XML 31 R18.htm IDEA: XBRL DOCUMENT
v3.10.0.1

Debt | 12 Months Ended
--- | ---
Dec. 31, 2018
Debt Disclosure [Abstract] |
Debt | Debt Debt at December 31, 2018 and 2017 was as follows:
(In millions) |  | 2018 |  | 2017
Allegheny Technologies $500 million 5.875% Senior Notes due 2023 (a) |  | $ | 500.0 |  |  | $ | 500.0 |
Allegheny Technologies $500 million 5.95% Senior Notes due 2021 |  | 500.0 |  |  | 500.0 |
Allegheny Technologies $287.5 million 4.75% Convertible Senior Notes due 2022 |  | 287.5 |  |  | 287.5 |
Allegheny Ludlum 6.95% Debentures due 2025 |  | 150.0 |  |  | 150.0 |
Term Loan due 2022 |  | 100.0 |  |  | 100.0 |
U.S. revolving credit facility |  | — |  |  | — |
Foreign credit agreements |  | — |  |  | 6.3 |
Other |  | 15.0 |  |  | 10.0 |
Debt issuance costs |  | (10.4 | ) |  | (13.1 | )
Total short-term and long-term debt |  | 1,542.1 |  |  | 1,540.7 |
Short-term debt and current portion of long-term debt |  | 6.6 |  |  | 10.1 |
Total long-term debt |  | $ | 1,535.5 |  |  | $ | 1,530.6 |
(a) | Bearing interest at 7.875% effective February 15, 2016.
In December 2017, the Company redeemed all $350 million aggregate principal amount of the 9.375% Senior Notes due 2019, resulting in a $37.0 million pre-tax debt extinguishment charge, which included a $35.8 million cash payment as a make-whole provision on the early extinguishment of debt, and a $1.2 million charge for previously-unrecognized debt issue costs. Interest expense was $102.1 million in 2018, $134.9 million in 2017, and $125.4 million in 2016. Interest expense was reduced by $4.1 million, $2.6 million, and $4.7 million, in 2018, 2017, and 2016, respectively, from interest capitalization on capital projects. Interest and commitment fees paid were $102.6 million in 2018, $133.8 million in 2017, and $127.2 million in 2016. Net interest expense includes interest income of $1.1 million in 2018, $1.1 million in 2017, and $1.4 million in 2016. Scheduled principal payments during the next five years are $6.6 million in 2019, $4.7 million in 2020, $502.0 million in 2021, $388.8 million in 2022, and $500.4 million in 2023. 2023 Notes The 5.875% stated interest rate payable on the Company’s Senior Notes due 2023 (2023 Notes) is subject to adjustment in the event of changes in the credit ratings on the 2023 Notes by either Moody’s or Standard & Poor’s (S&P). Each notch of credit rating downgrade from the credit ratings in effect when the 2023 Notes were issued in July 2013 increases interest expense by 0.25% on the 2023 Notes, up to a maximum 4 notches by each of the two rating agencies, or a total 2.0% potential interest rate change up to 7.875%. In February 2016, the 2023 Notes reset one notch to the maximum 7.875% annual interest rate as a result of a credit rating downgrade by S&P. Any further credit rating downgrades have no effect on the interest rate of the 2023 Notes, and increases in the Company’s credit ratings from these ratings agencies would reduce interest expense incrementally on the 2023 Notes to the original 5.875% interest rate in a similar manner. Credit Agreements The Company has a $500 million Asset Based Lending (ABL) Credit Facility, which is collateralized by the accounts receivable and inventory of the Company’s domestic operations. The ABL facility includes a $400 million revolving credit facility, a letter of credit sub-facility of up to $200 million, and a $100.0 million term loan (Term Loan). In June 2017, the ABL facility was amended to extend the maturity date of the Term Loan from November 2017 to February 2022 and to reduce the interest rate on the Term Loan to 3.0% plus a LIBOR spread from 3.5% plus a LIBOR spread. In July 2018, the ABL facility was further amended to reduce the Term Loan base interest rate to 2.5% plus a LIBOR spread. In conjunction with this 2018 amendment, the Company entered into a $50 million floating-for-fixed interest rate swap which converts half of the Term Loan to a 5.44% fixed interest rate. The swap matures in January 2021. The Term Loan can be prepaid in minimum increments of $50 million if certain minimum liquidity conditions are satisfied. The underwriting costs associated with amending the Term Loan in 2017 were $0.8 million, and are being amortized, along with the unamortized portion of the $1.0 million of previously recognized deferred fees from the issuance of the Term Loan, to interest expense over the extended term of the loan ending February 2022. Also in June 2017, the ABL facility was amended to, among other things, extend the duration of the revolving portion of the facility from September 2020 to February 2022. As amended, the applicable interest rate for revolving credit borrowings under the ABL facility includes interest rate spreads based on available borrowing capacity that range between 1.75% and 2.25% for LIBOR-based borrowings (2.0% and 2.5% prior to amendment) and between 1.0% and 1.5% for base rate borrowings. The ABL facility contains a financial covenant whereby the Company must maintain a fixed charge coverage ratio of not less than 1.00:1.00 after an event of default has occurred and is continuing or if the undrawn availability under the revolving credit portion of the facility is less than the greater of (i) 10%, as amended, of the then applicable maximum borrowing amount under the revolving credit portion of the ABL and any outstanding Term Loan balance, or (ii) $40 million. The Company was in compliance with the fixed charge coverage ratio at December 31, 2018. Additionally, the Company must demonstrate liquidity, as calculated in accordance with the terms of the ABL facility, of at least $700 million on the date that is 91 days prior to January 15, 2021, the maturity date of the 5.95% Senior Notes due 2021, and that such liquidity is available at all times thereafter until the 5.95% Senior Notes due 2021 are paid in full or refinanced. Costs associated with entering into the 2017 ABL amendment were $1.0 million, and are being amortized, along with the unamortized portion of $2.4 million of previously recognized deferred costs, to interest expense over the extended term of the facility ending February 2022. There were no outstanding revolving credit borrowings under the ABL facility as of December 31, 2018, and $35.3 million was utilized to support the issuance of letters of credit. Average revolving credit borrowings under the ABL facility for the fiscal year ended December 31, 2018 were $43 million, bearing an average annual interest rate of 3.7%. Average borrowings under the ABL for the fiscal year ended December 31, 2017 were $37 million, bearing an average annual interest rate of 3.3%. Convertible Notes In the second quarter of 2016, the Company issued and sold $287.5 million aggregate principal amount of 4.75% Convertible Senior Notes due 2022 (2022 Convertible Notes). Interest on the 2022 Convertible Notes is payable in cash semi-annually in arrears on each January 1 and July 1, commencing January 1, 2017. The underwriting fees and other third-party expense for the issuance of the 2022 Convertible Notes were $9.4 million and are being amortized to interest expense over the 6-year term of the 2022 Convertible Notes. The Company does not have the right to redeem the 2022 Convertible Notes prior to their stated maturity date. Holders of the 2022 Convertible Notes have the option to convert their notes into shares of the Company’s common stock, at any time prior to the close of business on the business day immediately preceding the stated maturity date (July 1, 2022). The initial conversion rate for the 2022 Convertible Notes is 69.2042 shares of ATI common stock per $1,000 (in whole dollars) principal amount of Notes (19.9 million shares), equivalent to conversion price of $14.45 per share, subject to adjustment in certain events. Other than receiving cash in lieu of fractional shares, holders do not have the option to receive cash instead of shares of common stock upon conversion. Accrued and unpaid interest that exists upon conversion of a note will be deemed paid by the delivery of shares of ATI common stock and no cash payment or additional shares will be given to the holders. If the Company undergoes a fundamental change as defined in the agreement, holders of the 2022 Convertible Notes may require the Company to repurchase the notes in whole or in part for cash at a price equal to 100% of the principal amount of the notes to be purchased plus any accrued and unpaid interest to, but excluding, the repurchase date. Foreign and Other Credit Facilities STAL, the Company’s Chinese joint venture company in which ATI has a 60% interest, has a separate $20 million revolving credit facility. Borrowings under the STAL revolving credit facility are in U.S. dollars based on U.S. interbank offered rates. The credit facility is supported solely by STAL’s financial capability without any guarantees from the joint venture partners. The credit facility requires STAL to maintain a minimum level of shareholders’ equity, and certain financial ratios. The Company has no off-balance sheet financing relationships as defined in Item 303(a)(4) of SEC Regulation S-K, with variable interest entities, structured finance entities, or any other unconsolidated entities. At December 31, 2018, the Company had not guaranteed any third-party indebtedness.

X
- References No definition available. + Details
Name: | us-gaap_DebtDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
Name: | us-gaap_DebtDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration