UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM
8-K
CURRENT
REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): |
July 27, 2011 |
Allegheny Technologies Incorporated |
(Exact name of registrant as specified in its charter) |
Delaware |
1-12001 |
25-1792394 |
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
1000 Six PPG Place, Pittsburgh, Pennsylvania |
15222-5479 |
(Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number, including area code |
(412) 394-2800 |
N/A |
(Former name or former address, if changed since last report). |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
⃞ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
⃞ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
⃞ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
⃞ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02. Results of Operations and Financial Condition.
On July 27, 2011, Allegheny Technologies Incorporated issued a press
release with respect to its second quarter 2011 financial results. A
copy of the press release is attached as Exhibit 99.1 and is being
furnished, not filed, under Item 2.02 of this Current Report on Form 8-K.
Item
9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit 99.1 Press release dated July 27, 2011.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
ALLEGHENY TECHNOLOGIES INCORPORATED |
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By: |
/s/ Elliot S. Davis |
Elliot S. Davis |
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Senior Vice President, General Counsel, |
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Chief Compliance Officer and Corporate Secretary |
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Dated: |
July 27, 2011 |
Exhibit 99.1
Allegheny Technologies Announces Second Quarter 2011 Results
Second Quarter 2011 Results
PITTSBURGH--(BUSINESS WIRE)--July 27, 2011--Allegheny Technologies Incorporated (NYSE: ATI) reported net income for the second quarter 2011 of $64.0 million, or $0.59 per share, on sales of $1.35 billion. Results included acquisition related expenses of $12.7 million, net of tax, primarily related to inventory fair value adjustments and transaction costs. Excluding these items, net income was $76.7 million, or $0.70 per share, on sales of $1.35 billion and 113.5 million diluted shares. In the second quarter 2010, ATI reported net income of $36.4 million, or $0.36 per share, on sales of $1.05 billion.
On May 9, 2011, ATI completed the acquisition of Ladish Co., Inc. for $897.6 million, comprised of the issuance of 7.3 million shares of ATI common stock and payment of $24.00 per Ladish share in cash. ATI Ladish results are included in the High Performance Metals segment from the date of the acquisition.
For the six months ended June 30, 2011, net income was $120.3 million, or $1.13 per share, on sales of $2.58 billion. Year to date 2011 results included $18.5 million of special items, or $0.16 per share, including $3.1 million, net of tax, related to the accelerated recognition of equity-based compensation expense due to executive retirements, a discrete tax charge of $2.7 million primarily related to foreign income taxes, and $12.7 million, net of tax, in Ladish acquisition related items. Excluding these special items, net income was $138.8 million, or $1.29 per share for the first six months of 2011.
For the six months ended June 30, 2010, net income, including special charges, was $54.6 million, or $0.54 per share. Results included a non-recurring tax charge of $5.3 million related to the Patient Protection and Affordable Care Act. Excluding this non-recurring tax charge, net income was $59.9 million, or $0.60 per share, on sales of $1.95 billion.
“We continue to see strong secular growth in our key global markets,” said Rich Harshman, Chairman, President and Chief Executive Officer. “In the second quarter 2011, sales increased 28% compared to the same period in 2010, and increased 10% compared to the first quarter 2011.”
“Second quarter 2011 segment operating profit, excluding inventory fair value adjustments associated with the Ladish transaction, increased 59% to almost $187 million, or nearly 14% of ATI sales,” said Mr. Harshman. “Operating profit improved significantly in our High Performance Metals and Flat-Rolled Products segments. Flat-Rolled Products segment operating profit was over 10% of sales, reflecting a strong high-value product mix, which offset soft demand and low base prices for our standard stainless sheet and plate products. The supply chain for our standard stainless products reduced their inventories as surcharges declined and U.S. GDP weakened in the second quarter.
“Results were impacted by idle facility, start-up and qualification costs of $9.7 million associated with our titanium sponge operations, including $6.7 million associated with start-up and qualification costs at our Rowley, Utah facility. Segment operating profit for the quarter was also impacted by LIFO charges of $5.2 million, which was $1.3 million higher than the first quarter, primarily due to higher titanium and tungsten raw material costs.
“We have made good progress integrating ATI Ladish since completing the transaction on May 9. We are pleased with customer reaction to the combination of ATI Ladish’s operations with ATI’s High Performance Metals businesses. ATI is now a fully integrated supplier, from raw material (for titanium) and melt (for other specialty alloy systems) through highly engineered finished components. This provides enhanced value to our customers and expands ATI’s profitable growth opportunities.
“We continued to improve our cost structure with over $32 million in gross cost reductions in the second quarter, bringing our total gross cost reductions for the year to $59 million. Our gross cost reduction goal for 2011 is at least $100 million. Our balance sheet remains strong with cash on-hand of $368 million at the end of June.
“High Performance Metals segment backlog, including ATI Ladish, was over $1.38 billion at the end of the second quarter 2011. In addition, demand for our nickel-based alloys and specialty alloys continued to be strong in our Flat-Rolled Products segment as we received additional large project orders in the oil and gas market extending that segment’s solid backlog for these products through 2011 and into 2012.
“Our Rowley, UT premium-titanium sponge facility has produced over 5 million pounds of sponge so far this year. This sponge is being used to produce industrial titanium products. Our primary focus is to continue the orderly production ramp and begin the program to achieve standard-grade qualification for Rowley sponge. We expect to complete this qualification by early 2012. We will then begin the premium-grade qualification program. Our new PAM (Plasma Arc Melt) premium-titanium melt furnace in Bakers, NC has begun melt trials. These new investments are important to ATI as we expect strong demand growth to continue for our titanium mill products and titanium forgings and castings.
“We expect to begin construction of our Flat-Rolled Products segment Hot-Rolling and Processing Facility later this summer. Site preparation is essentially complete and final engineering drawings are nearing completion. We currently expect 2011 capital expenditures to be approximately $275 to $300 million, of which $98 million has been spent to date. We expect cash on-hand to increase in the third quarter as investment in managed working capital declines.
“The on-going debate about the U.S. budget deficits and debt ceiling, combined with the European debt crisis, is having a negative impact on consumer confidence. In spite of these challenges, we remain optimistic about the current demand and the secular growth opportunities over the next several years in our key diversified global markets.
“In our High Performance Metals segment, we expect demand to continue to be strong for our mill products and component products, and anticipate better demand for our exotic alloys in the second half 2011. We expect additional pre-tax charges in the third quarter 2011 of approximately $8 to $9 million relating to the inventory fair-value adjustments from the acquisition of ATI Ladish. We do not expect any significant similar charges beyond the third quarter. In our Flat-Rolled Products segment, we expect the third quarter results to be impacted by seasonal factors, soft demand, and low base prices for standard stainless sheet and plate products. Also, this segment’s operating results are expected to be negatively impacted by approximately $6 million of major maintenance charges as we take advantage of the seasonally lower demand for our standard stainless products.
“With the Ladish acquisition now complete, we expect 2011 revenues of $5.4 to $5.5 billion, compared to our previous expectations of $4.6 to $4.8 billion, and segment operating profit of 13% to 14% of revenues, excluding the impact of purchase inventory accounting charges. These expectations are based on the strength in our key global markets, improving shipments and higher base prices for many of our high-value products, the expectation of improved demand in the fourth quarter for our standard stainless products, and the view that certain raw material costs will moderate slightly or at least remain at current levels.
“Over the next 3 to 5 years we expect ATI to continue to benefit from our new alloys and products, diversified global growth markets, and differentiated product mix. Demand is expected to be strong for our mill products and highly engineered forged and cast components from the aerospace market. Strong growth is also expected from the oil and gas/chemical process industry for our titanium-based alloys, nickel-based alloys and specialty alloys, and tungsten products. Global demand is expected to grow considerably from the electrical energy market driven by increased need for natural gas-fired turbines, nuclear applications, and alternative energy applications such as solar and wind, and from the rebuilding of transmission infrastructure. In addition, medical market demand for our titanium, zirconium, specialty, and niobium alloys is expected to grow significantly above global GDP growth rates.”
Three Months Ended | Six Months Ended | ||||||||||||||
June 30 | June 30 | ||||||||||||||
In Millions | |||||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||||
Sales | $ | 1,351.6 | $ | 1,052.0 | $ 2,579.0 | $ | 1,951.4 | ||||||||
Net income attributable to ATI before acquisition expenses and other charges |
$ |
76.7 |
$ |
36.4 |
$ 138.8 |
$ |
59.9 |
||||||||
Acquisition expenses and other charges* |
$ |
(12.7 |
) |
$ |
0.0 |
$ (18.5 |
) |
$ |
(5.3 |
) |
|||||
Net income attributable to ATI | $ | 64.0 | $ | 36.4 | $ 120.3 | $ | 54.6 | ||||||||
Per Diluted Share | |||||||||||||||
Net income attributable to ATI before acquisition expenses and other charges per common share ** |
$ |
0.70 |
$ |
0.36 |
$ 1.29 |
$ |
0.60 |
||||||||
Acquisition expenses and other charges |
$ |
(0.11 |
) |
$ |
0.00 |
$ (0.16 |
) |
$ |
(0.06 |
) |
|||||
Net income attributable to ATI per common share |
$ |
0.59 |
$ |
0.36 |
$ 1.13 |
$ |
0.54 |
* Includes non-recurring Ladish acquisition expenses of $12.7 million for the three months ended June 2011, and accelerated recognition of equity-based compensation expense due to previously announced executive retirements and a discrete tax charge for the six months ended June 2011. For the six months ended June 2010, charges were related to the impact of tax law changes.
** ATI issued 7.3 million shares of common stock as part of the Ladish merger consideration. The weighted average impact was 4.4 million shares for the three months ended June 2011 and 2.2 million shares for the six months ended June 2011. The additional shares reduced reported results by $0.02 per share for both 2011 periods.
Second Quarter 2011 Financial Results
High Performance Metals Segment
Market Conditions
Second quarter 2011 compared to second quarter 2010
Flat-Rolled Products Segment
Market Conditions
Second quarter 2011 compared to second quarter 2010
Engineered Products Segment
Market Conditions
Second quarter 2011 compared to second quarter 2010
Other Expenses
Retirement Benefit Expense
Income Taxes
Cash Flow, Working Capital and Debt
Allegheny Technologies will conduct a conference call with investors and analysts on Wednesday, July 27, 2011, at 1:00 p.m. ET to discuss the financial results. The conference call will be broadcast live on www.ATImetals.com. To access the broadcast, click on “Conference Call”. Replay of the conference call will be available on the Allegheny Technologies website.
This news release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Certain statements in this news release 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 global supply and demand conditions and prices for our specialty metals; (b) material adverse changes in the markets we serve, including the aerospace and defense, electrical energy, chemical process industry, oil and gas, medical, automotive, construction and mining, and other markets; (c) our inability to achieve the level of cost savings, productivity improvements, synergies, growth or other benefits anticipated by management, from the Ladish acquisition and other 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, 2010, and in other reports filed with the Securities and Exchange Commission. We assume no duty to update our forward-looking statements.
Building the World’s Best Specialty Metals Company®
Allegheny Technologies Incorporated is one of the largest and most diversified specialty metals producers in the world with revenues of approximately $4.7 billion for the last twelve months. ATI has approximately 11,300 full-time employees world-wide who use innovative technologies to offer global markets a wide range of specialty metals solutions. Our major markets are aerospace and defense, oil and gas/chemical process industry, electrical energy, medical, automotive, food equipment and appliance, machine and cutting tools, and construction and mining. Our products include titanium and titanium alloys, nickel-based alloys and superalloys, grain-oriented electrical steel, stainless and specialty steels, zirconium, hafnium, niobium, tungsten materials, forgings, castings, and fabrication and machining capabilities. The ATI website is www.ATImetals.com.
Allegheny Technologies Incorporated and Subsidiaries | |||||||||||||||||
Consolidated Statements of Income | |||||||||||||||||
(Unaudited, dollars in millions, except per share amounts) | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30 | June 30 | ||||||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||||||
Sales | $ | 1,351.6 | $ | 1,052.0 | $ | 2,579.0 | $ | 1,951.4 | |||||||||
Costs and expenses: | |||||||||||||||||
Cost of sales | 1,128.6 | 900.2 | 2,150.6 | 1,678.2 | |||||||||||||
Selling and administrative expenses | 99.3 | 76.0 | 188.0 | 150.2 | |||||||||||||
Income before interest, other income and income taxes |
123.7 | 75.8 | 240.4 | 123.0 | |||||||||||||
Interest expense, net | (23.7 | ) | (15.4 | ) | (46.7 | ) | (30.0 | ) | |||||||||
Other income, net | 0.3 | 0.2 | 0.4 | 0.6 | |||||||||||||
Income before income tax provision | 100.3 | 60.6 | 194.1 | 93.6 | |||||||||||||
Income tax provision | 34.3 | 22.4 | 69.4 | 35.6 | |||||||||||||
Net income | 66.0 | 38.2 | 124.7 | 58.0 | |||||||||||||
Less: Net income attributable to noncontrolling interests |
2.0 | 1.8 | 4.4 | 3.4 | |||||||||||||
Net income attributable to ATI | $ | 64.0 | $ | 36.4 | $ | 120.3 | $ | 54.6 | |||||||||
Basic net income attributable to ATI per common share |
$ | 0.63 | $ | 0.37 | $ | 1.20 | $ | 0.56 | |||||||||
Diluted net income attributable to ATI per common share |
$ | 0.59 | $ | 0.36 | $ | 1.13 | $ | 0.54 | |||||||||
Weighted average common shares outstanding -- basic (millions) |
102.1 | 97.5 | 99.9 | 97.4 | |||||||||||||
Weighted average common shares outstanding -- diluted (millions) |
113.5 | 108.4 | 111.2 | 108.4 | |||||||||||||
Actual common shares outstanding -- end of period (millions) |
106.3 | 98.6 | 106.3 | 98.6 | |||||||||||||
Allegheny Technologies Incorporated and Subsidiaries | ||||||||||||||||
Sales and Operating Profit by Business Segment | ||||||||||||||||
(Unaudited - Dollars in millions) | ||||||||||||||||
Three Months Ended |
Six Months Ended | |||||||||||||||
June 30 | June 30 | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Sales: | ||||||||||||||||
High Performance Metals | $ | 497.2 | $ | 341.8 | $ | 896.6 | $ | 644.1 | ||||||||
Flat-Rolled Products | 727.3 | 615.3 | 1,437.9 | 1,131.9 | ||||||||||||
Engineered Products | 127.1 | 94.9 | 244.5 | 175.4 | ||||||||||||
Total External Sales | $ | 1,351.6 | $ | 1,052.0 | $ | 2,579.0 | $ | 1,951.4 | ||||||||
Operating Profit: | ||||||||||||||||
High Performance Metals | $ | 92.9 | $ | 67.3 | $ | 178.5 | $ | 122.3 | ||||||||
% of Sales | 18.7 | % | 19.7 | % | 19.9 | % | 19.0 | % | ||||||||
Flat-Rolled Products | 73.7 | 42.1 | 137.1 | 73.5 | ||||||||||||
% of Sales | 10.1 | % | 6.8 | % | 9.5 | % | 6.5 | % | ||||||||
Engineered Products | 6.8 | 7.9 | 20.2 | 9.7 | ||||||||||||
% of Sales | 5.4 | % | 8.3 | % | 8.3 | % | 5.5 | % | ||||||||
Operating Profit | 173.4 | 117.3 | 335.8 | 205.5 | ||||||||||||
% of Sales | 12.8 | % | 11.2 | % | 13.0 | % | 10.5 | % | ||||||||
Corporate expenses | (25.8 | ) | (15.0 | ) | (51.6 | ) | (27.3 | ) | ||||||||
Interest expense, net | (23.7 | ) | (15.4 | ) | (46.7 | ) | (30.0 | ) | ||||||||
Other expense, net of gains on asset sales |
(4.2 | ) | (3.9 | ) | (4.7 | ) | (9.7 | ) | ||||||||
Retirement benefit expense | (19.4 | ) | (22.4 | ) | (38.7 | ) | (44.9 | ) | ||||||||
Income before income taxes |
$ | 100.3 | $ | 60.6 | $ | 194.1 | $ | 93.6 | ||||||||
Allegheny Technologies Incorporated and Subsidiaries | |||||||
Consolidated Balance Sheets | |||||||
(Current period unaudited--Dollars in millions) | |||||||
June 30, |
December 31, | ||||||
2011 | 2010 | ||||||
ASSETS | |||||||
Current Assets: | |||||||
Cash and cash equivalents | $ | 367.8 | $ | 432.3 | |||
Accounts receivable, net of allowances for doubtful accounts of
$7.3 and |
808.1 | 545.4 | |||||
Inventories, net | 1,465.4 | 1,024.5 | |||||
Deferred income taxes | 13.5 | - | |||||
Prepaid expenses and other current assets |
36.3 |
|
112.9 | ||||
Total Current Assets | 2,691.1 | 2,115.1 | |||||
Property, plant and equipment, net | 2,292.7 | 1,989.3 | |||||
Cost in excess of net assets acquired | 690.6 | 206.8 | |||||
Other assets | 374.6 | 182.4 | |||||
Total Assets | $ | 6,049.0 | $ | 4,493.6 | |||
LIABILITIES AND EQUITY | |||||||
Current Liabilities: | |||||||
Accounts payable | $ | 503.6 | $ | 394.1 | |||
Accrued liabilities | 341.0 | 249.9 | |||||
Deferred income taxes | - | 5.6 | |||||
Short term debt and current portion of long-term debt |
154.2 | 141.4 | |||||
Total Current Liabilities | 998.8 | 791.0 | |||||
Long-term debt | 1,496.5 | 921.9 | |||||
Accrued postretirement benefits | 439.2 | 423.8 | |||||
Pension liabilities | 97.4 | 58.3 | |||||
Deferred income taxes | 109.6 | 68.6 | |||||
Other long-term liabilities | 127.5 | 100.6 | |||||
Total Liabilities | 3,269.0 | 2,364.2 | |||||
Total ATI stockholders' equity | 2,690.7 | 2,040.8 | |||||
Noncontrolling interests | 89.3 | 88.6 | |||||
Total Equity | 2,780.0 | 2,129.4 | |||||
Total Liabilities and Equity | $ | 6,049.0 | $ | 4,493.6 | |||
Allegheny Technologies Incorporated and Subsidiaries | ||||||||||
Condensed Consolidated Statements of Cash Flows | ||||||||||
(Unaudited - Dollars in millions) | ||||||||||
Six Months Ended | ||||||||||
June 30 | ||||||||||
2011 | 2010 | |||||||||
Operating Activities: | ||||||||||
Net income | $ | 124.7 | $ | 58.0 | ||||||
Depreciation and amortization | 80.6 | 69.8 | ||||||||
Deferred taxes | (13.1 | ) | 36.0 | |||||||
Change in managed working capital | (455.1 | ) | (346.8 | ) | ||||||
Change in retirement benefits | 6.5 | 14.6 | ||||||||
Accrued liabilities and other | 184.4 | (25.0 | ) | |||||||
Cash used in operating activities | (72.0 | ) | (193.4 | ) | ||||||
Investing Activities: | ||||||||||
Purchases of property, plant and equipment | (97.7 | ) | (97.6 | ) | ||||||
Acquisition of business | (349.2 | ) | - | |||||||
Asset disposals and other | 2.6 | 1.0 | ||||||||
Cash used in investing activities | (444.3 | ) | (96.6 | ) | ||||||
Financing Activities: | ||||||||||
Borrowings on long-term debt | 500.0 | - | ||||||||
Payments on long-term debt and capital leases | (11.0 | ) | (5.3 | ) | ||||||
Net borrowings under credit facilities | 2.3 | 5.2 | ||||||||
Debt issuance costs | (5.0 | ) | - | |||||||
Dividends paid to shareholders | (36.7 | ) | (35.3 | ) | ||||||
Exercises of stock options | 1.1 | 1.1 | ||||||||
Taxes on share-based compensation and other | 1.1 | (5.8 | ) | |||||||
Cash provided by (used in) financing activities | 451.8 | (40.1 | ) | |||||||
Decrease in cash and cash equivalents | (64.5 | ) | (330.1 | ) | ||||||
Cash and cash equivalents at beginning of period | 432.3 | 708.8 | ||||||||
Cash and cash equivalents at end of period | $ | 367.8 | $ | 378.7 | ||||||
Allegheny Technologies Incorporated and Subsidiaries | ||||||||||||
Selected Financial Data - Mill Products | ||||||||||||
(Unaudited) | ||||||||||||
Three Months Ended |
Six Months Ended | |||||||||||
June 30 | June 30 | |||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||
Mill Products Volume: | ||||||||||||
High Performance Metals (000's lbs.) | ||||||||||||
Titanium | 7,132 | 7,138 | 13,885 | 13,235 | ||||||||
Nickel-based and specialty alloys | 12,493 | 9,517 | 24,317 | 17,961 | ||||||||
Exotic alloys | 991 | 1,143 | 2,070 | 2,124 | ||||||||
Flat-Rolled Products (000's lbs.) | ||||||||||||
High value | 129,785 | 112,979 | 251,812 | 223,474 | ||||||||
Standard | 149,726 | 177,539 | 320,054 | 334,390 | ||||||||
Flat-Rolled Products total | 279,511 | 290,518 | 571,866 | 557,864 | ||||||||
Mill Products Average Prices: | ||||||||||||
High Performance Metals (per lb.) | ||||||||||||
Titanium | $ | 21.20 | $ | 18.49 | $ | 21.22 | $ | 18.64 | ||||
Nickel-based and specialty alloys | $ | 15.35 | $ | 13.30 | $ | 15.11 | $ | 13.41 | ||||
Exotic alloys | $ | 66.72 | $ | 60.54 | $ | 63.83 | $ | 60.67 | ||||
Flat-Rolled Products (per lb.) | ||||||||||||
High value | $ | 3.35 | $ | 2.83 | $ | 3.27 | $ | 2.71 | ||||
Standard | $ | 1.93 | $ | 1.65 | $ | 1.90 | $ | 1.55 | ||||
Flat-Rolled Products combined average | $ | 2.59 | $ | 2.11 | $ | 2.50 | $ | 2.02 | ||||
Mill Products volume and average price information includes shipments to ATI Ladish for all periods presented. High Performance Metals mill product forms include ingot, billet, bar, shapes and rectangles, rod, wire, and seamless tubes.
Allegheny Technologies Incorporated and Subsidiaries | |||||||||||||
Computation of Basic and Diluted Earnings Per Share | |||||||||||||
(Unaudited, in millions, except per share amounts) | |||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||
June 30 | June 30 | ||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||
Numerator for Basic net income per common share - | |||||||||||||
Net income attributable to ATI | $ | 64.0 | $ | 36.4 | $ | 120.3 | $ | 54.6 | |||||
Effect of dilutive securities: | |||||||||||||
4.25% Convertible Notes due 2014 | 2.5 | 2.2 | 5.0 | 4.4 | |||||||||
Numerator for Dilutive net income per common share - | |||||||||||||
Net income attributable to ATI after assumed conversions |
$ | 66.5 | $ | 38.6 | $ | 125.3 | $ | 59.0 | |||||
Denominator for Basic net income per common share - | |||||||||||||
Weighted average shares outstanding | 102.1 | 97.5 | 99.8 | 97.4 | |||||||||
Effect of dilutive securities: | |||||||||||||
Share-based compensation | 1.8 | 1.3 | 1.8 | 1.4 | |||||||||
4.25% Convertible Notes due 2014 | 9.6 | 9.6 | 9.6 | 9.6 | |||||||||
Denominator for Diluted net income per common share - | |||||||||||||
Adjusted weighted average assuming conversions | 113.5 | 108.4 | 111.2 | 108.4 | |||||||||
Basic net income attributable to ATI per common share | $ | 0.63 | $ | 0.37 | $ | 1.20 | $ | 0.56 | |||||
Diluted net income attributable to ATI per common share | $ | 0.59 | $ | 0.36 | $ | 1.13 | $ | 0.54 | |||||
Allegheny Technologies Incorporated and Subsidiaries | |||||||
Other Financial Information | |||||||
Managed Working Capital | |||||||
(Unaudited - Dollars in millions) | |||||||
June 30, | December 31, | ||||||
2011 | 2010 | ||||||
Accounts receivable | $ | 808.1 | $ | 545.4 | |||
Inventory | 1,465.4 | 1,024.5 | |||||
Accounts payable | (503.6 | ) | (394.1 | ) | |||
Subtotal | 1,769.9 | 1,175.8 | |||||
Allowance for doubtful accounts | 7.3 | 5.6 | |||||
LIFO reserve | 172.1 | 163.0 | |||||
Corporate and other | 56.0 | 35.3 | |||||
Managed working capital | $ | 2,005.3 | $ | 1,379.7 | |||
Annualized prior 2 months sales |
$ | 5,700.3 | $ | 4,007.7 | |||
Managed working capital as a % of annualized sales |
35.2 | % | 34.4 | % | |||
Year to date change in managed working capital |
$ | 625.6 | |||||
Managed working capital acquired | (170.5 | ) | |||||
Net change in managed working capital | $ | 455.1 | |||||
As part of managing the liquidity in 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.
Allegheny Technologies Incorporated and Subsidiaries | ||||||||
Other Financial Information | ||||||||
Debt to Capital | ||||||||
(Unaudited - Dollars in millions) | ||||||||
June 30, | December 31, | |||||||
2011 | 2010 | |||||||
Total debt | $ | 1,650.7 | $ | 1,063.3 | ||||
Less: Cash |
(367.8 | ) | (432.3 | ) | ||||
Net debt | $ | 1,282.9 | $ | 631.0 | ||||
Net debt | $ | 1,282.9 | $ | 631.0 | ||||
Total ATI stockholders' equity | 2,690.7 | 2,040.8 | ||||||
Net ATI capital | $ | 3,973.6 | $ | 2,671.8 | ||||
Net debt to ATI capital | 32.3 | % | 23.6 | % | ||||
Total debt | $ | 1,650.7 | $ | 1,063.3 | ||||
Total ATI stockholders' equity | 2,690.7 | 2,040.8 | ||||||
Total ATI capital | $ | 4,341.4 | $ | 3,104.1 | ||||
Total debt to total ATI capital | 38.0 | % | 34.3 | % | ||||
In managing the overall capital structure of the Company, some of the measures that we focus on are net debt to net capitalization, which is the percentage of debt, net of cash that may be available to reduce borrowings, to the total invested and borrowed capital of ATI (excluding noncontrolling interest), and total debt to total ATI capitalization, which excludes cash balances.
CONTACT:
Allegheny Technologies Incorporated
Dan L. Greenfield,
412-394-3004
www.ATIMetals.com