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Pension Plans and Other Postretirement Benefits (Tables)
 12 Months Ended
Dec. 31, 2013
Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract]  
Schedule of defined benefit plans
The components of pension and other postretirement benefit expense for the Company’s defined benefit plans included the following:
 
 
Pension Benefits
 
Other Postretirement Benefits
(in millions)
 
2013
 
2012
 
2011
 
2013
 
2012
 
2011
Service cost—benefits earned during the year
 
$
39.0

 
$
35.0

 
$
30.0

 
$
3.2

 
$
3.1

 
$
3.2

Interest cost on benefits earned in prior years
 
122.8

 
132.4

 
135.1

 
22.4

 
26.1

 
27.5

Expected return on plan assets
 
(176.0
)
 
(181.4
)
 
(192.1
)
 
(0.5
)
 
(0.8
)
 
(1.0
)
Amortization of prior service cost (credit)
 
3.0

 
6.4

 
11.3

 
(18.2
)
 
(18.2
)
 
(18.3
)
Amortization of net actuarial loss
 
111.8

 
105.2

 
71.3

 
17.2

 
14.6

 
9.9

Termination benefits
 
4.8

 
—

 
0.8

 
1.3

 
—

 
0.2

Total retirement benefit expense
 
$
105.4

 
$
97.6

 
$
56.4

 
$
25.4

 
$
24.8

 
$
21.5
Schedule of assumptions used
Actuarial assumptions used to develop the components of defined benefit pension expense and other postretirement benefit expense were as follows:
 
 
Pension Benefits
 
Other Postretirement Benefits
 
 
2013
 
2012
 
2011
 
2013
 
2012
 
2011
Discount rate (a) (b)
 
4.25 - 4.95%

 
5.00
%
 
5.45 - 5.8%

 
4.25
%
 
5.00
%
 
5.45 - 5.8%

Rate of increase in future compensation levels
 
3.0 - 3.50%

 
3.0 - 4.50%

 
2.5 - 4.5%

 
—

 
—

 
—

Expected long-term rate of return on assets
 
8.25
%
 
8.50
%
 
8.50
%
 
8.3
%
 
8.3
%
 
8.3
%
(a)
Pension expense for 2013 was initially measured at a 4.25% discount rate. The U.S. qualified pension plan was remeasured using a 4.95% discount rate as of October 31, 2013, following the sale of the tungsten materials business.
(b)
Pension and other postretirement benefit expense for 2011 was initially measured at a 5.8% discount rate. The Ladish pension and other postretirement benefit plans acquired on May 9, 2011 were valued using a 5.45% discount rate. Certain other postretirement benefit plan obligations were remeasured as of August 1, 2011 using a 5.5% discount rate as a result of benefit changes.
Schedule of assumptions used for year end valuation
Actuarial assumptions used for the valuation of defined benefit pension and other postretirement benefit obligations at the end of the respective periods were as follows:
 
 
Pension Benefits
 
Other Postretirement Benefits
 
 
2013
 
2012
 
2013
 
2012
Discount rate
 
5.15
%
 
4.25
%
 
5.15
%
 
4.25
%
Rate of increase in future compensation levels
 
3.0 - 3.5%

 
3.0 - 3.5%

 
—

 
—
Schedule of changes in projected benefit obligations
A reconciliation of the funded status for the Company’s defined benefit pension and other postretirement benefit plans at December 31, 2013 and 2012 was as follows:
 
 
Pension Benefits
 
Other Postretirement Benefits
(in millions)
 
2013
 
2012
 
2013
 
2012
Change in benefit obligations:
 
 
 
 
 
 
 
 
Benefit obligation at beginning of year
 
$
2,952.0

 
$
2,750.3

 
$
574.3

 
$
568.6

Service cost
 
39.0

 
35.0

 
3.2

 
3.1

Interest cost
 
122.8

 
132.4

 
22.4

 
26.1

Benefits paid
 
(195.6
)
 
(194.6
)
 
(52.9
)
 
(52.6
)
Subsidy paid
 
—

 
—

 
1.2

 
1.6

Participant contributions
 
0.1

 
0.6

 
—

 
—

Effect of currency rates
 
0.8

 
3.5

 
—

 
—

Net actuarial (gains) losses – discount rate change
 
(280.4
)
 
242.4

 
(36.9
)
 
35.7

                – other
 
54.7

 
(17.6
)
 
(5.9
)
 
(8.2
)
Special termination benefits
 
4.8

 
—

 
1.3

 
—

Benefit obligation at end of year
 
$
2,698.2

 
$
2,952.0

 
$
506.7

 
$
574.3
Schedule of changes in fair value of plan assets
Change in plan assets:
 
 
 
 
 
 
 
 
Fair value of plan assets at beginning of year
 
$
2,220.0

 
$
2,232.7

 
$
6.3

 
$
8.8

Actual returns on plan assets and plan expenses
 
293.8

 
164.7

 
(0.9
)
 
(1.6
)
Employer contributions
 
10.7

 
14.0

 
—

 
—

Participant contributions
 
0.1

 
0.6

 
—

 
—

Effect of currency rates
 
0.8

 
2.6

 
—

 
—

Benefits paid
 
(195.6
)
 
(194.6
)
 
(1.4
)
 
(0.9
)
Fair value of plan assets at end of year
 
$
2,329.8

 
$
2,220.0

 
$
4.0

 
$
6.3
Schedule of amounts recognized in balance sheet
Amounts recognized in the balance sheet:
 
 
 
 
 
 
 
 
Noncurrent assets
 
$
5.1

 
$
—

 
$
—

 
$
—

Current liabilities
 
(5.3
)
 
(10.9
)
 
(60.3
)
 
(72.8
)
Noncurrent liabilities
 
(368.2
)
 
(721.1
)
 
(442.4
)
 
(495.2
)
Total amount recognized
 
$
(368.4
)
 
$
(732.0
)
 
$
(502.7
)
 
$
(568.0
)
Schedule of amounts recognized in other comprehensive income
Changes to accumulated other comprehensive loss related to pension and other postretirement benefit plans in 2013 and 2012 were as follows:
 
 
Pension Benefits
 
Other Postretirement Benefits
(in millions)
 
2013
 
2012
 
2013
 
2012
Beginning of year accumulated other comprehensive loss
 
$
(1,474.7
)
 
$
(1,343.3
)
 
$
(191.9
)
 
$
(158.6
)
Amortization of net actuarial loss
 
111.8

 
105.2

 
17.2

 
14.6

Amortization of prior service cost (credit)
 
3.0

 
6.4

 
(18.2
)
 
(18.2
)
Remeasurements
 
343.5

 
(243.0
)
 
41.4

 
(29.7
)
End of year accumulated other comprehensive loss
 
$
(1,016.4
)
 
$
(1,474.7
)
 
$
(151.5
)
 
$
(191.9
)
Net change in accumulated other comprehensive loss
 
$
458.3

 
$
(131.4
)
 
$
40.4

 
$
(33.3
)
Schedule of net periodic benefit cost not yet recognized
Amounts included in accumulated other comprehensive loss at December 31, 2013 and 2012 were as follows:
 
 
Pension Benefits
 
Other Postretirement Benefits
(in millions)
 
2013
 
2012
 
2013
 
2012
Prior service (cost) credit
 
$
(7.7
)
 
$
(10.7
)
 
$
(8.7
)
 
$
9.5

Net actuarial loss
 
(1,008.7
)
 
(1,464.0
)
 
(142.8
)
 
(201.4
)
Accumulated other comprehensive loss
 
(1,016.4
)
 
(1,474.7
)
 
(151.5
)
 
(191.9
)
Deferred tax effect
 
390.7

 
562.7

 
58.3

 
73.9

Accumulated other comprehensive loss, net of tax
 
$
(625.7
)
 
$
(912.0
)
 
$
(93.2
)
 
$
(118.0
)
Schedule of amounts in accumulated other comprehensive income to be recognized
Amounts in accumulated other comprehensive loss that are expected to be recognized as components of net periodic benefit cost in 2014 are:
(in millions)
 
Pension
Benefits
 
Other
Postretirement
Benefits
 
Total
Amortization of prior service cost (credit)
 
$
2.3

 
$
(3.0
)
 
$
(0.7
)
Amortization of net actuarial loss
 
73.9

 
14.1

 
88.0

Amortization of accumulated other comprehensive loss
 
$
76.2

 
$
11.1

 
$
87.3
Schedule of accumulated benefit obligations in excess of fair value of plan assets
Additional information for pension plans with accumulated benefit obligations in excess of plan assets:
 
 
Pension Benefits
(in millions)
 
2013
 
2012
Projected benefit obligation
 
$
2,619.6

 
$
2,952.0

Accumulated benefit obligation
 
2,545.4

 
2,865.4

Fair value of plan assets
 
2,246.1

 
2,220.0
Schedule of expected benefit payments
The following table summarizes expected benefit payments from the Company’s various pension and other postretirement benefit defined benefit plans through 2023, and also includes estimated Medicare Part D subsidies projected to be received during this period based on currently available information.
(in millions)
 
Pension
Benefits
 
Other
Postretirement
Benefits
 
Medicare Part
D Subsidy
2014
 
$
190.5

 
$
65.5

 
$
1.3

2015
 
190.3

 
52.9

 
1.3

2016
 
190.8

 
49.5

 
1.3

2017
 
191.0

 
47.1

 
1.3

2018
 
191.6

 
44.7

 
1.2

2019 - 2023
 
958.8

 
184.4

 
5.4
Schedule of effect of one-percentage-point change in assumed health care cost trend rates
A one percentage point change in assumed health care cost trend rates would have the following effects:
(in millions)
 
One
Percentage
Point
Increase
 
One
Percentage
Point
Decrease
Effect on total of service and interest cost components for the year ended December 31, 2013
 
$
0.6

 
$
(0.5
)
Effect on other postretirement benefit obligation at December 31, 2013
 
$
10.2

 
$
(9.0
)
Schedule of allocation of plan assets
The fair values of the Company’s pension plan assets at December 31, 2013 by asset category and by the level of inputs used to determine fair value, were as follows:
(in millions)
 
 
 
Quoted Prices in
Active Markets for
Identical Assets
 
Significant
Observable Inputs
 
Significant
Unobservable Inputs
Asset category
 
Total
 
(Level 1)
 
(Level 2)
 
(Level 3)
Equity securities:
 
 
 
 
 
 
 
 
ATI common stock
 
$
105.3

 
$
105.3

 
$
—

 
$
—

Other U.S. equities (a)
 
746.0

 
257.2

 
488.8

 
—

International equities (b)
 
311.0

 
—

 
311.0

 
—

Global debt securities and cash: (c)
 
 
 
 
 
 
 
 
Fixed income and cash equivalents
 
508.0

 
—

 
507.2

 
0.8

Floating rate
 
294.5

 
—

 
—

 
294.5

Private equity
 
94.5

 
—

 
—

 
94.5

Hedge funds
 
139.7

 
—

 
—

 
139.7

Real estate and other
 
130.8

 
—

 
5.0

 
125.8

Total assets
 
$
2,329.8

 
$
362.5

 
$
1,312.0

 
$
655.3

(a)
Includes investments in comingled funds that invest in U.S. equity securities, comprised of approximately 90% large-cap U.S. companies and 10% small-cap U.S. companies.
(b)
Includes investments in comingled funds that invest in non-U.S. equity securities, comprised of approximately 80% developed countries and 20% emerging market economies.
(c)
Global debt securities include both fixed interest rate and floating interest rate instruments. These are comprised of actively managed investments which include U.S. government and U.S. government agency securities, foreign government securities, corporate bonds, mortgage-backed securities and other debt securities, and include both investment grade and non-investment grade debt, public and private debt, and secured and unsecured debt investments. To mitigate risk, investment managers have limitations regarding the amount of investment in particular securities and the credit quality of such investments.
Transfers from Level 1 to Level 2 of the fair value hierarchy were approximately $203 million in 2013 based on the Company's reassessment of fair value input measures and observable market data used to value certain investments, due to a changing mix of securities and the increased use of derivative financial instruments.
The fair values of the Company’s pension plan assets at December 31, 2012 by asset category and by the level of inputs used to determine fair value, were as follows:
(in millions)
 
 
 
Quoted Prices in
Active Markets for
Identical Assets
 
Significant
Observable Inputs
 
Significant
Unobservable Inputs
Asset category
 
Total
 
(Level 1)
 
(Level 2)
 
(Level 3)
Equity securities:
 
 
 
 
 
 
 
 
ATI common stock
 
$
89.7

 
$
89.7

 
$
—

 
$
—

Other U.S. equities (a)
 
601.1

 
198.2

 
402.9

 
—

International equities (b)
 
264.2

 
27.0

 
237.2

 
—

Fixed income and cash equivalents (c)
 
911.3

 
224.5

 
685.4

 
1.4

Private equity
 
85.5

 
—

 
—

 
85.5

Hedge funds
 
148.9

 
—

 
—

 
148.9

Real estate and other
 
119.3

 
4.8

 
10.1

 
104.4

Total assets
 
$
2,220.0

 
$
544.2

 
$
1,335.6

 
$
340.2

(a)
Includes investments in comingled funds that invest in U.S. equity securities, comprised of approximately 90% large-cap U.S. companies and 10% small-cap U.S. companies.
(b)
Includes investments in comingled funds that invest in non-U.S. equity securities, comprised of approximately 80% developed countries and 20% emerging market economies.
(c)
Fixed income investments are comprised of actively managed investments which include U.S. government and U.S. government agency securities, corporate bonds, mortgage-backed securities and other fixed income securities. To mitigate risk, investment managers have limitations regarding the amount of investment in particular securities and the credit quality of such investments.
Changes in fair value of level 3 plan investments
Changes in the fair value of Level 3 pension plan assets for the year ended December 31, 2013 were as follows:
(in millions)
 
January 1,
2013 Balance
 
Net Realized
and Unrealized
Gains (Losses)
 
Net Purchases,
Issuances and
Settlements
 
Net Transfers
Into (Out Of)
Level 3
 
December 31,
2013 Balance
Global debt securities and cash:
 
 
 
 
 
 
 
 
 
 
Fixed income and cash equivalents
 
$
1.4

 
$
0.1

 
$
(0.7
)
 
$
—

 
$
0.8

Floating rate debt
 
—

 
5.4

 
289.1

 
—

 
294.5

Private equity
 
85.5

 
3.9

 
5.1

 
—

 
94.5

Hedge funds
 
148.9

 
13.8

 
(23.0
)
 
—

 
139.7

Real estate and other
 
104.4

 
16.4

 
5.0

 
—

 
125.8

Total
 
$
340.2

 
$
39.6

 
$
275.5

 
$
—

 
$
655.3

Changes in the fair value of Level 3 pension plan assets for the year ended December 31, 2012 were as follows:
(in millions)
 
January 1,
2012 Balance
 
Net Realized
and Unrealized
Gains (Losses)
 
Net Purchases,
Issuances and
Settlements
 
Net Transfers
Into (Out Of)
Level 3
 
December 31,
2012 Balance
Fixed income and cash equivalents
 
$
1.9

 
$
0.2

 
$
(0.7
)
 
$
—

 
$
1.4

Private equity
 
82.4

 
0.6

 
2.5

 
—

 
85.5

Hedge funds
 
121.9

 
7.1

 
19.9

 
—

 
148.9

Real estate and other
 
87.6

 
8.8

 
8.0

 
—

 
104.4

Total
 
$
293.8

 
$
16.7

 
$
29.7

 
$
—

 
$
340.2
Schedule of target asset allocations for pension plans
The target asset allocations for pension plans for 2014, by major investment category, are:
Asset category
 
Target asset allocation range
Equity securities:
 
 
U. S. equities
 
18% - 40%
International equities
 
7% - 17%
Global debt securities and cash
 
35% - 48%
Private equity*
 
0% - 10%
Hedge funds*
 
0% - 10%
Real estate and other*
 
0% - 10%
Schedule of multiemployer plans
The Company’s participation in multiemployer plans for the years ended December 31, 2013, 2012 and 2011 is reported in the following table. Participation with regard to multiemployer plans involving ATI Ladish LLC is included from the May 9, 2011 Ladish Co., Inc. acquisition date.
 
 
 
 
Pension
Protection Act
Zone Status (1)
 
FIP / RP Status
Pending /
Implemented (2)
 
in millions
 
 
 
Expiration Dates
of Collective
Bargaining
Agreements
 
 
EIN / Pension
Plan Number
 
 
 
Company Contributions
 
Surcharge
Imposed (3)
 
Pension Fund
 
 
2013
 
2012
 
 
2013
 
2012
 
2011
 
 
Steelworkers Western Independent Shops Pension Plan
 
90-0169564
/ 001
 
Red
 
Red
 
Yes
 
$
1.0

 
$
1.3

 
$
1.2

 
No
 
6/30/2015
Boilermakers-Blacksmiths National Pension Trust
 
48-6168020
/ 001
 
Yellow
 
Yellow
 
Yes
 
2.2

 
2.4

 
1.2

 
No
 
10/30/2018
IAM National Pension Fund
 
51-6031295
/ 002
 
Green
 
Green
 
N/A
 
1.8

 
1.9

 
1.1

 
No
 
Various between 2018-2019 (4)
Total contributions
 
 
 
 
 
 
 
 
 
$
5.0

 
$
5.6

 
$
3.5

 
 
 
 
(1)
The most recent Pension Protection Act Zone Status available for ATI’s fiscal years 2013 and 2012 is for plan years ending in calendar years 2012 and 2011, respectively. The zone status is based on information provided to ATI and other participating employers by each plan and is certified by the plan’s actuary. A plan in the “red” zone had been determined to be in “critical status”, based on criteria established by the Code, and is generally less than 65% funded. A plan in the “yellow” zone has been determined to be in “endangered status”, based on criteria established under the Code, and is generally less than 80% funded. A plan in the “green” zone has been determined to be neither in “critical status” nor in “endangered status”, and is generally at least 80% funded.
(2)
The “FIP / RP status Pending / Implemented” column indicates whether a Funding Improvement Plan, as required under the Code by plans in the “yellow” zone, or a Rehabilitation Plan, as required under the Code to be adopted by plans in the “red” zone, is pending or has been implemented as of the end of the plan year that ended in 2013.
(3)
The “Surcharge Imposed” column indicates whether ATI’s contribution rate for 2013 included an amount in addition to the contribution rate specified in the applicable collective bargaining agreement, as imposed by a plan in “critical status”, in accordance with the requirements of the Code.
(4)
The Company is party to five separate bargaining agreements that require contributions to this plan. Expiration dates of these collective bargaining agreements range between February 25, 2018 and July 14, 2019.