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Business Segments | 12 Months Ended
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Dec. 29, 2024
Segment Reporting [Abstract] |
Business Segments | Business Segments The Company operates under two business segments: High Performance Materials & Components (HPMC) and Advanced Alloys & Solutions (AA&S). HPMC is comprised of the Specialty Materials and Forged Products businesses, as well as the ATI Europe distribution operations. Approximately 86% of its revenue is derived from the aerospace & defense markets including nearly 60% of its revenue from products for commercial jet engines and 10% from defense products. Other core markets include medical and specialty energy. HPMC produces a wide range of high performance materials, components, and advanced metallic powder alloys. These products are made from nickel-based alloys and superalloys, titanium and titanium-based alloys, and a variety of other specialty materials. HPMC’s capabilities range from cast/wrought and powder alloy development to final production of highly engineered finished components, and 3D-printed aerospace products. The AA&S segment includes the Specialty Alloys & Components business, the Specialty Rolled Products business, the 60%-owned STAL PRS joint venture, and the A&T Stainless 50%-owned joint venture that is reported in AA&S segment results under the equity method of accounting. See Note 7 for further information on the Company’s joint ventures. AA&S is focused on delivering high-value flat products, with a focus in aerospace & defense and other core markets, which comprise approximately 60% of its revenue. Industrial markets comprise the remaining 40% of AA&S sales, which includes the conventional energy and automotive end-markets. AA&S produces nickel-based alloys, titanium and titanium-based alloys, and specialty alloys in a variety of forms including plate, sheet, and strip products. ATI’s Chief Operating Decision Maker (CODM) is the Chief Executive Officer. Segment EBITDA, the Company’s segment operating measure, is used by the CODM to assess segment operating performance and to determine the allocation of resources. Segment EBITDA as a percentage of segment revenues is utilized to assess the profitability of each segment and whether the Company’s strategies are resulting in margin expansion and expected operating performance improvements. The measure of segment EBITDA excludes net interest expense, income taxes, depreciation and amortization, goodwill impairment charges, debt extinguishment charges, corporate expenses, closed operations and other income (expense), restructuring and other credits/charges, gains or losses from the sale of accounts receivables, strike related costs, long-lived asset impairments, pension remeasurement gains and losses, other postretirement/pension curtailment and settlement gains and losses, and gains or losses on sales of businesses. Management believes segment EBITDA, as defined, provides an appropriate measure of controllable operating results at the business segment level. Intersegment sales are generally recorded at full cost or market.
| Fiscal Year 2024 |  | Fiscal Year 2023 |  | Fiscal Year 2022
| HPMC | AA&S | Total |  | HPMC | AA&S | Total |  | HPMC | AA&S | Total
Sales to external customers | $ | 2,278.5 |  | $ | 2,083.6 |  | $ | 4,362.1 |  |  | $ | 2,120.2 |  | $ | 2,053.5 |  | $ | 4,173.7 |  |  | $ | 1,641.2 |  | $ | 2,194.8 |  | $ | 3,836.0 |
Intersegment sales | 247.7 |  | 275.1 |  | 522.8 |  |  | 181.8 |  | 283.4 |  | 465.2 |  |  | 174.5 |  | 238.9 |  | 413.4 |
Total sales | 2,526.2 |  | 2,358.7 |  | 4,884.9 |  |  | 2,302.0 |  | 2,336.9 |  | 4,638.9 |  |  | 1,815.7 |  | 2,433.7 |  | 4,249.4 |
Reconciliation of sales |  |  |  |  |  |  |  |  |  |  |
Elimination of intersegment sales |  |  | (522.8) |  |  |  |  | (465.2) |  |  |  |  | (413.4) |
Total consolidated sales |  |  | $ | 4,362.1 |  |  |  |  | $ | 4,173.7 |  |  |  |  | $ | 3,836.0 |
Less(1): |  |  |  |  |  |  |  |  |  |  |
Allocated corporate overhead(2) | 65.7 |  | 65.4 |  |  |  | 60.1 |  | 58.6 |  |  |  | 37.9 |  | 34.2 |  |
Other segment items(3) | 1,999.1 |  | 1,972.4 |  |  |  | 1,808.3 |  | 2,001.7 |  |  |  | 1,474.4 |  | 2,024.2 |  |
Segment EBITDA | 461.4 |  | 320.9 |  | 782.3 |  |  | 433.6 |  | 276.6 |  | 710.2 |  |  | 303.4 |  | 375.3 |  | 678.7 |
Reconciliation of segment EBITDA |  |  |  |  |  |  |  |  |  |  |
Corporate expenses |  |  | (64.0) |  |  |  |  | (62.3) |  |  |  |  | (60.3) |
Closed operations and other income (expenses) |  |  | 10.8 |  |  |  |  | (13.3) |  |  |  |  | (5.6) |
Depreciation & amortization |  |  | (151.5) |  |  |  |  | (146.1) |  |  |  |  | (142.9) |
Interest expense, net |  |  | (108.2) |  |  |  |  | (92.8) |  |  |  |  | (87.4) |
Restructuring and other charges (See Note 19) |  |  | (22.1) |  |  |  |  | (31.4) |  |  |  |  | (23.7) |
Retirement benefit settlement loss (See Note 14) |  |  | — |  |  |  |  | (41.7) |  |  |  |  | — |
Pension remeasurement gain (loss) (See Note 14) |  |  | (14.1) |  |  |  |  | (26.8) |  |  |  |  | 100.3 |
Joint venture restructuring credit (See Note 7) |  |  | — |  |  |  |  | — |  |  |  |  | 0.9 |
Gain (loss) on sales of business, net |  |  | 52.9 |  |  |  |  | (0.6) |  |  |  |  | (105.4) |
Income before taxes |  |  | $ | 486.1 |  |  |  |  | $ | 295.2 |  |  |  |  | $ | 354.6 |
(1) The CODM is regularly provided with allocated corporate overhead and segment EBITDA, which is used to assess operating performance. Therefore, the significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM. Intersegment expenses are included within the amounts shown. (2) The increase in corporate overhead costs over the time periods presented represent the consolidation and centralization of certain functions, including information technology, human resources and talent acquisition, payroll and accounts payable, into the Company’s corporate shared services function. Such amounts are subject to change from year to year as allocation methodologies are revised to match the nature of these corporate costs. (3) Other segment items for each reportable segment include: cost of sales, general and administrative expenses, and gain/loss on asset sales. General & administrative expenses consist of non-manufacturing payroll and benefits, office expenses, professional service and legal expenses, occupancy expenses including rent and lease expense, and travel expense. Total international sales were $1,836.9 million in fiscal year 2024, $1,922.9 million in fiscal year 2023, and $1,617.4 million in fiscal year 2022. Of these amounts, sales by operations in the U.S. to customers in other countries were $1,425.4 million in fiscal year 2024, $1,498.7 million in fiscal year 2023, and $1,217.9 million in fiscal year 2022. Beginning in 2020, the U.S. government enacted various relief packages in response to the COVID-19 pandemic, including refundable employee retention tax credits. The Company applied for these employee retention tax credits and deferred recognition of a portion of the tax credits pending the completion of any potential audit or examination, or the expiration of the related statute of limitations. During fiscal year ended December 29, 2024, the Company recognized a benefit of $16.7 million in cost of sales on the consolidated statement of operations due to the expiration of the statute of limitations for a portion of these credits. For the fiscal year ended December 29, 2024, the Company recognized $9.0 million of the benefit in the HPMC segment and $7.7 million in the AA&S segment. See Note 21 for further explanation. In addition, results for the fiscal year ended January 1, 2023 include $34 million related to this government sponsored COVID relief in segment EBITDA. HPMC segment results for fiscal year 2022 include $27 million of benefits from the AMJP Program and employee retention credits, and AA&S segment results for fiscal year 2022 include $7 million in employee retention credits. AA&S segment EBITDA in fiscal year 2024 and 2023 included benefits from tax credits of $22.7 million and $10.1 million, respectively, for the AMPC, which were reported in cost of sales in the consolidated statement of operations. Fiscal year 2024 segment EBITDA also includes charges of $11.8 million, primarily reported in selling & administrative expenses, for a commercial negotiation with a customer, of which $6.3 million was included in the HPMC segment and $5.5 million in the AA&S segment. Corporate expenses are primarily classified as selling and administrative expenses in the consolidated statement of operations, and consist of salaries and benefits, incentive compensation, facility leases and other costs of ATI’s corporate functions. Closed operations and other expenses are primarily presented in selling and administrative expenses in the consolidated statements of operations. These items included costs at closed facilities, including legal matters, environmental, real estate and other facility costs, gains from the sale of non-core assets and foreign currency transaction gains and losses primarily related to ATI’s European Treasury Center operation. Closed operations and other income (expense) for fiscal year 2024 includes an $11.6 million gain on the sale of certain oil and gas rights, included within other income, net, on the consolidated statement of operations, and favorable foreign currency transaction impacts as compared to the prior year period. Fiscal year 2024 also includes a $2.3 million gain on the sale of assets for the Company’s idled Houston, PA facility, which is included within gain on asset sales and sales of businesses, net, on the consolidated statement of operations. The Company received $3.5 million of proceeds from this sale that are reported as an investing activity on the consolidated statement of cash flows. Closed operations and other expenses in fiscal year 2023 reflect higher insurance costs associated with an outstanding insurance claim involving our captive insurance company. Depreciation expense in fiscal year 2023 includes $3.8 million of accelerated depreciation of fixed assets related to the restructuring of our European operations and the closure of our Robinson, PA operations. Gain on sales of businesses for fiscal year 2024 is related to a $52.9 million gain on the sale of the Company’s precision rolled strip operations in New Bedford, MA and Remscheid, Germany, for which $48.0 million of proceeds, net of transaction costs, were received and reported as an investing activity on the consolidated statement of cash flows. Loss on sales of businesses for fiscal year 2023 is related to a $0.6 million loss on the sale of the Company’s Northbrook, IL operations, for which no proceeds were received but $0.3 million of transaction costs were paid and reported as an investing activity on the consolidated statement of cash flows. Gain (loss) on sales of businesses, net, for fiscal year 2022 relate to a $112.2 million loss on the sale of the Company’s Sheffield, U.K. operations, partially offset by a $6.8 million gain from the sale of assets from the Pico Rivera, CA operations. See Note 6 for further explanation regarding the sale of business transactions in fiscal years 2024 and 2022. Certain additional information regarding the Company’s business segments is presented below:
|  | Fiscal Year
(In millions) |  | 2024 |  | 2023 |  | 2022
Depreciation and amortization: |  |  |  |  |  |
High Performance Materials & Components |  | $ | 71.6 |  |  | $ | 71.1 |  |  | $ | 68.3 |
Advanced Alloys & Solutions |  | 73.2 |  |  | 67.9 |  |  | 67.4 |
Other |  | 6.7 |  |  | 7.1 |  |  | 7.2 |
Total depreciation and amortization |  | $ | 151.5 |  |  | $ | 146.1 |  |  | $ | 142.9 |
Capital expenditures: |  |  |  |  |  |
High Performance Materials & Components |  | $ | 132.0 |  |  | $ | 100.4 |  |  | $ | 33.3 |
Advanced Alloys & Solutions |  | 103.6 |  |  | 97.2 |  |  | 89.6 |
Corporate |  | 3.5 |  |  | 3.1 |  |  | 8.0 |
Total capital expenditures |  | $ | 239.1 |  |  | $ | 200.7 |  |  | $ | 130.9 |
|  | Fiscal Year
Identifiable assets: |  | 2024 |  | 2023 |  | 2022
High Performance Materials & Components |  | $ | 2,225.9 |  |  | $ | 1,990.9 |  |  | $ | 1,749.3 |
Advanced Alloys & Solutions |  | 2,207.8 |  |  | 1,996.7 |  |  | 1,981.1 |
Corporate: |  |  |  |  |  |
Deferred Taxes |  | 46.5 |  |  | 135.7 |  |  | 4.7 |
Cash and cash equivalents and other |  | 750.4 |  |  | 861.8 |  |  | 710.5 |
Total assets |  | $ | 5,230.6 |  |  | $ | 4,985.1 |  |  | $ | 4,445.6 |
|  | Fiscal Year |  |  |  | Fiscal Year |  |  |  | Fiscal Year |  |
($ in millions) |  | 2024 |  | Percent of total |  | 2023 |  | Percent of total |  | 2022 |  | Percent of total
Total assets: |  |  |  |  |  |  |  |  |  |  |  |
United States |  | $ | 4,666.3 |  |  | 89 | % |  | $ | 4,463.7 |  |  | 90 | % |  | $ | 3,942.7 |  |  | 89 | %
China |  | 310.3 |  |  | 6 | % |  | 295.8 |  |  | 6 | % |  | 321.1 |  |  | 7 | %
Other |  | 254.0 |  |  | 5 | % |  | 225.6 |  |  | 4 | % |  | 181.8 |  |  | 4 | %
Total Assets |  | $ | 5,230.6 |  |  | 100 | % |  | $ | 4,985.1 |  |  | 100 | % |  | $ | 4,445.6 |  |  | 100 | %

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- Definition The entire disclosure for reporting segments including data and tables. 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