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ATI ANNUAL REPOR ANNUAL ATI T 20 Corporate Headquarters 11 1000 Six PPG Place Pittsburgh, PA 15222-5479 U.S.A. 412-394-2800 ATImetals.com © 2012 ATI INVestor INFORMation CONTENTS CONTENTS Corporate Headquarters Stockholder Publications FINANCIAL REVIEW 1 1000 Six PPG Place Annual reports and proxy statements are mailed to all stockholders of Pittsburgh, PA 15222-5479 record. These publications and Reports on Form 10-K and Form MESSAGE FROM THE CHAIRMAN, 10-Q and other information may also be obtained through the PRESIDENT AND 412-394-2800 CHIEF EXECUTIVE OFFICER 3 Company’s website www.ATImetals.com. Annual Meeting INTEGRATED AEROSPACE SUPPLY CHAIN 8 The Annual Meeting of Stockholders will be For additional information contact: AEROSPACE ENGINES 10 held on May 11, 2012 at 11:00 a.m. Investor Relations and Corporate Communications at corporate headquarters, or by calling 412-394-3004. INTEGRATED OIL & GAS SUPPLY CHAIN 12 Grand Ballroom, 17th Floor Omni William Penn Hotel WHAT WE MAKE AND WHERE IT GOES 14 530 William Penn Place, Pittsburgh, PA 15219 Independent Auditors ATI PRODUCTS AND MARKETS 16 Ernst & Young LLP Transfer Agent and Registrar Pittsburgh, PA SEGMENT INFORMATION 17 Computershare (formerly BNY Mellon) GLOSSARY OF TERMS 18 P.O. Box 358015 Form 10-K CORPORATE SELF-GOVERNANCE 20 Pittsburgh, PA 15252-8015 The Company submits an annual report to the Securities and or Exchange Commission (SEC) on Form 10-K. Copies of the ANNUAL REPORT ON FORM 10-K F1 480 Washington Boulevard Form 10-K are available upon written request to the Corporate MANAGEMENT TEAM 21 Jersey City, NJ 07310-1900 Secretary at the corporate headquarters. BOARD OF DIRECTORS 22 1-800-406-4850 www.bnymellon.com/shareowner/equityaccess INVESTOR INFORMATION 23 (Information about dividend checks, dividend tax information, and stock certificates, including lost or unexchanged certificates) Investor Services Program Computershare (formerly BNY Mellon) offers an Investor Services Program for current stockholders and interested investors which includes: • Voluntary purchases of Allegheny Technologies common stock for new investors and current stockholders Stock Exchange Listing • Dividend reinvestment The common stock of Allegheny Technologies Incorporated • Direct deposit of dividends into your personal checking, is traded on the New York Stock Exchange (symbol ATI). savings or other account Options on the Company’s stock are traded on the American • Safekeeping of stock certificates at no charge Stock Exchange, the Chicago Board of Options Exchange, the Pacific Exchange, and on the Philadelphia Stock Exchange. To request Program information and enrollment forms, call: 1-866-353-7849 Internet Home Page To ask about the Program or your Program Allegheny Technologies’ Internet home page can be found at account, contact: www.ATImetals.com. Computershare (formerly BNY Mellon) P.O. Box 358035 Please visit our website for more information on the Company, Pittsburgh, PA 15252-8035 our products and operations. On this site you can find our news 1-800-406-4850 releases and SEC filings, and obtain instructions on how to transfer About the Cover ownership of your stock, sign-up for the Investor Services Program, ATI Pacific Cast Technologies Brian Lucero conducts an ultrasonic and directly deposit your dividend check, change your dividend payment visual inspection of a large titanium investment casting destined for an information and locate tax reporting information. aerospace engine. ATI ANNUAL REPORT 2011 ATI ANNUAL REPORT 2011 23 FINANCIAL REVIEW 2011 2010 2009 2008 2007 Sales $5.2 billion $4.0 billion $3.1 billion $5.3 billion $5.5 billion Segment Operating Profit $612.0 million $356.5 million $282.2 million $944.9 million $1,273.2 million Net Income Attributable to ATI $214.3 million $70.7 million $31.7 million $565.9 million $747.1 million Net Income per Common Share $1.97 $0.72 $0.32 $5.67 $7.26 Gross Cost Reductions(1) $124 million $135 million $173 million $134 million $112 million Managed Working Capital as % of Annualized Sales(2) 37.8% 34.4% 34.5% 35.2% 32.2% Net Debt(3) $1,128.7 million $631.0 million $362.3 million $39.9 million $(95.1) million Net Debt as % of Total Capitalization(4) 31.3% 23.6% 15.3% 2.0% (4.5)% Capital Investments and Asset Acquisitions $1,175.8 million $219.1 million $454.3 million $515.7 million $457.1 million (1) Before the effects of inflation. (2) Represents accounts receivable and gross inventory less accounts payable, excluding LIFO inventory reserves and other allowances. Sales annualized for last two months of the period. (3) Represents total debt less cash and cash equivalents. (4) Total capitalization is comprised of net debt plus total ATI stockholders’ equity. Top left: Senior Plasma Melter Lonnie Bowman looks through a viewport and instructs Below left: Sam Menzie, Operator Leader, in the ESR furnaces control room at ATI’s plasma control room operators on plasma torch position settings during the start-up of Latrobe, PA operations. the PAM-4 furnace at ATI’s Bakers, NC melting operations. Below right: X-ray analysis is one of several techniques employed by ATI Pacific Cast Bottom left: Investment casting begins in the wax assembly room at ATI Pacific Cast Tech- Technologies to assure the surface, internal integrity and dimensional excellence of its nologies. ATI Wax Assembler Mary E. Copeland joins several separate wax components products. ATI Technician Clayton Roth Jr. adds a visual inspection to his analysis of an to create a complete wax model. These wax models embody the effective combination of X-rayed near-net-shape titanium cast component. part design, die design, and molten metal solidification modeling. ATI ANNUAL REPORT 2011 1 FINANCIAL REVIEW Billions Millions $1,273 $6 $5.5 $1250 $5.3 $5.2 $4.9 $1,070 $5 $1000 $945 $4.0 $4 $3.5 $750 $3.1 $612 $3 $2.7 $542 $500 $2 $1.9$1.9 $357 $282 $1 $250 $174 $23$27 $0 $0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Sales Segment Operating Profit $747 Millions $8 $600 $574 $566 $7.26 $6 $5.61 $5.67 $400 $362 $4 $3.59 $214 $1.97 $200 $2 $71 $0.72 $32 $(0.82)$(3.89)$0.24 $0.32 $(314)$(66) $21 $0 $0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Earnings Per Share Net Income (Loss) Attributable to ATI Millions Millions $2,475 $2500 $800 $2,222 $709 $2,012 $2,041 $2000 $1,957 $623 $600 $1,503 $502 $470 $1500 $432 $400 $363 $381 $1000 $808 $251 $200 $500 $453 $431 $179 $59 $80 $0 $0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 ATI Stockholders’ Equity Cash and Cash Equivalents at End of Year at End of Year 2 ATI ANNUAL REPORT 2011 MESSAGE FROM THE CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER Creating Value for Our Customers and Stockholders In 2011, Secular Growth Resumed in Our Key Markets 011 was a much better year for ATI. As we entered 2011, have invested over $3.3 billion in capital expenditures and asset it was our view that the year would be marked by the acquisitions. ATI has self-funded approximately 75% of these resumption of secular growth in our key global markets. investments with the cash flow generated by our businesses. We This was realized in spite of the choppy recovery in the have created nearly 1,800 new jobs in just the last two years. U.S. economy and the mostly unanticipated impact from Our direct international sales were 35% in 2011, and we 2euro-zone sovereign debt issues. Our focus on product and market are proud that a U.S. manufacturer can achieve that level of diversification and a higher-value product mix, both of which are international sales. We are also proud to support our domestic key parts of ATI’s strategy, enabled ATI to achieve profitable growth customers who make important products in the U.S. for domestic in spite of a sluggish recovery in some of our short-cycle markets, and global markets – including such products as airplanes and jet particularly during the second half of 2011. engines, industrial gas turbines for electrical power generation, oil Revenues grew 28% over 2010 to nearly $5.2 billion. Growth in and gas equipment, and medical devices. our key markets combined with the May 2011 Ladish acquisition more than offset reduced demand and historically low base prices 2011 Major Accomplishments for our standard stainless products. Our key global markets, namely aerospace and defense, oil & gas/chemical process e understand that industry leadership and competitive industry, electrical energy, and medical, represented 70% of ATI Wadvantage exist only for a period of time. Status quo loses. sales in 2011. Growth in these key markets continued to be strong ATI is not the same company it was five years ago, and to be and sales were 33% higher than in 2010. Sales to the aerospace successful five years from now, ATI cannot be the same company and defense, oil & gas/chemical process industry, electrical energy, that it is today. and medical markets grew 44%, 41%, 16%, and 8%, respectively. Our ability to manufacture industry-leading mill products, Segment operating profit, excluding inventory fair value near-net shapes, and components made from Mission Critical accounting costs associated with the Ladish acquisition, was Metallics®, such as titanium and titanium alloys, nickel-based alloys $639 million, or 12% of sales. Earnings per share, excluding and superalloys, specialty alloys, and zirconium alloys, for our key special charges, was $2.23, which is 210% higher than 2010.