ||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||
Beginning balance | 22.4 | (38.7) | 15.8 | (50.3) | ||||||||||||||||
OCI before reclassifications | 0.0 | 0.0 | 0.0 | 0.0 | ||||||||||||||||
Amounts reclassified from AOCI | [6] | 4.7 | 12.5 | 11.3 | 24.1 | |||||||||||||||
Net current-period OCI | 4.7 | 12.5 | 11.3 | 24.1 | ||||||||||||||||
Ending balance | 27.1 | (26.2) | 27.1 | (26.2) | ||||||||||||||||
Increase (Decrease) in Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||||||||||||||||||||
Beginning balance | 0.0 | 0.0 | 0.0 | 0.0 | ||||||||||||||||
OCI before reclassifications | 0.0 | 0.0 | 0.0 | 0.0 | ||||||||||||||||
Amounts reclassified from AOCI | 0.0 | 0.0 | 0.0 | 0.0 | ||||||||||||||||
Net current-period OCI | 0.0 | 0.0 | 0.0 | 0.0 | ||||||||||||||||
Ending balance | $ 0.0 | $ 0.0 | $ 0.0 | $ 0.0 | ||||||||||||||||
|
Commitments and Contingencies (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Components of Environmental Loss Accrual [Abstract] | ||||
Accrual For Environmental Loss Contingencies | $ 13.0 | $ 13.0 | ||
Accrued Environmental Loss Contingencies Current | 6.0 | 6.0 | ||
Federal Superfund and comparable state-managed sites | 3.0 | 3.0 | ||
Formerly owned or operated sites | 8.0 | 8.0 | ||
Owned or controlled sites at which Company operations have been or plan to be discontinued | 2.0 | 2.0 | ||
Loss Contingency, Estimate [Abstract] | ||||
Litigation Reserve | (19.9) | $ 0.0 | (28.5) | $ 0.0 |
Maximum | ||||
Loss Contingency, Estimate [Abstract] | ||||
Loss contingency maximum possible loss | $ 16.0 | $ 16.0 |
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