Financial Information for Subsidiary and Guarantor Parent

The payment obligations under the $150.0 million 6.95% Debentures due 2025 issued by Allegheny Ludlum, LLC (formerly known as Allegheny Ludlum Corporation) (the “Subsidiary”) are fully and unconditionally guaranteed by Allegheny Technologies Incorporated (the “Guarantor Parent”). In accordance with positions established by the U.S. 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.

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.

Allegheny Technologies Incorporated

Financial Information for Subsidiary and Guarantor Parent

Balance Sheets

December 31, 2013



(In millions)	Guarantor Parent		Subsidiary		Non-guarantor Subsidiaries		Eliminations			Consolidated
Assets:
Cash and cash equivalents	$	3.6	$	13.5	$	1,009.7	$	—		$	1,026.8
Accounts receivable, net	0.3		179.4		348.5		—			528.2
Intercompany notes receivable	—		—		1,589.4		(1,589.4		)	—
Inventories, net	—		295.5		1,026.6		—			1,322.1
Prepaid expenses and other current assets	26.2		6.5		34.9		—			67.6
Current assets from discontinued operations	—		—		6.1		—			6.1
Total current assets	30.1		494.9		4,015.2		(1,589.4		)	2,950.8
Property, plant and equipment, net	2.9		1,397.5		1,473.7		—			2,874.1
Cost in excess of net assets acquired	—		112.1		615.8		—			727.9
Intercompany notes receivable	—		—		200.0		(200.0		)	—
Investments in subsidiaries	6,170.8		37.7		—		(6,208.5		)	—
Other assets	35.7		32.0		274.3		—			342.0
Non-current assets of discontinued operations	—		—		3.7		—			3.7
Total assets	$	6,239.5	$	2,074.2	$	6,582.7	$	(7,997.9	)	$	6,898.5
Liabilities and stockholders’ equity:
Accounts payable	$	3.1	$	310.5	$	158.2	$	—		$	471.8
Accrued liabilities	51.6		56.6		202.7		—			310.9
Intercompany notes payable	825.6		763.8		—		(1,589.4		)	—
Deferred income taxes	3.5		—		—		—			3.5
Short-term debt and current portion of long-term debt	402.9		0.1		16.9		—			419.9
Current liabilities of discontinued operations	—		—		4.9					4.9
Total current liabilities	1,286.7		1,131.0		382.7		(1,589.4		)	1,211.0
Long-term debt	1,350.8		150.4		26.2		—			1,527.4
Intercompany notes payable	—		200.0		—		(200.0		)	—
Accrued postretirement benefits	—		179.7		262.7		—			442.4
Pension liabilities	323.0		5.6		39.6		—			368.2
Deferred income taxes	206.6		—		—		—			206.6
Other long-term liabilities	77.7		20.2		50.3		—			148.2
Total liabilities	3,244.8		1,686.9		761.5		(1,789.4		)	3,903.8
Total stockholders’ equity	2,994.7		387.3		5,821.2		(6,208.5		)	2,994.7
Total liabilities and stockholders’ equity	$	6,239.5	$	2,074.2	$	6,582.7	$	(7,997.9	)	$	6,898.5

Allegheny Technologies Incorporated

Financial Information for Subsidiary and Guarantor Parent

Statements of Operations

For the year ended December 31, 2013



(In millions)	Guarantor Parent			Subsidiary			Non-guarantor Subsidiaries		Eliminations			Consolidated
Sales	$	—		$	1,769.4		$	2,274.1	$	—		$	4,043.5
Cost of sales	75.2			1,748.8			1,966.9		—			3,790.9
Selling and administrative expenses	124.3			34.9			117.2		—			276.4
Restructuring costs	1.1			15.7			50.7		—			67.5
Income (loss) before interest, other income and income taxes	(200.6		)	(30.0		)	139.3		—			(91.3		)
Interest expense, net	(63.4		)	(37.2		)	35.4		—			(65.2		)
Other income (expense) including equity in income of unconsolidated subsidiaries	109.2			0.9			0.8		(109.2		)	1.7
Income (loss) from continuing operations before income taxes	(154.8		)	(66.3		)	175.5		(109.2		)	(154.8		)
Income tax provision (benefit)	(63.6		)	(20.0		)	40.4		(20.4		)	(63.6		)
Income (loss) from continuing operations	(91.2		)	(46.3		)	135.1		(88.8		)	(91.2		)
Income (loss) from discontinued operations, net of tax	252.8			—			252.8		(252.8		)	252.8
Net income (loss)	161.6			(46.3		)	387.9		(341.6		)	161.6
Less: Net income attributable to noncontrolling interest	—			—			7.6		—			7.6
Net income (loss) attributable to ATI	$	161.6		$	(46.3	)	$	380.3	$	(341.6	)	$	154.0

Allegheny Technologies Incorporated

Financial Information for Subsidiary and Guarantor Parent

Statements of Comprehensive Income

For the year ended December 31, 2013



(In millions)	Guarantor Parent			Subsidiary			Non-guarantor Subsidiaries		Eliminations			Consolidated
Net income (loss)	$	161.6		$	(46.3	)	$	387.9	$	(341.6	)	$	161.6
Other comprehensive income (loss)
Currency translation adjustment arising during the period	15.3			—			15.3		(15.3		)	15.3
Unrealized holding gain (loss) on securities	0.1			—			0.1		(0.1		)	0.1
Net derivative loss on hedge transactions	(6.9		)	—			—		—			(6.9		)
Pension and postretirement benefits	311.1			22.0			27.6		(49.6		)	311.1
Other comprehensive income (loss), net of tax	319.6			22.0			43.0		(65.0		)	319.6
Comprehensive income (loss)	481.2			(24.3		)	430.9		(406.6		)	481.2
Less: Comprehensive income attributable to noncontrolling interest	—			—			11.0		—			11.0
Comprehensive income (loss) attributable to ATI	$	481.2		$	(24.3	)	$	419.9	$	(406.6	)	$	470.2

Condensed Statements of Cash Flows

For the year ended December 31, 2013



(In millions)	Guarantor Parent			Subsidiary			Non-guarantor Subsidiaries			Eliminations			Consolidated
Cash flows provided by (used in) operating activities	$	(41.1	)	$	(50.4	)	$	484.2		$	(24.3	)	$	368.4
Investing Activities:
Purchases of property, plant and equipment	(0.2		)	(564.8		)	(47.7		)	—			(612.7		)
Net receipts (payments) on intercompany activity	—			—			(248.8		)	248.8			—
Proceeds from sale of business, net of transaction costs	(7.9		)	—			608.8			—			600.9
Asset disposals and other	—			0.2			0.6			—			0.8
Cash flows provided by (used in) investing activities	(8.1		)	(564.6		)	312.9			248.8			(11.0		)
Financing Activities:
Borrowings on long-term debt	500.0			—			—			—			500.0
Net receipts (payments) on intercompany activity	(366.7		)	615.5			—			(248.8		)	—
Dividends paid to stockholders	(76.9		)	—			(24.3		)	24.3			(76.9		)
Other	(9.1		)	(0.1		)	(49.1		)	—			(58.3		)
Cash flows provided by (used in) financing activities	47.3			615.4			(73.4		)	(224.5		)	364.8
Increase (decrease) in cash and cash equivalents	$	(1.9	)	$	0.4		$	723.7		$	—		$	722.2

Allegheny Technologies Incorporated

Financial Information for Subsidiary and Guarantor Parent

Balance Sheets

December 31, 2012



(In millions)	Guarantor Parent		Subsidiary		Non-guarantor Subsidiaries		Eliminations			Consolidated
Assets:
Cash and cash equivalents	$	5.5	$	13.1	$	286.0	$	—		$	304.6
Accounts receivable, net	0.4		190.1		422.8		—			613.3
Intercompany notes receivable	—		—		1,289.9		(1,289.9		)	—
Inventories, net	—		311.1		1,225.5		—			1,536.6
Prepaid expenses and other current assets	1.1		10.2		44.8		—			56.1
Total current assets	7.0		524.5		3,269.0		(1,289.9		)	2,510.6
Property, plant and equipment, net	3.9		882.2		1,673.8		—			2,559.9
Cost in excess of net assets acquired	—		112.1		628.0		—			740.1
Deferred income taxes	71.5		—		—		—			71.5
Intercompany notes receivable	—		—		200.1		(200.1		)	—
Investments in subsidiaries	5,545.4		33.7		—		(5,579.1		)	—
Other assets	50.5		35.5		279.7		—			365.7
Total assets	$	5,678.3	$	1,588.0	$	6,050.6	$	(7,069.1	)	$	6,247.8
Liabilities and stockholders’ equity:
Accounts payable	$	5.3	$	262.6	$	232.0	$	—		$	499.9
Accrued liabilities	64.0		62.2		204.3		—			330.5
Intercompany notes payable	1,073.4		216.5		—		(1,289.9		)	—
Deferred income taxes	24.0		—		—		—			24.0
Short-term debt and current portion of long-term debt	0.3		0.1		16.7		—			17.1
Total current liabilities	1,167.0		541.4		453.0		(1,289.9		)	871.5
Long-term debt	1,253.4		150.5		59.1		—			1,463.0
Intercompany notes payable	—		200.1		—		(200.1		)	—
Accrued postretirement benefits	—		198.2		297.0		—			495.2
Pension liabilities	651.7		5.1		64.3		—			721.1
Other long-term liabilities	19.1		20.8		70.0		—			109.9
Total liabilities	3,091.2		1,116.1		943.4		(1,490.0		)	3,660.7
Total stockholders’ equity	2,587.1		471.9		5,107.2		(5,579.1		)	2,587.1
Total liabilities and stockholders’ equity	$	5,678.3	$	1,588.0	$	6,050.6	$	(7,069.1	)	$	6,247.8

The condensed consolidating balance sheets at December 31, 2012 have been restated to revise the presentation of intercompany balances, and to reflect equity elimination entries between Non-guarantor Subsidiaries within the Non-guarantor balance sheet, rather than as part of Eliminations. These revisions increased Non-guarantor balances of total current assets $1,289.9 million and total assets $1,112.7 million, decreased total current liabilities and total liabilities $196.8 million, and increased total stockholders' equity $1,309.5 million. The Subsidiary balances of total assets, total current liabilities and total liabilities were each reduced by $141.1 million to reclassify intercompany balances to a net payable presentation. There was no impact to the consolidated financial statements as result of these presentation changes.

Allegheny Technologies Incorporated

Financial Information for Subsidiary and Guarantor Parent

Statements of Operations

For the year ended December 31, 2012



(In millions)	Guarantor Parent			Subsidiary			Non-guarantor Subsidiaries			Eliminations			Consolidated
Sales	$	—		$	2,031.8		$	2,635.1		$	—		$	4,666.9
Cost of sales	57.0			1,888.2			2,096.2			—			4,041.4
Selling and administrative expenses	144.2			42.6			134.8			—			321.6
Income (loss) before interest, other income and income taxes	(201.2		)	101.0			404.1			—			303.9
Interest expense, net	(60.7		)	(10.5		)	(0.4		)	—			(71.6		)
Other income (expense) including equity in income of unconsolidated subsidiaries	494.2			(21.5		)	31.8			(504.5		)	—
Income (loss) from continuing operations before income taxes	232.3			69.0			435.5			(504.5		)	232.3
Income tax provision (benefit)	72.4			27.5			168.7			(196.2		)	72.4
Income (loss) from continuing operations	159.9			41.5			266.8			(308.3		)	159.9
Income (loss) from discontinued operations, net of tax	7.9			—			7.9			(7.9		)	7.9
Net income (loss)	167.8			41.5			274.7			(316.2		)	167.8
Less: Net income attributable to noncontrolling interest	—			—			9.4			—			9.4
Net income (loss) attributable to ATI	$	167.8		$	41.5		$	265.3		$	(316.2	)	$	158.4

Allegheny Technologies Incorporated

Financial Information for Subsidiary and Guarantor Parent

Statements of Comprehensive Income

For the year ended December 31, 2012



(In millions)	Guarantor Parent			Subsidiary			Non-guarantor Subsidiaries			Eliminations			Consolidated
Net income (loss)	$	167.8		$	41.5		$	274.7		$	(316.2	)	$	167.8
Other comprehensive income (loss)
Currency translation adjustment arising during the period	14.3			—			14.3			(14.3		)	14.3
Net derivative loss on hedge transactions	(2.8		)	—			—			—			(2.8		)
Pension and postretirement benefits	(97.4		)	(18.1		)	(5.1		)	23.2			(97.4		)
Other comprehensive income (loss), net of tax	(85.9		)	(18.1		)	9.2			8.9			(85.9		)
Comprehensive income (loss)	81.9			23.4			283.9			(307.3		)	81.9
Less: Comprehensive income attributable to noncontrolling interest	—			—			11.3			—			11.3
Comprehensive income (loss) attributable to ATI	$	81.9		$	23.4		$	272.6		$	(307.3	)	$	70.6

Condensed Statements of Cash Flows

For the year ended December 31, 2012



(In millions)	Guarantor Parent			Subsidiary			Non-guarantor Subsidiaries			Eliminations			Consolidated
Cash flows provided by (used in) operating activities	$	(52.3	)	$	43.9		$	435.9		$	—		$	427.5
Investing Activities:
Purchases of property, plant and equipment	(1.7		)	(308.6		)	(71.7		)	—			(382.0		)
Net receipts (payments) on intercompany activity	—			—			(304.4		)	304.4			—
Asset disposals and other	—			0.3			3.0			—			3.3
Cash flows provided by (used in) investing activities	(1.7		)	(308.3		)	(373.1		)	304.4			(378.7		)
Financing Activities:
Net receipts (payments) on intercompany acivity	156.5			147.9			—			(304.4		)	—
Dividends paid to stockholders	(76.5		)	—			—			—			(76.5		)
Other	(21.2		)	(0.1		)	(27.0		)	—			(48.3		)
Cash flows provided by (used in) financing activities	58.8			147.8			(27.0		)	(304.4		)	(124.8		)
Increase (decrease) in cash and cash equivalents	$	4.8		$	(116.6	)	$	35.8		$	—		$	(76.0	)

The condensed consolidating statements of cash flows for the year ended December 31, 2012 have been revised to reclassify intercompany activities between operating, investing and financing activities, rather than entirely as financing activities, as previously presented. These revisions increased (decreased) cash flows provided by (used in) the consolidating statements of cash flows as follows, in millions: operating activities for the Guarantor Parent, Subsidiary, Non-guarantor Subsidiaries and Eliminations, $(0.2), $(13.8), $13.2 and $0.8, respectively; investing activities for the Non-guarantor Subsidiaries and Eliminations, $(304.4) and $304.4, respectively; and financing activities for the Guarantor Parent, Subsidiary, Non-guarantor Subsidiaries and Eliminations, $0.2, $13.8, $291.2 and $(305.2), respectively.

Allegheny Technologies Incorporated

Financial Information for Subsidiary and Guarantor Parent

Statements of Operations

For the year ended December 31, 2011



(In millions)	Guarantor Parent			Subsidiary			Non-guarantor Subsidiaries			Eliminations			Consolidated
Sales	$	—		$	2,363.4		$	2,448.9		$	—		$	4,812.3
Cost of sales	27.4			2,129.2			1,918.9			—			4,075.5
Selling and administrative expenses	161.6			50.9			110.5			—			323.0
Income (loss) before interest, other income and income taxes	(189.0		)	183.3			419.5			—			413.8
Interest expense, net	(81.6		)	(10.4		)	(0.3		)	—			(92.3		)
Other income (expense) including equity in income of unconsolidated subsidiaries	592.7			4.1			2.6			(598.8		)	0.6
Income (loss) from continuing operations, before income taxes	322.1			177.0			421.8			(598.8		)	322.1
Income tax provision (benefit)	110.4			68.8			142.2			(211.0		)	110.4
Income (loss) from continuing operations	211.7			108.2			279.6			(387.8		)	211.7
Income (loss) from discontinued operations, net of tax	11.4			—			11.4			(11.4		)	11.4
Net income (loss)	223.1			108.2			291.0			(399.2		)	223.1
Less: Net income (loss) attributable to noncontrolling interest	—			—			8.8			—			8.8
Net income (loss) attributable to ATI	$	223.1		$	108.2		$	282.2		$	(399.2	)	$	214.3

Allegheny Technologies Incorporated

Financial Information for Subsidiary and Guarantor Parent

Statements of Comprehensive Income

For the year ended December 31, 2011



(In millions)	Guarantor Parent			Subsidiary			Non-guarantor Subsidiaries			Eliminations			Consolidated
Net income (loss)	$	223.1		$	108.2		$	291.0		$	(399.2	)	$	223.1
Other comprehensive income (loss)
Currency translation adjustment arising during the period	2.7			—			2.7			(2.7		)	2.7
Unrealized holding gain (loss) on securities	(0.1		)	—			(0.1		)	0.1			(0.1		)
Net derivative gain on hedge transactions	3.8			—			—			—			3.8
Pension and postretirement benefits	(277.1		)	(32.9		)	(20.9		)	53.8			(277.1		)
Other comprehensive income (loss), net of tax	(270.7		)	(32.9		)	(18.3		)	51.2			(270.7		)
Comprehensive income (loss)	(47.6		)	75.3			272.7			(348.0		)	(47.6		)
Less: Comprehensive income attributable to noncontrolling interest	—			—			14.6			—			14.6
Comprehensive income (loss) attributable to ATI	$	(47.6	)	$	75.3		$	258.1		$	(348.0	)	$	(62.2	)

Condensed Statements of Cash Flows

For the year ended December 31, 2011



(In millions)	Guarantor Parent			Subsidiary			Non-guarantor Subsidiaries			Eliminations			Consolidated
Cash flows provided by (used in) operating activities	$	58.9		$	58.3		$	190.4		$	(10.8	)	$	296.8
Investing Activities:
Purchases of property, plant and equipment	(1.1		)	(174.1		)	(103.0		)	—			(278.2		)
Net receipts (payments) on intercompany activity	—			95.9			—			(95.9		)	—
Purchases of businesses	(384.0		)	—			34.8			—			(349.2		)
Asset disposals and other	—			1.0			1.7			—			2.7
Cash flows provided by (used in) investing activities	(385.1		)	(77.2		)	(66.5		)	(95.9		)	(624.7		)
Financing Activities:
Borrowings on long-term debt	500.0			—			—			—			500.0
Payments on long-term debt	(116.7		)	(10.5		)	(16.6		)	—			(143.8		)
Net receipts (payments) on intercompany activity	11.3			—			(107.2		)	95.9			—
Dividends paid to stockholders	(74.7		)	—			(10.8		)	10.8			(74.7		)
Other	5.2			—			(10.5		)	—			(5.3		)
Cash flows provided by (used in) financing activities	325.1			(10.5		)	(145.1		)	106.7			276.2
Increase (decrease) in cash and cash equivalents	$	(1.1	)	$	(29.4	)	$	(21.2	)	$	—		$	(51.7	)

The condensed consolidating statements of cash flows for the year ended December 31, 2011 have been revised to reclassify intercompany activities between operating, investing and financing activities, rather than entirely as financing activities, as previously presented. These revisions increased (decreased) cash flows provided by (used in) the consolidating statements of cash flows as follows, in millions: operating activities for the Guarantor Parent, Subsidiary, Non-guarantor Subsidiaries and Eliminations, $75.1, $(19.9), $(44.4) and $(10.8), respectively; investing activities for the Subsidiary, Non-guarantor Subsidiaries and Eliminations, $83.6, $7.8 and $(91.4), respectively; and financing activities for the Guarantor Parent, Subsidiary, Non-guarantor Subsidiaries and Eliminations, $(75.1), $(63.7), $36.6 and $102.2, respectively.