XML 30 R20.htm IDEA: XBRL DOCUMENT v3.22.2.2
Business Segments
 9 Months Ended
Sep. 30, 2022
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):
Three months ended September 30,Nine months ended September 30,
 2022202120222021
Total sales:
High Performance Materials & Components$505.0 $325.0 $1,325.6 $908.9 
Advanced Alloys & Solutions646.8 464.7 1,805.5 1,280.1 
1,151.8 789.7 3,131.1 2,189.0 
Intersegment sales:
High Performance Materials & Components47.4 25.0 130.3 67.4 
Advanced Alloys & Solutions72.4 39.0 175.2 87.2 
119.8 64.0 305.5 154.6 
Sales to external customers:
High Performance Materials & Components457.6 300.0 1,195.3 841.5 
Advanced Alloys & Solutions574.4 425.7 1,630.3 1,192.9 
$1,032.0 $725.7 $2,825.6 $2,034.4 
Three months ended September 30,Nine months ended September 30,
 2022202120222021
EBITDA:
High Performance Materials & Components$85.8 $37.4 $214.2 $99.2 
Advanced Alloys & Solutions75.8 56.8 255.7 142.5 
Total segment EBITDA161.6 94.2 469.9 241.7 
Corporate expenses(14.2)(12.9)(47.9)(41.0)
Closed operations and other expense(6.3)(1.4)(12.8)(4.5)
Depreciation & amortization (a)(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 (See Note 12)— 64.9 — 64.9 
Gain (loss) on asset sales and sales of businesses, net (See Note 5)— 13.7 (134.2)13.7 
Income before income taxes$67.4 $77.2 $76.6 $39.9 
a) The following is depreciation & amortization by each business segment:
Three months ended September 30,Nine months ended September 30,
2022202120222021
High Performance Materials & Components$16.7 $18.2 $51.5 $57.0 
Advanced Alloys & Solutions17.1 16.3 50.0 47.9 
Other1.8 1.1 5.6 3.1 
$35.6 $35.6 $107.1 $108.0 
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.