Slide 1: Fourth Quarter 2018 Conference Call
Fourth Quarter 2018 Conference Call January 22, 2019 © 2018 ATI. All rights reserved.
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: 2018 Highlights
2018 Highlights $M (excl. EPS) FY 2018 FY 2017 % Chg. Q4 2018 Q4 2017 % Chg. Revenue $4,046.6 $3,525.1 +15% $1,037.9 $909.9 +14% Segment Operating Profit 413.2 283.4 +46% 87.3 88.2 -1% Segment Operating Profit Margin 10.2% 8.0% +220 b.p. 8.4% 9.7% -130 b.p. Net Income (Loss)* 222.4 $(91.9) --- $41.1
Slide 4: High Performance Materials & Components
High Performance Materials & Components Segment ($M) FY ‘18 FY ‘17 ‘18 O/(U) ‘17 Q4 ‘18 Q4 ‘17 ‘18 O/(U) ‘17 Sales $2,334.2 $2,067.4 +13% $596.1 $517.7 +15% Operating Profit $335.4 $246.4 +36% $76.0 $65.8 +16% % of Sales 14.4% 11.9% +250 b.p. 12.7% 12.7% n/c Full-Year vs. Prior Year Double-digit r
Slide 5: High Performance Materials & Components
High Performance Materials & Components Revenue by Market Airframe 2018 Full-Year Revenue Aerospace & Defense Medical Jet Engine Production Gov’t & 7% Electrical Energy Defense 6% Oil & Gas 11% 3% Const. & Mining Next 18% 3% Number of Engines Airframe Other Generation 5% Legacy Jet Engine 47% 2014 2
Slide 6: Flat Rolled Products
Flat Rolled Products Segment ($M) FY ‘18 FY ‘17 ‘18 O/(U) ‘17 Q4 ‘18 Q4 ‘17 ‘18 O/(U) ‘17 Sales $1,712.4 $1,457.7 +17% $441.8 $392.2 +13% Operating Profit $77.8 $37.0 +110% $11.3 $22.4 -50% % of Sales 4.5% 2.5% +200 b.p. 2.6% 5.7% -310 b.p. Full-Year vs. Prior Year ATI FRP Type 304 Surcharge 2017-20
Slide 7: Flat Rolled Products
Flat Rolled Products Revenue by Market & Product 2018 Full Year Revenue by Market 2018 Full Year Revenue by Product Construction & Mining Stainless Plate Electrical Energy 9% 4% 11% 6% Aero & Def Electronics Precision & 9% Engineered Stainless & 14% Specialty Strip 5% Other Food Equip. & Sheet 33% A
Slide 8: Financial Update
Financial Update Free Cash Flow Balance Sheet and Cash Flow $ millions +660% Cash and liquidity at 12/31/2018 > 290 • $382 million cash on hand 288 • ~$350 million available on ABL • No outstanding borrowings on ABL revolver 2018 capital spending of $139 million • Q4 2018: $38 million 38 2014 20
Slide 9: 2019 Financial Assumptions
2019 Financial Assumptions Category 2019 Expected Impact 2018 Actual Pension contribution $145 $40 Retirement benefit expense ~$88 $53 Capital expenditures $165 - $170 $139 Interest expense $95 - $98 $101 Effective tax rate 5% - 7% 4.4% Diluted average share count (Q1) 146.5 million shares 145.9 mil
Slide 10: 2019 Outlook
2019 Outlook High Performance Materials & Components Segment Q1 2019 financial results expected to increase modestly vs. strong PY • Revenue growth inline with full-year guidance • Modest operating profit improvement; ongoing supply and regional energy issues, elevated retirement benefit expense l
Slide 11: 2018 Full-Year Summary
2018 Full-Year Summary Financial and Operational Performance Sales of $4.0 billion, increased 15% vs. prior year • Continued growth in Jet Engine and Airframe market sales; Oil & Gas market ongoing recovery • Emergent demand from Aerospace customers to meet production ramp requirements Segment o
Slide 12: Fourth Quarter 2018 Conference Call
Fourth Quarter 2018 Conference Call Q&A © 2018 ATI. All rights reserved. 12
Slide 13: Additional Materials Appendix
Additional Materials Appendix 13
Slide 14: Non-GAAP Financial Measures
Non-GAAP Financial Measures The Company reports its financial results in accordance with accounting principles generally accepted in the United States of America ("GAAP"). However, management believes that certain non-GAAP financial measures, used in managing the business, may provide users of this