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News Allegheny Technologies Announces Strong First Quarter 201

CONTACT:

Dan L. Greenfield

(412) 394-3004

PITTSBURGH , Pennsylvania -- April 21 , 2005 -- Allegheny Technologies Incorp(

(NYSE:ATI)

® Revenues increased 52% to $880 million

® Net income was $66.3 million, or $0.66 per share

® Operating profit increased to $114 million

® Segment operating margins as a percentage of sales:

o Flat-Rolled Products 7.5%

o High Performance Metals 24%

o Engineered Products 12%

• Net debt to total capitalization improved to 39.4%

® Cash on hand was $231 million

Allegheny Technologies Incorporated reported net income for the first quarter 2(

million, or $0.66 per share, on sales of $879.6 million.

In the first quarter 2004, ATI reported a net loss of $50.4 million, or $(0.63) per

of $577.8 million.

"Our strong first quarter results are a good start to achieving the next level of su

said L. Patrick Hassey, Chairman, President and Chief Executive Officer of Allel

Technologies.

"Robust demand from the early stage recovery of the commercial aerospace m^,

High Performance Metals segment results. We continue to be encouraged by th

market and cost position of our Flat-Rolled Products segment. Our Engineered I

segment also performed very well and is becoming more important to our result!

"AT[ sales increased by 52% compared to the first quarter 2004 and by more. the

compared to the fourth quarter 2004. Overall segment operating profit improved

million, and operating margins reached nearly 13% of sales.

"Operating performance benefited from strong demand, higher selling prices, or

reductions and capital investments, and from ATI Business System manufacturi

"First quarter operating margin in our High Performance Metals segment excee(

Demand was robust from the aerospace market for our titanium alloys, nickel-be

superalloys, and vacuum melted specialty steels. In addition, our exotic alloys b

another outstanding quarter due to continued government, corrosion, and medic

strength.

"First quarter results in our Flat-Rolled Products segment were good. We expec

Shipments were 172,800 tons and segment operating margin was 7.5%. Operas

costs were higher than expected as we balanced production flow in the first qua

addition , some of our stainless steel sheet service center and tubing customers

their inventories , which had risen at the end of 2004 , due in part to an import sus

December. Stainless steel sheet imports through February 2005, the latest data

returned to approximately the 2004 monthly average. Importantly , most end mai

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 EE-RM/STD-00-550 COMMENT 86

Allegheny Technologies 

Products 

News 

About 

I Search: r=='----

Investors News Careers Contact 

Technologies Announces Strong rst 

CONTACT: 

Dan L. Greenfield 

(412) 394-3004 

Page 1 of 10 

201 

PITTSBURGH, Pennsylvania -- April 21, 2005 -- Allegheny Technologies Incorp< 

(NYSE:ATI) 

® Revenues increased 52% to $880 million 

® Net income was $66.3 million, or $0.66 per share 

® Operating profit increased to $114 million 

® Segment operating margins as a percentage of sales: 

o Flat-Rolled Products 7.5% 

o High Performance Metals 24% 

o Engineered Products 12% 

® Net debt to total capitalization improved to 39.4% 

® Cash on hand was $231 million 

Allegheny Technologies Incorporated reported net income for the first quarter 2( 

million, or $0.66 per share, on sales of $879.6 million. 

In the first quarter 2004, ATI reported a net loss of $50.4 million, or $(0.63) per ~ 

of $577.8 million. 

"Our strong first quarter results are a good start to achieving the next level of su 

said L. Patrick Hassey, Chairman, President and Chief Executive Officer of Aile! 

Tech nolog ies. 

"Robust demand from the early stage recovery of the commercial aerospace me 

High Performance Metals segment results. We continue to be encouraged by th 

market and cost position of our Flat-Rolled Products segment. Our Engineered I 

segment also performed very well and is becoming more important to our result: 

"ATI sales increased by 52% compared to the first quarter 2004 and by more thi 

compared to the fourth quarter 2004. Overall segment operating profit improved 

million, and operating margins reached nearly 13% of sales. 

"Operating performance benefited from strong demand, higher selling prices, or 

reductions and capital investments, and from ATI Business System manufacturi 

"First quarter operating margin in our High Performance Metals segment exceec 

Demand was robust from the aerospace market for our titanium alloys, nickel-be 

superalloys, and vacuum melted specialty steels. In addition, our exotic alloys b 

another outstanding quarter due to continued government, corrosion, and medic 

strength. 

"First quarter results in our Flat-Rolled Products segment were good. We expec 

Shipments were 172,800 tons and segment operating margin was 7.5%. Operal 

costs were higher than expected as we balanced production flow in the first qua 

addition, some of our stainless steel sheet service center and tubing customers 

their inventories, which had risen at the end of 2004, due in part to an import SUI 

December. Stainless steel sheet imports through February 2005, the latest data 

returned to approximately the 2004 monthly average. Importantly, most end mal 

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Allegheny Technologies Page 2 of 10

flat-rolled products remained solid.

"In our Engineered Products segment, operating margins increased to over 12°/

ATI Business System improvements and strong demand from several key mark,

and gas, aerospace, and transportation markets as well as general manufacturii

"We remain optimistic about the prospects for ATI. Backlogs in our High Perforn

segment are at near record levels and lead times continue to lengthen. We expE

demand for our materials used for jet engine after-market parts and new commE

engines and airframes. In addition, we see continued strength for our exotic allo

Rolled Products segment, capital goods markets are expected to remain strong.

stainless steel service center supply chain inventories will be in balance by the E

second quarter 2005. The global electrical steel markets for power distribution a

added supply as that market gains momentum . Markets for our Engineered Prof

businesses remain robust."

Three Mont

Marcr

In Mil]

-------------

2005

Sales $ 879.6

Net income (loss) $ 66.3

Per Dilut

Net income (loss) $ 0.66

First Quarter 2005 Financial Highlights

® Sales were $879.6 million, 52% higher than the first quarter 2004. Sales i

in the Flat-Rolled Products segment, 47% in the High Performance Metal

32% in the Engineered Products segment.

® Segment operating profit was $113.9 million, an increase of $113.3 milli(

the first quarter 2004, as a result of improved performance across all thre

segments. First quarter 2005 results included a LIFO inventory valuation

of $5.7 million, due primarily to higher

titanium scrap costs. The LIFO inventory valuation reserve charge was $z

the first quarter 2004.

• Net income was $66.3 million, or $0.66 per share.

® Retirement benefit expense was $20.2 million compared to $36.0 million

primarily as a result of actions taken in the second quarter 2004 to contro

medical costs and the favorable effect of the Medicare prescription drug 11

® Cash flow used in operations was $4.7 million. Improved market conditio

the further investment of $122.2 million in managed working capital.

® Cash on hand was $231.2 million at March 31, 2005.

® Cost reductions , before the effects of inflation, totaled $30 million compa

quarter. Our 2005 cost reduction goal is $100 million.

Flat-Rolled Products Segment

Market Conditions

® Demand continued to be strong from the residential construction and rem

gas, food service and equipment, and transportation markets. Demand in

capital goods markets, such as chemical processing and power generatic

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 EE-RM/STD-00-550 COMMENT 86

Allegheny Technologies Page 2 of 10 

flat-rolled products remained solid. 

"In our Engineered Products segment, operating margins increased to over 12°;; 

ATI Business System improvements and strong demand from several key mark, 

and gas, aerospace, and transportation markets as well as general manufacturil 

"We remain optimistic about the prospects for AT!. Backlogs in our High Perforn 

segment are at near record levels and lead times continue to lengthen. We expE 

demand for our materials used for jet engine after-market parts and new commE 

engines and airframes. In addition, we see continued strength for our exotic allo 

Rolled Products segment, capital goods markets are expected to remain strong. 

stainless steel service center supply chain inventories will be in balance by the E 

second quarter 2005. The global electrical steel markets for power distribution a 

added supply as that market gains momentum. Markets for our Engineered Pro! 

businesses remain robust." 

Sales 

Net income (loss) 

Net income (loss) 

First Quarter 2005 Financial Highlights 

Three Mont 

Marcr 

In Mil] 

2005 

$ 879.6 

$ 66.3 

Per Dilut 

$ 0.66 

CI Sales were $879.6 million, 52% higher than the first quarter 2004. Sales i 

in the Flat-Rolled Products segment, 47% in the High Performance Metal 

32% in the Engineered Products segment. 

• Segment operating profit was $113.9 million, an increase of $113.3 millie 

the first quarter 2004, as a result of improved performance across all thre 

segments. First quarter 2005 results included a LIFO inventory valuation 

of $5.7 million, due primarily to higher 

titanium scrap costs. The LIFO inventory valuation reserve charge was $L 

the first quarter 2004. 

• Net income was $66.3 million, or $0.66 per share. 

CI Retirement benefit expense was $20.2 million compared to $36.0 million 

primarily as a result of actions taken in the second quarter 2004 to contro 

medical costs and the favorable effect of the Medicare prescription drug" 

CI Cash flow used in operations was $4.7 million. Improved market conditio 

the further investment of $122.2 million in managed working capital. 

• Cash on hand was $231.2 million at March 31,2005. 

• Cost reductions, before the effects of inflation, totaled $30 million compa 

quarter. Our 2005 cost reduction goal is $100 million. 

Flat-Rolled Products Segment 

Market Conditions 

CI Demand continued to be strong from the residential construction and rem 

gas, food service and equipment, and transportation markets. Demand in 

capital goods markets, such as chemical processing and power generatic 

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Allegheny Technologies Page 3 of 10

Demand remained good from the automotive market for our specialty pro

improved our position for automotive exhaust alloys as a result of the J&L

acquisition.

First quarter 2005 compared to first quarter 2004

® Sales increased 59% to $524.9 million primarily due to improved demand

selling prices , higher raw material surcharges, and higher shipments inch.

from the Midland , PA and Louisville, OH facilities acquired in June 2004. '

tons shipped increased by over 47,800 tons, or 38%. Shipments of comrr

increased 49% and shipments of high-value products increased 13%. Av(

transaction prices, which include surcharges , were 17% higher for comm(

and 25% higher for high-value products.

® Segment operating income was $39.2 million, an increase of $50.2 millior

result of increased shipments, higher base-selling prices, additional surclbenefits of gross cost reductions, and no LIFO inventory valuation reservf

quarter 2004 results had a LIFO inventory valuation reserve charge of $3

® Results benefited from $23.1 million in gross cost reductions , before the E

inflation.

High Performance Metals Segment

Market Conditions

® Demand for our titanium alloys, nickel-based superalloys, and vacuum-m,

steels was strong from the aerospace, biomedical, and power generation

exotic alloys business continued to benefit from sustained high demand fl

government and medical markets, and from corrosion markets particularl,

First quarter 2005 compared to first quarter 2004

® Sales increased 47% to $262.7 million. Shipments increased 22% for titai

16% for nickel-based and specialty steel alloys, but decreased 13% fore;

primarily to product mix. Average selling prices increased 52% for titaniur

for nickel-based and specialty steel alloys, and 11 % for exotic alloys.

® Operating profit was $63.5 million, an increase of $55.7 million, as a resu

shipments for most products, higher selling prices, and the benefits of grc

reductions. Raw material cost inflation and higher inventory levels resulte

inventory valuation reserve charge of $6.0 million in 2005 compared to a

charge in 2004.

• Results benefited from $5.5 million of gross cost reductions, before the of

inflation.

Engineered Products Segment

Market Conditions

® Demand for our tungsten products was strong from the oil and gas, aeros

general manufacturing markets. Demand remained strong for our forged I

the Class 8 truck, and construction and mining markets. Demand for our

was strong from the transportation, wind energy, and oil and gas markets

First quarter 2005 compared to first quarter 2004

® Sales improved 32% to $92.0 million due to increased volume and higher

® Operating profit improved to $11.2 million, a $7.4 million increase, due to

volumes, improved pricing, cost reductions and lower LIFO inventory vale,

charges. Changes in raw material costs and inventory levels resulted in a

inventory valuation reserve gain of $0.3 million in 2005 compared to a $1

charge in 2004.

® Results benefited from $1.5 million of cost reductions, before the effects c

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 EE-RM/STD-00-550 COMMENT 86

Allegheny Technologies Page 3 of 10 

Demand remained good from the automotive market for our specialty pro, 

improved our position for automotive exhaust alloys as a result of the J&L 

acquisition. 

First quarter 2005 compared to first quarter 2004 

II Sales increased 59% to $524.9 million primarily due to improved demand 

selling prices, higher raw material surcharges, and higher shipments inciL 

from the Midland, PA and Louisville, OH facilities acquired in June 2004. ' 

tons shipped increased by over 47,800 tons, or 38%. Shipments of comrr 

increased 49% and shipments of high-value products increased 13%. AVI 

transaction prices, which include surcharges, were 17% higher for comml 

and 25% higher for high-value products. 

II Segment operating income was $39.2 million, an increase of $50.2 millior 

result of increased shipments, higher base-selling prices, additional surcr 

benefits of gross cost reductions, and no LIFO inventory valuation reservl 

quarter 2004 results had a LIFO inventory valuation reserve charge of $3 

II Results benefited from $23.1 million in gross cost reductions, before the E 

inflation. 

High Performance Metals Segment 

Market Conditions 

II Demand for our titanium alloys, nickel-based superalloys, and vacuum-m 

steels was strong from the aerospace, biomedical, and power generation 

exotic alloys business continued to benefit from sustained high demand fl 

government and medical markets, and from corrosion markets particularl~ 

First quarter 2005 compared to first quarter 2004 

II Sales increased 47% to $262.7 million. Shipments increased 22% for titaJ 

16% for nickel-based and specialty steel alloys, but decreased 13% for e: 

primarily to product mix. Average selling prices increased 52% for titaniur 

for nickel-based and specialty steel alloys, and 11 % for exotic alloys. 

• Operating profit was $63.5 million, an increase of $55.7 million, as a resu 

shipments for most products, higher selling prices, and the benefits of grc 

reductions. Raw material cost inflation and higher inventory levels resulte 

inventory valuation reserve charge of $6.0 million in 2005 compared to a ' 

charge in 2004. 

• Results benefited from $5.5 million of gross cost reductions, before the ef 

inflation. 

Engineered Products Segment 

Market Conditions 

• Demand for our tungsten products was strong from the oil and gas, aeros 

general manufacturing markets. Demand remained strong for our forged I 

the Class 8 truck, and construction and mining markets. Demand for our I 

was strong from the transportation, wind energy, and oil and gas markets 

First quarter 2005 compared to first quarter 2004 

• Sales improved 32% to $92.0 million due to increased volume and higher 

II Operating profit improved to $11.2 million, a $7.4 million increase, due to 

volumes, improved pricing, cost reductions and lower LIFO inventory vaiL 

charges. Changes in raw material costs and inventory levels resulted in a 

inventory valuation reserve gain of $0.3 million in 2005 compared to a $1 

charge in 2004. 

• Results benefited from $1.5 million of cost reductions, before the effects ( 

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Allegheny Technologies Page 4 of 10

Retirement Benefit Expense

® Retirement benefit expense declined to $20.2 million in the first quarter 2(

to $36.0 million in the first quarter 2004, primarily as a result of actions tal

second quarter 2004 to control retiree medical costs and the favorable efi

Medicare prescription drug legislation.

® For the first quarter 2005, retirement benefit expense included in cost of

million, and in selling and administrative expenses was $6.0 million. For tl

2004, retirement benefit expense included in cost of sales was $27.6 milli

selling and administrative expenses was $8.4 million.

® Retirement benefit expense for the full year 2005 is expected to decline t(

$81 million from $120 million in 2004. The pension expense portion of ret

expense is expected to decrease to pproximately $63 million for 2005 cor

million in 2004 as actual returns on pension assets in 2004 were higher tt

This decrease is partially offset by a lower assumed discount rate to valu(

benefit liabilities. Postretirement medical expense for 2005, which is now

approximately $17 million compared to $46 million for 2004, will continue

the actions taken in the second quarter 2004 to control retiree medical co

partially offset by a lower assumed discount rate to value plan liabilities. 1

2005 postretirement medical expense reflects a $7 million reduction from

2005 estimate due primarily to a revision of the projected impact of the M.

prescription drug legislation resulting from updated regulations.

® ATI is not required to make cash contributions to its U.S. defined benefit I

for 2005, and based on current regulations and actuarial studies, ATI doe

be required to make cash contributions to its U.S. defined benefit pensior

the next several years. However, we may elect, depending upon investmf

performance of the pension plan assets and other factors, to make volunt

contributions to this pension plan in the future.

Other Expenses

® Corporate expenses for the first quarter 2005 were $10.3 million comparE

million in the year-ago period. This increase is due primarily to expenses

cash and equity-based long-term performance-based incentive compens<

® Excluding the effects of retirement benefit expense, selling and administr,

as a percentage of sales declined to 6.3% in the 2005 first quarter from 7

same period of 2004.

® First quarter 2005 interest expense, net of interest income, increased to

from $8.2 million in the year-ago period primarily related to interest assoc

financing of the June 2004 J&L asset acquisition and higher short-term in

Income Taxes

The 2005 first quarter includes a provision for income taxes of $2.3 million, whic

related to foreign and state income taxes. No income tax provision or benefit wa

in 2004. We maintain a valuation allowance for a major portion of our deferred ti

accordance with SFAS No. 109, "Accounting for Income Taxes". Future tax prop

benefits will be recognized when taxable income exceeds net operating tax loss

resulting in cash tax payments, or when tax losses, if any, are recoverable as ce

due to changes in our judgment regarding the realizability of our deferred tax as

Cash Flow, Working Capital and Debt

® Cash on hand was $231.2 million at March 31, 2005.Cash flow used in or

during the first quarter 2005 was $4.7 million as the significant improvem(

earnings was more than offset by a $122.2 million investment in manage(

capital.

® The investment in managed working capital resulted from a $68.2 million

accounts receivable, which reflects the significantly higher level of sales ii

quarter 2005 compared to the fourth quarter 2004, and a $63.3 million inc

inventory mostly as a result of higher raw material costs and increased bi

volumes, partially offset by a $9.3 million increase in accounts payable. N

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 EE-RM/STD-00-550 COMMENT 86

Allegheny Technologies Page 4 of 10 

Retirement Benefit Expense 

o Retirement benefit expense declined to $20.2 million in the first quarter 2( 

to $36.0 million in the first quarter 2004, primarily as a result of actions tal 

second quarter 2004 to control retiree medical costs and the favorable eft 

Medicare prescription drug legislation. 

o For the first quarter 2005, retirement benefit expense included in cost of ~ 

million, and in selling and administrative expenses was $6.0 million. For tl 

2004, retirement benefit expense included in cost of sales was $27.6 milli 

selling and administrative expenses was $8.4 million. 

o Retirement benefit expense for the full year 2005 is expected to decline t< 

$81 million from $120 million in 2004. The pension expense portion of ret 

expense is expected to decrease to pproximately $63 million for 2005 cor 

million in 2004 as actual returns on pension assets in 2004 were higher tt 

This decrease is partially offset by a lower assumed discount rate to valw 

benefit liabilities. Postretirement medical expense for 2005, which is now 

approximately $17 million compared to $46 million for 2004, will continue 

the actions taken in the second quarter 2004 to control retiree medical co 

partially offset by a lower assumed discount rate to value plan liabilities. 1 

2005 postretirement medical expense reflects a $7 million reduction from 

2005 estimate due primarily to a revision of the projected impact of the M 

prescription drug legislation resulting from updated regulations. 

o ATI is not required to make cash contributions to its U.S. defined benefit 1 

for 2005, and based on current regulations and actuarial studies, ATI doe 

be required to make cash contributions to its U.S. defined benefit pensior 

the next several years. However, we may elect, depending upon investmE 

performance of the pension plan assets and other factors, to make volunt 

contributions to this pension plan in the future. 

Other Expenses 

o Corporate expenses for the first quarter 2005 were $10.3 million comparE 

million in the year-ago period. This increase is due primarily to expenses 

cash and equity-based long-term performance-based incentive compens, 

o Excluding the effects of retirement benefit expense, selling and administrc 

as a percentage of sales declined to 6.3% in the 2005 first quarter from 7 

same period of 2004. 

o First quarter 2005 interest expense, net of interest income, increased to ~ 

from $8.2 million in the year-ago period primarily related to interest assoc 

financing of the June 2004 J&L asset acquisition and higher short-term in 

Income Taxes 

The 2005 first quarter includes a provision for income taxes of $2.3 million, whic 

related to foreign and state income taxes. No income tax provision or benefit wa 

in 2004. We maintain a valuation allowance for a major portion of our deferred t; 

accordance with SFAS No.1 09, "Accounting for Income Taxes". Future tax prO\ 

benefits will be recognized when taxable income exceeds net operating tax loss 

resulting in cash tax payments, or when tax losses, if any, are recoverable as CE 

due to changes in our judgment regarding the realizability of our deferred tax as 

Cash Flow, Working Capital and Debt 

• Cash on hand was $231.2 million at March 31, 2005.Cash flow used in 01 

during the first quarter 2005 was $4.7 million as the significant improvemE 

earnings was more than offset by a $122.2 million investment in manage< 

capital. 

o The investment in managed working capital resulted from a $68.2 million 

accounts receivable, which reflects the significantly higher level of sales il 

quarter 2005 compared to the fourth quarter 2004, and a $63.3 million inc 

inventory mostly as a result of higher raw material costs and increased bL 

volumes, partially offset by a $9.3 million increase in accounts payable. til 

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Allegheny Technologies Page 5 of 10

increase in raw material costs is expected to be recovered through surch,

pricing mechanisms.

® At March 31, 2005, managed working capital improved to 27.2% of annuE

compared to 29.5% of annualized sales at year-end 2004. We define mar

capital as accounts receivable and gross inventories less accounts payat

in investing activities was $7.8 million in the first quarter 2005 and consist

capital expenditures.

® Cash used in financing activities was $7.1 million in the first quarter 2005

decrease in net borrowings of $5.8 million and payment of dividends of $!

offset by $4.5 million of proceeds received from the exercise of stock opti,

® Net debt as a percentage of total capitalization improved to 39.4% at Mar

from 43.8% at the end of 2004.

® There were no borrowings outstanding during 2005 or 2004 under ATI's

secured domestic borrowing facility, although a portion of the letters of crn

was utilized.

New Accounting Pronouncement Adopted in 2005

In the first quarter 2005, the Company adopted Statement of Financial Accounti

No. 123R, "Share-Based Payment". Under the revised standard, companies ma

account for share-based compensation transactions, such as stock options, resl

and potential payments under programs such as our Total Shareholder Return r

intrinsic value method as defined in APB Opinion No. 25. Instead, companies ar

account for such equity transactions using an approach in which the fair value o

estimated at the date of grant and recognized as an expense over the requisite

Compensation expense is adjusted for equity awards that do not vest because

performance conditions are not satisfied. However, compensation expense alre;

is not adjusted if market conditions are not met, such as stock options expiring

money". We adopted the new standard using the modified prospective method

with the first quarter 2005 will reflect compensation expense in accordance with

123R transition provisions. Under the modified prospective method, the effect of

is recognized in the period of adoption and in future periods. Prior periods are ni

reflect the impact of adopting the new standard at earlier dates.

First quarter 2005 compensation expense related to share-based incentive plan

million compared to $1.2 million in the first quarter 2004. First quarter 2005 shar

compensation expense includes $0.8 million related to expensing of stock optioi

Allegheny Technologies will conduct a conference call with investors and analy:

2005, at 1 p.m. ET to discuss the financial results. The conference call will be br

www.alleghenytechnologies.com. To access the broadcast, click on "Confereno

addition, the conference call will be available through the CCBN website, locate,

www.ccbn.com.

This news release contains "forward-looking statements" within the meaning of

Securities Litigation Reform Act of 1995. Certain statements in this news release

future events and expectations and, as such, constitute forward-looking statemE

looking statements include those containing such words as "anticipates," "belie

"estimates," "expects," "would," "should," "will," "will likely result," "forecast," "ou

"projects," and similar expressions. Forward-looking statements are based on rr

current expectations and include known and unknown risks, uncertainties and o

many of which we are unable to predict or control, that may cause our actual re,,

performance or achievements to materially differ from those expressed or impliE

forward-looking statements. Important factors that could cause actual results to

from those in the forward-looking statements include: (a) material adverse char

economic or industry conditions generally, including global supply and demand

prices for our specialty materials; (b) material adverse changes in the markets v

including the commercial aerospace, construction and mining, automotive, elect

chemical process industry and oil and gas, government, and other markets; (c)

achieve the level of cost savings, productivity improvements, synergies, growth

benefits anticipated by management, including those anticipated from the integr

acquired businesses, whether due to significant increases in energy, raw mated

employee benefits costs or other factors; (d) volatility of prices and availability o'

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 EE-RM/STD-00-550 COMMENT 86

Allegheny Technologies Page 5 of 10 

increase in raw material costs is expected to be recovered through surch, 

pricing mechanisms. 

G At March 31,2005, managed working capital improved to 27.2% of annuc 

compared to 29.5% of annualized sales at year-end 2004. We define mar 

capital as accounts receivable and gross inventories less accounts payat 

in investing activities was $7.8 million in the first quarter 2005 and consisl 

capital expenditures. 

G Cash used in financing activities was $7.1 million in the first quarter 2005 

decrease in net borrowings of $5.8 million and payment of dividends of $! 

offset by $4.5 million of proceeds received from the exercise of stock opH 

G Net debt as a percentage of total capitalization improved to 39.4% at Mar 

from 43.8% at the end of 2004. 

G There were no borrowings outstanding during 2005 or 2004 under ATI's ~ 

secured domestic borrowing facility, although a portion of the letters of cn 

was utilized. 

New Accounting Pronouncement Adopted in 2005 

In the first quarter 2005, the Company adopted Statement of Financial Accounti 

No. 123R, "Share-Based Payment". Under the revised standard, companies ma 

account for share-based compensation transactions, such as stock options, res1 

and potential payments under programs such as our Total Shareholder Return r 

intrinsic value method as defined in APB Opinion No. 25. Instead, companies ar 

account for such equity transactions using an approach in which the fair value 0 

estimated at the date of grant and recognized as an expense over the requisite 

Compensation expense is adjusted for equity awards that do not vest because ~ 

performance conditions are not satisfied. However, compensation expense alre, 

is not adjusted if market conditions are not met, such as stock options expiring" 

money". We adopted the new standard using the modified prospective method ( 

with the first quarter 2005 will reflect compensation expense in accordance with 

123R transition provisions. Under the modified prospective method, the effect 01 

is recognized in the period of adoption and in future periods. Prior periods are n' 

reflect the impact of adopting the new standard at earlier dates. 

First quarter 2005 compensation expense related to share-based incentive plan 

million compared to $1.2 million in the first quarter 2004. First quarter 2005 shar 

compensation expense includes $0.8 million related to expensing of stock optiol 

Allegheny Technologies will conduct a conference call with investors and analy~ 

2005, at 1 p.m. ET to discuss the financial results. The conference call will be br 

www.alleghenytechnologies.com.Toaccessthebroadcast.click on "Confereno 

addition, the conference call will be available through the CCBN website, locate, 

www.ccbn.com. 

This news release contains "forward-looking statements" within the meaning of i 

Securities Litigation Reform Act of 1995. Certain statements in this news releast 

future events and expectations and, as such, constitute forward-looking statemE 

looking statements include those containing such words as "anticipates," "belie\! 

"estimates," "expects," "would," "should," "will," "will likely result," "forecast," "ou 

"projects," and similar expressions. Forward-looking statements are based on rr 

current expectations and include known and unknown risks, uncertainties and 0 

many of which we are unable to predict or control, that may cause our actual rel 

performance or achievements to materially differ from those expressed or impliE 

forward-looking statements. Important factors that could cause actual results to 

from those in the forward-looking statements include: (a) material adverse chan 

economic or industry conditions generally, including global supply and demand, 

prices for our specialty materials; (b) material adverse changes in the markets VI 

including the commercial aerospace, construction and mining, automotive, elect 

chemical process industry and oil and gas, government, and other markets; (c) t 

achieve the level of cost savings, productivity improvements, synergies, growth 

benefits anticipated by management, including those anticipated from the integr 

acquired businesses, whether due to significant increases in energy, raw materi 

employee benefits costs or other factors; (d) volatility of prices and availability 0: 

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Allegheny Technologies Page 6 of 10

raw materials that are critical to the manufacture of our products; (e) declines in

our defined benefit pension plan assets or unfavorable changes in laws or regul

govern pension plan funding ; (f) significant legal proceedings or investigations a

and (g ) the other risk factors summarized in our Annual Report on Form 10-K fo

ended December 31, 2004, and other reports filed with the Securities and Exchi

Commission . We assume no duty to update our forward -looking statements.

Allegheny Technologies Incorporated (NYSE:ATI) is one of the largest and mos

specialty materials producers in the world, with revenues of approximately $2.7

2004. The Company has approximately 9,000 full-time employees world-wide w

innovative technologies and advanced research and development to offer growi

markets a wide range of specialty materials solutions. High-value products inclu

based and cobalt-based alloys and superalloys, titanium and titanium alloys, spy

super stainless steel, exotic alloys, which include zirconium, hafnium and niobiu

materials, and highly engineered strip and Precision Rolled Strip® products. In

produce commodity specialty materials such as stainless steel sheet and plate,

steels, and forgings and castings. The Allegheny Technologies website can be t

w .al leghentechnologles.com.

Allegheny Technologies Incorporated and Subsidiaries

Consolidated Statements of Operations

(Unaudited - Dollars in millions, except per share amounts)

Three Mor

Marc

2005

Sales $ 879.6

Costs and expenses:

Cost of sales 738.3

Selling and administrative expenses 61.5

Income (loss) before interest, other income

(expense) and income taxes 79.8

Interest expense, net (10.4)

Other income (expense), net (0.8)

Income (loss) before income tax provision 68.6

Income tax provision 2.3

Net income (loss) $ 66.3

Basic net income (loss) per common share $ 0.69

Diluted net income (loss) per common share $ 0.66

Weighted average common shares

outstanding -- basic (millions) 95.4

Weighted average common shares

outstanding -- diluted (millions) 99.9

Actual common shares outstanding--

end of period (millions) 96.4

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 EE-RM/STD-00-550 COMMENT 86

Allegheny Technologies Page 6 of 10 

raw materials that are critical to the manufacture of our products; (e) declines in 

our defined benefit pension plan assets or unfavorable changes in laws or regul 

govern pension plan funding; (f) significant legal proceedings or investigations a 

and (g) the other risk factors summarized in our Annual Report on Form 1 O-K fo 

ended December 31,2004, and other reports filed with the Securities and Exch, 

Commission. We assume no duty to update our forward-looking statements. 

Allegheny Technologies Incorporated (NYSE:ATI) is one of the largest and mos 

specialty materials producers in the world, with revenues of approximately $2.7 

2004. The Company has approximately 9,000 full-time employees world-wide w 

innovative technologies and advanced research and development to offer growi 

markets a wide range of specialty materials solutions. High-value products inclu 

based and cobalt-based alloys and superalloys, titanium and titanium alloys, Spl 

super stainless steel, exotic alloys, which include zirconium, hafnium and niobiu 

materials, and highly engineered strip and Precision Rolled Strip® products. In c 

produce commodity specialty materials such as stainless steel sheet and plate, 

steels, and forgings and castings. The Allegheny Technologies website can be f 

Allegheny Technologies Incorporated and Subsidiaries 

Consolidated Statements of Operations 

(Unaudited - Dollars in millions, except per share amounts) 

Sales 

Costs and expenses: 

Cost of sales 

Selling and administrative expenses 

Income (loss) before interest, other income 

(expense) and income taxes 

Interest expense, net 

Other income (expense), net 

Income (loss) before income tax provision 

Income tax provision 

Net income (loss) 

Basic net income (loss) per cornmon share 

Diluted net income (loss) per cornmon share 

Weighted average common shares 

outstanding -- basic (millions) 

Weighted average common shares 

outstanding -- diluted (millions) 

Actual common shares outstanding--

end of period (millions) 

$ 

$ 

$ 

$ 

Three Mor 

Marc 

2005 

879.6 

738.3 

61. 5 

79.8 

(10.4) 

(0.8) 

68.6 

2.3 

66.3 

0.69 

0.66 

95.4 

99.9 

96.4 

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Allegheny Technologies Page 7 of 10

Allegheny Technologies Incorporated and Subsidiaries

Sales and Operating Profit (Loss) by Business Segment

(Unaudited - Dollars in millions)

Sales:

Flat-Rolled Products

High Performance Metals

Engineered Products

Total External Sales

Operating Profit (Loss):

Flat-Rolled Products

% of Sales

High Performance Metals

% of Sales

Engineered Products

% of Sales

Operating Profit (Loss)

% of Sales

Corporate expenses

Interest expense, net

Subtotal

Other expense, net of

gains on asset sales

Retirement benefit expense

Income (loss) before

income taxes

Allegheny Technologies Incorporated and Subsidiaries

Consolidated Balance Sheets

(Current period unaudited--Dollars in millions)

Q1 2C

$524.

262.

92.

$879.

$ 39.

7.

63.

24.

113.

12.

(10.

(10.

93.

(4.

(20.

$ 68.

March 31,

2005

ASSETS

Current Assets:

Cash and cash equivalents $ 231.2

Accounts receivable, net of allowances for

doubtful accounts of $9.1 and $8.4 at

March 31, 2005 and December 31, 2004,

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 EE-RM/STD-00-550 COMMENT 86

Allegheny Technologies Page 7 of 10 

Allegheny Technologies Incorporated and Subsidiaries 

Sales and Operating Profit (Loss) by Business Segment 

(Unaudited - Dollars in millions) 

Sales: 

Flat-Rolled Products 

High Performance Metals 

Engineered Products 

Total External Sales 

Operating Profit (Loss): 

Flat-Rolled Products 

% of Sales 

High Performance Metals 

% of Sales 

Engineered Products 

% of Sales 

Operating Profit (Loss) 

% of Sales 

Corporate expenses 

Interest expense, net 

Subtotal 

Other expense, net of 

gains on asset sales 

Retirement benefit expense 

Income (loss) before 

income taxes 

Allegheny Technologies Incorporated and Subsidiaries 

Consolidated Balance Sheets 

(Current period unaudited--Dollars in millions) 

Ql 2C 

$524. 

262. 

92. 

$879. 

$ 39. 

7. 

63. 

24. 

11. 

12. 

113. 

12. 

(10. 

(10. 

93. 

(4. 

(20. 

$ 68. 

March 31, I 

2005 

ASSETS 

Current Assets: 

Cash and cash equivalents 

Accounts receivable, net of allowances for 

doubtful accounts of $9.1 and $8.4 at 

March 31, 2005 and December 31, 2004, 

$ 231. 2 

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Allegheny Technologies Page 8 of 10

respectively 425.6

Inventories, net 568.1

Prepaid expenses and

other current assets 48.0

Total current assets 1,272.9

Property, plant and equipment, net 709.5

Cost in excess of net assets acquired 206.6

Deferred pension asset 122.3

Deferred income taxes 53.4

Other assets 61.4

Total Assets $ 2,426.1

LIABILITIES AND

STOCKHOLDERS' EQUITY

Current

Accounts

Liabilities:

payable $ 281.4

Accrued liabilities 201.7

Short term debt and current

portion of long-term debt 26.7

Total current liabilities 509.8

Long-term debt 549.6

Accrued postretirement benefits 470.5

Pension liabilities 255.6

Other long-term liabilities 109.5

Total liabilities 1,895.0

------------

Total stockholders' equity 531.1

Total Liabilities and Stockholders' Equity $ 2,426.1

Allegheny Technologies Incorporated and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited--Dollars in millions)

Three Mor

Max

2005

Operating Activities:

Net income (loss) $ 66.E

Depreciation and amortization 17.E

Change in managed working capital (122.2

Change in pension assets/liabilities 14.,

Postretirement benefits (2.2

Accrued liabilities and other 20.S

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 EE-RM/STD-00-550 COMMENT 86

Allegheny Technologies 

respectively 

Inventories, net 

Prepaid expenses and 

other current assets 

Total current assets 

Property, plant and equipment, net 

Cost in excess of net assets acquired 

Deferred pension asset 

Deferred income taxes 

Other assets 

Total Assets 

LIABILITIES AND 

STOCKHOLDERS' EQUITY 

Current Liabilities: 

Accounts payable 

Accrued liabilities 

Short term debt and current 

portion of long-term debt 

Total current liabilities 

Long-term debt 

Accrued postretirement benefits 

Pension liabilities 

Other long-term liabilities 

Total liabilities 

Total stockholders' equity 

Total Liabilities and Stockholders' Equity 

$ 

$ 

$ 

Page 8 of 10 

425.6 

568.1 

48.0 

1,272.9 

709.5 

206.6 

122.3 

53.4 

61. 4 

2,426.1 

281. 4 

201.7 

26.7 

509.8 

549.6 

470.5 

255.6 

109.5 

1,895.0 

531.1 

2,426.1 

Allegheny Technologies Incorporated and Subsidiaries 

Condensed Consolidated Statements of Cash Flows 

(Unaudited--Dollars in millions) 

Operating Activities: 

Net income (loss) 

Depreciation and amortization 

Change in managed working capital 

Change in pension assets/liabilities 

Postretirement benefits 

Accrued liabilities and other 

Three Mor 

Mar 

2005 

$ 66.~ 

17.E 

(122.::: 

14.~ 

(2. ::: 

20.~ 

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Allegheny Technologies Page 9 of 10

Cash used in operating activities (4.;

Investing Activities:

Purchases of property, plant and equipment (7.1

Asset disposals and other (O.E

Cash used in investing activities (7.E

Financing Activities:

Net decrease in debt (5. E

Dividends paid (5.E

Exercises of stock options 4._`

Cash used in financing activities (7.1

Decrease in cash and cash equivalents (19.E

Cash and cash equivalents at beginning of period 250.E

Cash and cash equivalents at end of period $ 231.2

Allegheny Technologies Incorporated and Subsidiaries

Selected Financial Data

(Unaudited)

Ql 20C

Volume:

Flat-Rolled Products (finished tons) 172,7E

Commodity 129,94

High value 42,84

High Performance Metals

(000's lbs.)

Nickel-based and

specialty steel alloys 0,34

Titanium mill products 6,1;

Exotic alloys 1,0^

Average Prices:

Fl at-Rolled Products (per finished ton) $3,01

Commodity $2,34

High value $5,1C

Hi gh Performance Metals (per lb.)

Nickel-based and specialty

steel alloys $ 9.;

Titanium mill products $17.1

Exotic alloys $40.4

All egheny Technologies Incorporated and Subsidiarie s

Oth

Man

(Un

er Financial Information

aged Working Capital

audited - Dollars in millions)

March 31,

2005

ecember 31,

2004

arcy

Change

Workl

Accounts receivable $ 425.6 $ 357.9

Inventory 568.1 513.0

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 EE-RM/STD-00-550 COMMENT 86

Allegheny Technologies Page 9 of 10 

Cash used in operating activities 

Investing Activities: 

Purchases of property, plant and equipment 

Asset disposals and other 

Cash used in investing activities 

Financing Activities: 

Net decrease in debt 

Dividends paid 

Exercises of stock options 

Cash used in financing activities 

Decrease in cash and cash equivalents 

Cash and cash equivalents at beginning of period 

(4 • ~ 

(7 • ~ 

(0. E 

(7. E 

(5. E 

(5. E 

4. : 

(7. ] 

(19. E 

250. E 

Cash and cash equivalents at end of period $ 231. ~ 

Allegheny Technologies Incorporated and Subsidiaries 

Selected Financial Data 

(Unaudi ted) 

Volum~: 

Flat-Rolled Products (finished tons) 

Commodity 

High value 

High Performance Metals 

(OOO's lbs.) 

Nickel-based and 

specialty steel alloys 

Titanium mill products 

Exotic alloys 

Average Prices: 

Flat-Rolled Products 

Commodity 

High value 

(per finished ton) 

High Performance Metals (per lb.) 

Nickel-based and specialty 

steel alloys 

Titanium mill products 

Exotic alloys 

Allegheny Technologies Incorporated and Subsidiaries 

Other Financial Information 

Managed Working Capital 

(Unaudited - Dollars in millions) 

Accounts receivable 

Inventory 

$ 

March 31, 

2005 

December 31, 

2004 

425.6 $ 

56S.1 

357.9 

513.0 

Ql 20C 

172,7E 

129, 9 L 

42,SL 

10,3 L 

6, 1~ 

I, O~ 

$3, O~ 

$2,3 L 

$5,lC 

$ 9. ~ 

$17 . ~ 

$40.L 

Marcr 

Change 

Workj 

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Allegheny Technologies Page 10 of 10

Accounts payable (281.4) (271.2)

-------------- ---------------

Subtotal 712.3 599.7

Allowance for doubtful

accounts 9.1 8.4

LIFO reserve 229.6 223.9

Corporate and other 23.8 20.6

Managed working

capital $ 974.8 $ 852.6 $

Annualized prior 2

months sales $ 3,588.0 $ 2,887.0

-------------- ---------------

Managed working

capital as a

% of annualized sales 27.2% 29.5%

As part of managing the liquidity in our business, we focus

controlling managed working capital, which is defined as gz

accounts receivable and gross inventories, less accounts pa

measuring performance in controlling this managed working c

exclude the effects of LIFO inventory valuation reserves, E

obsolete inventory reserves, and reserves for uncollectiblE

receivable which, due to their nature, are managed separatE

Allegheny Technologies Incorporated and Subsidiaries

Other Financial Information

Net Debt to Capital

(Unaudited - Dollars in millions)

March 31, Dec

2005

Total debt $ 576.3 $

Less: Cash (231.2)

--------------- ----

Net debt $ 345.1 $

Net debt $ 345.1 $

Stockholders' equity 531.1

Total capital $ 876.2 $

Net debt to capital ratio 39.4%

In managing the overall capital structure of the Company, c

measures on which we focus is net debt to total capitalizat

is the percentage of debt to the total invested and borrowE

of the Company. In determining this measure, debt and totE

capitalization are net of cash on hand which may be availal

reduce borrowings.

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 EE-RM/STD-00-550 COMMENT 86

Allegheny Technologies 

Accounts payable 

Subtotal 

Allowance for doubtful 

accounts 

LIFO reserve 

Corporate and other 

Managed working 

capital 

Annualized prior 2 

months sales 

Managed working 

capital as a 

% of annualized sales 

$ 

$ 

(281.4) 

712.3 

9.1 

229.6 

23.8 

974.8 $ 

3,588.0 $ 

27.2% 

Page 10 of 10 

(271.2) 

599.7 

8.4 

223.9 

20.6 

852.6 $ 

2,887.0 

29.5% 

As part of managing the liquidity in our business, we focuo 

controlling managed working capital, which is defined as gl 

accounts receivable and gross inventories, less accounts pc 

measuring performance in controlling this managed working c 

exclude the effects of LIFO inventory valuation reserves, E 

obsolete inventory reserves, and reserves for uncollectiblE 

receivable which, due to their nature, are managed separatE 

Allegheny Technologies Incorporated and Subsidiaries 

Other Financial Information 

Net Debt to Capital 

(Unaudited - Dollars in millions) 

March 31, Dec 

Total debt 

Less: Cash 

Net debt 

Net debt 

Stockholders' equity 

Total capital 

Net debt to capital ratio 

2005 

$ 576.3 $ 

(231. 2) 

---------------

$ 345.1 $ 

$ 345.1 $ 

531.1 

---------------

$ 876.2 $ 

39.4% 

In managing the overall capital structure of the Company, c 

measures on which we focus is net debt to total capitalizat 

is the percentage of debt to the total invested and borrowE 

of the Company. In determining this measure, debt and tote 

capitalization are net of cash on hand which may be availat 

reduce borrowings. 

### 

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