Restructuring Charges

For the three and nine months ended September 30, 2016, the Company recorded restructuring charges of $488.6 million and $498.6 million, respectively, which are presented as restructuring charges in the consolidated statement of operations. These charges for the three months ended September 30, 2016 were comprised of $471.3 million in long-lived impairment charges, $16.3 million of facility shutdown and idling costs and $1.0 million of employee benefit costs.

On August 24, 2016, the Company announced the indefinite idling of the Rowley, UT titanium sponge production facility and the consolidation of certain titanium manufacturing operations. Over the last several years, significant global capacity has been added to produce titanium sponge, which is a key raw material used to produce ATI’s titanium products. In addition, demand for industrial-grade titanium products from global markets continues to be weak. As a result of these factors, titanium sponge, including aerospace quality sponge, can now be purchased from qualified global producers under long-term supply agreements at prices lower than the production costs at ATI’s titanium sponge facility in Rowley, UT. ATI has entered into long-term cost competitive supply agreements with several producers of premium-grade and standard-grade titanium sponge. The lower cost titanium sponge purchased under these supply agreements will replace the titanium sponge produced at the Rowley facility. As a result of these actions, the Company recorded a non-cash impairment charge of $470.8 million during the third quarter ended September 30, 2016 to reduce the carrying value of the Rowley, UT facility to an estimated fair value of $15.0 million. The long-lived asset impairment charges were based on analysis of the estimated fair values, including asset appraisals using cost, income and market approaches, which represent Level 3 unobservable information in the fair value hierarchy. In addition, during the third quarter ended September 30, 2016, the Company recognized $16.3 million of facility shutdown and idling costs, including contract termination costs, and $1.0 million of employee benefit costs including severance obligations. Additional closure costs for the Rowley facility, including additional severance costs for the elimination of approximately 150 positions, are expected to be recorded in the fourth quarter of 2016 with the orderly wind-down of operations through December 2016. The Rowley facility is being idled in a manner that allows the facility to be restarted in the future if supported by market conditions.

During the first quarter of 2016, a $9.0 million charge was recorded for severance obligations in the Flat Rolled Products (FRP) operations, with the reduction of approximately one-third of FRP’s salaried workforce through the elimination of over 250 positions, which is expected to be completed by the end of 2016. During the second quarter of 2016, an additional $1.0 million charge was recorded for severance obligations for approximately 20 employees in the High Performance Materials & Components segment.

Reserves for restructuring charges at September 30, 2016 consist of severance and employee benefit costs and closure costs incurred in both 2015 and 2016, the majority of which are expected to be paid over the next twelve months. Restructuring reserves are as follows:



	Severance and Employee Benefit Costs			Closure Costs			Total Restructuring Reserves
Balance at December 31, 2015	$	4.5		$	3.6		$	8.1
Additions	11.0			16.0			27.0
Payments	(8.6		)	(3.3		)	(11.9		)
Balance at September 30, 2016	$	6.9		$	16.3		$	23.2