Financial Information for Subsidiary and Guarantor Parent

The payment obligations under the $150 million 6.95% debentures due 2025 issued by Allegheny Ludlum, LLC (the “Subsidiary”) are fully and unconditionally guaranteed by Allegheny Technologies Incorporated (the “Guarantor Parent”). In accordance with positions established by the 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.

ATI is the plan sponsor for the ATI Pension Plan, the Company’s 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 and valuation allowances. 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. The effects of income tax valuation allowances on U.S. Federal and State deferred tax assets are excluded from the Subsidiary’s financial results, and are reported by the Guarantor Parent or the non-guarantor subsidiaries, as applicable.

Allegheny Technologies Incorporated

Financial Information for Subsidiary and Guarantor Parent

Balance Sheets

September 30, 2017



(In millions)	Guarantor Parent		Subsidiary			Non-guarantor Subsidiaries		Eliminations			Consolidated
Assets:
Cash and cash equivalents	$	2.1	$	7.4		$	115.4	$	—		$	124.9
Accounts receivable, net	0.1		140.1			385.7		—			525.9
Intercompany notes receivable	—		—			3,425.7		(3,425.7		)	—
Inventories, net	—		154.2			946.9		—			1,101.1
Prepaid expenses and other current assets	9.7		10.0			32.5		—			52.2
Total current assets	11.9		311.7			4,906.2		(3,425.7		)	1,804.1
Property, plant and equipment, net	0.9		1,579.6			910.4		—			2,490.9
Goodwill	—		—			531.9		—			531.9
Intercompany notes receivable	—		—			200.0		(200.0		)	—
Investment in subsidiaries	5,524.0		37.7			—		(5,561.7		)	—
Other assets	26.5		18.6			203.1		—			248.2
Total assets	$	5,563.3	$	1,947.6		$	6,751.6	$	(9,187.4	)	$	5,075.1
Liabilities and stockholders’ equity:
Accounts payable	$	3.7	$	148.8		$	198.0	$	—		$	350.5
Accrued liabilities	42.9		83.1			160.7		—			286.7
Intercompany notes payable	1,783.8		1,641.9			—		(3,425.7		)	—
Short term debt and current portion of long-term debt	0.3		0.3			35.8		—			36.4
Total current liabilities	1,830.7		1,874.1			394.5		(3,425.7		)	673.6
Long-term debt	1,623.8		149.8			104.1		—			1,877.7
Intercompany notes payable	—		200.0			—		(200.0		)	—
Accrued postretirement benefits	—		235.6			67.6		—			303.2
Pension liabilities	630.5		4.8			42.9		—			678.2
Deferred income taxes	14.1		—			—		—			14.1
Other long-term liabilities	16.7		18.4			45.7		—			80.8
Total liabilities	4,115.8		2,482.7			654.8		(3,625.7		)	3,627.6
Total stockholders’ equity (deficit)	1,447.5		(535.1		)	6,096.8		(5,561.7		)	1,447.5
Total liabilities and stockholders’ equity	$	5,563.3	$	1,947.6		$	6,751.6	$	(9,187.4	)	$	5,075.1

Allegheny Technologies Incorporated

Financial Information for Subsidiary and Guarantor Parent

Statements of Operations and Comprehensive Income

For the three months ended September 30, 2017



(In millions)	Guarantor Parent			Subsidiary			Non-guarantor Subsidiaries			Eliminations			Consolidated
Sales	$	—		$	287.9		$	581.2		$	—		$	869.1
Cost of sales	10.4			283.8			481.6			—			775.8
Gross profit (loss)	(10.4		)	4.1			99.6			—			93.3
Selling and administrative expenses	25.8			8.6			31.8			—			66.2
Impairment of goodwill	—			—			114.4			—			114.4
Operating loss	(36.2		)	(4.5		)	(46.6		)	—			(87.3		)
Interest income (expense), net	(40.1		)	(22.9		)	28.8			—			(34.2		)
Other income (loss) including equity in income of unconsolidated subsidiaries	(45.0		)	0.3			(0.1		)	45.0			0.2
Income (loss) before income tax provision (benefit)	(121.3		)	(27.1		)	(17.9		)	45.0			(121.3		)
Income tax provision (benefit)	(1.9		)	(8.6		)	28.3			(19.7		)	(1.9		)
Net income (loss)	(119.4		)	(18.5		)	(46.2		)	64.7			(119.4		)
Less: Net income attributable to noncontrolling interests	—			—			1.8			—			1.8
Net income (loss) attributable to ATI	$	(119.4	)	$	(18.5	)	$	(48.0	)	$	64.7		$	(121.2	)
Comprehensive income (loss) attributable to ATI	$	(63.5	)	$	(15.5	)	$	(28.5	)	$	37.2		$	(70.3	)

Allegheny Technologies Incorporated

Financial Information for Subsidiary and Guarantor Parent

Statements of Operations and Comprehensive Income

For the nine months ended September 30, 2017



(In millions)	Guarantor Parent			Subsidiary			Non-guarantor Subsidiaries		Eliminations			Consolidated
Sales	$	—		$	866.3		$	1,748.9	$	—		$	2,615.2
Cost of sales	33.4			822.5			1,440.9		—			2,296.8
Gross profit (loss)	(33.4		)	43.8			308.0		—			318.4
Selling and administrative expenses	70.1			27.0			95.3		—			192.4
Impairment of goodwill	—			—			114.4		—			114.4
Operating income (loss)	(103.5		)	16.8			98.3		—			11.6
Interest income (expense), net	(118.4		)	(66.6		)	82.8		—			(102.2		)
Other income (loss) including equity in income of unconsolidated subsidiaries	135.0			1.1			2.6		(135.0		)	3.7
Income (loss) before income tax provision (benefit)	(86.9		)	(48.7		)	183.7		(135.0		)	(86.9		)
Income tax provision (benefit)	(2.0		)	(16.3		)	97.4		(81.1		)	(2.0		)
Net income (loss)	(84.9		)	(32.4		)	86.3		(53.9		)	(84.9		)
Less: Net income attributable to noncontrolling interests	—			—			8.7		—			8.7
Net income (loss) attributable to ATI	$	(84.9	)	$	(32.4	)	$	77.6	$	(53.9	)	$	(93.6	)
Comprehensive income (loss) attributable to ATI	$	(0.3	)	$	(27.1	)	$	109.9	$	(98.7	)	$	(16.2	)

Condensed Statements of Cash Flows

For the nine months ended September 30, 2017



(In millions)	Guarantor Parent			Subsidiary			Non-guarantor Subsidiaries			Eliminations			Consolidated
Cash flows provided by (used in) operating activities	$	(84.2	)	$	(83.1	)	$	113.5		$	—		$	(53.8	)
Investing Activities:
Purchases of property, plant and equipment	(0.5		)	(27.4		)	(57.4		)	—			(85.3		)
Net receipts/(payments) on intercompany activity	—			—			(205.1		)	205.1			—
Asset disposals and other	—			0.1			3.1			—			3.2
Cash flows provided by (used in) investing activities	(0.5		)	(27.3		)	(259.4		)	205.1			(82.1		)
Financing Activities:
Borrowings on long-term debt	—			—			8.5			—			8.5
Payments on long-term debt and capital leases	(0.3		)	(0.2		)	(1.4		)	—			(1.9		)
Net borrowings under credit facilities	—			—			28.0			—			28.0
Debt issuance costs	—			—			(0.8		)	—			(0.8		)
Net receipts/(payments) on intercompany activity	89.6			115.5			—			(205.1		)	—
Sale to noncontrolling interests	—			—			2.2			—			2.2
Shares repurchased for income tax withholding on share-based compensation and other	(4.8		)	—			—			—			(4.8		)
Cash flows provided by (used in) financing activities	84.5			115.3			36.5			(205.1		)	31.2
Increase (decrease) in cash and cash equivalents	$	(0.2	)	$	4.9		$	(109.4	)	$	—		$	(104.7	)

Allegheny Technologies Incorporated

Financial Information for Subsidiary and Guarantor Parent

Balance Sheets

December 31, 2016



	Guarantor					Non-guarantor
(In millions)	Parent		Subsidiary			Subsidiaries		Eliminations			Consolidated
Assets:
Cash and cash equivalents	$	2.3	$	2.5		$	224.8	$	—		$	229.6
Accounts receivable, net	0.1		107.8			344.2		—			452.1
Intercompany notes receivable	—		—			2,892.9		(2,892.9		)	—
Inventories, net	—		106.7			930.3		—			1,037.0
Prepaid expenses and other current assets	6.6		5.2			36.0		—			47.8
Total current assets	9.0		222.2			4,428.2		(2,892.9		)	1,766.5
Property, plant and equipment, net	1.3		1,583.6			914.0		—			2,498.9
Goodwill	—		—			641.9		—			641.9
Intercompany notes receivable	—		—			200.0		(200.0		)	—
Investment in subsidiaries	5,241.2		37.7			—		(5,278.9		)	—
Other assets	23.0		25.5			214.2		—			262.7
Total assets	$	5,274.5	$	1,869.0		$	6,398.3	$	(8,371.8	)	$	5,170.0
Liabilities and stockholders’ equity:
Accounts payable	$	3.1	$	97.4		$	193.8	$	—		$	294.3
Accrued liabilities	54.6		83.3			171.4		—			309.3
Intercompany notes payable	1,341.1		1,551.8			—		(2,892.9		)	—
Short term debt and current portion of long-term debt	0.4		0.3			104.4		—			105.1
Total current liabilities	1,399.2		1,732.8			469.6		(2,892.9		)	708.7
Long-term debt	1,621.7		150.0			0.2		—			1,771.9
Intercompany notes payable	—		200.0			—		(200.0		)	—
Accrued postretirement benefits	—		244.0			73.7		—			317.7
Pension liabilities	778.5		5.2			44.2		—			827.9
Deferred income taxes	15.6		—			—		—			15.6
Other long-term liabilities	14.7		18.1			50.6		—			83.4
Total liabilities	3,829.7		2,350.1			638.3		(3,092.9		)	3,725.2
Total stockholders’ equity (deficit)	1,444.8		(481.1		)	5,760.0		(5,278.9		)	1,444.8
Total liabilities and stockholders’ equity	$	5,274.5	$	1,869.0		$	6,398.3	$	(8,371.8	)	$	5,170.0

Allegheny Technologies Incorporated

Financial Information for Subsidiary and Guarantor Parent

Statements of Operations and Comprehensive Income

For the three months ended September 30, 2016



(In millions)	Guarantor Parent			Subsidiary			Non-guarantor Subsidiaries			Eliminations		Consolidated
Sales	$	—		$	253.0		$	517.5		$	—	$	770.5
Cost of sales	14.0			266.6			439.7			—		720.3
Gross profit (loss)	(14.0		)	(13.6		)	77.8			—		50.2
Selling and administrative expenses	23.8			4.2			32.5			—		60.5
Restructuring charges	—			0.5			488.1			—		488.6
Operating loss	(37.8		)	(18.3		)	(442.8		)	—		(498.9		)
Interest income (expense), net	(36.5		)	(19.3		)	23.2			—		(32.6		)
Other income (loss) including equity in income of unconsolidated subsidiaries	(457.2		)	0.2			(0.2		)	457.2		—
Income (loss) before income tax provision (benefit)	(531.5		)	(37.4		)	(419.8		)	457.2		(531.5		)
Income tax provision (benefit)	(4.3		)	(9.1		)	(165.8		)	174.9		(4.3		)
Net income (loss)	(527.2		)	(28.3		)	(254.0		)	282.3		(527.2		)
Less: Net income attributable to noncontrolling interests	—			—			3.6			—		3.6
Net income (loss) attributable to ATI	$	(527.2	)	$	(28.3	)	$	(257.6	)	$	282.3	$	(530.8	)
Comprehensive income (loss) attributable to ATI	$	(516.8	)	$	(27.0	)	$	(260.0	)	$	285.0	$	(518.8	)

Allegheny Technologies Incorporated

Financial Information for Subsidiary and Guarantor Parent

Statements of Operations and Comprehensive Income

For the nine months ended September 30, 2016



(In millions)	Guarantor Parent			Subsidiary			Non-guarantor Subsidiaries			Eliminations		Consolidated
Sales	$	—		$	727.7		$	1,610.8		$	—	$	2,338.5
Cost of sales	43.0			852.0			1,378.3			—		2,273.3
Gross profit (loss)	(43.0		)	(124.3		)	232.5			—		65.2
Selling and administrative expenses	66.3			18.8			97.3			—		182.4
Restructuring charges	—			9.5			489.1			—		498.6
Operating loss	(109.3		)	(152.6		)	(353.9		)	—		(615.8		)
Interest income (expense), net	(101.4		)	(51.0		)	61.2			—		(91.2		)
Other income (loss) including equity in income of unconsolidated subsidiaries	(494.5		)	0.6			1.5			494.2		1.8
Income (loss) before income tax provision (benefit)	(705.2		)	(203.0		)	(291.2		)	494.2		(705.2		)
Income tax provision (benefit)	(64.4		)	(70.1		)	(116.3		)	186.4		(64.4		)
Net income (loss)	(640.8		)	(132.9		)	(174.9		)	307.8		(640.8		)
Less: Net income attributable to noncontrolling interests	—			—			10.0			—		10.0
Net income (loss) attributable to ATI	$	(640.8	)	$	(132.9	)	$	(184.9	)	$	307.8	$	(650.8	)
Comprehensive income (loss) attributable to ATI	$	(592.6	)	$	(114.2	)	$	(199.0	)	$	307.8	$	(598.0	)

Condensed Statements of Cash Flows

For the nine months ended September 30, 2016



(In millions)	Guarantor Parent			Subsidiary			Non-guarantor Subsidiaries			Eliminations			Consolidated
Cash flows provided by (used in) operating activities	$	(73.0	)	$	(183.7	)	$	169.0		$	(24.0	)	$	(111.7	)
Investing Activities:
Purchases of property, plant and equipment	(0.5		)	(93.0		)	(81.4		)	—			(174.9		)
Net receipts/(payments) on intercompany activity	—			—			(102.0		)	102.0			—
Asset disposals and other	—			—			2.1			—			2.1
Cash flows provided by (used in) investing activities	(0.5		)	(93.0		)	(181.3		)	102.0			(172.8		)
Financing Activities:
Borrowings on long-term debt	287.5			—			100.0			—			387.5
Payments on long-term debt and capital leases	(0.5		)	(0.2		)	(1.7		)	—			(2.4		)
Net borrowings under credit facilities	—			—			2.4			—			2.4
Debt issuance costs	(9.4		)	—			(1.0		)	—			(10.4		)
Net receipts/(payments) on intercompany activity	(176.4		)	278.4			—			(102.0		)	—
Dividends paid to stockholders	(25.8		)	—			(24.0		)	24.0			(25.8		)
Dividends paid to noncontrolling interests	—			—			(16.0		)	—			(16.0		)
Acquisition of noncontrolling interests	—			—			(12.2		)	—			(12.2		)
Cash flows provided by (used in) financing activities	75.4			278.2			47.5			(78.0		)	323.1
Increase in cash and cash equivalents	$	1.9		$	1.5		$	35.2		$	—		$	38.6