Joint Ventures

12 Months Ended

Dec. 31, 2022

Equity Method Investments and Joint Ventures [Abstract]

Joint Ventures

Joint VenturesThe 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 statement 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. Stockholders’ equity includes undistributed

earnings of investees accounted for under the equity method of accounting of approximately $7.8 million at December 31, 2022.

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® (PRS) stainless products mainly for the electronics and automotive markets located in Asia. Cash and cash equivalents held by STAL as of December 31, 2022 were $53.5 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. 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 December 31, 2022 were $1.2 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 had been received by ATI through December 31, 2021. ATI received the remaining $5.5 million from Tsingshan in the fourth quarter of 2022, which is reported as a financing activity on the consolidated statement of cash flows. 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 Hot-Rolling and Processing Facility. ATI accounts for the A&T Stainless joint venture under the equity method of accounting.

In late March 2018, ATI filed for an exclusion from the Section 232 tariffs on behalf of A&T Stainless, which imported semi- finished stainless slab products from Indonesia. In April 2019, the Company learned that this exclusion request was denied by the U.S. 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 U.S. 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 2020. A&T Stainless recorded a $4.8 million charge in 2020 for contractual termination benefits as a result of the idling decision, of which $1.8 million was reversed in 2022 as a result of revised estimates. 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 2022. ATI’s share of the A&T Stainless results were income of $9.1 million for the fiscal year ended December 31, 2022, which included ATI’s $9.9 million share of the tariff refund and accrued interest, and losses of $0.9 million and $10.6 million for the fiscal years ended December 31, 2021 and 2020, respectively, which is included within other income/expense, net, on the consolidated statements of operations. AA&S segment results in 2022 include equity method recognition of A&T Stainless operating income of $8.2 million, and in 2021 and 2020 include operating losses of $0.9 million and $8.2 million, respectively. ATI’s share of the A&T Stainless credits/charges for termination benefits in 2022 and 2020 were excluded from AA&S segment results.

As of December 31, 2022, ATI had net receivables from A&T Stainless for working capital advances and administrative services of $3.2 million, of which $0.4 million was reported in prepaid expenses and other current assets and $2.8 million in other long-term assets on the consolidated balance sheet. As of December 31, 2021, ATI had net receivables from A&T Stainless for working capital advances and administrative services of $2.9 million, of which $0.7 million was reported in prepaid expenses and other current assets and $2.2 million in other long-term assets on the consolidated balance sheet.

Sales to A&T Stainless, which are included in ATI’s consolidated statement of operations for the 2020 fiscal year, were $18.4 million. There were no sales to A&T Stainless for the 2022 and 2021 fiscal years.

Uniti:

ATI has a 50% interest in the industrial titanium joint venture known as Uniti LLC (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 $4.4 million in 2022, $1.0 million in 2021, and $1.2 million in 2020, which is included in AA&S segment’s operating results, and within other income/expense, net, on the consolidated statements of operations. Sales to Uniti, which are included in ATI’s consolidated statements of operations, were $45.0 million in 2022, $45.8 million in 2021, and $36.7 million in 2020. Accounts receivable from Uniti were $4.5 million and $6.1 million at December 31, 2022 and 2021, respectively.

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.