Slide 1: Proven to perform anywhere. Second Quarter 2023 Earnings
Proven to perform anywhere. Second Quarter 2023 Earnings August 2, 2023 ATI Proprietary and Confidential ©2023 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 driving continued results Deploying capital for shareholder Portfolio transformation driving returns, balance sheet product mix and cost benefits A&D climbed to 58% of sales in Q2, up strengthening from 56% in Q1’23 and 46% in Q2’
Slide 4: Strategic Markets & Diversified Applications
Strategic Markets & Diversified Applications Near-term Q2 ‘23 vs. vs. Market Market Comments Revenue Q2 ‘22 Q1 ‘23 Outlook • Ramping jet engine production driving strong demand for materials and forgings. Jet Engine $341M +37% +10% • Growth trend expected to continue, supported by narrowbody and wid
Slide 5: Second Quarter 2023 Financial Results
Second Quarter 2023 Financial Results $M (excl. EPS) Q2 2023 Q2 2022 % Chg. Q1 2023 % Chg. HPMC Segment • Revenue: Sequential and YoY top -line growth driven by: Revenue $1,046 $960 +9% $1,038 +1% ‒ Ramping jet engine shipments. ‒ Increased Defense activity supporting naval fleets, ground vehicle ar
Slide 6: Cash & Liquidity
Cash & Liquidity Balance Sheet and Cash Flow (1) (2) Net Debt/Adj. EBITDA Ratio: 2.7x Q2 results • Liquidity of ~$770M, including $267M of cash on hand • Managed working capital(2) increased to 39% of sales at quarter due to: ‒ Increased inventory from increasing production levels and ramping melt c
Slide 7: Third Quarter & Full Year 2023 Outlook
Third Quarter & Full Year 2023 Outlook Third Quarter 2023 Full Year Adj. EPS1 Adj. EPS1 FCF2 $0.51 – $0.57 $2.15 - $2.35 $125 – $175 million (Previously $2.10- $2.30) Implies Q4’23 EPS of $0.63 at midpoint of full year and Q3 guidance Key Assumptions Key Drivers “Double -digit” growth in A&D, as w
Slide 8: Additional Materials Appendix
Additional Materials Appendix
Slide 9: Appendix 1 – 2023 Outlook Assumptions
Appendix 1 – 2023 Outlook Assumptions Earnings Drivers Annual Net Interest Expense ~ $82M Annual Effective Tax Rate ~4.4%(1) Annual Retirement Benefit Expense ~$74M(2) Annual Cash Flow Drivers Capital Expenditures $200M - $240M Managed Working Capital(3) Cash Usage of ~$100M Full Year Cash Taxes ~$1
Slide 10: 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 The Company Companyreports itsits reports financial results financial in accordance results with accounting in accordance principles with accounting generally principles ac
Slide 11: Appendix 2 (continued)
Appendix 2 (continued) Three Months Ended June 30, 2023 March 31, 2023 June 30, 2022 Reported Adjusted Reported Adjusted Reported Adjusted Numerator for Basic net income (loss) per common share - Net income (loss) attributable to ATI $ 76.0 $ 86.2 $ 70.1 $ 71.2 $ (38.0) $ 76.7 Effect of dilutive sec
Slide 12: Appendix 2 (continued)
Appendix 2 (continued) Three Months Ended Latest Twelve Months Ended June 30, 2023 March 31, 2023 June 30, 2022 June 30, 2023 Net income (loss) attributable to ATI $ 76.0 $ 70.1 $ (38.0) $ 284.1 Net income attributable to noncontrolling interests 3.1 2.1 3.7 12.8 Net income (loss) 79.1 72.2 (34.3) 2
Slide 13: Appendix 2 (continued)
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