Slide 1: Proven to perform anywhere. Fourth Quarter 2023 Earnings
Proven to perform anywhere. Fourth Quarter 2023 Earnings February 1, 2024 ATI Proprietary and Confidential ©2024 ATI. All rights reserved. 1
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains forward-looking statements. Actual results may differ materially from results anticipated in the forward-looking statements due to various known and unknown risks, many of which we are unable to predict or control. These and additional risk facto
Slide 3: Key Takeaways
Key Takeaways Performance Balance Sheet Strategic Progress A&D growth drives strong fourth Deploying capital for shareholder Titanium capacity expansion on quarter and full year 2023 results returns, balance sheet strengthening track, to drive 2H’24 strength A&D at 63% of sales in Q4, up from 61% Fu
Slide 4: Strategic Markets & Diversified Applications
Strategic Markets & Diversified Applications Near-term Q4 ‘23 vs. vs. Market Market Comments Revenue Q4 ‘22 Q3 ‘23 Outlook • Continued demand growth for materials and forgings, driven by ramping engine production Jet Engine $352M +15% +7% • Growth to continue, supported by narrowbody and widebody pr
Slide 5: Fourth Quarter 2023 Financial Results
Fourth Quarter 2023 Financial Results $M (excl. EPS) Q4 2023 Q4 2022(2) % Chg. Q3 2023(2) % Chg. HPMC Segment • Revenue: Sequential and year-over-year growth driven by: Revenue $1,064 $1,010 +5% $1,026 +4% ‒ Strong demand from ramping commercial aerospace build rates and ongoing elevated defense dem
Slide 6: Full Year 2023 Financial Results
Full Year 2023 Financial Results $M (excl. EPS) FY 2023(2) FY 2022(2) % Chg. HPMC Segment • Revenue: 29% year-over-year top-line growth driven by: Revenue $4,174 $3,836 +9% ‒ Ramping commercial aerospace build rates. Jet Engine and Airframe sales increased by 29% and 90% year-over-year, respectively
Slide 7: Cash & Liquidity
Cash & Liquidity Balance Sheet and Cash Flow (1) (2) Net Debt/Adj. EBITDA Ratio: 2.3x Q4 results Full year 2023 free cash flow of $165M (2) • Managed working capital (2) decreased to 31.1% of sales; improvement of 880+ bps versus Q3 2023 • Capital expenditures were $53M in Q4 and $201M for the full
Slide 8: First Quarter & Full Year 2024 Outlook
First Quarter & Full Year 2024 Outlook First Quarter 2024 Key Assumptions Adj. EPS (1) Key Drivers Continued growth in A&D $0.36 – $0.44 45% increase in capacity for titanium production from existing assets ramping Industrial headwinds to continue in 1H 24 Supply chain and inflation remain m
Slide 9: Additional Materials Appendix
Additional Materials Appendix
Slide 10: Appendix 1 – 2024 Outlook Assumptions
Appendix 1 – 2024 Outlook Assumptions Earnings Drivers 2024 FY Net Interest Expense ~$113M Annual Cash Flow Drivers Capital Expenditures $190M - $230M Managed Working Capital(1) Cash Usage of $50M - $100M Full Year Cash Taxes ~$19M Q1’24: 149.4M shares Avg. Fully Diluted Share Count FY’24: 146.9M sh
Slide 11: Appendix 2 – Non-GAAP Financial Measures
Appendix 2 ATI Inc. and Subsidiaries Non-GAAP Financial Measures (Unaudited, dollars in millions, except per share amounts) The Company Companyreports reportsitsits financial results financial in accordance results in accordancewith accounting principles with accounting generally principles accepted
Slide 12: Appendix 2 (continued)
Appendix 2 (continued) Three Months Ended December 31, 2023 September 30, 2023* December 31, 2022* Reported Adjusted Reported Adjusted Reported Adjusted Numerator for Basic net income per common share - Net income attributable to ATI $ 145.7 $ 93.0 $ 90.2 $ 94.2 $ 193.0 $ 92.7 Effect of dilutive sec
Slide 13: Appendix 2 (continued)
Appendix 2 (continued) Three Months Ended Fiscal Year Ended December 31, 2023 September 30, 2023 December 31, 2022* December 31, 2023 December 31, 2022* Net income attributable to ATI $ 145.7 $ 90.2 $ 193.0 $ 410.8 $ 323.5 Net income attributable to noncontrolling interests 3.5 3.9 4.3 12.6 15.6 Net
Slide 14: Appendix 2 (continued) – Free Cash Flow
Appendix 2 (continued) Free Cash Flow Free cash flow as defined by ATI includes the total of cash provided by (used in) operating activities and investing activities as presented on the consolidated statements of cash flows, adjusted to exclude cash contributions to the Company’s U.S. qualified defi