10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2009

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period From                      to                     

Commission File Number 1-12001

ALLEGHENY TECHNOLOGIES INCORPORATED

(Exact name of registrant as specified in its charter)

Delaware	25-1792394
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
1000 Six PPG Place
Pittsburgh, Pennsylvania	15222-5479
(Address of Principal Executive Offices)	(Zip Code)

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

     Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the Registrant submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes o No o

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ	Accelerated filer o	Non-accelerated filer o	Smaller reporting company o
		(Do not check if a smaller reporting company)

     Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o     No þ

     At April 28, 2009, the registrant had outstanding 98,017,737 shares of its Common Stock.

ALLEGHENY TECHNOLOGIES INCORPORATED
SEC FORM 10-Q
QUARTER ENDED MARCH 31, 2009

INDEX

	Page No.
PART I. — FINANCIAL INFORMATION
Item 1. Financial Statements		3
Consolidated Balance Sheets		3
Consolidated Statements of Income		4
Consolidated Statements of Cash Flows		5
Statements of Changes in Consolidated Equity		6
Notes to Consolidated Financial Statements		7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		18
Item 3. Quantitative and Qualitative Disclosures About Market Risk		28
Item 4. Controls and Procedures		29
PART II. — OTHER INFORMATION
Item 1. Legal Proceedings		30
Item 1A. Risk Factors		30
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		30
Item 6. Exhibits		31
SIGNATURES		32
EXHIBIT INDEX		33
EX-10.1
EX-10.2
EX-10.3
EX-10.4
EX-31.1
EX-31.2
EX-32.1

2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

ALLEGHENY TECHNOLOGIES INCORPORATED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In millions, except share and per share amounts)

(Unaudited)

	March 31,			December 31,
	2009			2008
ASSETS
Cash and cash equivalents	$	506.0		$	469.9
Accounts receivable, net		448.8			530.5
Inventories, net		746.2			887.6
Prepaid expenses and other current assets		44.9			41.4
Total Current Assets		1,745.9			1,929.4
Property, plant and equipment, net		1,709.8			1,633.6
Deferred income taxes		263.8			281.6
Cost in excess of net assets acquired		189.1			190.9
Other assets		124.7			134.9
Total Assets	$	4,033.3		$	4,170.4
LIABILITIES AND EQUITY
Accounts payable	$	232.6		$	278.5
Accrued liabilities		273.5			322.0
Deferred income taxes		24.8			78.2
Short-term debt and current portion of long-term debt		14.7			15.2
Total Current Liabilities		545.6			693.9
Long-term debt		488.8			494.6
Accrued postretirement benefits		449.5			446.9
Pension liabilities		405.2			378.2
Other long-term liabilities		121.9			127.8
Total Liabilities		2,011.0			2,141.4
Equity:
ATI Stockholders’ Equity:
Preferred stock, par value $0.10: authorized- 50,000,000 shares; issued-none		—			—
Common stock, par value $0.10: authorized-500,000,000 shares; issued-102,404,256 shares at March 31, 2009 and December 31, 2008; outstanding-98,011,785 shares at March 31, 2009 and 97,330,969 shares at December 31, 2008		10.2			10.2
Additional paid-in capital		639.4			651.8
Retained earnings		2,260.3			2,286.7
Treasury stock: 4,392,471 shares at March 31, 2009 and 5,073,287 shares at December 31, 2008		(211.7	)		(244.8	)
Accumulated other comprehensive loss, net of tax		(747.2	)		(746.5	)
Total ATI Stockholders’ Equity		1,951.0			1,957.4
Noncontrolling interests		71.3			71.6
Total Equity		2,022.3			2,029.0
Total Liabilities and Equity	$	4,033.3		$	4,170.4

The accompanying notes are an integral part of these statements.

3

ALLEGHENY TECHNOLOGIES INCORPORATED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per share amounts)

(Unaudited)

	Three Months Ended
	March 31,
	2009			2008
Sales	$	831.6		$	1,343.4
Costs and expenses:
Cost of sales		750.9			1,052.8
Selling and administrative expenses		80.8			70.2
Income (loss) before interest, other income and income taxes		(0.1	)		220.4
Interest income, net		0.1			0.2
Other income, net		0.3			1.0
Income before income tax provision (benefit)		0.3			221.6
Income tax provision (benefit)		(5.0	)		77.9
Net income		5.3			143.7
Less: Net income (loss) attributable to noncontrolling interests		(0.6	)		1.7
Net income attributable to ATI	$	5.9		$	142.0
Basic net income per common share attributable to ATI common stockholders	$	0.06		$	1.41
Diluted net income per common share attributable to ATI common stockholders	$	0.06		$	1.40
Dividends declared per common share	$	0.18		$	0.18

The accompanying notes are an integral part of these statements.

4

ALLEGHENY TECHNOLOGIES INCORPORATED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

	Three Months Ended
	March 31,
	2009			2008
Operating Activities:
Net income	$	5.3		$	143.7
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		32.3			27.3
Deferred income taxes		(38.5	)		25.3
Change in operating assets and liabilities:
Inventories		141.3			(169.3	)
Accounts receivable		81.7			(63.8	)
Accounts payable		(45.9	)		80.9
Retirement benefits		29.5			(6.3	)
Accrued income taxes, net of tax benefits on share-based compensation		(5.9	)		53.8
Accrued liabilities and other		(30.9	)		(25.6	)
Cash provided by operating activities		168.9			66.0
Investing Activities:
Purchases of property, plant and equipment		(108.6	)		(112.0	)
Asset disposals and other		(0.6	)		0.3
Cash used in investing activities		(109.2	)		(111.7	)
Financing Activities:
Payments on long-term debt and capital leases		(5.2	)		(5.3	)
Net repayments under credit facilities		(0.4	)		(0.3	)
Net decrease in debt		(5.6	)		(5.6	)
Dividends paid		(17.6	)		(18.2	)
Shares repurchased for income tax withholding on share-based compensation		(0.7	)		(15.5	)
Tax benefit on share-based compensation		0.3			(9.1	)
Purchase of treasury stock		—			(62.3	)
Exercises of stock options		—			1.1
Cash used in financing activities		(23.6	)		(109.6	)
Increase (decrease) in cash and cash equivalents		36.1			(155.3	)
Cash and cash equivalents at beginning of the year		469.9			623.3
Cash and cash equivalents at end of period	$	506.0		$	468.0

The accompanying notes are an integral part of these statements.

5

ALLEGHENY TECHNOLOGIES INCORPORATED AND SUBSIDIARIES

STATEMENTS OF CHANGES IN CONSOLIDATED EQUITY

(In millions, except per share amounts)

(Unaudited)

	ATI Stockholders
												Accumulated
			Additional									Other						Non-
	Common		Paid-In			Retained			Treasury			Comprehensive			Comprehensive			controlling			Total
	Stock		Capital			Earnings			Stock			Income (Loss)			Income			Interests			Equity
Balance, December 31, 2007	$	10.2	$	693.7		$	1,830.7		$	(75.4	)	$	(237.2	)	$	—		$	57.2		$	2,279.2
Net income		—		—			142.0			—			—			142.0			1.7			143.7
Other comprehensive income, net of tax:
Pension plans and other postretirement benefits		—		—			—			—			2.0			2.0			—			2.0
Foreign currency translation gains		—		—			—			—			5.5			5.5			3.8			9.3
Unrealized gains on derivatives		—		—			—			—			10.2			10.2			—			10.2
Comprehensive income		—		—			142.0			—			17.7		$	159.7			5.5			165.2
Purchase of treasury stock		—		—			—			(62.3	)		—						—			(62.3	)
Effect of changing the measurement date for pension plans and other postretirement benefits, net of tax		—		—			—			—			1.2						—			1.2
Cash dividends on common stock ($0.18 per share)		—		—			(18.2	)		—			—						—			(18.2	)
Employee stock plans		—		(54.5	)		—			35.6			—						—			(18.9	)
Balance, March 31, 2008	$	10.2	$	639.2		$	1,954.5		$	(102.1	)	$	(218.3	)				$	62.7		$	2,346.2
Balance, December 31, 2008	$	10.2	$	651.8		$	2,286.7		$	(244.8	)	$	(746.5	)	$	—		$	71.6		$	2,029.0
Net income (loss)		—		—			5.9			—			—			5.9			(0.6	)		5.3
Other comprehensive income (loss), net of tax:
Pension plans and other postretirement benefits		—		—			—			—			0.2			0.2			—			0.2
Foreign currency translation gains (losses)		—		—			—			—			(6.1	)		(6.1	)		0.3			(5.8	)
Unrealized gains on derivatives		—		—			—			—			5.2			5.2			—			5.2
Comprehensive income (loss)		—		—			5.9			—			(0.7	)	$	5.2			(0.3	)		4.9
Cash dividends on common stock ($0.18 per share)		—		—			(17.6	)		—			—						—			(17.6	)
Employee stock plans		—		(12.4	)		(14.7	)		33.1			—						—			6.0
Balance, March 31, 2009	$	10.2	$	639.4		$	2,260.3		$	(211.7	)	$	(747.2	)				$	71.3		$	2,022.3

The accompanying notes are an integral part of these statements.

6

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Unaudited

Note 1. Accounting Policies

Basis of Presentation

     The interim consolidated financial statements include the accounts of Allegheny Technologies Incorporated and its subsidiaries. Unless the context requires otherwise, “Allegheny Technologies”, “ATI” and “the Company” refer to Allegheny Technologies Incorporated 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 2008 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, 2008 financial information has been derived from our audited financial statements, which were revised in the current period to reflect changes in the presentation of noncontrolling interests (formerly minority interests) in accordance with the required adoption of the accounting standard discussed below. Certain amounts from prior years have been reclassified to conform with the 2009 presentation.

New Accounting Pronouncement Adopted

As required, in the first quarter 2009, the Company adopted FASB Statement of Financial Accounting Standards No. 160 (“FAS 160”), “Noncontrolling Interests in Consolidated Financial Statements”. Early adoption of this standard was prohibited. FAS 160 changes the classification of noncontrolling (minority) interests on the balance sheet and the accounting for and reporting of transactions between the reporting entity and holders of such noncontrolling interests. Under the new standard, noncontrolling interests are considered equity and are reported as an element of stockholders’ equity rather than within the mezzanine or liability sections of the balance sheet. In addition, the practice of reporting minority interest expense or benefit changed. Under the new standard, net income encompasses the total income before noncontrolling interest expense or benefit. The income statement includes separate disclosure of the attribution of income or loss between the controlling and noncontrolling interests. Absent a change in control, increases and decreases in the noncontrolling ownership interest amount are accounted for as equity transactions. As a result of adopting FAS 160, the balance sheet and the income statement have been recast retrospectively for the presentation of noncontrolling interest in our STAL joint venture.

     On January 1, 2009, the Company adopted Statement of Financial Accounting Standards No. 157 (“FAS 157”), “Fair Value Measurements,” as it relates to nonfinancial assets and nonfinancial liabilities. FAS 157 defines fair value, establishes a framework for measuring fair value in accordance with U.S. generally accepted accounting principles, and expands disclosures about fair value measurements. The provisions of this standard apply to other accounting pronouncements that require or permit fair value measurements and are to be applied prospectively with limited exceptions. The adoption of FAS 157, as it relates to nonfinancial assets and nonfinancial liabilities, had no impact on the financial statements. The provisions of FAS 157 will be applied at such time a fair value measurement of a nonfinancial asset or nonfinancial liability is required, which may result in a fair value that is materially different than would have been calculated prior to the adoption of FAS 157.

     On January 1, 2009, the Company adopted FSP No. EITF 03-6-1, “Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities”. FSP EITF 03-6-1 states that unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method. There was no impact to reported earnings per share upon adoption of FSP EITF 03-6-1.

7

Note 2. Inventories

     Inventories at March 31, 2009 and December 31, 2008 were as follows (in millions):

	March 31,			December 31,
	2009			2008
Raw materials and supplies	$	138.0		$	163.6
Work-in-process		646.4			772.6
Finished goods		144.6			164.9
Total inventories at current cost		929.0			1,101.1
Less allowances to reduce current cost values to LIFO basis		(178.1	)		(205.6	)
Progress payments		(4.7	)		(7.9	)
Total inventories, net	$	746.2		$	887.6

     Inventories are stated at the lower of cost (last-in, first-out (“LIFO”), first-in, first-out (“FIFO”), and average cost methods) or market, less progress payments. Most of the Company’s inventory is valued utilizing the LIFO costing methodology. Inventory of the Company’s non-U.S. operations is valued using average cost or FIFO methods. The effect of using the LIFO methodology to value inventory, rather than FIFO, decreased cost of sales by $27.5 million for the first three months of 2009 compared to an increase to cost of sales of $1.3 million for the first three months of 2008.

Note 3. Supplemental Financial Statement Information

     Property, plant and equipment at March 31, 2009 and December 31, 2008 were as follows (in millions):

	March 31,			December 31,
	2009			2008
Land	$	23.1		$	23.1
Buildings		317.5			310.9
Equipment and leasehold improvements		2,598.2			2,508.5
		2,938.8			2,842.5
Accumulated depreciation and amortization		(1,229.0	)		(1,208.9	)
Total property, plant and equipment, net	$	1,709.8		$	1,633.6

     Note 4. Debt

     Debt at March 31, 2009 and December 31, 2008 was as follows (in millions):

	March 31,			December 31,
	2009			2008
Allegheny Technologies $300 million 8.375% Notes due 2011, net (a)	$	303.9		$	304.2
Allegheny Ludlum 6.95% debentures, due 2025		150.0			150.0
Domestic Bank Group $400 million unsecured credit agreement		—			—
Promissory note for J&L asset acquisition		25.6			30.7
Foreign credit agreements		14.9			15.6
Industrial revenue bonds, due through 2020		8.9			9.0
Other		0.2			0.3
Total short-term and long-term debt		503.5			509.8
Short-term debt and current portion of long-term debt		(14.7	)		(15.2	)
Total long-term debt	$	488.8		$	494.6

(a) Includes fair value adjustments for settled interest rate swap contracts of $6.2 million at March 31, 2009 and $6.7 million at December 31, 2008.

8

     The Company has a $400 million senior unsecured domestic revolving credit facility (“the facility”), which includes a $200 million sublimit for the issuance of letters of credit. As of March 31, 2009, there had been no borrowings made under the facility, although a portion of the facility was used to support approximately $12 million in letters of credit. The Company has an additional separate credit facility for the issuance of letters of credit. As of March 31, 2009, $30 million in letters of credit was outstanding under this facility.

     In addition, STAL, the Company’s Chinese joint venture company in which ATI has a 60% interest, had approximately $5 million in letters of credit outstanding as of March 31, 2009 related to the expansion of its operations in Shanghai, China. These letters of credit are supported solely by STAL’s financial capability without any guarantees from the joint venture partners.

Note 5. Per Share Information

     The following table sets forth the computation of basic and diluted net income per common share (in millions, except per share amounts):

	Three Months Ended
	March 31,
	2009		2008
Numerator for basic and diluted net income per common share — net income attributable to ATI common stockholders	$	5.9	$	142.0
Denominator:
Denominator for basic net income per common share-weighted average shares		97.2		100.8
Effect of dilutive securities:
Option equivalents		0.4		0.5
Contingently issuable shares		0.2		0.3
Denominator for diluted net income per common share — adjusted weighted average shares and assumed conversions		97.8		101.6
Basic net income per common share attributable to ATI common stockholders	$	0.06	$	1.41
Diluted net income per common share attributable to ATI common stockholders	$	0.06	$	1.40

Note 6. 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. The Company accounts for all of these contracts as hedges under Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Hedging Activities” (“FAS 133”). In general, hedge effectiveness is determined by examining the relationship between offsetting changes in fair value or cash flows attributable to the item being hedged, and the financial instrument being used for the hedge. Effectiveness is measured utilizing regression analysis and other techniques to determine whether the change in the fair market value or cash flows of the derivative exceeds the change in fair value or cash flow of the hedged item. Calculated ineffectiveness, if any, is immediately recognized on the statement of income.

     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. Generally under these contracts, which are 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.

9

     The majority of ATI’s products are sold utilizing raw material surcharges and index mechanisms. However, as of March 31, 2009, the Company had entered into financial hedging arrangements primarily at the request of its customers, related to firm orders, for approximately 7% of the Company’s total annual nickel requirements through 2010. Any gain or loss associated with these hedging arrangements is included in the selling price to the customer requesting the hedge over the designated hedge period.

     At March 31, 2009, the outstanding financial derivatives used to hedge the Company’s exposure to natural gas cost volatility represented approximately 40% of our forecasted requirements for the next three years.

     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. At March 31, 2009, the outstanding financial derivatives used to hedge the Company’s exposure to foreign currency, primarily euros, represented approximately 8% of our forecasted total international sales through 2011. In addition, the Company may also designate cash balances held in foreign currencies as hedges of forecasted foreign currency transactions.

     The Company may enter into derivative interest rate contracts to maintain a reasonable balance between fixed- and floating-rate debt. There were no unsettled derivative financial instruments related to debt balances for the periods presented, although previously settled contracts remain a component of the recorded value of debt. See Note 4. Debt, for further information.

10

     For derivative financial instruments that are designated as cash flow hedges, the effective portion of 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. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current period results. The Company did not use fair value or net investment hedges for the periods presented.

(in millions)

									Amount of Gain (Loss)
					Amount of Gain (Loss)			Location of Gain	Recognized in Income
	Amount of Gain				Reclassified from			(Loss) Recognized in	on Derivatives (Ineffective
	(Loss) Recognized in			Location of Gain	Accumulated OCI			Income on Derivatives	Portion and Amount
	OCI on Derivatives			(Loss) Reclassified	into Income			(Ineffective Portion	Excluded from
Derivatives in FAS 133	(Effective Portion)			from Accumulated	(Effective Portion)			and Amount Excluded	Effectiveness Testing)
Cash Flow Hedging	Quarter ended			OCI into Income	Quarter ended			from Effectiveness	Quarter ended
Relationships	March 31, 2009			(Effective Portion)	March 31, 2009			Testing)	March 31, 2009
Nickel and other raw material contracts	$	(0.1	)	Cost of sales	$	(6.5	)	Selling, general & administrative exp.	$	—
Natural gas contracts		(10.0	)	Cost of sales		(4.7	)	Selling, general & administrative exp.		—
Foreign exchange contracts		6.2		Cost of sales		2.1		Selling, general & administrative exp.		0.6
Total	$	(3.9	)		$	(9.1	)		$	0.6

     Assuming market rates remain constant with the rates at March 31, 2009, a loss of $19.5 million is expected to be recognized over the next 12 months.

     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.

     The fair values of the Company’s derivative financial instruments are presented below. All fair values for these derivatives were measured using Level 2 information as defined by the FAS 157 fair value 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.

(in millions)

		March 31,		December 31,
	Balance sheet location	2009		2008
Asset derivatives
Foreign exchange contracts	Prepaid expenses and other current assets	$	10.7	$	7.0
Foreign exchange contracts	Other assets		13.6		10.2
Total asset derivatives		$	24.3	$	17.2
Liability derivatives
Nickel and other raw material contracts	Accrued liabilities	$	24.4	$	31.6
Natural gas contracts	Accrued liabilities		18.2		14.3
Foreign exchange contracts	Accrued liabilities		—		0.2
Nickel and other raw material contracts	Other long-term liabilities		3.2		5.4
Natural gas contracts	Other long-term liabilities		14.8		10.0
Total liability derivatives		$	60.6	$	61.5

     There are no credit risk-related contingent features in our derivative contracts, and the contracts contained no provisions under which we have posted, or would be required to post, collateral. The counterparties to our derivative contracts were substantial and creditworthy commercial banks that are recognized market makers. We control our credit exposure by diversifying across multiple counterparties and by monitoring credit ratings and credit default swap spreads of our counterparties. We also enter into master netting agreements with counterparties when possible.

11

Note 7. Income Taxes

     Results for the first quarter 2009 included an income tax benefit of $5.0 million compared to an income tax provision of $77.9 million, or 35.2% of income before tax, for the comparable 2008 quarter. The 2009 first quarter benefited from a lower income tax provision due primarily to $5.1 million of discrete adjustments associated primarily with prior years’ taxes. The 2008 first quarter included a discrete $2.6 million benefit related to foreign taxes.

Note 8. Pension Plans and Other Postretirement Benefits

     The Company has defined benefit pension plans and defined contribution plans covering substantially all employees. 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.

     The Company also sponsors several postretirement plans covering certain salaried and hourly employees. The plans provide health care and life insurance benefits for eligible retirees. In most plans, Company contributions towards premiums are capped based on the cost as of a certain date, thereby creating a defined contribution. For the non-collectively bargained plans, the Company maintains the right to amend or terminate the plans at its discretion.

     For the three months ended March 31, 2009 and 2008, the components of pension (income) expense and components of other postretirement benefit expense for the Company’s defined benefit plans included the following (in millions):

	Three Months Ended
	March 31,
	2009			2008
Pension Benefits:
Service cost — benefits earned during the year	$	6.1		$	7.0
Interest cost on benefits earned in prior years		34.4			32.6
Expected return on plan assets		(34.7	)		(50.2	)
Amortization of prior service cost		4.1			4.1
Amortization of net actuarial loss		21.6			3.2
Total pension (income) expense	$	31.5		$	(3.3	)

	Three Months Ended
	March 31,
	2009			2008
Other Postretirement Benefits:
Service cost — benefits earned during the year	$	0.7		$	0.8
Interest cost on benefits earned in prior years		8.2			7.9
Expected return on plan assets		(0.4	)		(1.4	)
Amortization of prior service cost (credit)		(4.8	)		(5.3	)
Amortization of net actuarial loss		1.6			1.3
Total other postretirement benefit expense	$	5.3		$	3.3
Total retirement benefit expense — defined benefit plans	$	36.8		$	—

     Other postretirement benefit costs for a defined contribution plan were $0.5 million for the quarter ended March 31, 2009 and zero for the comparable prior year period.

12

Note 9. Business Segments

     Following is certain financial information with respect to the Company’s business segments for the periods indicated (in millions):

	Three Months Ended
	March 31,
	2009			2008
Total sales:
High Performance Metals	$	407.0		$	525.1
Flat-Rolled Products		387.0			760.6
Engineered Products		75.6			128.5
		869.6			1,414.2
Intersegment sales:
High Performance Metals		19.1			44.1
Flat-Rolled Products		8.8			13.7
Engineered Products		10.1			13.0
		38.0			70.8
Sales to external customers:
High Performance Metals		387.9			481.0
Flat-Rolled Products		378.2			746.9
Engineered Products		65.5			115.5
	$	831.6		$	1,343.4
Operating profit (loss):
High Performance Metals	$	54.3		$	131.4
Flat-Rolled Products		7.7			102.9
Engineered Products		(6.1	)		5.7
Total operating profit		55.9			240.0
Corporate expenses		(14.4	)		(17.7	)
Interest income, net		0.1			0.2
Other expense, net of gains on asset sales		(4.0	)		(0.9	)
Retirement benefit expense		(37.3	)		—
Income before income taxes	$	0.3		$	221.6

     Retirement benefit expense represents defined benefit plan pension expense, and other postretirement benefit expense for both defined benefit and defined contribution plans. Operating profit with respect to the Company’s business segments excludes any retirement benefit expense.

     Corporate expenses for the first three months of 2009 were $14.4 million, compared to $17.7 million for the first three months of 2008. This decrease is due primarily to lower expenses associated with long-term performance-based cash incentive compensation programs.

     Other expense, net of gains on asset sales, primarily includes charges incurred in connection with closed operations and other non-operating income or expense. These items are presented primarily in selling and administrative expenses and in other expense in the statement of income. These items resulted in net charges of $4.0 million for the first three months of 2009 and $0.9 million for the first three months of 2008. This increase was primarily related to lower foreign currency gains, and higher franchise and other non-income related taxes.

Note 10. Financial Information for Subsidiary and Guarantor Parent

     The payment obligations under the $150 million 6.95% debentures due 2025 issued by Allegheny Ludlum Corporation (the “Subsidiary”) are fully and unconditionally guaranteed by Allegheny Technologies Incorporated (the “Guarantor Parent”). In accordance with positions established by the Securities and Exchange Commission, the following financial information sets forth separately financial information with respect to the Subsidiary, the non-guarantor subsidiaries and the Guarantor Parent. The principal elimination entries eliminate investments in subsidiaries and certain intercompany balances and transactions. Investments in subsidiaries, which are eliminated in consolidation, are included in other assets on the balance sheets.

13

     Allegheny Technologies is the plan sponsor for the U.S. qualified defined benefit pension plan (the “Plan”) which covers certain current and former employees of the Subsidiary and the non-guarantor subsidiaries. As a result, the balance sheets presented for the Subsidiary and the non-guarantor subsidiaries do not include any Plan assets or liabilities, or the related deferred taxes. The Plan assets, liabilities and related deferred taxes and pension income or expense are recognized by the Guarantor Parent. Management and royalty fees charged to the Subsidiary and to the non-guarantor subsidiaries by the Guarantor Parent have been excluded solely for purposes of this presentation.

     Cash flows related to intercompany activity between the Guarantor Parent, the Subsidiary, and the non-guarantor subsidiaries are presented as financing activities on the condensed statements of cash flows.

Allegheny Technologies Incorporated
Financial Information for Subsidiary and Guarantor Parent
Balance Sheets
March 31, 2009

	Guarantor				Non-guarantor
(In millions)	Parent		Subsidiary		Subsidiaries		Eliminations			Consolidated
Assets:
Cash and cash equivalents	$	3.0	$	313.3	$	189.7	$	—		$	506.0
Accounts receivable, net		0.3		154.2		294.3		—			448.8
Inventories, net		—		114.4		631.8		—			746.2
Prepaid expenses and other current assets		0.7		9.6		34.6		—			44.9
Total current assets		4.0		591.5		1,150.4		—			1,745.9
Property, plant and equipment, net		2.2		397.5		1,310.1		—			1,709.8
Deferred income taxes		263.8		—		—		—			263.8
Cost in excess of net assets acquired		—		112.1		77.0		—			189.1
Investments in subsidiaries and other assets		4,405.4		1,577.3		1,346.2		(7,204.2	)		124.7
Total assets	$	4,675.4	$	2,678.4	$	3,883.7	$	(7,204.2	)	$	4,033.3
Liabilities and stockholders’ equity:
Accounts payable	$	4.9	$	82.3	$	145.4	$	—		$	232.6
Accrued liabilities		1,896.6		65.3		762.1		(2,450.5	)		273.5
Deferred income taxes		24.8		—		—		—			24.8
Short-term debt and current portion of long-term debt		—		10.5		4.2		—			14.7
Total current liabilities		1,926.3		158.1		911.7		(2,450.5	)		545.6
Long-term debt		303.8		366.6		18.4		(200.0	)		488.8
Accrued postretirement benefits		—		272.7		176.8		—			449.5
Pension liabilities		379.0		3.1		23.1		—			405.2
Other long-term liabilities		44.0		21.3		56.6		—			121.9
Total liabilities		2,653.1		821.8		1,186.6		(2,650.5	)		2,011.0
Total stockholders’ equity		2,022.3		1,856.6		2,697.1		(4,553.7	)		2,022.3
Total liabilities and stockholders’ equity	$	4,675.4	$	2,678.4	$	3,883.7	$	(7,204.2	)	$	4,033.3

14

Note 10. CONTINUED

Allegheny Technologies Incorporated
Financial Information for Subsidiary and Guarantor Parent
Statements of Income
For the three months ended March 31, 2009

	Guarantor						Non-guarantor
(In millions)	Parent			Subsidiary			Subsidiaries			Eliminations			Consolidated
Sales	$	—		$	354.2		$	477.4		$	—		$	831.6
Cost of sales		23.0			334.2			393.7			—			750.9
Selling and administrative expenses		32.4			9.3			39.1			—			80.8
Interest income (expense), net		2.5			(2.5	)		0.1			—			0.1
Other income (expense) including equity in income of unconsolidated subsidiaries		53.2			0.5			1.8			(55.2	)		0.3
Income before income tax provision		0.3			8.7			46.5			(55.2	)		0.3
Income tax provision (benefit)		(5.0	)		3.8			11.7			(15.5	)		(5.0	)
Net income		5.3			4.9			34.8			(39.7	)		5.3
Less: Net income (loss) attributable to noncontrolling interest		(0.6	)		—			(0.6	)		0.6			(0.6	)
Net income attributable to ATI	$	5.9		$	4.9		$	35.4		$	(40.3	)	$	5.9

Condensed Statements of Cash Flows
For the three months ended March 31, 2009

	Guarantor						Non-guarantor
(In millions)	Parent			Subsidiary			Subsidiaries			Eliminations		Consolidated
Cash flows provided by (used in) operating activities	$	(16.1	)	$	92.9		$	92.1		$	—	$	168.9
Cash flows used in investing activities		(0.7	)		(13.8	)		(94.7	)		—		(109.2	)
Cash flows provided by (used in) financing activities		16.6			(47.6	)		7.4			—		(23.6	)
Increase (decrease) in cash and cash equivalents	$	(0.2	)	$	31.5		$	4.8		$	—	$	36.1

15

Note 10. CONTINUED

Allegheny Technologies Incorporated
Financial Information for Subsidiary and Guarantor Parent
Balance Sheets
December 31, 2008

	Guarantor				Non-guarantor
(In millions)	Parent		Subsidiary		Subsidiaries		Eliminations			Consolidated
Assets:
Cash and cash equivalents	$	3.2	$	281.8	$	184.9	$	—		$	469.9
Accounts receivable, net		0.3		191.9		338.3		—			530.5
Inventories, net		—		190.4		697.2		—			887.6
Prepaid expenses, and other current assets		0.6		4.7		36.1		—			41.4
Total current assets		4.1		668.8		1,256.5		—			1,929.4
Property, plant and equipment, net		1.5		395.2		1,236.9		—			1,633.6
Deferred income taxes		281.6		—		—		—			281.6
Cost in excess of net assets acquired		—		112.1		78.8		—			190.9
Investment in subsidiaries and other assets		4,666.3		1,514.7		1,304.3		(7,350.4	)		134.9
Total assets	$	4,953.5	$	2,690.8	$	3,876.5	$	(7,350.4	)	$	4,170.4
Liabilities and stockholders’ equity:
Accounts payable	$	3.7	$	83.7	$	191.1	$	—		$	278.5
Accrued liabilities		2,132.3		74.5		798.1		(2,682.9	)		322.0
Deferred income taxes		78.2		—		—		—			78.2
Short-term debt and current portion of long-term debt		—		10.5		4.7		—			15.2
Total current liabilities		2,214.2		168.7		993.9		(2,682.9	)		693.9
Long-term debt		304.2		371.8		18.6		(200.0	)		494.6
Postretirement benefits		—		270.9		176.0		—			446.9
Pension liabilities		351.2		3.2		23.8		—			378.2
Other long-term liabilities		54.9		18.3		54.6		—			127.8
Total liabilities		2,924.5		832.9		1,266.9		(2,882.9	)		2,141.4
Total stockholders’ equity		2,029.0		1,857.9		2,609.6		(4,467.5	)		2,029.0
Total liabilities and stockholders’ equity	$	4,953.5	$	2,690.8	$	3,876.5	$	(7,350.4	)	$	4,170.4

16

Note 10. CONTINUED

Allegheny Technologies Incorporated
Financial Information for Subsidiary and Guarantor Parent
Statements of Income
For the three months ended March 31, 2008

	Guarantor						Non-guarantor
(In millions)	Parent			Subsidiary			Subsidiaries			Eliminations			Consolidated
Sales	$	—		$	695.0		$	648.4		$	—		$	1,343.4
Cost of sales		10.2			572.6			470.0			—			1,052.8
Selling and administrative expenses		27.1			9.8			33.3			—			70.2
Interest income (expense), net		(0.7	)		(2.1	)		3.0			—			0.2
Other income (expense) including equity in income of unconsolidated subsidiaries		259.6			9.2			(2.0	)		(265.8	)		1.0
Income before income tax provision		221.6			119.7			146.1			(265.8	)		221.6
Income tax provision		77.9			44.1			52.2			(96.3	)		77.9
Net income		143.7			75.6			93.9			(169.5	)		143.7
Less: Net income attributable to noncontrolling interest		1.7			—			1.7			(1.7	)		1.7
Net income attributable to ATI	$	142.0		$	75.6		$	92.2		$	(167.8	)	$	142.0

Condensed Statements of Cash Flows
For the three months ended March 31, 2008

	Guarantor						Non-guarantor
(In millions)	Parent			Subsidiary			Subsidiaries			Eliminations		Consolidated
Cash flows provided by (used in) operating activities	$	(33.8	)	$	(59.0	)	$	158.8		$	—	$	66.0
Cash flows used in investing activities		(0.1	)		(12.0	)		(99.6	)		—		(111.7	)
Cash flows provided by (used in) financing activities		33.9			(84.2	)		(59.3	)		—		(109.6	)
Increase (decrease) in cash and cash equivalents	$	—		$	(155.2	)	$	(0.1	)	$	—	$	(155.3	)

Note 11. 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 expects that it will adjust its accruals to reflect new

17

information as appropriate. Future adjustments could have a material adverse effect on the Company’s results of operations in a given period, but the Company cannot reliably predict the amounts of such future adjustments.

     Based on currently available information, the Company does not believe that there is a reasonable possibility that a loss exceeding the amount already accrued for any of the sites with which the Company is currently associated (either individually or in the aggregate) will be an amount that would be material to a decision to buy or sell the Company’s securities. Future developments, administrative actions or liabilities relating to environmental matters, however, could have a material adverse effect on the Company’s financial condition or results of operations.

     At March 31, 2009, the Company’s reserves for environmental remediation obligations totaled approximately $18 million, of which $7 million was included in other current liabilities. The reserve includes estimated probable future costs of $5 million for federal Superfund and comparable state-managed sites; $7 million for formerly owned or operated sites for which the Company has remediation or indemnification obligations; $4 million for owned or controlled sites at which Company operations have been discontinued; and $2 million for sites utilized by the Company in its ongoing operations. The Company continues to evaluate whether it may be able to recover a portion of future costs for environmental liabilities from third parties.

     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.

     See Note 12. Commitments and Contingencies to the Company’s consolidated financial statements in the Company’s Annual Report on Form 10-K for its fiscal year ended December 31, 2008 for a discussion of legal proceedings affecting the Company.

     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, patent infringement, commercial, government contracting work, employment, employee benefits, taxes, environmental and health and safety, and stockholder 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 results of operations for that period.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

     Allegheny Technologies Incorporated (ATI) is a Delaware corporation with its principal executive offices located at 1000 Six PPG Place, Pittsburgh, Pennsylvania 15222-5479, telephone number (412) 394-2800. References to “Allegheny Technologies,” “ATI,” the “Company,” the “Registrant,” “we,” “our” and “us” and similar terms mean Allegheny Technologies Incorporated and its subsidiaries, unless the context otherwise requires.

     Allegheny Technologies is one of the largest and most diversified specialty metals producers in the world. We use innovative technologies to offer global markets a wide range of specialty metals solutions. Our products include titanium and titanium alloys, nickel-based alloys and superalloys, zirconium, hafnium, and niobium, stainless and specialty steel alloys, grain-oriented electrical steel, tungsten-based materials and cutting tools, carbon alloy impression die forgings, and large grey and ductile iron castings. Our specialty metals are produced in a wide range of alloys and product forms and are selected for use in applications that demand metals having exceptional hardness, toughness, strength, resistance to heat, corrosion or abrasion, or a combination of these characteristics.

18

Results of Operations

     We operate in three business segments: High Performance Metals, Flat-Rolled Products, and Engineered Products. These segments represented the following percentages of our total revenues and segment operating profit for the first three months of 2009 and 2008:

	2009						2008
				Operating						Operating
	Revenue			Profit			Revenue			Profit
High Performance Metals		47	%		97	%		36	%		55	%
Flat-Rolled Products		45	%		14	%		55	%		43	%
Engineered Products		8	%		(11	%)		9	%		2	%

     Sales for the first quarter 2009 were $831.6 million, a decrease of 38% compared to the first quarter 2008, due to lower selling prices and shipments due to the challenging business conditions resulting from the severe global economic recession. Compared to the 2008 first quarter, sales for the 2009 first quarter decreased 19% in the High Performance Metals segment, 49% in the Flat-Rolled Products segment, and 43% in the Engineered Products segment. Demand from the global aerospace and defense, chemical process industry, oil and gas, electrical energy and medical markets accounted for nearly 79% of our first quarter 2009 sales. Aerospace and defense was the largest of our markets at 34% of first quarter 2009 sales, with the chemical process industry and oil and gas markets representing 21% of total sales and sales to the electrical energy market representing 20%. Commercial aerospace continued to be impacted by schedule pushouts and uncertainties as the supply chain adjusted to revised commercial airplane build schedules and reduced demand from the aeroengine aftermarket. In the chemical process industry, our exotic alloys business benefited from a solid backlog, but demand for many of our other products was soft due primarily to tight credit markets and the global recession. In the oil and gas market, demand for our products for pipelines and offshore projects was good. On the other hand, demand for downhole drilling weakened considerably and projects for refineries and unconventional fuel, such as tar sands, remained delayed primarily as a result of lower crude oil prices and tight credit markets. In the electrical energy market, demand for our grain-oriented electrical steel was good, demand for our industrial titanium products for electrical power plants remained at a high level, and demand for our exotic alloys for nuclear energy applications continued to grow. Demand for our large castings for wind energy applications was nearly nonexistent; however, early signs of a recovery began to emerge. As expected, consumer-related markets, such as automotive, appliance, and residential construction, were very weak.

     For the first quarter 2009, direct international sales were $244.4 million, or nearly 30% of total sales. Sales of our key high-value products (titanium alloys, exotic alloys, nickel-based alloys and specialty alloys, and grain-oriented electrical steel) represented 69% of total sales. ATI titanium product shipments, including ATI-produced products for our Uniti Titanium joint venture, were 10.3 million pounds in the first quarter 2009, which represents 23% of total sales.

     Segment operating profit for the first quarter 2009 was $55.9 million, or 6.7% of sales, compared to $240 million, or 17.9% of sales, in the first quarter 2008. Segment operating profit was adversely affected by the decline in selling prices and shipments due to the global economic recession. The selling prices for many of our products include surcharges or indices by which we attempt to match changes in raw material costs with shipments. The first quarter 2009 results were negatively impacted by approximately $65 million in out-of-phase raw material surcharges and indices due primarily to the rapid decrease in the cost of raw materials in the second half of the fourth quarter 2008. This was partially offset by a LIFO inventory valuation reserve benefit of $27.5 million as a result of the continuing decline in raw material costs in 2009. Results for the first quarter 2008 included a LIFO inventory valuation reserve charge of $1.3 million. First quarter 2009 benefited from gross cost reductions, before the effects of inflation, of $34.8 million. Segment operating profit (loss) as a percentage of sales for the three month periods ended March 31, 2009 and 2008 was:

	Three Months Ended
	March 31,
	2009			2008
High Performance Metals		14.0	%		27.3	%
Flat-Rolled Products		2.0	%		13.8	%
Engineered Products		(9.3	%)		4.9	%

19

     Our measure of segment operating profit, which we use to analyze the performance and results of our business segments, excludes income taxes, corporate expenses, net interest income or expense, retirement benefit expense, and other costs net of gains on asset sales. We believe segment operating profit, as defined, provides an appropriate measure of controllable operating results at the business segment level.

     Income before tax for the first quarter 2009 was $0.3 million compared to $221.6 million for the first quarter 2008. In addition to the factors discussed above, income before tax was adversely impacted by a $37.3 million increase in retirement benefit expenses resulting from lower returns on benefit plan assets in 2008 notwithstanding the positive impact of the voluntary pension contributions made over the last several years.

     Net income attributable to ATI for the first quarter 2009 was $5.9 million, or $0.06 per share, compared to the first quarter 2008 of $142.0 million, or $1.40 per share. First quarter 2009 results include an income tax benefit of $5.0 million compared to an income tax provision of $77.9 million, or 35.2% of income before tax for the first quarter 2008. The 2009 first quarter benefited from a lower income tax provision due primarily to $5.1 million of discrete adjustments associated primarily with adjusting prior years’ estimated taxes. The 2008 first quarter included a discrete benefit of $2.6 million related to foreign taxes.

     We continued to maintain our solid balance sheet. We ended the 2009 first quarter with cash on hand of $506 million, an increase of $36.1 million from year end 2008. This increase in cash was after investing $108.6 million in self-funded capital projects, paying dividends of $17.6 million, and a reduction in borrowings of $5.6 million during the quarter. At the end of the 2009 first quarter, we had no borrowings under our $400 million domestic credit facility and no significant near-term debt maturities. Total debt to total capitalization improved to 20.5%. Net debt as a percentage of total capitalization was a negative 0.1% as cash on hand exceeded total debt at the end of the 2009 first quarter.

     As we look forward to the second quarter we remain cautious. While we see some signs of stabilization in certain markets due to low inventory in the supply chain, demand for many of our products remains at a very low level, the pricing environment is challenging, and demand visibility is limited for many of our markets. The aerospace supply chain likely needs to further adjust to recently announced commercial aircraft production plans and reduced aftermarket demand. We will continue to adjust our production schedules and cost structures to market conditions through this difficult and uncertain period. We expect the second quarter 2009 segment operating profit to be negatively impacted by approximately $20 million from out-of-phase surcharges and indices.

     Considering all the above, we expect ATI’s second quarter 2009 earnings to be modestly better than the first quarter 2009. In addition, we expect to end the second quarter 2009 with a significant amount of cash on hand while continuing to self fund our capital investments.

     We remain confident in the long-term growth potential of our core aerospace and infrastructure markets that have been driving ATI’s performance. We intend to use the current difficult market conditions to continue to positively differentiate ATI as a uniquely positioned, diversified, technology-driven global specialty metals company with unsurpassed manufacturing capabilities. Our strategic direction and vision remain intact.

High Performance Metals Segment

     Sales decreased 19% to $387.9 million, compared to the first quarter 2008. Demand for our titanium alloys and our nickel-based alloys from the aerospace market was at lower levels as the supply chain adjusted to aircraft production schedule pushouts and reduced demand from the aeroengine aftermarket. Our exotic alloys business continued to benefit from a solid backlog from the chemical process industry and the nuclear energy market.

     Certain comparative information on the segment’s major products for the three months ended March 31, 2009 and 2008 is provided in the following table:

20

	Three Months Ended
	March 31,				%
	2009		2008		Change
Volume (000’s pounds):
Titanium mill products		6,938		8,770		(21	)%
Nickel-based and specialty alloys		9,970		9,537		5	%
Exotic alloys		1,289		1,364		(6	)%
Average prices (per pound):
Titanium mill products	$	22.48	$	25.54		(12	)%
Nickel-based and specialty alloys	$	14.74	$	18.56		(21	)%
Exotic alloys	$	57.08	$	44.61		28	%

     Shipments of titanium mill products decreased primarily due to lower demand from the commercial aerospace market. Shipments of nickel-based and specialty alloys increased primarily due to higher sales to the electrical energy market and oil and gas markets, which more than offset reduced demand from the aeroengine market. Shipments for exotic alloys decreased primarily due to product mix. Average selling prices for titanium and titanium alloys and nickel-based and specialty alloys decreased, primarily due to lower raw material indices as a result of lower raw material costs, and a more competitive pricing environment.

     Segment operating profit in the quarter was $54.3 million, or 14.0% of sales, a $77.1 million decrease compared to the first quarter 2008. The decrease in operating profit primarily resulted from lower base-selling prices and shipments for most products and the negative impact of raw material costs, primarily nickel and titanium, being higher than the raw material indices included in our selling prices due to long manufacturing cycle times, which totaled approximately $17 million. These negative impacts were partially offset by higher margins on exotic alloys and the benefits of gross cost reductions. There was no change in our LIFO inventory valuation reserve in the 2009 first quarter. A LIFO inventory valuation charge of $1.3 million was recognized in the first quarter 2008 in this segment. Results for the 2009 first quarter benefited from $20.5 million of gross cost reductions.

Flat-Rolled Products Segment

     First quarter 2009 sales were $378.2 million, 49% lower than the first quarter 2008. Demand for certain high-value products, such as grain-oriented electrical steel and industrial titanium products, was at reasonably good levels relative to economic conditions. Demand for most of our stainless products was weak, particularly from consumer markets such as automotive, appliance, and residential construction.

     Comparative information on the segment’s products for the three months ended March 31, 2009 and 2008 is provided in the following table:

	Three Months Ended
	March 31,				%
	2009		2008		Change
Volume (000’s pounds):
High value		93,928		119,792		(22	)%
Standard		101,574		170,620		(40	)%
Total		195,502		290,412		(33	)%
Average prices (per lb.):
High value	$	2.64	$	3.22		(18	)%
Standard	$	1.21	$	2.07		(42	)%
Combined Average	$	1.90	$	2.54		(25	)%

     Average selling transaction prices, which include surcharges, were 25% lower due to a combination of reduced raw material surcharges and lower base prices for most products due to a more competitive pricing environment.

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     Segment operating profit decreased to $7.7 million, or 2.0% of sales, compared to $102.9 million, or 13.8% of sales, for the 2008 period. The decline in operating profit primarily resulted from lower shipments and average base selling prices for most of our products and the negative impact from $48 million of higher cost raw materials purchased in 2008 flowing through cost of sales and not being in phase with raw material surcharges included in selling prices. This was due primarily to the rapid decrease in raw material costs in the second half of the fourth quarter 2008 and the long manufacturing times of some of our products. These negative impacts were partially offset by a $26.2 million decrease in the LIFO inventory valuation reserve and the benefits of gross cost reductions. There was no change in our LIFO inventory valuation reserve in the first quarter 2008. Results for the 2009 first quarter benefited from $12.1 million in gross cost reductions.

Engineered Products Segment

     Sales for the first quarter 2009 of $65.5 million were 43% lower than the first quarter 2008. Demand for our tungsten and tungsten carbide products, forged products, and cast products was weak. Demand for our titanium precision metal processing conversion services was stable. Segment operating loss in the first quarter 2009 was $6.1 million, compared to operating profit of $5.7 million for the comparable 2008 period. The decline was primarily due to significantly reduced demand and the impact of unabsorbed operating costs resulting from very low operating rates. The first quarter 2009 results included a LIFO inventory valuation reserve benefit of $1.3 million primarily due to lower raw material costs. There was no change in our LIFO inventory valuation reserve in the first quarter 2008. Results benefited from $2.2 million of gross cost reductions.

Corporate Items

     Corporate expenses decreased to $14.4 million for the first quarter of 2009, compared to $17.7 million in the year-ago period. This decrease is due primarily to lower expenses associated with long-term performance-based cash incentive compensation programs.

     First quarter 2009 interest income, net of interest expense, was $0.1 million compared $0.2 million for the same period last year. Interest expense benefited from the capitalization of interest costs on strategic capital projects of $9.0 million in the first quarter 2009 and $5.7 million in the first quarter 2008.

     Other expense, net of gains on asset sales, primarily includes charges incurred in connection with closed operations and other assets, and other non-operating income or expense. These items are presented primarily in selling and administration expenses, and in other income (expense) in the statement of income and resulted in other expense of $4.0 million for the first quarter of 2009 and $0.9 million for the first quarter of 2008. The increases primarily related to lower foreign currency gains, and higher franchise and other non-income related taxes.

     Retirement benefit expense, which includes pension expense and other postretirement expense, increased to $37.3 million in the first quarter 2009, compared to zero in the first quarter 2008. This increase is primarily a result of lower returns on plan assets in 2008 notwithstanding the positive benefits of the voluntary pension contributions made over the last several years. We now expect 2009 retirement benefit expense to be approximately $149 million, compared to $8.4 million of expense in 2008. For the full year, we now expect pension expense to be $126 million in 2009, compared to pension income of $12.2 million in 2008. For the first quarter 2009, retirement benefit expense included in cost of sales was $27.7 million and the amount included in selling and administrative expenses was $9.6 million. For the first quarter 2008, the amount of retirement benefit income included in cost of sales was $0.3 million, and the retirement benefit expense included in selling and administrative expenses was $0.3 million.

Income Taxes

     First quarter 2009 results include an income tax benefit of $5.0 million compared to an income tax provision of $77.9 million, or 35.2% of income before tax, for the comparable 2008 quarter. The 2009 first quarter benefited from a lower income tax provision due primarily to $5.1 million of discrete adjustments associated primarily with prior years’ taxes. The 2008 first quarter included a discrete $2.6 million benefit related to foreign taxes.

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Financial Condition and Liquidity

     We believe that internally generated funds, current cash on hand, and available borrowings under existing credit lines will be adequate to meet foreseeable liquidity needs, including a substantial expansion of our production capabilities over the next few years. We did not borrow funds under our domestic senior unsecured credit facility during the first three months of 2009. However, a portion of this facility is utilized to support letters of credit.

     Our ability to access the credit markets in the future to obtain additional financing, if needed, may be influenced by our credit rating. As of March 31, 2009, Moody’s Investor Service’s senior unsecured debt rating for our Company was Baa3 with a stable ratings outlook. As of March 31, 2009, Standard & Poor’s Ratings Services’ corporate credit and senior unsecured debt rating for our Company was BBB- with a stable ratings outlook. Changes in our credit rating do not impact our access to, or the cost of, our existing credit facilities.

     We have no off-balance sheet arrangements as defined in Item 303(a)(4) of SEC Regulation S-K.

Cash Flow and Working Capital

     For the three months ended March 31, 2009, cash provided by operating activities was $168.9 million, which benefited from a $216.2 million reduction in managed working capital due to lower business activity and raw material costs. Investing activities included capital expenditures of $108.6 million. Cash used in financing activities was $23.6 million in the first quarter 2009, and included dividend payments of $17.6 million, and a reduction in borrowings of $5.6 million. At March 31, 2009, cash and cash equivalents totaled $506.0 million, an increase of $36.1 million from year end 2008.

     As part of managing the liquidity of our business, we focus on controlling managed working capital, which is defined as gross accounts receivable and gross inventories, less accounts payable. In measuring performance in controlling this managed working capital, we exclude the effects of LIFO inventory valuation reserves, excess and obsolete inventory reserves, and reserves for uncollectible accounts receivable which, due to their nature, are managed separately. At March 31, 2009, managed working capital was 34.5% of annualized sales, compared to 35.2% of annualized sales at December 31, 2008. During the first three months of 2009, managed working capital decreased by $216.2 million, to $1,195.5 million. The decrease in managed working capital from December 31, 2008, was due to decreased accounts receivable of $82.2 million, and decreased inventory of $181.1 million, which was partially offset by decreased accounts payable of $47.1 million. While accounts receivable balances decreased during first quarter 2009, days sales outstanding, which measures actual collection timing for accounts receivable, improved. Gross inventory turns, which excludes the effect of LIFO inventory valuation reserves, remained essentially constant across our High Performance Metals and Flat-Rolled Products business segments but declined in our Engineered Products segment due to significantly lower business activity.

The components of managed working capital were as follows:

	March 31,			December 31,
(in millions)	2009			2008
Accounts receivable	$	448.8		$	530.5
Inventories		746.2			887.6
Accounts payable		(232.6	)		(278.5	)
Subtotal		962.4			1,139.6
Allowance for doubtful accounts		5.6			6.3
LIFO reserves		178.1			205.6
Corporate and other		49.4			60.2
Managed working capital	$	1,195.5		$	1,411.7
Annualized prior two months sales	$	3,466.2		$	4,008.0
Managed working capital as a % of annualized sales		34.5	%		35.2	%
Change in managed working capital from December 31, 2008	$	(216.2	)

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Capital Expenditures

     We currently expect capital expenditures for 2009 will be in the range of approximately $425 million to $450 million, of which approximately $109 million was expended in the first three months of 2009. We are significantly expanding our manufacturing capabilities to meet expected demand from the aerospace (engine and airframe) and defense, chemical process industry, oil and gas, electrical energy, and medical markets, especially for titanium and titanium-based alloys, nickel-based alloys and superalloys, specialty alloys, and exotic alloys. We are committed to continuing to self-fund these projects and can further adjust the timing of any project, if necessary. These self-funded capital investments include:

• The expansion of ATI’s aerospace quality titanium sponge production capabilities. Titanium sponge is an important raw material used to produce our titanium mill products. Our greenfield premium-grade titanium sponge (jet engine rotating parts) facility in Rowley, UT is expected to begin initial production in the 2009 third quarter. When the Utah sponge facility is fully operational, our total annual sponge production capacity including our Albany, OR sponge facility is projected to be approximately 46 million pounds, and these secure supply sources are intended to reduce our purchased titanium sponge and purchased titanium scrap requirements. In addition, the Utah facility will have the infrastructure in place to further expand annual capacity by approximately 18 million pounds, bringing the total annual capacity at that facility to 42 million pounds, if needed.

• The expansion of ATI’s mill products processing and finishing capabilities for titanium and titanium-based alloys, nickel-based alloys and superalloys, and specialty alloys. Announced projects include a $260 million expansion of our titanium and superalloy forging capacity at our Bakers, NC facility through the addition of an integrated 10,000 ton press forge, 700mm rotary forge, and conditioning, finishing and inspection facilities to produce large diameter products needed for certain demanding applications. The conditioning, finishing and inspection facilities began operations in the third quarter 2008, and the forging operations are expected to be operational by the third quarter 2009. Forging is a hot-forming process that produces wrought forging billet and forged machining bar from an ingot.

• A new advanced specialty metals hot rolling and processing facility at our existing Brackenridge, PA site. The project is estimated to cost approximately $1.16 billion and take at least four years to complete. It is designed to produce exceptional quality, thinner, and wider hot-rolled coils at reduced cost with shorter lead times, and require lower working capital requirements. When completed, we believe ATI’s new advanced specialty metals hot rolling and processing facility will provide unsurpassed manufacturing capability and versatility in the production of a wide range of flat-rolled specialty metals. We expect improved productivity, lower costs, and higher quality for our diversified product mix of flat-rolled specialty metals, including nickel-based and specialty alloys, titanium and titanium alloys, zirconium alloys, Precision Rolled Strip^® products, and stainless sheet and coiled plate products. Our new advanced hot-rolling and processing facility is designed to be the most powerful mill in the world for production of specialty metals. It is designed to roll and process exceptional quality hot bands of up to 78.62 inches, or 2 meters, wide.

• In connection with the new advanced specialty metals hot rolling and processing facility, we announced the consolidation of our Natrona, PA grain-oriented electrical steel melt shop into ATI’s Brackenridge, PA melt shop. This consolidation is expected to improve the overall productivity of ATI’s flat-rolled grain-oriented electrical steel and other stainless and specialty alloys, and reduce the cost of producing slabs and ingots. The investment should also result in significant reduction of particulate emissions. We expect to realize considerable cost savings from this project to begin in late 2010.

• We are increasing our capacity to produce zirconium products through capital expansions of zirconium sponge production and VAR melting. This new zirconium sponge and melting capacity better positions ATI for the current and expected strong growth in demand from the nuclear electrical energy and chemical process industry markets.

• Our STAL joint venture commenced an expansion of its operations in Shanghai, China in late 2006. This expansion, which is expected to more than triple STAL’s rolling and slitting capacity to produce Precision Rolled Strip products, is estimated to cost approximately $100 million and is expected to be operational in the second quarter 2009.

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Debt

     At March 31, 2009, we had $503.5 million in total outstanding debt, compared to $509.8 million at December 31, 2008, a decrease of $6.3 million. The decrease in debt was primarily due to scheduled debt maturity payments.

     In managing our overall capital structure, some of the measures on which we focus are net debt to total capitalization, which is the percentage of our debt, net of cash that may be available to reduce borrowings, to our total invested and borrowed capital, and total debt to total capitalization, which excludes cash balances. Net debt as a percentage of capitalization was a negative 0.1% at March 31, 2009, compared to a positive 2.0% at December 31, 2008, as cash on hand exceeded total debt at the end of the first quarter 2009. The net debt to capitalization was determined as follows:

(in millions)	March 31, 2009			December 31, 2008
Total debt	$	503.5		$	509.8
Less: cash		(506.0	)		(469.9	)
Net debt (cash)	$	(2.5	)	$	39.9
Net debt (cash)	$	(2.5	)	$	39.9
Total ATI stockholders’ equity		1,951.0			1,957.4
Total ATI capital	$	1,948.5		$	1,997.3
Net debt (cash) to capital ratio		(0.1	)%		2.0	%

     Total debt to total capitalization improved to 20.5% at March 31, 2009 from 20.7% at December 31, 2008. Total debt to total capitalization was determined as follows:

(in millions)	March 31, 2009			December 31, 2008
Total debt	$	503.5		$	509.8
Total ATI stockholders’ equity		1,951.0			1,957.4
Total ATI capital	$	2,454.5		$	2,467.2
Total debt to total capital ratio		20.5	%		20.7	%

     We did not borrow funds under our $400 million senior unsecured domestic credit facility during the first three months of 2009, although approximately $12 million has been utilized to support the issuance of letters of credit. The unsecured facility requires us to maintain a leverage ratio (consolidated total indebtedness divided by consolidated earnings before interest, taxes and depreciation and amortization) of not greater than 3.25, and maintain an interest coverage ratio (consolidated earnings before interest and taxes divided by interest expense) of not less than 2.0. For the twelve months ended March 31, 2009, our leverage ratio was 0.68, and our interest coverage ratio was 66.06.

     The Company has an additional separate credit facility for the issuance of letters of credit. As of March 31, 2009, $30 million in letters of credit were outstanding under this facility.

     STAL, our Chinese joint venture company in which ATI has a 60% interest, has a 585 million renminbi (approximately $86 million at March 31, 2009 exchange rates) revolving credit facility with a group of banks. This credit facility is supported solely by STAL’s financial capability without any guarantees from the joint venture partners, and is intended to be utilized in the future for the expansion of STAL’s operations, which are located in Shanghai, China. As of March 31, 2009, there were no borrowings under this credit facility although STAL had approximately $5 million in letters of credit outstanding related to the expansion of its operations.

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Dividends

     A regular quarterly dividend of $0.18 per share of common stock was declared on February 19, 2009, payable on March 27, 2009 to stockholders of record at the close of business on March 12, 2009. The payment of dividends and the amount of such dividends depends upon matters deemed relevant by our Board of Directors, such as our results of operations, financial condition, cash requirements, future prospects, any limitations imposed by law, credit agreements or senior securities, and other factors deemed relevant and appropriate.

Share Repurchase Program

     On November 1, 2007, our Board of Directors approved a share repurchase program of $500 million. Repurchases of Company common stock are expected to be made on the open market or in unsolicited or privately negotiated transactions. Share repurchases are expected to be funded from internal cash flow and cash on hand. The number of shares to be purchased, and the timing of the purchases, will be based on several factors, including other investment opportunities, the level of cash balances, and general business conditions. No shares of common stock were purchased during the three months ended March 31, 2009. As of March 31, 2009, 6,837,000 shares of common stock had been purchased under this program at a cost of $339.5 million.

Critical Accounting Policies

Inventory

     At March 31, 2009, we had net inventory of $746.2 million. Inventories are stated at the lower of cost (last-in, first-out (LIFO), first-in, first-out (FIFO) and average cost methods) or market, less progress payments. Costs include direct material, direct labor and applicable manufacturing and engineering overhead, and other direct costs. Most of our inventory is valued utilizing the LIFO costing methodology. Inventory of our non-U.S. operations is valued using average cost or FIFO methods. Under the LIFO inventory valuation method, changes in the cost of raw materials and production activities are recognized in cost of sales in the current period even though these material and other costs may have been incurred at significantly different values due to the length of time of our production cycle. The prices for many of the raw materials we use have been volatile. Since we value most of our inventory utilizing the LIFO inventory costing methodology, a rise in raw material costs has a negative effect on our operating results, while conversely, a fall in material costs results in a benefit to operating results. For example, in 2008, the effect of falling raw material costs on our LIFO inventory valuation method resulted in cost of sales which was $169.0 million lower than would have been recognized if we utilized the FIFO methodology to value our inventory. In a period of rising prices, cost of sales expense recognized under LIFO is generally higher than the cash costs incurred to acquire the inventory sold. Conversely, in a period of declining raw material prices, cost of sales recognized under LIFO is generally lower than cash costs incurred to acquire the inventory sold.

     Since the LIFO inventory valuation methodology is designed for annual determination, interim estimates of the annual LIFO valuation are required. We recognize the effects of the LIFO inventory valuation method on an interim basis by projecting the expected annual LIFO cost and allocating that projection to the interim quarters equally. These projections of annual LIFO inventory valuation reserve changes are updated quarterly and are evaluated based upon material, labor and overhead costs and projections for such costs at the end of the year plus projections regarding year-end inventory levels. For the first quarter 2009, we recognized a $27.5 million benefit associated with utilizing the LIFO inventory valuation methodology.

     The LIFO inventory valuation methodology is not utilized by many of the companies with which we compete, including foreign competitors. As such, our results of operations may not be comparable to those of our competitors during periods of volatile material costs due, in part, to the differences between the LIFO inventory valuation method and other acceptable inventory valuation methods.

     We evaluate product lines on a quarterly basis to identify inventory values that exceed estimated net realizable value. The calculation of a resulting reserve, if any, is recognized as an expense in the period that the need for the reserve is identified. At March 31, 2009, no significant reserves were required. It is our general policy to write-down to scrap value any inventory that is identified as obsolete and any inventory that has aged or has not moved in more than twelve months. In some instances this criterion is up to twenty-four months due to the longer manufacturing and distribution process for such products.

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Other Critical Accounting Policies

     A summary of other significant accounting policies is discussed in Management’s Discussion and Analysis of Financial Condition and Results of Operations and in Note 1 to the consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2008.

     The preparation of the financial statements in accordance with U.S. generally accepted accounting principles requires us to make judgments, estimates and assumptions regarding uncertainties that affect the reported amounts of assets and liabilities. Significant areas of uncertainty that require judgments, estimates and assumptions include the accounting for derivatives, retirement plans, income taxes, environmental and other contingencies as well as asset impairment, inventory valuation and collectibility of accounts receivable. We use historical and other information that we consider to be relevant to make these judgments and estimates. However, actual results may differ from those estimates and assumptions that are used to prepare our financial statements.

New Accounting Pronouncements Adopted

     As required, in the first quarter 2009, we adopted FASB Statement of Financial Accounting Standards No. 160 (“FAS 160”), “Noncontrolling Interests in Consolidated Financial Statements”. Early adoption of this standard was prohibited. FAS 160 changes the classification of noncontrolling (minority) interests on the balance sheet and the accounting for and reporting of transactions between the reporting entity and holders of such noncontrolling interests. Under the new standard, noncontrolling interests are considered equity and are reported as an element of stockholders’ equity rather than within the mezzanine or liability sections of the balance sheet. In addition, the practice of reporting minority interest expense or benefit changed. Under the new standard, net income encompasses the total income before minority interest expense or benefit. The income statement includes separate disclosure of the attribution of income or loss between the controlling and noncontrolling interests. Increases and decreases in the noncontrolling ownership interest amount are accounted for as equity transactions. As a result of adopting FAS 160, the balance sheet and the income statement have been recast retrospectively for the presentation of noncontrolling (minority) interest in our STAL joint venture.

     On January 1, 2009, we adopted Statement of Financial Accounting Standards No. 157 (“FAS 157”), “Fair Value Measurements,” as it relates to nonfinancial assets and nonfinancial liabilities. FAS 157 defines fair value, establishes a framework for measuring fair value in accordance with U.S. generally accepted accounting principles, and expands disclosures about fair value measurements. The provisions of this standard apply to other accounting pronouncements that require or permit fair value measurements and are to be applied prospectively with limited exceptions. The adoption of FAS 157, as it relates to nonfinancial assets and nonfinancial liabilities, had no impact on the financial statements. The provisions of FAS 157 will be applied at such time a fair value measurement of a nonfinancial asset or nonfinancial liability is required, which may result in a fair value that is materially different than would have been calculated prior to the adoption of FAS 157.

     On January 1, 2009, we adopted FSP No. EITF 03-6-1, “Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities”. FSP EITF 03-6-1 states that unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method. There was no impact to reported earnings per share upon adoption of FSP EITF 03-6-1.

Forward-Looking and Other Statements

     From time to time, we have made and may continue to make “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Certain statements in this report relate to future events and expectations and, as such, constitute forward-looking statements. Forward-looking statements include those containing such words as “anticipates,” “believes,” “estimates,” “expects,” “would,” “should,” “will,” “will likely result,” “forecast,” “outlook,” “projects,” and similar expressions. Forward-looking statements are based on management’s current expectations and include known and unknown risks, uncertainties and other factors, many of which we are unable to predict or control, that may cause our actual results, performance or achievements to materially differ from those expressed or implied in the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include: (a) material adverse changes in economic or industry conditions generally, including credit market conditions and related issues, and global supply and demand conditions and prices for our specialty metals; (b) material adverse changes in the markets

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we serve, including the aerospace and defense, construction and mining, automotive, electrical energy, chemical process industry, oil and gas, medical and other markets; (c) our inability to achieve the level of cost savings, productivity improvements, synergies, growth or other benefits anticipated by management, including those anticipated from strategic investments and the integration of acquired businesses, whether due to significant increases in energy, raw materials or employee benefits costs, the possibility of project cost overruns or unanticipated costs and expenses, or other factors; (d) volatility of prices and availability of supply of the raw materials that are critical to the manufacture of our products; (e) declines in the value of our defined benefit pension plan assets or unfavorable changes in laws or regulations that govern pension plan funding; (f) significant legal proceedings or investigations adverse to us; and (g)  other risk factors summarized in our Annual Report on Form 10-K for the year ended December 31, 2008, and in other reports filed with the Securities and Exchange Commission. We assume no duty to update our forward-looking statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

     As part of our risk management strategy, we utilize derivative financial instruments, from time to time, to hedge our exposure to changes in raw material prices, foreign currencies, and interest rates. We monitor the third-party financial institutions which are our counterparty to these financial instruments on a daily basis and diversify our transactions among counterparties to minimize exposure to any one of these entities. Fair values for derivatives were measured using exchange-traded prices for the hedged items including consideration of counterparty risk and the Company’s credit risk.

Interest Rate Risk. We attempt to maintain a reasonable balance between fixed- and floating-rate debt to keep financing costs as low as possible. At March 31, 2009, we had approximately $40 million of floating rate debt outstanding with a weighted average interest rate of approximately 2.0%. Approximately $26 million of this floating rate debt is capped at a 6% maximum interest rate. Since the interest rate on floating rate debt changes with the short-term market rate of interest, we are exposed to the risk that these interest rates may increase, raising our interest expense in situations where the interest rate is not capped. For example, a hypothetical 1% increase in the rate of interest on the $14 million of our outstanding floating rate debt not subjected to a cap would result in increased annual financing costs of approximately $0.1 million.

Volatility of Energy Prices. Energy resources markets are subject to conditions that create uncertainty in the prices and availability of energy resources. The prices for and availability of electricity, natural gas, oil and other energy resources are subject to volatile market conditions. These market conditions often are affected by political and economic factors beyond our control. Increases in energy costs, or changes in costs relative to energy costs paid by competitors, have and may continue to adversely affect our profitability. To the extent that these uncertainties cause suppliers and customers to be more cost sensitive, increased energy prices may have an adverse effect on our results of operations and financial condition. We use approximately 10 to 12 million MMBtu’s of natural gas annually, depending upon business conditions, in the manufacture of our products. These purchases of natural gas expose us to risk of higher gas prices. For example, a hypothetical $1.00 per MMBtu increase in the price of natural gas would result in increased annual energy costs of approximately $10 to $12 million. We use several approaches to minimize any material adverse effect on our financial condition or results of operations from volatile energy prices. These approaches include incorporating an energy surcharge on many of our products and using financial derivatives to reduce exposure to energy price volatility.

     At March 31, 2009, the outstanding financial derivatives used to hedge our exposure to natural gas cost volatility represented approximately 40% of our forecasted requirements for the next three years. The net mark-to-market valuation of these outstanding hedges at March 31, 2009 was an unrealized pre-tax loss of $33.0 million, of which $18.2 million was presented in accrued liabilities on the balance sheet with the remainder included in other long-term liabilities. The effects of the hedging activity will be recognized in income over the designated hedge periods. For the three months ended March 31, 2009, the effects of natural gas hedging activity increased cost of sales by $7.7 million.

Volatility of Raw Material Prices. We use raw materials surcharge and index mechanisms to offset the impact of increased raw material costs; however, competitive factors in the marketplace can limit our ability to institute such mechanisms, and there can be a delay between the increase in the price of raw materials and the realization of the benefit of such mechanisms. For example, in 2008 we used approximately 80 million pounds of nickel; therefore a hypothetical change of $1.00 per pound in nickel prices would result in increased costs of approximately $80 million. In addition, in 2008 we also used approximately 500 million pounds of ferrous scrap in the production of our flat-rolled products and a hypothetical change of $0.01 per pound would result in increased costs of

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approximately $5 million. While we enter into raw materials futures contracts from time-to-time to hedge exposure to price fluctuations, such as for nickel, we cannot be certain that our hedge position adequately reduces exposure. We believe that we have adequate controls to monitor these contracts, but we may not be able to accurately assess exposure to price volatility in the markets for critical raw materials.

     The majority of our products are sold utilizing raw material surcharges and index mechanisms. However as of March 31, 2009, we had entered into financial hedging arrangements primarily at the request of our customers related to firm orders for approximately 7% of our total annual nickel requirements through 2010. Any gain or loss associated with these hedging arrangements is included in the selling price to the customer requesting the hedge over the designated hedge period. At March 31, 2009, the net mark-to-market valuation of our outstanding raw material hedges was an unrealized pre-tax loss of $27.6 million, of which $24.4 million is included in accrued liabilities on the balance sheet with the remainder included in other long-term liabilities.

Foreign Currency Risk. Foreign currency exchange contracts are used, from time-to-time, to limit transactional exposure to changes in currency exchange rates. We sometimes purchase foreign currency forward contracts that permit us to sell specified amounts of foreign currencies expected to be received from our 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. At March 31, 2009, the outstanding financial derivatives used to hedge our exposure to foreign currency, primarily euros, represented approximately 8% of our forecasted total international sales through 2011. In addition, we may also designate cash balances held in foreign currencies as hedges of forecasted foreign currency transactions. At March 31, 2009, the net mark-to-market valuation of the outstanding foreign currency forward contracts was an unrealized pre-tax gain of $24.3 million, of which $10.7 million is included in other current assets on the balance sheet, with the remainder included in other long-term assets.

Item 4. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

Our Chief Executive Officer and Chief Financial Officer have evaluated the Company’s disclosure controls and procedures as of March 31, 2009, and they concluded that these controls and procedures are effective.

(b) Changes in Internal Controls

There was no change in our internal control over financial reporting identified in connection with the evaluation of the Company’s disclosure controls and procedures as of March 31, 2009, conducted by our Chief Executive Officer and Chief Financial Officer, that occurred during the quarter ended March 31, 2009 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

     A number of lawsuits, claims and proceedings have been or may be asserted against the Company relating to the conduct of its business, including those pertaining to product liability, patent infringement, commercial, government contract work, employment, employee benefits, environmental and health and safety, and stockholder matters. Certain of such lawsuits, claims and proceedings are described in our Annual Report on Form 10-K for the year ended December 31, 2008, and addressed in Note 11 to the unaudited interim financial statements included herein. 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 results of operations for that period.

Item 1A. Risk Factors

     In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2008, which could materially affect our business, financial condition or future results. The risks described in our Annual Report on Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

     Set forth below is information regarding the Company’s stock repurchases during the period covered by this report, including shares repurchased by ATI from employees to satisfy employee-owed taxes on share-based payments.

   ATI’s Board of Directors approved a share repurchase program of $500 million on November 1, 2007. Repurchases of Company common stock are made in the open market or in unsolicited or privately negotiated transactions. Share repurchases are funded from internal cash flow and cash on hand. The number of shares purchased, and the timing of the purchases, are based on several factors, including other investment opportunities, the level of cash balances, and general business conditions. No shares of common stock were purchased during the three months ended March 31, 2009. As of March 31, 2009, 6,837,000 shares of common stock had been purchased under this program at a cost of $339.5 million. All of these purchases were made in the open market.

							Maximum Number (or
					Total Number of		Approximate Dollar
					Shares (or Units)		Value) of Shares (or
	Total Number of		Average Price		Purchased as Part of		Units) that May Yet Be
	Shares (or Units)		Paid per Share		Publicly Announced		Purchased Under the
Period	Purchased		(or Unit)		Plans or Programs		Plans or Programs
January 1-31, 2009		34,308	$	21.59		—	$	160,505,939
February 1-28, 2009		—		—		—		160,505,939
March 1-31, 2009		—		—		—		160,505,939
Total		34,308	$	21.59		—	$	160,505,939

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Item 6. Exhibits

(a) Exhibits

10.1	Form of Key Executive Performance Plan Agreement dated February 18, 2009, including Key Executive Performance Plan, as amended February 18, 2009 (filed herewith)*.
10.2	Form of Total Shareholder Return Incentive Compensation Program Award Agreement effective as of January 1, 2009 (filed herewith)*.
10.3	Form of Performance/Restricted Stock Agreement dated February 18, 2009 (filed herewith)*.
10.4	2009 Annual Incentive Plan (filed herewith)*.
31.1	Certification of Chief Executive Officer required by Securities and Exchange Commission Rule 13a – 14(a) or 15d – 14(a) (filed herewith).
31.2	Certification of Chief Financial Officer required by Securities and Exchange Commission Rule 13a – 14(a) or 15d – 14(a) (filed herewith).
32.1	Certification pursuant to 18 U.S.C. Section 1350 (filed herewith).

* Management contract or compensatory plan or arrangement required to be filed as an Exhibit to this Report.

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SIGNATURES

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

ALLEGHENY TECHNOLOGIES INCORPORATED
(Registrant)

Date: May 6, 2009	By	/s/ Richard J. Harshman
		Richard J. Harshman
		Executive Vice President, Finance and Chief Financial Officer (Principal Financial Officer and Duly Authorized Officer)
Date: May 6, 2009	By	/s/ Dale G. Reid
		Dale G. Reid
		Vice President, Controller and Chief Accounting Officer and Treasurer (Principal Accounting Officer)

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EXHIBIT INDEX

10.1	Form of Key Executive Performance Plan Agreement dated February 18, 2009, including Key Executive Performance Plan, as amended February 18, 2009.
10.2	Form of Total Shareholder Return Incentive Compensation Program Award Agreement effective as of January 1, 2009.
10.3	Form of Performance/Restricted Stock Agreement dated February 18, 2009.
10.4	2009 Annual Incentive Plan.
31.1	Certification of Chief Executive Officer required by Securities and Exchange Commission Rule 13a – 14(a) or 15d – 14(a).
31.2	Certification of Chief Financial Officer required by Securities and Exchange Commission Rule 13a – 14(a) or 15d – 14(a).
32.1	Certification pursuant to 18 U.S.C. Section 1350.

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EX-10.1

Exhibit 10.1

KEY EXECUTIVE PERFORMANCE PLAN AGREEMENT

     This Key Executive Performance Plan Agreement (the “Agreement”) made as of the 18^th day of February, 2009 by and between ALLEGHENY TECHNOLOGIES INCORPORATED, a Delaware corporation (the “Corporation”) and [NAME] (“the Employee”).

     WHEREAS, the Corporation sponsors and maintains the Allegheny Technologies Incorporated Stock 2007 Key Executive Performance Plan (the “KEPP”);

     WHEREAS, the Corporation desires to encourage the Employee to remain an employee of the Corporation and, during the KEPP Performance Period measuring calendar years 2009, 2010 and 2011 (the “2009-2011 Performance Period”) to contribute substantially to the financial performance of the Corporation and, to provide that incentive, the Corporation has awarded the Employee the opportunity to participate in the KEPP for the 2009-2011 Performance Period, subject to the terms and conditions set forth in the KEPP and in this Agreement; and

     WHEREAS, the Corporation and the Employee desire to evidence the Award of the opportunity to participate in the KEPP for the 2009-2011 Performance Period and the terms and conditions applicable thereto in this KEPP Agreement.

     NOW THEREFORE, in consideration of the mutual promises and covenants contained herein and intending to be legally bound, the Corporation and the Employee agree as follows:

     1. KEPP Document Controls; Definitions. In the event of any conflict between the provisions of the KEPP document and this Agreement, the provisions of the KEPP document shall control. Initially capitalized terms not specifically defined in this Agreement shall have the meanings ascribed thereto under the KEPP document, which is attached hereto as Exhibit I and made a part hereof.

     2. Grant of Award for 2009-2011 Performance Period. The Corporation hereby grants an Award under KEPP to the Employee to participate in the KEPP for the 2009-2011 Performance Period. The Employee’s opportunity is measured as a multiple of his annual base salary at the rate in effect on the Date of Award, which for the Employee for the 2009-2011 Performance Period is $                     (the “Base Amount”). For each gradation of achievement of Earnings in Level 1 and/or for each gradation determined by the Personnel and Compensation Committee (the “Committee”) under Level 2, the Base Amount shall be multiplied by the designated gradation of achievement as set forth under Section 3 or as determined by the Committee under Section 4 of this Agreement.

     3. Level 1 Earnings Gradations. For the 2009-2011 Performance Period, Earnings shall be measured in aggregate income before taxes as reported by the Corporation for calendar years 2009, 2010 and 2011. The gradations and amounts shall be as follows for the 2009-2011 Performance Period:

	Earnings (in income before taxes of
Gradation	the Corporation, in millions)
1X	$	375
2X	$	490
3X	$	605
4X	$	720
5X	$	835
6X	$	950
7X	$	1,065
8X	$	1,180
9X	$	1,295
10X	$	1,410

     No KEPP Payments will be made under Level 1 if aggregate income before taxes of the Corporation for 2009, 2010 and 2011 is less than $375 million. No KEPP payment in excess of 10X will be made if aggregate income before taxes of the Corporation for 2009, 2010 and 2011 is in excess of $1,410 million.

     4. Level 2 Opportunities. The Employee shall have an opportunity to receive a KEPP Payment under Level 2 in an amount determined appropriate by the Committee, in its discretion, based on the Committee’s determination of applicable factors and the Committee’s perception of the Corporation’s implementation of the Operational Goals provided to the Employee and other participants in KEPP for the 2009-2011 Performance Period.

     5. Termination of Employment. If Employee’s employment with the Corporation and all of its direct or indirect subsidiaries is terminated by either party for any reason prior to January 1, 2012 (except if such date is preceded by a Change in Control as provided in Section 6 below, including, but not limited to, the involuntary termination of the Employee’s employment with the Corporation for any reason, with or without cause, other than the Employee’s death, disability or retirement with the consent of the Corporation when the Employee is at least 55 years of age with at least five years of service (“Retirement”), all rights of the Employee to the Award made under this Agreement shall terminate immediately and be forfeited in their entirety. Without limiting the foregoing, the Employee will not be considered for any KEPP Payment under Level 2. If the Employee dies, has a Retirement or becomes disabled during the 2009-2011 Performance Period, the Employee shall be entitled to a KEPP Payment equal to the greater of (i) a pro rata KEPP Award determined by multiplying (a) the gradation of earnings under Level 1 actually achieved by the Corporation for the 2009-2011 Performance Period by (b) the Employee’s Base

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Amount and then by (c) a fraction of which the numerator is the number of months beginning on January 1, 2009 and ending on the effective date of the Employee’s death, Disability or Retirement and the denominator is 36 and (ii) the amount reserved in the Participant Retention Achievement Bank as of the last day of the calendar year immediately preceding the date of the Employee’s death, Disability or Retirement. Any KEPP Payment due to the Employee if he becomes Disabled or has a Retirement or to the Beneficiary of the Employee if he dies shall be paid after the end of the 2009-2001 Performance Period when KEPP Payments are made to other participants in KEPP for the 2009-2011 Performance Period.

     5. Change of Control. In the event of a Change in Control, the Employee shall be entitled to receive an amount determined under Section 8.01 of the KEPP Document.

     6. Withholding. The Corporation or its direct or indirect subsidiary may withhold from amount of any KEPP Payment due to Employee all taxes, including social security taxes, which the Corporation or its direct or indirect subsidiary is required or otherwise authorized to withhold with respect to any KEPP Payment.

     7. No Right to Continued Employment; Effect on Benefit Plans. This Agreement shall not confer upon Employee any right with respect to continuance of his or her employment or other relationship, nor shall it interfere in any way with the right of the Corporation or its direct or indirect subsidiary to terminate his or her employment or other relationship at any time. Income realized by Employee pursuant to this Agreement shall not be included in Employee’s earnings for the purpose of any benefit plan, qualified or non-qualified, in which Employee may be enrolled or for which Employee may become eligible unless otherwise specifically provided for in such plan.

     8. Employee Representations. In connection with this Award, the Employee represents the following:

     (a) Employee has reviewed with Employee’s own tax advisors, the federal, state, local and foreign tax consequences of this Agreement and the transactions contemplated hereby. Employee is relying solely on such advisors and not on any statements or representations of the Corporation or any of its agents. Employee understands that Employee (and not the Corporation) shall be responsible for Employee’s own tax liability that may arise as a result of this Agreement and the transactions contemplated hereby.

     (b) Employee has received, read and understood this Agreement and KEPP and agrees to abide by and be bound by their respective terms and conditions.

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     9. Miscellaneous.

     (a) Governing Law. This Agreement shall be governed and construed in accordance with the domestic laws of the Commonwealth of Pennsylvania without regard to such Commonwealth’s principles of conflicts of laws.

     (b) Successors and Assigns. The provisions of this Agreement shall inure to the benefit of, and be binding upon, the successors, permitted assigns, heirs, executors and administrators of the parties hereto. Neither this Agreement nor any rights hereunder shall be assignable or otherwise subject to hypothecation without the consent of all parties hereto.

     (c) Entire Agreement; Amendment. This Agreement contain the entire understanding between the parties hereto with respect to the subject matter of this Agreement and supersedes all prior and contemporaneous agreements and understandings, inducements or conditions, express or implied, oral or written, with respect to the subject matter of this Agreement. This Agreement may not be amended or modified without the written consent of the Corporation and Employee.

     (d) Counterparts. This Agreement may be executed simultaneously in any number of counterparts, each of which when so executed and delivered shall be taken to be an original and all of which together shall constitute one document.

     IN WITNESS WHEREOF, the parties have executed this Key Executive Performance Plan Agreement as of the date first written above.

ALLEGHENY TECHNOLOGIES INCORPORATED

By:
Name:	Jon D. Walton
Title:	Executive Vice President,
	Human Resources, Chief Legal and Compliance Officer
PARTICIPANT		WITNESS

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EXHIBIT I

Allegheny Technologies Incorporated

Key Executive Performance Plan

Effective as of January 1, 2004
And as amended February 24, 2005
and as further amended on February 22, 2006
and as further amended on February 21, 2007
and as further amended on February 21, 2008
and as further amended on February 18, 2009

Article I. Adoption and Purpose of the Key Executive Performance Plan

     1.01 Adoption. This Key Executive Performance Plan is adopted by the Personnel and Compensation Committee of the Board of Directors as a part of the Allegheny Technologies Incorporated executive compensation program effective January 1, 2004. The KEPP Payments, if any, earned under this Plan are intended as performance based compensation within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended, as incentive compensation determined solely with reference to attainment in predetermined levels of Earnings and Operational Goals within the relevant Performance Period.

     1.02 Purpose. The purposes of the KEPP are (i) to direct the focus of key management employees to the achievement of goals deemed necessary for the success of the Corporation, (ii) to assist the Corporation in retaining and motivating selected key management employees of the Corporation and its subsidiaries who will contribute to the success of the Corporation and (iii) to reward key management employees for the overall success of the Corporation as determined with reference to predetermined levels of Earnings of the Corporation and attainment of Operational Goals. The KEPP is intended to act as an incentive to participating key management employees to achieve long-term objectives that will inure to the benefit of all stockholders of the Corporation measured in terms of achievement of predetermined levels of Earnings of the Corporation and attainment of Operational Goals.

     1.03 Plan Document. This KEPP plan document is intended as the plan document as adopted by the Committee, which will govern all Performance Periods of the KEPP beginning in or after 2004.

Article II. Definitions

     For purposes of this Plan, the capitalized terms set forth below shall have the following meanings:

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     2.01 Award means an opportunity to earn a KEPP Payment in a particular Performance Period. Each Award shall be denominated in dollars that can be earned upon attainment of predetermined Earnings thresholds (Level 1) and the maximum amount that may be paid with respect to Operational Goals before the application of Negative Discretion (Level 2).

     2.02 Award Agreement means a written agreement between the Corporation and a Participant or a written acknowledgment from the Corporation specifically setting forth the terms and conditions of a KEPP Award granted to a Participant pursuant to Article VI of this Plan.

     2.03 Board means the Board of Directors of the Corporation.

     2.04 Cause means a determination by the Committee that a Participant has engaged in conduct that is dishonest or illegal, involves moral turpitude or jeopardizes the Corporation’s right to operate its business in the manner in which it is now operated.

     2.05 Change in Control means any of the events set forth below:

          (a) The acquisition in one or more transactions, other than from the Corporation, by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of a number of Corporation Voting Securities in excess of 25% of the Corporation Voting Securities unless such acquisition has been approved by the Board; or

          (b) Any election has occurred of persons to the Board that causes two-thirds of the Board to consist of persons other than (i) persons who were members of the Board on January 1, 2001 and (ii) persons who were nominated for election as members of the Board at a time when two-thirds of the Board consisted of persons who were members of the Board on January 1, 2001; provided, however, that any person nominated for election by the Board at a time when at least two-thirds of the members of the Board were persons described in clauses (i) and/or (ii) or by persons who were themselves nominated by such Board shall, for this purpose, be deemed to have been nominated by a Board composed of persons described in clause (i); or

          (c) Approval by the stockholders of the Corporation of a reorganization, merger or consolidation, unless, following such reorganization, merger or consolidation, all or substantially all of the individuals and entities who were the respective beneficial owners of the Outstanding Stock and Corporation Voting Securities immediately prior to such reorganization, merger or consolidation, following such reorganization, merger or consolidation beneficially own, directly or indirectly, more than 60% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors or trustees, as the case may be, of the entity resulting from such reorganization, merger or consolidation in substantially the same proportion as their ownership of the

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Outstanding Stock and Corporation Voting Securities immediately prior to such reorganization, merger or consolidation, as the case may be; or

          (d) Approval by the stockholders of the Corporation of (i) a complete liquidation or dissolution of the Corporation or (ii) a sale or other disposition of all or substantially all the assets of the Corporation.

     2.06 Committee means the Personnel and Compensation Committee of the Board.

     2.07 Corporation means Allegheny Technologies Incorporated, a Delaware corporation, and its successors.

     2.08 Corporation Voting Securities means the combined voting power of all outstanding voting securities of the Corporation entitled to vote generally in the election of the Board.

     2.09 Date of Award means the date as of which an Award is granted in accordance with Article VI of this Plan.

     2.10 Disability means any physical or mental injury or disease of a permanent nature which renders a Participant incapable of meeting the requirements of the employment performed by such Participant immediately prior to the commencement of such disability. The determination of whether a Participant is disabled shall be made by the Committee in its sole and absolute discretion. Notwithstanding the foregoing, if a Participant’s employment by the Corporation or an applicable subsidiary terminates by reason of a disability, as defined in an Employment Agreement between such Participant and the Corporation or an applicable subsidiary, such Participant shall be deemed to be disabled for purposes of the KEPP.

     2.11 Earnings means the earnings of the Corporation determined in accordance with generally accepted accounting principles, provided, however, for the 2005 through 2007, the 2006 through 2008, the 2007 through 2009, the 2008 through 2010 and the 2009 through 2011 Performance Periods, Earnings shall be expressed in terms of income before taxes.

     2.12 Effective Date means January 1, 2004.

     2.13 Exchange Act means the Securities Exchange Act of 1934, as amended.

     2.14 KEPP Payment means the amount actually earned by a Participant in a particular Performance Period. Each KEPP Payment shall be the sum of the amounts earned by a Participant during a Performance Period as Level I and Level 2 achievement or, for the 2006-2008, 2007-2009, 2008-2010 and 2009-2011 Performance Period, the amount under the Participant Retention Achievement Bank under Section 8.04.

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     2.15 Level 1 means that portion of an Award that may be earned based on attainment of Earnings.

     2.16 Level 2 means that portion of an Award that may be earned, after application of Negative Discretion by the Committee, based on attainment of Operational Goals. The Level 2 portion of any Award shall be denominated in the maximum amount that may be earned with respect to Operational Goals prior to the application of Negative Discretion.

     2.17 Negative Discretion means the power of the Committee to be exercised solely in the Committee’s discretion to reduce the Level 2 portion of any Award. It is anticipated that the Committee will review with the Chief Executive Officer of the Corporation the relative attainment of Operational Goals during a particular Performance Period before the Committee exercises its Negative Discretion.

     2.18 Operational Goals means the goals set by the Committee at the commencement of a Performance Period to be attained by the Participants during the course of a particular Performance Period. Operational Goals will be set forth in terms of operating objectives and/or criteria, which may or may not be earnings measures that, in the judgment of the Committee after consultation with the Chief Executive Officer of the Corporation, will enhance the success of the Corporation during and beyond a particular Performance Period.

     2.19 Participant means any key management employee selected by the Committee, pursuant to Section 5.01 of this Plan, as eligible to participate under the KEPP for any one or more Performance Period.

     2.20 Performance Period means a period of more than one fiscal year of the Corporation over which the attainment of Earnings and Operational Goals shall be measured.

     2.21 Plan or KEPP means the Key Executive Performance Plan as set forth in this plan document or as the same may be amended from time to time.

     2.22 Retirement means, a termination of employment with the Corporation and each subsidiary of the Corporation at or after (i) attaining age 55 and (ii) completing five years of employment with the Corporation and/or any subsidiary of the Corporation.

     2.23 Withholding Obligations means the amount of federal, state and local income and payroll taxes the Corporation determines in good faith must be withheld with respect to a KEPP Payment. Withholding Obligations may be settled by the Participant, as permitted by the Committee in its discretion, in cash, previously owned shares of common stock of the Corporation or any combination of the foregoing.

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Article III. Administration

     In addition to any power reserved to the Committee under the governing documents of the Corporation, the KEPP shall be administered by the Committee, which shall have exclusive and final authority and discretion in each determination, interpretation or other action affecting the KEPP and its Participants. The Committee shall have the sole and absolute authority and discretion to interpret the KEPP, to amend or modify this Plan for the KEPP, to select, in accordance with Section 5.01 of this Plan, the persons who will be Participants hereunder, to set all Earnings thresholds and Operational Goals, to determine all performance criteria, levels of Awards and KEPP Payments payable, to determine, after review of the Corporation’s financial reports, the degree to which any threshold of Earnings has been achieved for a Performance Period with respect to the Level 1 portion of any Award, to review the attainment of Operational Goals and exercise Negative Discretion with respect to the Level 2 portion of any Award, to impose such conditions and restrictions as it determines appropriate and to take such other actions and make such other determinations in connection with the KEPP as it may deem necessary or advisable.

Article IV. Overview of KEPP

     4.01 Cash Bonus Plan. KEPP is designed to pay cash bonuses to participating key executives after the end of a Performance Period based on the level (i) of achievement of predetermined Earnings thresholds and (ii) attainment of Operational Goals (to which the Committee may exercise Negative Discretion).

     4.02 Levels of Awards. KEPP Awards are granted with two levels. The first level, Level 1, is a cash bonus payment based on achievement of Earnings that the Committee has no discretion to reduce. KEPP Payments earned under Level 1 will be earned solely with reference to Earnings attained during the Performance Period. The second level, Level 2, is a cash bonus payment based on level of attainment of Operational Goals that the Committee has the Negative Discretion to reduce. The Committee’s judgment in exercising its Negative Discretion to arrive at a KEPP Payment under Level 2 is expected to be guided by the degree to which the Corporation generally or the participating key executives in particular have attained predetermined Operational Goals. The Committee is expected to review the level of attainment of Operational Goals with the Chief Executive Officer of the Corporation before exercising any Negative Discretion. For the 2006-2008, the 2007-2009 the 2008-2010 and the 2009-2011 Performance Period, the Committee has established the Participant Retention Achievement Bank under Section 8.04.

     4.03 Participating Key Executives. It is intended that the number of participating key executives shall be limited to those key executives with the most direct influence on the attainment of Earnings and operational goals.

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Article V. Participation

     5.01 Designation of Participants. Participants in the KEPP shall be such key management employees of the Corporation or of its subsidiaries as the Committee, in its sole discretion, may designate as eligible to participate in the KEPP for any one or more Performance Periods. No later than 90 days after the commencement of each Performance Period during the term of the KEPP, the Committee shall designate the Participants who are eligible to participate in the KEPP during such Performance Period. The Committee’s designation of a Participant with respect to any Performance Period shall not require the Committee to designate such person as a Participant with respect to any other Performance Period. The Committee shall consider such factors as it deems pertinent in selecting Participants. The Committee shall promptly provide to each person selected as a Participant written notice of such selection.

Article VI. Grants under the KEPP

     6.01 Annual Determination Regarding Performance Period. No later than the 60^th day of each calendar year, the Committee shall determine whether to establish a Performance Period, provided, however, for a Performance Period established in calendar year 2004, the Committee may make a determination under this Section 6.01 at any time prior to the 90^th day of calendar year 2004.

     6.02 Determination of Grants, Awards (both Level 1 and Level 2) and Performance Criteria. For each Performance Period, the Committee shall take the following actions no later than the 90^th day of the first calendar year of that Performance Period:

     (a) Identify Participants for that Performance Period.

     (b) Establish the level of Level 1 and Level 2 opportunities for each Participant.

     (c) Set the Earnings target(s).

     (d) Set the Operational Goals and relative weightings after discussing such goals and weighting with the Chief Executive Officer in order to bring the Operational Goals as closely as possible in line with the Corporation’s business plans.

     6.03 Termination of Employment. If a Participant terminates employment with the Corporation and each subsidiary of the Corporation during a then uncompleted Performance Period for reasons other than death, Disability or Retirement, any KEPP Award for any then uncompleted Performance Period shall be forfeited automatically. If a Participant terminates employment with the Corporation and each subsidiary of the Corporation for reasons of death, Disability or Retirement during a then uncompleted

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Performance Period, the Participant shall be entitled to receive a pro rata KEPP Payment for each then uncompleted Performance Period determined:

     (a) when the KEPP Payments for all other Participants in such Performance Period(s) are determined; and

     (b) based on the actual level of achievement of Earnings for that Performance Period and the attainment of Operational Goals, after the application of Negative Discretion.

Article VII. Determination of Achievement of Earnings and Operational Goals

     7.01 Determination of Earnings and Operational Goals. As promptly as administratively feasible but in no event later than the March 1st of the calendar year following last calendar year of each Performance Period, the Committee shall determine Earnings of the Corporation and the attainment of Operational Goals and the degree, if any, to which the Committee will exercise Negative Discretion.

     7.02 Determination of KEPP Payments. KEPP Payments for a particular Performance Period for a particular Participant shall be the result of adding (i) the amount earned by a particular Participant under Level 1 based on the Corporation’s actual Earnings during the Performance Period and (ii) the amount earned by a particular Participant under Level 2 based on attainment of Operational Goals and after the application, if any, by the Committee of Negative Discretion or, for the 2006-2008, for the 2007-2009, for the 2008-2010 and for the 2009-2011 Performance Period, the Participant Retention Achievement Bank amount determined under Section 8.04.

Article VIII. Miscellaneous

     8.01 Change in Control. In the event of a Change in Control, KEPP Payments shall be determined for all then uncompleted Performance Periods under Leas the greater of (A) 1X performance for each then uncompleted Performance Period and (B) the level of performance that would have been achieved of the rate of the Company’s financial performance for the then completed period would have continued for the remained of each then uncompleted Performance Period. KEPP Payments shall be delivered to the Participant as soon after the Change in Control as is administratively feasible.

     8.02 Non-Uniform Determinations. The actions and determinations of the Committee need not be uniform and may be taken or made by the Committee selectively among employees or Participants, whether or not similarly situated.

     8.03 Amendment and Termination of the Plan. The Committee shall have complete power and authority to amend or terminate this Plan at any time it is deemed necessary or appropriate. No termination or amendment of the Plan may, without the consent of the Participant to whom any award shall theretofore have been

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granted under the KEPP, adversely affect the right of such individual under such award; provided, however, that the Committee may, in its sole discretion, make such provision in the Award Agreement for amendments which, in its sole discretion, it deems appropriate.

     8.04 Participant Retention Achievement Bank. In order to retain participants designated as eligible to participate in KEPP for the 2006-2008, the 2007-2009, the 2008-2010 and the 2009-2011 Performance Period (“Banking Performance Period(s)”), for those Performance Periods, KEPP Payments will be made under this Participant Retention Achievement Bank provision if greater than the KEPP Payment otherwise due under the KEPP for the relevant Banking Performance Periods. The aggregate amount in the Participant Retention Achievement Bank shall be equal to the sum of the three amounts (none less than 0) determined as of the close of each year in the relevant Banking Performance Period by taking the amount of Earnings for that year multiplied by three and determining the Level 1 amount due for that level of achievement for the entire three year, relevant Banking Performance Period(s) and then dividing the KEPP Payment due under the foregoing clause by three. The resulting amount will be one of the three amounts added together (one for each year in the relevant Banking Performance Period) to comprise the aggregate Participant Retention Achievement Bank. The amount of the KEPP Payment due to any individual Participant for the relevant Banking Performance Period will be equal to the amount determined by multiplying the Participant Retention Achievement Bank by a fraction, the numerator of which is the Level 1 KEPP Payment due to that Participant if actual performance for the relevant Banking Performance Period was at the 1X Threshold Reference and the denominator of which is the sum of all payments due at Level 1 for 1X achievement for all Participants for the relevant Banking Performance Period.

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EX-10.2

Exhibit 10.2

TOTAL SHAREHOLDER RETURN INCENTIVE COMPENSATION PROGRAM
AWARD AGREEMENT

Allegheny Technologies Incorporated (the “Company”) and the award recipient named below (“Participant”) enter into this Total Shareholder Return Incentive Compensation Program Agreement effective as of January 1, 2009.

Participant:	[NAME]
	PARTICIPANT TO COMPLETE THE FOLLOWING CHART
	(Please print)
Street Address
City/State/Zip Code
Social Security Number

WHEREAS, the Company has adopted the Allegheny Technologies Incorporated 2007 Incentive Plan (the "Plan”) and, in accordance with the Plan, has adopted Administrative Rules for the Total Shareholder Return Incentive Compensation Program, as amended (the “TSRP”) as a portion of the Plan to (i) assist the Company retain and motivate key management employees; (ii) reward key management employees for the overall success of the Company; and (iii) provide a means of encouraging key management employees to acquire and hold shares of Company Common Stock.

WHEREAS, the TSRP provides that each TSR Target Award made under the TSRP shall be evidenced by an Award Agreement between the Company and the key management employee who receives a TSR Target Award under the TSRP setting forth the terms and conditions of such TSR Target Award;

WHEREAS, the Company desires to make a TSR Target Award to the Participant and evidence such TSR Target Award by this Award Agreement and the Participant, having read and understood the Plan and the TSRP, is willing to enter into this Award Agreement on the terms and conditions set forth herein.

NOW THEREFORE, in consideration of the covenants and agreements herein contained and intending to be legally bound, the parties hereto agree with each other as follows:

Subject to the attainment of the Performance Levels described below and to the terms and conditions of the Plan, the TSRP and the Terms and Conditions of Award attached hereto and incorporated herein by reference, by which Participant agrees to be bound, the Company awards to Participant the Award described below, with respect to the Performance Period described below:

PERFORMANCE PERIOD: January 1, 2009 through December 31, 2011

TSR TARGET AWARD: [TSRP target shares] Shares of Company Common Stock
[equals applicable base salary times                     % (which is the Participant’s target award opportunity as a percent of salary) divided by $22.23 (which is the average Closing Price for the 30 trading days prior to January 1, 2009)]

PERFORMANCE LEVELS: The following table shows the performance award relationship under the TSRP for the 2009—2011 performance period:

	Outcome Relative to Peer Group TSR
	Three-Year Percentile	Percent of Target
Level of Performance	Ranking in TSR	Award Earned
Below Threshold	Below 25th percentile		0	%
Threshold	25th percentile		50	%
Target	50th percentile		100	%
Excellent	75th percentile		200	%
Outstanding	90th percentile		300	%

Note: Interpolation between points will be made on a straight line basis on each scale. Below the 25^th percentile and above the 90^th percentile, there will be no extrapolation.

THE ACTUAL AWARD UNDER THE TSRP WILL EQUAL THE TSR TARGET AWARD TIMES THE APPLICABLE PERCENT OF TARGET AWARD EARNED.

IN WITNESS WHEREOF, the parties hereto have executed this Total Shareholder Return Incentive Compensation Program Award Agreement effective the day and year first above written.

ALLEGHENY TECHNOLOGIES INCORPORATED
By:
	Title:	Executive Vice President, Human Resources, Chief Legal & Compliance Officer

PARTICIPANT: WITNESS:

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TERMS AND CONDITIONS OF TSRP AWARD

Section 1: Definitions

Capitalized words used but not defined below or elsewhere in these Terms and Conditions shall have the meanings ascribed to them in the Plan.

"Administrative Rules” or “TSRP” shall mean the Administrative Rules for the TSRP adopted by the Committee effective January 1, 2001, as amended effective February 24, 2005 and as further amended effective February 21, 2008, as the same may be amended from time to time.

"Award” shall mean the grant of a TSR Target Award evidenced by this Award Agreement.

"Committee” means the Personnel and Compensation Committee of the Board of Directors.

"Common Stock” shall mean the common stock, $0.10 par value per share, of Allegheny Technologies Incorporated.

"Company” shall mean Allegheny Technologies Incorporated and its subsidiaries, unless the context requires otherwise.

"Disability” shall mean the total and permanent disability of Participant as determined by the Committee in its sole discretion.

"Excellent” shall mean a relative standing of the Company’s TSR as against the TSR for the Peer Group, in each case for the TSR Performance Period, equal to or greater than 75% but less than 90%.

"Outstanding” shall mean a relative standing of the Company’s TSR as against the TSR for the Peer Group, in each case for the TSR Performance Period, equal to or greater than 90%.

"Peer Group” shall mean the corporations listed on Exhibit 1 to this Award Agreement, subject to the adjustments to such group as permitted under the Administrative Rules.

"Retirement” means a termination of employment with the Company and each of its subsidiaries, with the consent of the Company, at or after (i) attaining age 55 and (ii) completing five years of employment with the Company and/or any subsidiary of the Company.

"Target” shall mean a relative standing of the Company’s TSR as against the TSR of the Peer Group, in each case for the TSR Performance Period, of equal to or greater than 50% but less than 75%.

"Threshold” shall mean a relative standing of the Company’s TSR as against the TSR of the Peer Group, in each case for the TSR Performance Period, of equal to or greater than 25% but less than 50%.

“TSR Performance Level” means the measure of Company TSR performance relative to the Peer Group, as set forth on page 2 of this Award Agreement. In determining the final Performance Level, the Committee shall use straight-line interpolation between Threshold and Target, between Target and Excellent, and between Excellent and Outstanding. No TSR Reward will be earned for a Performance Level less than Threshold. No additional TSR Reward above Outstanding will be earned for a Performance Level greater than Outstanding.

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Section 2: TSRP Award

2.1 Subject to the attainment of the TSR Performance Levels and to the terms and conditions otherwise set forth in the Plan, the TSRP and this Award Agreement, the Company awards to Participant the TSRP Award described in the first two pages of this Award Agreement with respect to the Performance Period described therein.

Section 3: Payment

3.1 Subject to the withholding obligations and any requirements of Section 4 then applicable, the Company shall deliver to the Participant certificates representing the TSR Rewards, if any, for the TSR Performance Period within 75 days after the end of the TSR Performance Period.

3.2 If the Participant terminates employment with the Company and each subsidiary of the Company during a then uncompleted TSR Performance Period for reasons other than death, Disability or Retirement, any TSR Target Award for any then uncompleted TSR Performance Period shall be forfeited automatically and the shares represented by such TSR Target Awards shall again be eligible for awards under the Rules.

3.3 If the Participant terminates employment with the Company and each Subsidiary of the Company during a then uncompleted TSR Performance Period due to the Participant’s death, Disability, or Retirement, a pro rata award based on the number of full months worked by the Participant during that Performance Period will be calculated, based on goal achievement over the entire performance period. Any award determined to be payable shall be paid after the end of the applicable Performance Period.

Section 4: Miscellaneous

4.1 General Restriction. To the extent any TSR Target Award is denominated in Common Stock under this Award Agreement, it shall be subject to the requirement that if at any time the Committee shall determine that any listing or registration of the shares of Common Stock or any consent or approval of any governmental body or any other agreement or consent is necessary or desirable as a condition of the issuance of shares of Common Stock or cash in satisfaction thereof, such issuance of shares of Common Stock may not be consummated unless such requirement is satisfied in a manner acceptable to the Committee. The Company shall in no event be obligated to register any securities pursuant to the Securities Act of 1933 (as the same shall be in effect from time to time) or to take any other affirmative action to cause the issuance of shares pursuant to the distribution of TSR Rewards to comply with any law or regulation of any governmental authority.

4.2 Non-Assignability. No TSR Target Award granted under this Award Agreement shall be assignable or transferable by the Participant, except by will or by the laws of descent and distribution. During the life of the Participant, any TSR Rewards shall be payable only to the Participant. No assignment or transfer of a TSR Target Award or of the rights represented thereby, whether voluntary or involuntary, by operation of law or otherwise (except by will or the laws of descent and distribution), shall vest in the assignee or transferee any interest or right herein whatsoever, and immediately upon

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such purported assignment or transfer, the TSR Target Awards shall terminate and become of no further effect.

4.3 Withholding Obligations. Whenever the Company makes delivery under the Plan, in whole or in part, the Company shall notify the Participant of the amount of withholding for tax, if any, which must be paid under federal and, where applicable, state and local law. The Company shall, in the discretion of the Company, but with the consent of the Committee, arrange for payment for such withholding for taxes in any one or combination of the following ways: (i) acceptance of an amount in cash paid by the Participant; or (ii) reduction in the number of shares to be issued by that number of shares which, in aggregate, have a value equal to such withholding amount. If the full amount of the required withholding is not recovered in the above manner, the Participant shall, forthwith upon receipt of notice, remit the deficiency to the Company. No shares of Common Stock shall be issued or delivered to the Participant (and/or the Participant’s designee) until all applicable withholding obligations shall have been satisfied in full.

4.4 Delivery of Certificates. As soon as practicable after compliance by the Participant with all applicable conditions including, but not limited to, the satisfaction of the Withholding Obligations described in Section 4.3 hereof, the Company will issue and deliver by mail, or cause delivery by mail, to the Participant at the address specified by the Participant in writing, certificates registered in the name of the Participant (and/or the Participant’s designee) for the number of shares of Common Stock which the Participant is entitled to receive (subject to reduction for withholding as provided in Section 4.3 hereof) under the provisions of this Award Agreement.

4.5 No Right to Employment. Nothing in the Plan or in this Award Agreement shall confer upon the Participant the right to continue in the employ of the Company or any subsidiary or affect any right that the Company or a subsidiary may have to terminate the employment of the Participant.

4.6 Amendment or Termination of the Plan. The Plan, or any part thereof (including the TSRP and/or Administrative Rules) may be terminated or may, from time to time, be amended, each in accordance with the Plan, TSRP or Administrative Rules, as applicable, provided, however, the termination or amendment of the Plan, the Administrative Rules or TSRP shall not, without the consent of the Participant, affect Participant’s rights under this Award Agreement.

4.7 Investment Representation. Under the federal and/or state securities laws, the Participant may be required to deliver, and, if so, shall deliver, to the Committee, upon demand by the Committee, at the time of any payment of Common Stock, a written representation that the shares to be acquired are to be acquired for investment and not for resale or with a view to the distribution thereof. Upon such demand, delivery of such representation prior to delivery of any shares shall be a condition precedent to the right of the Participant to receive any shares.

4.8 No Rights as Shareholder. The Participant shall have no rights as a stockholder of the Company with respect to shares of Common Stock subject to the Award evidenced this Award Agreement unless and until a certificate for shares of Common Stock is issued to the Participant.

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4.9 Adjustment of Award. In the event of any change or changes in the outstanding Common Stock of the Company by reason of any stock dividend, recapitalization, reorganization, merger, consolidation, split-up, combination or exchange of shares or any rights offering to purchase a substantial amount of Common Stock at a price substantially below fair market value or of any similar change affecting the Common Stock, any of which takes effect after the first grant of a TSR Target Award under this Award Agreement, the Committee may, in its discretion, appropriately adjust the number of shares of Common Stock which may be issued under this Award Agreement, the number of shares of Common Stock subject to TSR Target Awards under this Award Agreement and any and all other adjustments deemed appropriate by the Committee to prevent substantial dilution or enlargement of the rights granted to the Participant in such manner as the Committee shall deem appropriate. Any adjustment so made shall be final and binding upon the Participant.

4.10 Awards Not a Bar to Corporate Event. The existence of the TSR Target Awards granted hereunder shall not affect in any way the right or the power of the Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the Company’s capital structure or its business, or any merger or consolidation of the Company, or any issue of bonds, debentures, preferred or prior preference stocks ahead of or affecting the Common Stock or the rights thereof, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.

4.11 Not Income for Qualified Plans. No amounts of income received by a Participant pursuant to this Award Agreement shall be considered compensation for purposes of any pension or retirement plan, insurance plan or any other employee benefit plan of the Company or any of its affiliates.

4.12 Meaning of Participant. Whenever the word “Participant” is used in any provision of this Award Agreement under circumstances where the provision should logically be construed to apply to the executors, the administrators, or the person or persons to whom the TSR Target Awards may be transferred by will or by the laws of descent and distribution, the word “Participant” shall be deemed to include such person or persons.

4.13 Determinations of Committee. The actions taken and determinations of the Committee made pursuant to this Award Agreement and of the Committee pursuant to the Plan, the TSRP and the Administrative Rules shall be final, conclusive and binding upon the Company and upon the Participant. No member of the Committee shall be liable for any action taken or determination made relating to this Award Agreement, the Plan, the TSRP, or the Administrative Rules if made in good faith.

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Exhibit 1: List of Peer Companies (2009 — 2011 Performance Period)

Alcoa Inc.
AK Steel Holding Corp.
Brush Engineered Materials
Carpenter Technology Corp.
Castle (A M) & Co.
Commercial Metals
Gerdau Ameristeel Corp.
Kennametal Inc.
Ladish Co. Inc.
Nucor Corp.
Precision Castparts Corp.
Reliance Steel & Aluminum Co.
RTI International Metals Inc.
Schnitzer Steel Industries, Inc.
Steel Dynamics Inc.
Timken Co.
Titanium Metals Corp.
United States Steel Corp.
Universal Stainless & Alloy Products
Worthington Industries

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EX-10.3

Exhibit 10.3

PERFORMANCE/RESTRICTED STOCK AGREEMENT

     This Performance/Restricted Stock Agreement (the “Agreement”) made as of the 18^th day of February, 2009 by and between ALLEGHENY TECHNOLOGIES INCORPORATED, a Delaware corporation (the “Corporation”) and [NAME] (“the Employee”).

     WHEREAS, the Corporation sponsors and maintains the Allegheny Technologies Incorporated Stock 2007 Incentive Plan (the “Incentive Plan”);

     WHEREAS, the Corporation desires to encourage the Employee to remain an employee of the Corporation and, during such employment, to contribute substantially to the financial performance of the Corporation and, to provide that incentive, the Corporation has awarded, subject to the performance and employment restrictions described herein, the Employee an aggregate of                      shares of the common stock of the Corporation, $0.10 par value per share (“Common Stock”);

     WHEREAS, half of the Shares Subject to Restrictions are subject to the Corporation’s attainment of the performance requirements set forth in Paragraph 3(a) (the “Performance Criteria”); and half of the Shares Subject to Restrictions are subject to the Employee’s remaining an Employee (except in instances of death, disability or Retirement as described below) during the Restriction Period set forth in Paragraph 3(b), subject to accelerated termination of the Restriction in the event of attainment of the Performance Criteria; and

     WHEREAS, the Corporation and the Employee desire to evidence the award of the Shares Subject to Restrictions and the terms and conditions applicable thereto in this Restricted Stock Agreement.

     NOW THEREFORE, in consideration of the mutual promises and covenants contained herein and intending to be legally bound, the Corporation and the Employee agree as follows:

     1. Grant of Shares Subject to Restrictions. The Corporation hereby grants to the Employee, as of the date first written above, the Shares Subject to Restrictions subject to the restrictions and other terms and conditions set forth herein. Simultaneously with the execution and delivery of this Agreement, the Employee shall deliver to the Corporation a stock power endorsed in blank relating to the Shares Subject to Restrictions (including in such power any increases or adjustments to the Shares Subject to Restrictions). As soon as practicable after the Date of Grant, the Corporation shall direct that the Shares Subject to Restrictions be registered in the name of and issued to the Employee and initially bearing the legend described in Paragraph 5. The Shares Subject to Restrictions and any certificate or certificates representing the Shares Subject to Restrictions shall be held in the custody of the Corporation or its designee until the expiration of the applicable

Restrictions. Upon any forfeiture in accordance with Paragraph 4 of the Shares Subject to Restrictions, the forfeited shares and any certificate or certificates representing the forfeited Shares Subject to Restrictions shall be canceled.

     2. Restrictions. Employee shall have all rights and privileges of a stockholder of the Corporation with respect to the Shares Subject to Restrictions, except that the following restrictions shall apply:

     (a) None of the Shares Subject to Restrictions may be sold, transferred, assigned, pledged or otherwise encumbered or disposed of during the “Restriction Period” as defined below, except to the extent of the Corporation’s earlier attainment of the Performance Criteria, as defined below.

     (b) The Shares Subject to Restrictions are subject to forfeiture during the Restriction Period in accordance with Paragraph 4 of this Agreement.

     (c) The Shares Subject to Restrictions and any certificate representing the Shares Subject to Restrictions shall be held in custody by the Corporation or its designee until such time as either the Performance Criteria are attained or the Restriction Period shall have been completed.

     (d) Dividends paid with respect to the Shares Subject to Restrictions during the Restriction Period shall be paid to the Employee.

     3. Term of Restriction.

     (a) Subject to the forfeiture provisions of Paragraph 4 of this Agreement, the Restrictions shall lapse (i) with respect to half of the Shares Subject to Restrictions on the earlier of (x) February 17, 2014 if the Employee is an employee of the Corporation on February 17, 2014, unless the Employee’s cessation of employment was due to the Employee’s death, disability or Retirement (as defined below), or (y) as soon after the completion of the audit of the Corporation for the 2011 fiscal year as it may be determined that the Performance Criteria have been attained and (ii) with respect to half of the Shares Subject to Restrictions, as soon after the completion of the audit of the Corporation for the 2011 fiscal year as it may be determined that the Performance Criteria have been. With respect to the half of the Shares Subject to Restrictions subject only to the Performance Criteria, if the Corporation does not attain the Performance Criteria on or before the three year measurement period ending December 31, 2011, such half of the Shares Subject to Restrictions shall be forfeited immediately upon the completion of that three-year measurement period.

     (b) For purposes of this Agreement, the “Performance Criteria” shall mean that the net income of the Corporation, measured under GAAP, shall exceed $300 million, in the aggregate, for the 2009, 2010 and 2011 fiscal years of the Corporation. The period for measuring the Performance Criteria shall end as of

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December 31, 2011 and the Personnel and Compensation Committee shall as promptly as possible following the completion of the audit of the Corporation for the 2011 fiscal year determine whether the Performance Criteria have been met.

     (c) The period from the Date of Grant until the lapse of the applicable of the Restrictions with respect to the Shares Subject to Restrictions is the “Restriction Period” for purposes of this Agreement.

     (d) As soon as administratively practicable following the lapse of the Restrictions without a forfeiture of the applicable Shares Subject to Restrictions, and upon the satisfaction of all other applicable conditions as to such Shares Subject to Restrictions, including, but not limited to, the payment by the Employee of all applicable withholding taxes, if any, the Corporation shall deliver or cause to be delivered to the Employee shares of Common Stock, which may be in the form of a certificate or certificates for such shares, equal in number to the applicable Shares Subject to Restrictions, which shall not be subject to the transfer restrictions set forth above and shall not bear the legend described in Paragraph 5. Without limiting the foregoing, (i) if the Performance Criteria are met, all Shares Subject to Restrictions shall become non-forfeitable and such Shares or the certificate representing such non-forfeitable shares of common stock of the Corporation shall be delivered as described above and (ii) if the Performance Criteria are not met, (x) half of the Shares Subject to Restrictions shall be forfeited immediately after the end of the measurement period for such Performance Criteria and (y) the remaining half of the Shares Subject to Restrictions shall be non-forfeitable, if at all, at the end of the Restriction Period.

     4. Forfeiture of Shares Subject to Restrictions. If Employee’s employment with the Corporation and all of its direct or indirect subsidiaries is terminated by either party for any reason, including, but not limited to, the involuntary termination of the Employee’s employment with the Corporation for any reason, with or without cause, other than the Employee’s death, disability or retirement with the consent of the Corporation when the Employee is at least 55 years of age with at least five years of service (“Retirement”), (i) all rights of the Employee to the Shares Subject to Restrictions which remain subject to the Restrictions shall terminate immediately and be forfeited in their entirety, and (ii) the forfeited Shares Subject to Restrictions and any stock certificate or certificates representing the forfeited Shares Subject to Restrictions shall be canceled. If the Employee dies or becomes disabled during the Restriction Period, the Shares Subject to Restrictions will immediately vest. If the Employee retires with the consent of the Corporation when the Employee is at least 55 years of age with at least five years of service, the Employee (or the Employee’s beneficiary) shall receive the Shares Subject to Restrictions when, if and to the extent, the Restrictions lapse under Paragraph 3.

     5. Change of Control. All Shares Subject to Restrictions shall fully vest in the event of a Change of Control as defined in the Incentive Plan.

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     6. Legend. During the Restriction Period, the shares of Restricted Stock and any share certificate or certificates evidencing the Shares Subject to Restrictions shall be endorsed with the following legend (in addition to any legend required under applicable securities laws or any agreement by which the Corporation is bound):

THE TRANSFERABILITY OF THE SHARES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE TERMS AND CONDITIONS OF A RESTRICTED STOCK AGREEMENT ENTERED INTO BY AND BETWEEN ALLEGHENY TECHNOLOGIES INCORPORATED AND THE HOLDER OF THIS CERTIFICATE. A COPY OF SUCH AGREEMENT IS ON FILE AT THE OFFICE OF THE CORPORATION.

     7. Withholding. The Corporation or its direct or indirect subsidiary may withhold from the number of Shares Subject to Restrictions or from any cash amount payable hereunder or any other cash payments due to Employee all taxes, including social security taxes, which the Corporation or its direct or indirect subsidiary is required or otherwise authorized to withhold with respect to the Shares Subject to Restrictions.

     8. Adjustments to Number of Shares. Any shares issued to Employee with respect to the Shares Subject to Restrictions in the event of any change in the number of outstanding common stock of the Corporation through the declaration of a stock dividend or a stock split or combination of shares or any other similar capitalization change shall be deemed to be Shares Subject to Restrictions subject to all the terms set forth in this Agreement.

     9. No Right to Continued Employment; Effect on Benefit Plans. This Agreement shall not confer upon Employee any right with respect to continuance of his or her employment or other relationship, nor shall it interfere in any way with the right of the Corporation or its direct or indirect subsidiary to terminate his or her employment or other relationship at any time. Income realized by Employee pursuant to this Agreement shall not be included in Employee’s earnings for the purpose of any benefit plan in which Employee may be enrolled or for which Employee may become eligible unless otherwise specifically provided for in such plan.

     10. Employee Representations. In connection with the issuance of the Shares Subject to Restrictions, Employee represents the following:

     (a) Employee has reviewed with Employee’s own tax advisors, the federal, state, local and foreign tax consequences of this Agreement and the transactions contemplated hereby. Employee is relying solely on such advisors and not on any statements or representations of the Corporation or any of its agents. Employee understands that Employee (and not the Corporation) shall be responsible for Employee’s own tax liability that may arise as a result of this Agreement and the transactions contemplated hereby.

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     (b) Employee has received, read and understood this Agreement and the Incentive Plan and agrees to abide by and be bound by their respective terms and conditions.

     11. Miscellaneous.

     (a) Governing Law. This Agreement shall be governed and construed in accordance with the domestic laws of the Commonwealth of Pennsylvania without regard to such Commonwealth’s principles of conflicts of laws.

     (b) Successors and Assigns. The provisions of this Agreement shall inure to the benefit of, and be binding upon, the successors, permitted assigns, heirs, executors and administrators of the parties hereto. Neither this Agreement nor any rights hereunder shall be assignable or otherwise subject to hypothecation without the consent of all parties hereto.

     (c) Entire Agreement; Amendment. This Agreement contain the entire understanding between the parties hereto with respect to the subject matter of this Agreement and supersedes all prior and contemporaneous agreements and understandings, inducements or conditions, express or implied, oral or written, with respect to the subject matter of this Agreement. This Agreement may not be amended or modified without the written consent of the Corporation and Employee.

     (d) Counterparts. This Agreement may be executed simultaneously in any number of counterparts, each of which when so executed and delivered shall be taken to be an original and all of which together shall constitute one document.

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     (e) Definitions. Initially capitalized terms not otherwise defined in this Restricted Stock Agreement shall have the meanings ascribed thereto in the Incentive Plan.

     IN WITNESS WHEREOF, the parties have executed this Shares Subject to Restrictions Agreement as of the date first written above.

ALLEGHENY TECHNOLOGIES INCORPORATED
By:
Name:	Jon D. Walton
Title:	Executive Vice President, Human Resources, Chief Legal and Compliance Officer
PARTICIPANT		WITNESS

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EX-10.4

Exhibit 10.4

The Annual Incentive Plan
For Year 2009

Contents	Page
At a Glance		1
What is the Annual Incentive Plan?		1
Who is Eligible for This Plan?		1
How Does the Annual Incentive Plan Work?		1
Calculation of the Annual Incentive Plan Award		2
Target Bonus Percentage		2
Performance Goals and the Target Bonus Percentage		2
2009 Performance Goals		3
How the AIP Incentive Award is Calculated When All Goals Are 100% Achieved		4
How the AIP Incentive Award is Calculated for Other Achievement Levels		5
Maximums and Minimums		5
Additional Guidelines for the Annual Incentive Plan		6
Discretionary Adjustments		6
Some Special Circumstances		6
Making Payments		6
Administration Details		7

At a Glance

What is the Annual Incentive Plan?

The Annual Incentive Plan (the “AIP” or the “Plan”) provides participants of Allegheny Technologies Incorporated (“Allegheny Technologies” or the “Company”) and its operating companies with the opportunity to earn an incentive award when certain pre-established goals are met at the corporate and operating company levels.

Who is Eligible for This Plan?

Generally, participants who have a significant impact on the Company’s operations will be eligible to participate in the Plan. Individuals eligible for participation are determined annually, based on recommendations of the operating company presidents, if applicable, and the Company’s chief executive officer and the Company’s executive vice president-human resources, with the approval of the Personnel and Compensation Committee of the Company’s Board of Directors.

How Does the Annual Incentive Plan Work?

Under the Plan, participants may earn an incentive award based on a percentage of their base salary, depending on the extent to which pre-established operating company and/or corporate performance goals have been achieved.

• For purposes of the Plan, base salary is generally the participant’s annual base salary rate as of the end of the year, excluding any commission or other incentive pay. For some special circumstances affecting the amount of base salary used in the Plan, see page 6.

• A target bonus percentage for each participant is used in calculating the incentive award and is explained on the next page.

• The target bonus percentage will be adjusted (upward or downward) based on the extent to which various performance goals are achieved.

Incentive award payments will be distributed in cash after the year-end audit is complete and the awards have been approved by the Personnel and Compensation Committee.

Page 1

Calculation of the Annual Incentive Plan Award

Target Bonus Percentage

The Plan establishes an incentive opportunity for each Plan participant, calculated as a percentage of the participant’s base salary. Each participant will be provided with an initial percentage, referred to as a “target bonus percentage.”

Generally, the target bonus percentage is the percentage of base salary that can be earned as an award under the Plan if 100% of the various performance goals are achieved. For 2009, if 100% of the performance goals are achieved, 100% of the target bonus percentage can be earned.

Generally, if there is a change in a participant’s target bonus percentage during the year, the newly adjusted target bonus percentage will be used to calculate the individual’s award for the full year. If an individual becomes a participant in AIP during the year, the individual’s award for the year will be based on a pro rata calculation.

Performance Goals and the Target Bonus Percentage

For 2009, AIP awards will be based on the extent to which the participant’s company, division or area of responsibility achieves specified levels of achievement as to:

• Operating Earnings

• Operating Cash Flow

• Manufacturing Improvements

• Safety and Environmental Compliance

• Customer Responsiveness

For operating company presidents, 65% of the goals’ overall weight will be based on the performance of the president’s operating company, and 35% of the goals’ overall weight will be based on corporate-wide performance.

For executive officers and certain other senior employees, performance will be measured completely on a corporate-wide basis.

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At the end of the year, the Company will measure actual performance against each of the pre-established objectives.

The achievements attributable to each performance goal as noted above, then will be added together, and that sum will be multiplied by: (1) the individual’s target bonus percentage, times (2) the individual’s annual base salary, to produce the amount, if any, of the incentive award for 2009.

Note that potential adjustments are described on page 6.

2009 Performance Goals

The performance goals for 2009 generally consist of:
•    Operating Earnings	40	%
•    Operating Cash Flow	30	%
•    Manufacturing Improvements	10	%
•    Safety and Environmental Compliance	10	%
•    Customer Responsiveness	10	%

Targeted achievements as to each performance goal above have been established for each operating company and for corporate participants. Together the above goals comprise 100% of the target bonus percentage.

No annual incentive will be paid if the achievement of Operating Earnings is less than the established applicable minimum of Operating Earnings, notwithstanding the achievements as to the other applicable performance goals for 2009.

The AIP program allows the Personnel and Compensation Committee of the Board of Directors to exercise negative discretion to reduce payments if actual performance does not exceed performance targets.

A prerequisite to any AIP award is compliance with Allegheny Technologies’ Corporate Guidelines for Business Conduct and Ethics.

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How the AIP Incentive Award is Calculated When All Goals are 100% Achieved

For the Year 2009, if 100% of the performance goals are achieved, then 100% of the target bonus percentage will be credited to the participant:

	Goal %			Goal %			Earned % of
Goals	Target			Achieved			Target *
Operating Earnings		40	%		100	%		40	%
Operating Cash Flow		30	%		100	%		30	%
Manufacturing Improvements		10	%		100	%		10	%
Safety and Environmental Compliance		10	%		100	%		10	%
Customer Responsiveness		10	%		100	%		10	%
Total		100	%					100	%

* Earned % of Target = Goal % of Target X Goal Achieved %

In this example, assume that the participant’s target bonus percentage is 15%.

The target bonus percentage of 15% is then multiplied by 100% to produce a bonus award equal to 15% of base salary:

Earned Percentage of Target	100	%
X Target Bonus Percent	15	%
Equals Percentage of Salary for Incentive Award	15	%

The sections below discuss the impact of achieving more or less than 100% of various goals, and they also discuss the impact of other potential adjustments.

Page 4

How the AIP Incentive Award is Calculated for Other Achievement Levels

The percentage of a goal achieved will determine the earned percentage of target for that particular goal. The earned percentage of target will be extrapolated for achievement between the established minimum level and the established target level for a particular goal. Similarly, the earned percentage of target will be extrapolated for achievement between the established target level and the established maximum level for a particular goal.

Maximums and Minimums

• Generally, the maximum percentage calculated as an earned percentage of target for any goal is 200%, and the overall maximum incentive award that a participant can earn under the weighting formula is 200% of the participant’s target bonus percentage.

• Where the established minimum of a performance goal is achieved, only 50% of that goal’s share will be allocated to the participant’s target bonus percentage.

• Where less than the established minimum of a performance goal is achieved, no amount of that goal will be allocated to the participant’s target bonus percentage.

No annual incentive will be paid if the achievement of Operating Earnings is less than the established applicable minimum of Operating Earnings, notwithstanding the achievements as to the other applicable performance goals for 2009.

Page 5

Additional Guidelines for the Annual Incentive Plan

Discretionary Adjustments

The Plan allows for discretionary adjustments of up to +20% or –20% of an individual’s calculated award. However, generally, the sum of discretionary adjustments for all eligible participants cannot exceed +5% of the aggregate calculated awards.

Some Special Circumstances

The above formulas generally determine the amount of the incentive award for the year. Other factors that may affect the actual award follow:

• If a participant leaves the Company due to retirement, death, or disability, an award will be calculated based on the actual base salary earned during the year in which the manager left—so long as the participant worked at least six months of that year.

• If a participant leaves the Company before the end of the plan year for any other reason, the manager will not receive a bonus award for that year.

• If a participant voluntarily leaves the Company after the end of the year but before the award is paid, the participant would receive any bonus due unless the employment is terminated for cause. If employment is terminated for cause, the participant would not be entitled to receive an award under the Plan.

• Participant’s who are hired mid-year may earn a pro-rated award for that year, based on the salary earned during that year. However, managers with less than two months service in a plan year (i.e. hired after October 31) would not be eligible for an award for that year.

• A prerequisite to any AIP award is compliance with Allegheny Technologies’ Corporate Guidelines for Business Conduct and Ethics.

Making Payments

All incentive award payments will be paid in cash, less applicable withholding taxes, after the year-end audit is complete and payment has been considered and approved by the Personnel and Compensation Committee.

Page 6

Administration Details

This summary relates to the Annual Incentive Plan (AIP) of Allegheny Technologies Incorporated and its subsidiaries. The Plan is administered by the Personnel and Compensation Committee, which has full authority to:

• Interpret the Plan;

• Designate eligible participants and categories of eligible participants;

• Set the terms and conditions of incentive awards; and

• Establish and modify administrative rules for the Plan.

Plan participants may obtain additional information about the plan and the Committee from:

Jon D. Walton
Executive Vice President,
Human Resources, Chief Legal and Compliance Officer,
General Counsel and Secretary
Allegheny Technologies Incorporated
1000 Six PPG Place
Pittsburgh PA 15222 5479
Phone: 412-394-2836                         Fax: 412-394-2837

The Plan will remain in effect until terminated by the Personnel and Compensation Committee. The Personnel and Compensation Committee may also amend the Plan at its sole discretion.

The Plan is not subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA) and is not “qualified” under Section 401(a) of the Internal Revenue Code.

Page 7

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, L. Patrick Hassey certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Allegheny Technologies Incorporated;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 6, 2009

/s/ L. Patrick Hassey  

L. Patrick Hassey 

President and Chief Executive Officer 

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

I, Richard J. Harshman certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Allegheny Technologies Incorporated;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 6, 2009

/s/ Richard J. Harshman  

Richard J. Harshman 

Executive Vice President, Finance
and Chief Financial Officer 

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Allegheny Technologies Incorporated (the “Company”) on Form 10-Q for the period ended March 31, 2009 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned, in the capacities and on the dates indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 6, 2009	/s/ L. Patrick Hassey
	L. Patrick Hassey
	President and Chief Executive Officer

Date: May 6, 2009	/s/ Richard J. Harshman
	Richard J. Harshman
	Executive Vice President, Finance and Chief Financial Officer