1、2024 ANNUAL REPORTWho we are.Searing heat.Crushing stress.Blistering corrosion.Maybe all the above.No matter the challenge,we are honored to be our customers first call.Thats because at ATI,were solving the worlds challenges through materials science.ATI is a global producer of high-performance mate
2、rials and solutions for the aerospace and defense markets,and critical applications in electronics,medical and specialty energy.Built on the strong foundation of our legacy companies,we are a market-driven powerhouse:advanced,innovative,highly sophisticated and quality driven.When you need materials
3、 to go further and faster,in the most extreme conditions,ATI is proven to perform.Primary MarketsOther Core MarketsDEFENSEOur materials power and protect the armed services in the air,in the sea and on the ground,and help to push the limits of space.MEDICALEssential for modern medical equipment,devi
4、ces and implants,our specialty materials save and improve thousands of lives every day.ELECTRONICSWe give capability to electronic devices through our alloys unique electrical,magnetic,cosmetic and corrosion-resistance properties and our chemicals for metal precursors.AEROSPACEYou cant fly without A
5、TIour materials are on virtually every commercial aircraft flying today engines and airframes.SPECIALTY ENERGYOur alloys fuel electrical energy in nuclear reactors,renewables and land-based turbines.Our oil and gas materials fight heat and corrosion deep in the sea.WWW.ATIMATERIALS.COM 1ATI 2024 FIN
6、ANCIAL OVERVIEWIn millions,except per share amounts2022 2023 2024Sales$3,836$4,174$4,362 Gross profit$714$803$898 Restructuring charges(credits)$(5)$8$4 Operating income$316$466$609 Results attributable to ATI:Net income$324$411$368 Per common share$2.23$2.81$2.55 Adjusted results:ATI EBITDA(a)$613$
7、635$729 Net income as adjusted(a)$351$373$355 Adjusted results per common share(a)$2.41$2.56$2.46 BUSINESS SEGMENT RESULTSHigh Performance Materials&Components(HPMC)202220232024Sales$1,641$2,120$2,278 Segment EBITDA$303$434$461 As percentage of segment sales18.5%20.5%20.3%2024 HPMC by quarterQ1Q2Q3Q
8、4Sales$530$562$552$634 Segment EBITDA$97$114$123$127 As percentage of segment sales18.4%20.2%22.3%20.0%Advanced Alloys&Solutions(AA&S)202220232024Sales$2,195$2,054$2,084Segment EBITDA$375$277$321 As percentage of segment sales17.1%13.5%15.4%2024 AA&S by quarterQ1Q2Q3Q4Sales$513$533$499$539 Segment E
9、BITDA$72$87$74$88 As percentage of segment sales14.0%16.4%14.8%16.3%(a)Please see pages 7-8 for a reconciliation of adjusted results with the financial results prepared in accordance with accounting principles generally accepted in the U.S.2 ATI 2024 ANNUAL REPORTMESSAGE FROM THE PRESIDENT AND CHIEF
10、 EXECUTIVE OFFICERTo our shareholders,customers,and employeesIn 2024,ATI continued its momentum as a premier aerospace and defense leader.We delivered top-line growth with double-digit increases to adjusted EBITDA and Free Cash Flow,strong indications that our transformational strategy is on track.T
11、he ATI team responded nimbly to the dynamic customer environment in aerospace,ending the year with its highest revenue since 2012.Heres what gives us confidence in our bright future.1.Were in strong markets,and theyre growing.While 2024 was a year of challenge for the aerospace industry,our focus ce
12、ntered on delivering for our customers,pivoting with them to meet their evolving needs.Strong maintenance repair overhaul(MRO)demand as airlines extend the lifespan of their fleet supplemented original equipment manufacturers volume.ATIs aerospace revenue grew by 4.5%overall in 2024,and 9%in jet eng
13、ines.Our defense business continues to grow as wellfull-year revenues were up 22%.When the United States and our allies need reliable,high-performance advanced materials,were honored they turn to ATI.The continued growth of our defense business demonstrates both demand for our products and confidenc
14、e in our ability to deliver.Combined,aerospace and defense sales exceeded 65%of fourth-quarter revenue and for the full year represented more than 62%.As the market recognizes ATI as a premier aerospace and defense company on track with our strategy,we expect this mix to continue to grow.In addition
15、 to our core A&D markets,we serve markets that rely on our differentiated materials,delivering growth and margins like aerospace.In the electronics and specialty energy markets,continued demand for high-performance chips and the resurgence of nuclear energy put our hafnium,niobium and zirconium allo
16、ys in high demand.Medical advancements depend on our materials,from titanium for joint replacements to nitinol for life-saving stents and niobium for ever more powerful imaging.2.Werewellpositionedinthosemarkets.We have extraordinary capabilities,capacity to meet demand,and long-term agreements that
17、 demonstrate our value to our customers.In 2024,we celebrated$4 billion in new sales commitments through 2040.Much of the additional revenueapproximately$2.2 billionwill be delivered in the balance of this decade.The collective commitments are predominantly for nickel alloys serving the jet engine m
18、arket,where ATIs high-performance materials and solutions are differentiated the most.Were proud to be on every commercial platform flying todayengines and airframes.We achieved significant milestones in the capacity investments necessary to capitalize on growing customer demand:We expanded critical
19、 titanium melt capacity.Our new electron beam furnace in Richland,Washington,continues our measured,targeted approach to meeting growing demand.We commissioned powerful new titanium-forging assets.A new,state-of-the-art 12,500-ton billet forging press critical to titanium production for aerospace an
20、d defense complements our expanded melt capacity.The Bakers,North Carolina,press delivers increased capability for the manufacture of novel high-performance alloys that are challenging to make.We are solving customer challenges with the most advanced finishing operation of its kind.Our new bright an
21、neal furnace in Vandergrift,Pennsylvania,is part of a streamlined,competitive flow path that is transforming Specialty Rolled Products by focusing on growing production of high-value,differentiated materials with the shortest lead times in the world.It delivers the advantages our customers are hungr
22、y for:best-in-class attributes including thickness,coil size and cycle times.3.Weresharpeningouroperationaladvantageincreasing our efficiency and reliability.Our team gives me great confidence,as their productivity improvements unlock additional capacity,giving us the opportunity to participate in t
23、ransactional business where were valued most.Quality and safety are our priority.Our team is focused on continuing to improve as we make ATI the best it can be.In 2024,we took action to align our asset portfolio with our strategic focus on aerospace and defense.As a result,we completed the sale of o
24、ur precision rolled strip operations in New Bedford,Massachusetts,and Remscheid,Germany.WWW.ATIMATERIALS.COM 3Combined,aerospace and defense sales represented more than 62%of full-year 2024 revenue.As the market recognizes ATI as a premier aerospace and defense company on track with our strategy,we
25、expect this mix to continue to grow.Our path to the future.Our MissionSolving the Worlds Challenges through Materials ScienceOur VisionDeliver performance to create long-term shareholder value by:Transforming to be an aerospace and defense leader;Securing technology leadership in strategic nickel an
26、d titanium applications;Earning the first call through strong customer relationships and capabilities.MESSAGE FROM THE EXECUTIVE CHAIRMANDear Shareholders,Customers and Employees,The past year was marked by many ATI achievements.Notable among them,our successful CEO transition reflected robust and t
27、houghtful succession planning by ATIs Board of Directors.Kim Fields was clearly ready to lead the organization,her demonstrated operational and commercial expertise making her proven to perform.On behalf of the Board,I congratulate her and the team for their 2024 successes and clear commitment to gr
28、owing shareholder value.As we look toward the future,your Board remains committed to serving as effective stewards of that value and as advocates for our investors interests and concerns.Thank you for your ongoing support of ATI.All the best,Robert S.WetherbeeExecutive ChairmanWhile continuing to in
29、vest,we also are committed to returning capital to our shareholders.To that end,we repurchased$260 million of our outstanding stock during 2024,with$590 million remaining in our current repurchase authorization as of year-end.Our commitment to focused execution of our strategic priorities continues
30、to drive results for our shareholders.It is gratifying to see our teams hard work and transformational strategies deliver meaningful shareholder value.But were not stopping here.There is always more to achieve.We remain nimble in the face of continuously evolving markets and prevailing geopolitical
31、climate,guided by our strategy and rooted in our core values.With each goal met,our team strives to set the bar higher.We do what we say were going to do,when we say were going to do it,and we do it the right way.These values drive shareholder value creation and permeate our corporate governance,our
32、 approach to talent and culture,and our investor outreach.It has been my great privilege to take the ATI helm from Bob Wetherbee,and I thank him for helping to create the opportunities we see on the horizon.Thank you for your support of ATI.Sincerely,Kimberly A.FieldsPresident and Chief Executive Of
33、ficerOur Strategic Priorities1.PositionATIforthefuture,clearly defining our destination and creating a path to succeed.2.Growthecore,establishing the path to grow revenue and expand technology leadership.3.Achieveworld-classbenchmarks,including inventory efficiency and operational productivity.Suppo
34、rted by foundational pillars:Culture and Talent,Digital Technology,and Product Technology4 ATI 2024 ANNUAL REPORTRobert S.WetherbeeExecutive Chairman,ATI|Executive MemberKimberly A.FieldsPresident and CEO,ATI|Executive MemberWe at ATI are committed to a strong governance program.We have long believe
35、d that integrity is vitally important to the success of our Company.Our Corporate Governance Guidelines,along with the charters of the Board committees,provide the framework for the corporate governance of ATI.These Guidelines reflect the Boards commitment to oversee the effectiveness of decision-ma
36、king at the Board and management levels,with a view toward achieving ATIs strategic objectives.This information,and more about our corporate governance,is available on our website,ATI.Our Code of Conduct applies to all directors,officers,employees,agents and consultants and sets forth clear standard
37、s to guide the conduct of our daily affairs.Our commitment is to reflect the highest standards of ethical performance in our dealings with all of our stakeholders.Our compliance program incorporates policies to address key compliance areas for ATI,including antitrust,ethics,environmental compliance,
38、anti-bribery,export compliance and insider trading,as well as cybersecurity matters and various human resources issues,including workplace respect and safety.ATI provides annual compliance training to its employees on a variety of these topics.We understand that confidence in our Company is in large
39、 measure dependent upon the reliability and transparency of our financial statements,including maintaining effective internal control over financial reporting.Accordingly,our Code of Conduct recognizes our responsibility for maintaining accurate records that support timely disclosures that fairly re
40、flect our financial position and results of operations.Providing timely information that fairly reflects our financial position and results of operations.We encourage employees to speak up about any concerns they may have.The ATI Speak Up Line,which provides confidential,secure and anonymous reporti
41、ng capability,is available to all employees 24 hours a day,seven days a week.In addition,our Chief Compliance Officer,our Human Resources Department,our Law Department and our managers are confidential resources for employees to surface their concerns without fear of retaliation.Building and maintai
42、ning trust,respect and communication among our employees is essential to the effectiveness of our governance program.Our commitment to integrityDon P.Newman Executive Vice President,Finance,and Chief Financial OfficerVaishali S.BhatiaSenior Vice President,General Counsel,and Chief Compliance Officer
43、Kimberly A.Fields President and Chief Executive OfficerATI BOARD OF DIRECTORSLeroy M.BallPresident and Chief Executive Officer,Koppers Holdings,Inc.,a leading integrated global provider of treated wood products,wood treatment chemicals and carbon compounds 1|3 J.Brett HarveyLead Independent Director
44、 of ATI.Retired Chairman and Chief Executive Officer of CONSOL Energy,Inc.,a leading diversified energy company in the United States2|3Herbert J.CarlisleRetired President and Chief Executive Officer of the National Defense Industrial Association(NDIA),and retired United States Air Force four-star ge
45、neral1 Carolyn CorviRetired Vice President,General Manager of Airplane Programs of The Boeing Company2|3 WWW.ATIMATERIALS.COM 52024 EXECUTIVE OFFICERSRobert S.WetherbeeExecutive ChairmanKimberly A.FieldsPresident and Chief Executive OfficerStanding committees1 Audit and Risk2 Nominating and Governan
46、ce3 Compensation and Leadership DevelopmentDavid P.HessRetired EVP and Chief Customer Officer for Aerospace,United Technologies Corporation,a global leader in aerospace and technology;formerly President,Pratt&Whitney2|3David J.MorehouseSenior Advisor to the President of the Pittsburgh Steelers1 Ruby
47、 SharmaRetired Managing Partner,RNB Strategic Advisors,a strategic advisory firm,and retired Senior Partner of Ernst&Young LLP 1 Marianne KahRetired Chief Economist for ConocoPhillips and current adjunct senior research scholar at Columbia Universitys Center on Global Energy Policy1 WWW.ATIMATERIALS
48、.COM 5Don P.NewmanExecutive Vice President,Finance,and Chief Financial OfficerTina K.BuschSenior Vice President,Chief Human Resources OfficerVaishali S.BhatiaSenior Vice President,General Counsel,and Chief Compliance OfficerTimothy J.HarrisSenior Vice President,Chief Digital and Information Officer6
49、 ATI 2024 ANNUAL REPORTATI SALES BY END MARKET&2024 SEGMENT INFORMATION$2,2782024 Segment Sales($in millions)High Performance Materials&Components Segment SalesAdvanced Alloys&Solutions Segment Sales$2,084 2024 Segment Sales($in millions)Total ATI Sales($in millions)202220232024Jet EnginesCommercial
50、$1,064 28%$1,334 32%$1,458 33%AirframesCommercial 469 12%739 18%773 18%Defense 341 9%402 9%490 11%Total Aerospace&Defense 1,874 49%2,475 59%2,721 62%Specialty Energy 276 7%273 7%285 7%Medical 163 4%177 4%225 5%Electronics 200 5%160 4%194 4%Other Core Markets 639 16%610 15%704 16%Conventional Energy4
51、7713%41510%3027%Automotive 302 8%211 5%259 6%Construction&Mining 176 5%163 4%159 4%Other 368 9%3007%217 5%Industrial Markets$1,32335%$1,08926%$937 22%Total$3,836 100%$4,174 100%$4,362100%Jet EnginesCommercial60%AirframesCommercial16%Defense10%Total Aerospace&Defense86%Specialty Energy4%Medical5%Elec
52、tronics0%Other Core Markets9%Conventional Energy1%Automotive1%Construction&Mining1%Other2%Industrial Markets5%Jet EnginesCommercial4%AirframesCommercial19%Defense13%Total Aerospace&Defense36%Specialty Energy9%Medical6%Electronics9%Other Core Markets24%Conventional Energy14%Automotive12%Construction&
53、Mining6%Other8%Industrial Markets40%UNITED STATES SECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549FORM 10-K(Mark One)Annual report pursuant to Section 13 or 15(d)of the Securities Exchange Act of 1934For the fiscal year ended December 29,2024 ORTransition report pursuant to Section 13 or 15(d)
54、of the Securities Exchange Act of 1934For the transition period from to Commission file number 1-12001 ATI Inc.(Exact name of registrant as specified in its charter)Delaware25-1792394(State or other jurisdiction ofincorporation or organization)(I.R.S.EmployerIdentification Number)2021 McKinney Avenu
55、eDallas,Texas75201(Address of principal executive offices)(Zip Code)Registrants telephone number,including area code:(800)289-7454 Securities registered pursuant to Section 12(b)of the Act:Title of each classTrading SymbolName of each exchange on which registeredCommon stock,par value$0.10ATINew Yor
56、k Stock ExchangeSecurities registered pursuant to Section 12(g)of the Act:None Indicate by check mark whether the Registrant is well known seasoned issuer,as defined in Rule 405 of the Securities Act.Yes No Indicate by check mark if the Registrant is not required to file reports pursuant to Section
57、13 or Section 15(d)of the Act.Yes No Indicate by check mark whether the Registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding 12 months,and(2)has been subject to such filing requirements for the past 90 days.Yes No I
58、ndicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter)during the preceding 12 months(or for such shorter period that the registrant was required to submit such fil
59、es).Yes No Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smaller reporting company or an emerging growth company.See definitions of“large accelerated filer,”“accelerated filer,”“smaller reporting company”and“emerging growth
60、company”in Rule 12b-2 of the Exchange Act.(Check one):Large accelerated filerAccelerated filerNon-accelerated filer(Do not check if a smaller reporting company)Smaller reporting companyEmerging growth company If an emerging growth company,indicate by check mark if the registrant has elected not to u
61、se the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a)of the Exchange Act.Indicate by check mark whether the registrant has filed a report on and attestation to its managements assessment of the effectiveness of its i
62、nternal control over financial reporting under Section 404(b)of the Sarbanes-Oxley Act(15 U.S.C.7262(b)by the registered public accounting firm that prepared or issued its audit report.If securities are registered pursuant to Section 12(b)of the Act,indicate by check mark whether the financial state
63、ments of the registrant included in the filing reflect the correction of an error to previously issued financial statement.Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registran
64、ts executive officers during the relevant recovery period pursuant to 240.10D-1(b).Indicate by check mark whether the Registrant is a shell company(as defined in Rule 12b-2 of the Exchange Act).Yes No On January 31,2025,the Registrant had outstanding 142,166,931 shares of its Common Stock.The aggreg
65、ate market value of the Registrants voting stock held by non-affiliates at June 30,2024 was approximately$6.9 billion,based on the closing price per share of Common Stock on June 30,2024 of$55.45 as reported on the New York Stock Exchange.Shares of Common Stock known by the Registrant to be benefici
66、ally owned by directors and officers of the Registrant subject to the reporting and other requirements of Section 16 of the Securities Exchange Act of 1934,as amended(the“Exchange Act”),are not included in the computation.The Registrant,however,has made no determination that such persons are“affilia
67、tes”within the meaning of Rule 12b-2 under the Exchange Act.Documents Incorporated By ReferenceSelected portions of the Proxy Statement for the Annual Meeting of Stockholders to be held on May 16,2025 are incorporated by reference into Part III of this Report.F-1INDEX PageNumberPART IItem 1.Business
68、F-3Item 1A.Risk FactorsF-9Item 1B.Unresolved Staff CommentsF-17Item 1C.CybersecurityF-17Item 2.PropertiesF-18Item 3.Legal ProceedingsF-18Item 4.Mine Safety DisclosuresF-19PART IIItem 5.Market for the Registrants Common Equity,Related Stockholder Matters and Issuer Purchases of Equity SecuritiesF-19I
69、tem 6.ReservedF-20Item 7.Managements Discussion and Analysis of Financial Condition and Results of OperationsF-20Item 7A.Quantitative and Qualitative Disclosures About Market RiskF-38Item 8.Financial Statements and Supplementary DataF-40Item 9.Changes in and Disagreements with Accountants on Account
70、ing and Financial DisclosureF-90Item 9A.Controls and ProceduresF-90Item 9B.Other InformationF-93Item 9C.Disclosure Regarding Foreign Jurisdictions that Prevent InspectionsF-93PART IIIItem 10.Directors and Executive Officers of the RegistrantF-93Item 11.Executive CompensationF-93Item 12.Security Owne
71、rship of Certain Beneficial Owners and Management and Related Stockholder MattersF-94Item 13.Certain Relationships and Related Transactions,and Director IndependenceF-94Item 14.Principal Accountant Fees and ServicesF-94PART IVItem 15.Exhibits,Financial Statements and Financial Statement SchedulesF-9
72、4Item 16.Form 10-K SummaryF-97SIGNATURESF-2PART IItem 1.Business The CompanyATI Inc.is a Delaware corporation with its corporate headquarters located at 2021 McKinney Avenue,Suite 1100,Dallas,TX 75201,telephone number(800)289-7454,Internet website address .Our Internet website and content contained
73、therein or connected thereto are not intended to incorporate into this Annual Report on Form 10-K.References to“ATI,”the“Company,”“the Registrant,”“we,”“our”and“us”and similar terms mean ATI Inc.and its subsidiaries,unless the context otherwise requires.When used in this Annual Report on Form 10-K,u
74、nless the context otherwise requires or unless otherwise specified,any reference to“year”is to the Companys fiscal year.The Company follows a 4-4-5 or 5-4-4 fiscal calendar,whereby each fiscal quarter consists of thirteen weeks grouped into two four-week months and one five-week month,and its fiscal
75、 year ends on the Sunday closest to December 31.Fiscal years 2024,2023 and 2022 ended on December 29,2024,December 31,2023,and January 1,2023,respectively.All fiscal years presented include 52 weeks of operations.Our BusinessATI produces specialty materials,highly differentiated by our materials sci
76、ence expertise and advanced process technologies.Our mission is to solve the worlds challenges through materials science.Our largest markets of aerospace&defense represent approximately 62%of total sales,led by products for jet engines and airframes.Additionally,we have a strong presence in our othe
77、r core markets consisting of specialty energy,medical and electronics markets.In aggregate,these core markets represent almost 80%of our revenue.We operate in two business segments:High Performance Materials&Components(HPMC)and Advanced Alloys&Solutions(AA&S).The HPMC segments primary focus is on ma
78、ximizing jet engine materials and components growth,with approximately 86%of its revenue derived from the aerospace&defense markets,including nearly 60%of its revenue from products for commercial jet engines.Commercial aerospace products have been the main source of sales and EBITDA growth for HPMC
79、over the last several years and are expected to continue to drive HPMC and overall ATI results in the future.HPMC has also experienced growth in defense products,which comprise almost 10%of total sales.Other core markets include medical and specialty energy.HPMC produces a wide range of high perform
80、ance 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.HPMCs capabilities range from cast/wrought and powder alloy development to final production of
81、highly engineered finished components,and 3D-printed aerospace products.The AA&S segment 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 sale
82、s,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.Strategic end-use markets for our products include:Aerospace&Defense.We are a w
83、orld leader in the production of specialty materials and components for both commercial and military jet engines and airframes supporting customer needs for initial build requirements and for spare parts.We believe that through alloy development,internal growth efforts,and long-term supply agreement
84、s on current and next-generation jet engines and airframes,we are well-positioned with a fully qualified asset base to meet the expected multi-year demand growth from the commercial aerospace market.Typical aerospace applications for nickel-based alloys and superalloys and advanced metallic powders
85、include jet engine disks,blades,vanes,rings,casings and shafts.Nickel-based alloys and superalloys remain extremely strong at high temperatures and resist degradation under extreme conditions.Next-generation jet engines use advanced nickel-based superalloys and metallic powder alloys to enable incre
86、ased fuel efficiency requirements that require hotter-burning engines.Our specialty materials are also used in the manufacture of aircraft landing gear and structural components.We are a global industry leader in iso-thermal and hot-die forging technologies for advanced aerospace components.We produ
87、ce highly sophisticated components that have differing mechanical properties across a single product unit and are highly resistant to fatigue and temperature effects.Our precision forgings are used for jet engine components,structural components for aircraft,helicopters,space propulsion,and other de
88、manding applications.ATI provides a full range of post-production inspection and machining with the certified quality needed to meet demanding application requirements.F-3Products and components made from titanium and titanium-based alloys,such as jet engine components including disks,blades and van
89、es,and airframe components such as structural members,landing gears,and hydraulic systems,are critical in aerospace applications.These materials and components possess an extraordinary combination of properties that help to increase jet engine fuel efficiency and product longevity,including superior
90、 strength-to-weight ratios,elevated temperature resistance,low coefficient of thermal expansion,and extreme corrosion resistance.Availability of titanium supply continues to be a critical issue across the aerospace&defense supply chain.As such,in fiscal year 2023,we restarted a significant amount of
91、 titanium melt capacity in Albany,Oregon with a modest investment and have continued to invest in additional capacity at this facility,bringing online a fourth furnace in the first half of fiscal year 2024.In addition,we have further invested in additional titanium melt capacity to meet growing dema
92、nd at our Richland,Washington facility,which is expected to begin qualifications in the second quarter of 2025.When our Richland,Washington expansion is at full production in late fiscal year 2025,our total titanium melt capacity is expected to be 80%greater than our fiscal year 2022 titanium melt c
93、apacity.Our specialty materials and components for defense applications include naval nuclear products,military jet engines,fixed wing and rotorcraft products,armor applications and munitions materials.We expect to continue to increase our sales in government defense applications in future years.We
94、continuously seek to develop and manufacture innovative new alloys to better serve the needs of the aerospace&defense markets,and several of the alloys we produce have won significant share in current and next-generation jet engines.ATIs metallic powder technology delivers alloy compositions and ref
95、ined microstructures that offer increased performance and longer useful lives in high-temperature aerospace environments,as well as improved efficiency of jet engines.We continue to increase our production capacity for advanced metallic powders for use in next-generation aerospace products,including
96、 additive manufacturing applications.In fiscal year 2023,ATI established a dedicated additive manufacturing and post-processing facility near Fort Lauderdale,Florida which achieved its first print in fiscal year 2024.This facility will allow ATI to tap into significant aerospace and defense demand f
97、or additively manufactured laser powered bed fusion parts,serving both commercial and defense customers.Energy.We also serve energy markets,with a focus on specialty energy,which includes nuclear power generation and gas turbines.Our specialty materials are widely used in the global electrical power
98、 generation and distribution industries.We believe clean energy needs,expanding global environmental policies and the electrification of developing countries will continue to drive demand for our specialty materials and products for use in these industries over the long term.Our specialty materials,
99、including corrosion-resistant alloys(CRAs),are used in nuclear,natural gas and other electrical power generation fuel source applications,including for pipe,tube,and heat exchanger applications in water systems and in pollution control scrubbers.We are an industry pioneer in producing nuclear reacto
100、r fuel cladding and structural components utilizing zirconium and hafnium alloys for use in nuclear power generation.We also are a technology leader for large diameter components used in natural gas land-based turbines for power generation,and our alloys are used for alternative energy generation,in
101、cluding solar,fuel cell and geothermal applications.Both of our business segments also produce specialty materials that are critical to the conventional energy market,which includes oil&gas and chemical and hydrocarbon processing industries.The environments in which oil&gas can be found in commercia
102、l quantities have become more challenging,involving deep offshore wells,high pressure and high temperature conditions in sour wells and unconventional sources.These challenging offshore environments are located further off the continental shelf,including locations in arctic and tropical waters where
103、 drilling is more difficult than previously-sourced locations.Our specialty materials,including nickel-based alloys,duplex alloys and other specialty alloys,have the strength and corrosion-resistant properties necessary to meet these challenging operating conditions.We enable our customers success i
104、n these applications by developing and producing specialty materials for equipment that can operate for up to 30 years in these harsh environments.Medical.ATIs advanced specialty materials are used in medical device products that enhance the quality of lives around the world.Manufacturers of magneti
105、c resonance imaging(MRI)devices rely on our niobium superconducting wire to help produce electromagnetic fields that allow physicians to safely scan the bodys soft tissue.We have a joint technology development agreement with Bruker Energy&Supercon Technologies to advance state-of-the-art niobium-bas
106、ed superconductors,including those used in MRI magnets for the medical industry,and preclinical MRI magnets used in the life-science tools industry.Our specialty alloys also are used for replacement knees,hips and other prosthetic devices.The use of our alloys in these replacement devices offers the
107、 potential for longer product lifespans versus previous implant generations.Our biocompatible nickel-titanium(nitinol)shape memory alloy is used for stents to support collapsed or clogged blood vessels.Reduced in diameter for insertion,these stents expand post-implant to their original tube-like sha
108、pe due to the metals superelasticity.In addition,our ultra fine diameter(0.002 inch/0.051 mm)titanium wire is used for screens to prevent blood F-4clots from entering critical areas of the body.We have a strategic partnership with Confluent Medical Technologies(Confluent)whereby Confluent has begun
109、to provide a$50 million investment in our capacity expansion to produce nitinol.As a result of this expansion,we expect to more than triple our production of this life saving alloy by fiscal year 2027.Electronics.ATIs materials perform a variety of important roles in the growing consumer electronics
110、 market.Nickel alloys and Precision Rolled Strip(PRS)from Specialty Rolled Products(SRP)and our Asian PRS joint venture are used in computers and smart phones.The magnetic properties of nickel alloys are used in relay cores,magnets and magnetic shielding,while their thermal expansion is useful in gl
111、ass-to-metal sealing applications such as monitors.PRS is selected for electronics and communications applications based on corrosion resistance,strength,wear resistance,electrical resistivity or thermal expansion.In addition,metal precursors which use chemicals produced by ATI,such as hafnium have
112、a variety of important applications in consumer and industrial electronics.Business SegmentsOur two business segments accounted for the following percentages of total revenues of$4.4 billion,$4.2 billion,and$3.8 billion for the fiscal years ended December 29,2024,December 31,2023,and January 1,2023,
113、respectively.Fiscal Year EndedDecember 29,2024December 31,2023January 1,2023High Performance Materials&Components 52%51%43%Advanced Alloys&Solutions 48%49%57%Information with respect to our business segments is presented below and in Note 18 of the notes to the consolidated financial statements.High
114、 Performance Materials&Components SegmentOur HPMC segment produces a wide range of high performance specialty materials,parts and components for several of our core markets,including aerospace&defense,medical,and specialty energy,with approximately 86%of fiscal year 2024 revenues derived from the ae
115、rospace&defense markets.Most of the products in this segment are sold directly to end-use customers,and a substantial portion of our HPMC segment products are sold under multi-year agreements.Demand for our products is driven primarily by the commercial aerospace cycle.Large aircraft and jet engines
116、 are manufactured by a small number of companies,such as The Boeing Company(Boeing),Airbus S.A.S.(an Airbus Group company)including the former operations of Bombardier Aerospace,and Empresa Brasileira de Aeronutica S.A.(Embraer)for airframes.GE Aerospace,Rolls-Royce plc,Pratt&Whitney(a division of R
117、aytheon Technologies Corporation),Safran Aircraft Engines,formerly known as Snecma(a division of Safran Group),and various joint ventures manufacture jet engines.These companies and their suppliers form a substantial part of our customer base in this business segment.We have long-term agreements(LTA
118、s)in place with most major aerospace market original equipment manufacturers(OEMs).The loss of one or more of our customers in the aerospace or defense markets could have a material adverse effect on ATIs results of operations and financial condition(see Item 1A.Risk Factors).Within this segment,our
119、 products are manufactured from a wide range of advanced materials including metallic powder alloys made from nickel-based alloys and superalloys,titanium and titanium-based alloys,and a variety of other specialty materials.These materials are made into a variety of product forms that include precis
120、ion forgings,machined parts and others.We are integrated across these alloy systems in melt,forging,finishing,testing and machining processes.Principal competitors in the HPMC segment include:Berkshire Hathaway Inc.,for nickel-based alloys and superalloys and specialty steel alloys,titanium and tita
121、nium-based alloys,and precision forgings through its ownership of Precision Castparts Corporation and subsidiaries;Howmet Aerospace Inc.,for titanium and titanium-based alloys;Carpenter Technology Corporation for legacy nickel-based alloys and superalloys and specialty steel alloys;VSMPO-AVISMA for
122、titanium and titanium-based alloys;and Aubert&Duval for precision forgings.Advanced Alloys&Solutions SegmentOur AA&S segment produces nickel-based alloys,titanium and titanium-based alloys,and specialty alloys in a variety of forms including plate,sheet,and PRS products.The major end markets for our
123、 flat rolled products are specialty and conventional energy,aerospace&defense,automotive,medical and electronics markets.The operations in this segment include our SRP and Specialty Alloys&Components businesses in addition to our Shanghai STAL Precision Stainless Steel Company Limited(STAL)PRS joint
124、 venture in China,in which we hold a 60%interest.F-5Nickel-based alloys,titanium,and stainless sheet products are used in a wide variety of industrial and consumer applications.In fiscal year 2024,approximately 30%of our stainless sheet products by volume were sold to independent service centers,whi
125、ch have slitting,cutting or other processing facilities,with the remainder sold directly to end-use customers.Nickel-based alloy,titanium,and specialty alloy plate products are primarily used in aerospace&defense,and corrosion and industrial markets.In fiscal year 2024,approximately 35%of our plate
126、products by volume were sold to independent service centers,with the remainder sold directly to end-use customers.PRS products,which are under 0.015 inches thick,are used by customers to fabricate a variety of products primarily in the automotive and electronics markets.In fiscal year 2024,approxima
127、tely 90%of these products by volume were sold directly to end-use customers or through our own distribution network,with the remainder sold to independent service centers.With the sale of our New Bedford,MA PRS business in 2024,PRS sales in this segment will be significantly reduced going forward.Co
128、mpetitors for nickel-based alloys and superalloys and specialty alloys include Haynes International and VDM Metals GmbH,a subsidiary of Acerinox S.A.Raw Materials and SuppliesSubstantially all raw materials and supplies required in the manufacture of our products are available from more than one sup
129、plier,and the sources and availability of raw materials essential to our businesses are currently adequate.The principal raw materials we use in the production of our specialty materials are scrap(including iron-,nickel-,chromium-,titanium-,and molybdenum-bearing scrap),nickel,titanium sponge,zircon
130、ium sand and sponge,ferrochromium,ferrosilicon,molybdenum and molybdenum alloys,manganese and manganese alloys,cobalt,niobium,vanadium,hafnium and other alloying materials.While we enter into raw materials futures contracts from time to time to hedge exposure to price fluctuations,such as for nickel
131、,we cannot be certain that our hedge position adequately reduces exposure.We believe that we have adequate controls to monitor these contracts,but we may not be able to accurately assess exposure to price volatility in the markets for critical raw materials.Some raw materials,such as nickel,titanium
132、 sponge,cobalt,and ferrochromium,are available to us and our specialty materials industry competitors primarily from foreign sources.Some of these foreign sources are in countries that may be subject to unstable political and economic conditions,which could disrupt supplies or affect the price of th
133、ese materials.Further changes in global trade policies could materially impact the total cost of imported materials.We source our raw materials through a variety of producers located throughout the world,including the United States(U.S.).The following is a summary of the primary source countries of
134、raw materials that play an important role in our products:Nickel:Canada,Norway,Japan,Finland,and South Africa.Zirconium:U.S.and China.Hafnium:U.S.and China.Cobalt:Norway and Japan.Chromium:the United Kingdom(U.K.),South Africa,Germany and Turkey.Niobium:Brazil.Molybdenum:U.S.,Brazil,and China.Titani
135、um sponge:Japan,Kazakhstan,Saudi Arabia,and ChinaCertain key supplies used in melting and other processing operations,such as graphite electrodes and industrial gases including helium and argon,are from time-to-time limited in availability and may be subject to significant price inflation.We enter i
136、nto long-term supply contracts where possible to ensure an adequate supply of these products.However,overall industry shortages may impact our operations and scheduling.Export Sales and Foreign OperationsInternational sales represent approximately 42%of our total annual sales,with direct export sale
137、s by our U.S.-based operations to customers in foreign countries accounting for approximately 33%of our total sales.Our overseas sales,marketing and distribution efforts are aided by our international marketing team or by independent representatives throughout the world.Changes in global trade polic
138、ies may negatively impact our international sales if export or import tariffs increase the cost of our products.Our HPMC segment has manufacturing capabilities for precision forging and machining in Poland,primarily serving the aerospace,construction&mining and transportation markets.In fiscal year
139、2024,the Company completed the sale of its precision rolled strip operations in Remscheid,Germany,which was part of the HPMC segment.In fiscal year 2022,the Company completed the sale of its Sheffield,U.K.operations,which included facilities for melting and re-melting,machining F-6and bar mill opera
140、tions,and was part of the HPMC segment.Within our AA&S segment,our Asian joint venture makes PRS products,which enables us to offer these products more effectively to markets in China and other Asian countries.Backlog,Seasonality and CyclicalityOur backlog of confirmed orders was approximately$3.9 b
141、illion at December 29,2024 and$3.8 billion at December 31,2023.We expect that approximately 70%of confirmed orders on hand at December 29,2024 will be filled during fiscal year 2025.Our HPMC segments backlog of confirmed orders was approximately$3.3 billion at December 29,2024 and$3.0 billion at Dec
142、ember 31,2023.We expect that approximately 70%of the confirmed orders on hand at December 29,2024 for this segment will be filled during fiscal year 2025.Our AA&S segments backlog of confirmed orders was approximately$0.6 billion at December 29,2024 and$0.8 billion at December 31,2023.We expect that
143、 approximately 85%the confirmed orders on hand at December 29,2024 for this segment will be filled during fiscal year 2025.Demand for our products is cyclical over longer periods because specialty materials customers generally operate in cyclical industries and are subject to changes in general econ
144、omic conditions and other factors both external and internal to those industries.Historically,the HPMC segment typically has experienced modest seasonal weakness in the third quarter of each fiscal year due to many European customers,particularly in the aerospace supply chain,taking plant outages du
145、ring this summer period.ATI also typically performs corresponding annual preventative maintenance outages at several facilities during this same period.Research,Development and Technical ServicesWe believe that our research and development capabilities give ATI a competitive advantage in developing
146、new products and manufacturing processes that contribute to the long-term profitable growth potential of our businesses.We conduct research and development at our various operating locations both for ourselves and,on a limited basis,for customers on a contract basis.Research and development expendit
147、ures for the fiscal years ended December 29,2024,December 31,2023,and January 1,2023 included the following:Fiscal Year Ended(In millions)December 29,2024December 31,2023January 1,2023Company-Funded:High Performance Materials&Components$10.4$9.6$8.4 Advanced Alloys&Solutions 8.4 10.2 7.3 Corporate 0
148、.8 0.9 0.6 19.6 20.7 16.3 Customer-Funded:High Performance Materials&Components 2.5 1.4 1.4 Total Research and Development$22.1$22.1$17.7 Our research,development and technical service activities are closely interrelated and directed toward development of new products,improvement of existing product
149、s,quality assurance,development of new manufacturing methods,improvement of existing manufacturing methods,and reducing our manufacturing costs.The increase in our research and development expenditures in fiscal years 2024 and 2023 was largely related to efforts to develop and/or refine materials an
150、d manufacturing methods for products supporting the aerospace&defense markets.We own hundreds of U.S.patents,many of which are also filed under the patent laws of other nations.Although these patents,as well as our numerous trademarks,technical information,license agreements,and other intellectual p
151、roperty,have been and are expected to be of value,we believe that the loss of any single such item or technically related group of such items would not materially affect the conduct of our business.Environmental,Health and Safety MattersWe are subject to various domestic and international environmen
152、tal laws and regulations that govern the discharge of pollutants and disposal of wastes,and which may require that we investigate and remediate the effects of the release or disposal of materials at sites associated with past and present operations.We could incur substantial cleanup costs,fines,civi
153、l or criminal sanctions,third party property damage or personal injury claims as a result of violations or liabilities under these laws or non-compliance with environmental permits required at our facilities.We are currently involved in the investigation and remediation of a number of our current an
154、d former sites as well as third party sites.We consider environmental compliance to be an integral part of our operations.We have a comprehensive environmental management and reporting program that focuses on compliance with applicable federal,state,regional and local environmental F-7laws and regul
155、ations.Each operating company has an environmental management system that includes mechanisms for regularly evaluating environmental compliance and managing changes in business operations while assessing environmental impact.Safety is one of our core values.We strive for a zero injury culture commit
156、ted to the safety of our people,our products,and the communities in which we operate.Our fiscal year 2024 OSHA Total Recordable Incident Rate was 1.39 per 200,000 hours and our Lost Time Case Rate was 0.26 per 200,000 hours.Nearly all of our domestic employees are working in an ATI facility that has
157、 achieved its ISO 45001 certification.Human Capital ManagementWe believe that our people and culture are a competitive differentiator.We attract,develop,and retain purpose and performance-driven leaders.Those leaders build teams with diverse,empowered and fulfilled employees who want to stay and gro
158、w with the company.As of December 29,2024,we employed approximately 7,700 active employees,15%of whom are located outside the U.S.across 15 countries.Our Culture:At the center of our commitment to excellence are our values,which drive how we succeed:Accountability,Integrity,Innovation,Safety&Sustain
159、ability,and Teamwork&Respect.We continuously strive to cultivate and support a highly engaged and productive workforce.We actively seek opportunities for listening and communication by our CEO and other senior executive leaders with our employees.Annually,we conduct a confidential company-wide engag
160、ement survey that offers our employees the ability to provide feedback and valuable insight to identify opportunities for improvement and support employee engagement and our overall human capital strategy.Governance:The Compensation and Leadership Development Committee of our Board oversees the Comp
161、anys human capital management policies and procedures,including its workforce and professional development and diversity and inclusion initiatives,and is responsible for establishing and administering the policies governing annual compensation and long-term compensation to ensure the policies are de
162、signed to align compensation with our overall business strategy and performance to link to the interests of our stockholders.Our Code of Conduct establishes the baseline requirements of our integrity and compliance program and promotes an environment where everyone is treated ethically and with resp
163、ect.It outlines our pledge to recognize the dignity of each individual,respect each employee,provide compensation and benefits that are competitive,promote self-development through training,and value diversity of perspectives and ideas.Employees complete Business Conduct and Ethics training and,wher
164、e permitted by law,are asked to certify each year that they will comply with the Code.Talent Acquisition:Our performance and development process is integrated in the ATI business strategy,and is a key component to recruiting,hiring,and developing top-performing talent.We believe in providing a welco
165、ming,engaging and inclusive assessment and interviewing process that encourages people from all backgrounds to consider ATI.Our hiring practices include a goal that position candidate slates be composed at least 30%of diverse candidates.Further,we partner with top academic institutions that have pro
166、grams relevant to our business,external professional organizations,trade schools and high schools to enhance the diversity of our workforce and identify materials science,STEM and other relevant expertise.Learning and Development:Developing talent and leaders at all levels of the organization is cri
167、tical to our long-term success.We have leadership and management development programs as well as broad learning opportunities for our employees to support their career growth and advance their skills.By providing a consistent and comprehensive learning experience,we focus on growing top talent acros
168、s the enterprise and enhancing Front Line Leader development.Additionally,we maintain a formal talent review process to work in connection with performance management for systematic career development and succession planning at both the individual employee and organizational levels.Compensation and
169、Benefits:We provide market-based competitive compensation through our salary,annual incentive and long-term incentive programs and robust benefits packages that promote the well-being of our employees across all aspects of their lives.Eligible employees are compensated for their contributions to ach
170、ievement of our goals with both short-term cash incentives and long-term equity-based incentives.We believe the structure of our compensation packages provides the appropriate incentives to attract,retain,and motivate our employees.Our well-being focus addresses physical,mental,financial,and individ
171、ual needs,providing benefits and resources to help employees and their families be their best,both personally and professionally.We have implemented several campaigns to promote well-being and help provide visibility to resources and available benefits.We offer Employee Assistance Programs with ther
172、apy sessions to employees and family members,comprehensive mental health benefits to those enrolled in the U.S.medical plan,virtual mental health options and navigation tools to improve access and speed of care,and preventive/mental health resilience programs.Inclusion and Diversity:Our long traditi
173、on of innovation and operational excellence demands the contributions of leaders and team members with a wide array of characteristics,backgrounds,experiences,knowledge,and skills.We believe our business F-8success is intricately tied to cultivating a culture in which all members of our workforce ar
174、e included and empowered to do their best work.We recognize the benefits and importance of diversity amongst our board and management.As of December 29,2024,women made up 40%of our Board,and 10%of our Directors were racially diverse.Labor Relations and Collective Bargaining:Approximately 35%of our w
175、orkforce is covered by various collective bargaining agreements(CBAs),predominantly with the United Steel,Paper and Forestry,Rubber,Manufacturing,Energy,Allied&Industrial Service Workers International Union(USW).The Company is currently renegotiating CBAs,which expire on February 28,2025,that cover
176、approximately 1,100 USW-represented full-time employees within our AA&S operations.There can be no assurance that the Company will successfully conclude these renegotiations to replace the expiring CBAs.Available InformationOur Internet website address is .Our annual reports on Form 10-K,quarterly r
177、eports on Form 10-Q,current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a)or 15(d)of the Securities Exchange Act of 1934,as well as proxy and information statements and other information that we file,are available free of charge through our Internet
178、website as soon as reasonably practicable after we electronically file such material with,or furnish such material to,the U.S.Securities and Exchange Commission(“SEC”).Our Internet website and the content contained therein or connected thereto are not intended to be incorporated into this Annual Rep
179、ort on Form 10-K.The SEC maintains an Internet website at www.sec.gov,which also contains reports,proxy and information statements and other information that we file electronically with the SEC.We routinely post important information on our website,in the“Investors”section.We also may use our websit
180、e as a means of disclosing material,non-public information and for complying with our disclosure obligations under Regulation FD.Accordingly,investors should monitor the Investors section of our website,in addition to following our press releases,SEC filings,public conference calls,presentations and
181、 webcasts.The information contained on,or that may be accessed through,our website is not incorporated by reference into,and is not a part of,this document.Item 1A.Risk Factors There are inherent risks and uncertainties associated with our business that could adversely affect our operating performan
182、ce and financial condition.Set forth below are descriptions of those risks and uncertainties that we currently believe to be material,but the risks and uncertainties described are not the only risks and uncertainties that could affect our business.See the discussion under“Forward-Looking Statements”
183、in Item 7.Managements Discussion and Analysis of Financial Condition and Results of Operations,in this Annual Report on Form 10-K.RISKS RELATED TO CYCLICAL NATURE OF OUR BUSINESSCyclical Demand for Products.The cyclical nature of the industries in which our customers operate causes demand for our pr
184、oducts to fluctuate,creating potential uncertainty regarding future profitability.Various changes in general economic conditions may affect the industries in which our customers operate.These changes could include decreases in the rate of consumption or use of our customers products due to economic
185、downturns.Other factors that may cause fluctuation in our customers positions are changes in market demand,lower overall pricing due to domestic and international overcapacity,currency fluctuations,lower priced imports and increases in use or decreases in prices of substitute materials.As a result o
186、f these factors,our profitability has been and may in the future be subject to significant fluctuation.Risks Associated with the Commercial Aerospace Industry.A significant portion of our sales represent products sold to customers in the commercial aerospace industry.Fulfilling contractual arrangeme
187、nts to provide various products to customers in this industry often involves meeting highly exacting performance requirements and product specifications,and our failure to meet those requirements and specifications on a timely and cost-efficient basis could have a material adverse effect on our resu
188、lts of operations,business and financial condition.The commercial aerospace industry has historically been cyclical due to factors both external and internal to the airline industry.These factors include general economic conditions,airline profitability,consumer demand for air travel,varying fuel an
189、d labor costs,changes in projected build rates,price competition,and international and domestic political conditions such as military conflict and the threat of terrorism.The length and degree of cyclical fluctuation are influenced by these factors and therefore are difficult to predict with certain
190、ty.Demand for our products is subject to these cyclical trends.Cyclical and event-driven downturns in the commercial aerospace industry have had,and may in the future have,an adverse effect on the prices at which we are able to sell our products,and our results of operations,business and financial c
191、ondition could be materially adversely affected.Risks Associated with Cyclicality in General Industrial Markets.Our exposure to general industrial markets is primarily in our AA&S segment,where we have sales to the oil&gas industry,automotive,food equipment&appliances and construction and mining mar
192、kets.These markets tend to be highly cyclical and subject to volatility as a result of fluctuations in worldwide F-9economic activity and associated demand,changes in applicable regulation,global geopolitical conditions and numerous other factors.Demand for our products,particularly within the AA&S
193、segment,is subject to these trends,and in recent years,our business has at times been negatively impacted by depressed demand from general industrial markets.We expect that these end markets will remain highly cyclical.Future downturns in these markets could have an adverse effect on the prices at w
194、hich we are able to sell our products,and our results of operations,business and financial condition could be materially adversely affected.Product Pricing.From time-to-time,reduced demand,intense competition,and excess manufacturing capacity have resulted in reduced prices,excluding raw material su
195、rcharges,for many of our products.These factors,recent inflationary trends for certain critical raw material costs,and potential international trade actions,as discussed below,have had and may have an adverse impact on our revenues,operating results,and financial condition.We change prices on certai
196、n of our products from time-to-time.Our ability to implement price increases is dependent on market conditions,economic factors,raw material costs and availability,competitive factors,operating costs and other factors,some of which are beyond our control.As such,we may be unable to implement price i
197、ncreases to the degree or within the time frame necessary to fully mitigate the impact of inflationary trends,including those resulting from changes in trade policy,or at all,and the benefits of any price increases may be delayed due to long manufacturing lead times and the terms of existing contrac
198、ts.Risks Associated with Key Customers.We have long-term contracts with certain of our customers,some of which are subject to renewal,renegotiation,or re-pricing at periodic intervals or upon changes in competitive supply conditions.Our failure to successfully renew,renegotiate or favorably re-price
199、 such agreements,or a material deterioration in or termination of these or other key customer relationships,could result in a reduction or loss in customer purchase revenue.Additionally,a significant downturn or deterioration in the business or financial condition or loss of a key customer could neg
200、atively impact our business.Our customers may change their business strategies or modify their business relationships with us,including to reduce the amount of our products they purchase or to switch to alternative suppliers,as a result of which our financial condition and results of operations may
201、be adversely affected.RISKS RELATED TO THE RAW MATERIALS AND SUPPLIES THAT WE USEDependence on Critical Raw Materials Subject to Price and Availability Fluctuations.We rely to a substantial extent on third parties to supply certain raw materials that are critical to the manufacture of our products.P
202、urchase prices and availability of these critical items are subject to volatility,and in some cases,we have supply arrangements with only a limited number of suppliers for a given material.At any given time,we may be unable to obtain an adequate supply of these critical raw materials on a timely bas
203、is,on price and other terms acceptable to us,or at all.If suppliers increase the price of critical raw materials,we may not have alternative sources of supply.In addition,to the extent that we have quoted prices to customers and accepted customer orders for products prior to purchasing necessary raw
204、 materials,or have existing contracts,we may be unable to raise the price of products to cover all or part of the increased cost of the raw materials.We source some of these materials from China,which has and may in the future continue to impose export controls that could limit or significantly dela
205、y our access to such materials and could compel us to identify alternative sources,which we may not be able to do in a timely fashion or at all.The prices for many of the raw materials we use have been volatile during the past several years.Due to the long lead times required to manufacture many of
206、our products,volatility in raw material prices exposes us to cash costs that may not be fully recovered through surcharge and index pricing mechanisms.Recently,due to inflationary trends,certain critical raw material costs,such as nickel,hafnium,titanium sponge,cobalt,chromium,and molybdenum and scr
207、ap containing iron,nickel,titanium,chromium,and molybdenum have been volatile and they may continue to be so in the future,including as a result of changes in international trade policy.While we have been able to mitigate some of the adverse impact of volatile raw material costs through various mean
208、s,including the application of raw material surcharges or pricing indices to customers,rapid changes in raw material costs cause volatility in,and may adversely affect,our results of operations.The manufacture of some of our products is a complex process and requires long lead times.As a result,we m
209、ay experience delays or shortages in the supply of raw materials.In particular,we acquire certain important raw materials that we use to produce specialty materials,including nickel,zirconium,niobium,chromium,cobalt,vanadium and titanium sponge,from foreign sources.Some of these sources operate in c
210、ountries that may be subject to unstable political and economic conditions.These or similar conditions may disrupt supplies or affect the prices of the materials that are necessary to our operations.If unable to obtain adequate and timely deliveries of required raw materials,we may be unable to time
211、ly manufacture sufficient quantities of products.This could cause us to lose sales,incur additional costs,delay new product introductions,or suffer harm to our reputation.Dependence on Critical Supplies Subject to Price and Availability Fluctuations.We rely on third parties for certain supplies,such
212、 as graphite electrodes and industrial gases including helium and argon that are critical to the manufacture of our products.Purchase prices and availability of these critical items are subject to volatility.At any given time,we may be unable to obtain F-10an adequate supply of these critical suppli
213、es on a timely basis,on price and other terms acceptable to us,or at all.If suppliers increase the price of these items,we may not have alternative sources of supply.The manufacture of some of our products is a complex process and requires long lead times.As a result,we may experience delays or shor
214、tages of critical supplies.If unable to obtain adequate and timely deliveries of required supplies,we may be unable to timely manufacture sufficient quantities of products.This could cause us to lose sales,incur additional costs,delay new product introductions,or suffer harm to our reputation.Availa
215、bility of Energy Resources.We rely upon third parties for our supply of energy resources consumed in the manufacture of our products.The prices for and availability of electricity,natural gas,oil and other energy resources are subject to volatile market conditions.These market conditions often are a
216、ffected by political and economic factors and by supply and demand trends that are beyond our control.Disruptions in the supply of energy resources could temporarily impair our ability to manufacture products for customers.Further,increases in energy costs,or changes in costs relative to energy cost
217、s paid by competitors,has and may continue to adversely affect our profitability.To the extent that these uncertainties cause suppliers and customers to be more cost sensitive,increased energy prices may have an adverse effect on our results of operations and financial condition.The ongoing conflict
218、 between Russia and Ukraine may adversely affect our business and results of operations.Since February 2022,Russia and Ukraine have been engaged in active armed conflict.The length,impact,and outcome of the ongoing conflict and its potential impact on our business is highly volatile and difficult to
219、 predict.It has and could continue to cause significant market and other disruptions,including significant volatility in commodity prices and supply of energy resources,instability in financial markets,supply chain interruptions,political and social instability,trade disputes or trade barriers,chang
220、es in consumer or purchaser preferences,and increases in cyberattacks and espionage.Governments in the European Union,the U.S.,the U.K.and other countries have enacted sanctions against Russia and Russian interests.These sanctions include controls on the export,re-export,and in-country transfer in R
221、ussia of certain goods,supplies,and technologies,and the imposition of restrictions on doing business with certain state-owned Russian customers and other investments and business activities in Russia.We terminated our Uniti,LLC joint venture with Russian-based VSMPO-AVISMA(Verkhnaya Salda Metallurg
222、ical Production Association-Berezniki Titanium-Magnesium Works),the purpose of which was to market and sell a range of commercially pure titanium products.However,conditions in Ukraine and/or existing or future sanctions may disrupt supplies or affect the prices of materials that are necessary to ou
223、r operations.If unable to obtain adequate and timely deliveries of required raw materials,we may be unable to timely manufacture sufficient quantities of products.This could cause us to lose sales,incur additional costs,delay new product introductions,or suffer harm to our reputation.Further,the bro
224、ader consequences of the current conflict between Russia and Ukraine may also have the effect of heightening many other risks disclosed in our public filings,any of which could materially and adversely affect our business and results of operations.Such risks include,but are not limited to,adverse ef
225、fects on global macroeconomic conditions;increased volatility in the price and demand of oil,natural gas and other commodities,increased exposure to cyberattacks;disruptions in global supply chains;and exposure to foreign currency fluctuations and potential constraints or disruption in the capital m
226、arkets and our sources of liquidity.RISKS RELATED TO OUR WORKFORCERisks Associated with the Recruitment and Retention of Key Talent and the Sustainability of our Workforce.Our business and manufacturing processes are complex.We require highly skilled personnel with relevant industry and technical ex
227、perience to effectively operate,and as such,depend on our ability to recruit,retain and motivate our employees.Shortages in skilled labor and other labor market pressures currently are resulting in greater competition for skilled labor and increased labor costs in some instances.If we fail to attrac
228、t,develop,retain and motivate a sustainable workforce with the skills and in the locations we need to operate and grow our business,our operations could be adversely impacted.In addition,the loss of key members of management and other personnel could negatively impact our business,and any unplanned
229、turnover,or failure to develop adequate succession plans for key positions,could result in loss of technical or other expertise or institutional knowledge,delay or impede the execution of our strategic plans and priorities and,ultimately,negatively impact our business and results.Labor Matters.We ha
230、ve approximately 7,700 active employees,of which approximately 15%are located outside the U.S.Approximately 35%of our workforce is covered by various CBAs,predominantly with the USW.At various times,our CBAs expire and are subject to renegotiation.Generally,CBAs that expire may be terminated after n
231、otice by the union.After termination,the union may authorize a strike.A labor dispute,which could lead to a strike,lockout,or other work stoppage by the employees covered by one or more of the collective bargaining agreements,could have a material adverse effect on production at one or more of our f
232、acilities and,depending upon the length of such dispute or work stoppage,on our operating F-11results.There can be no assurance that we will succeed in obtaining CBAs to replace those that expire.The Company is currently renegotiating CBAs,which expire on February 28,2025,that cover approximately 1,
233、100 USW-represented full-time employees within our AA&S operations.There can be no assurance that the Company will successfully conclude these renegotiations to replace the expiring CBAs.RISKS RELATED TO INTELLECTUAL PROPERTY,INFORMATION TECHNOLOGY AND SECURITYRisks Associated with our Intellectual
234、Property.We own valuable intellectual property,including trade secrets,patents,trademarks and copyrights.Our intellectual property protects our investments in technological innovation,research and development,and plays an important role in maintaining our competitive position in the markets we serve
235、.Despite efforts to secure our intellectual property,it may be infringed or misappropriated by our employees,our competitors or other third parties.The pursuit of remedies for infringement or misappropriation of intellectual property is expensive and uncertain.Additionally,our competitors may develo
236、p technologies of their own that are similar or superior to our proprietary technologies,or design around our patents,to lawfully avoid our intellectual property rights.A failure to sufficiently secure or successfully enforce our intellectual property rights could adversely affect our business and c
237、ompetitive position.Risks Associated with Digital Technology.Information technology infrastructure is critical to supporting business objectives;failure of our information technology infrastructure to operate effectively could adversely affect our business.If a problem occurs that impairs this infra
238、structure,the resulting disruption could impede our ability to record or process orders,manufacture and ship in a timely manner,or otherwise carry on business in the normal course.Any such events could cause us to lose customers or revenue and could require us to incur significant remediation expens
239、e.As we integrate,implement and deploy new information technology processes and information infrastructure across our operations,we could experience disruptions in our business that could have an adverse effect on our business,financial condition,results of operations and cash flow.Cybersecurity Thr
240、eats.Increased global information technology threats,vulnerabilities,and a rise in sophisticated and targeted international computer crime pose a risk to the security of our systems and networks and the confidentiality,availability and integrity of our data.We believe that ATI faces the threat of su
241、ch cyberattacks due to the markets we serve,the products we manufacture,the locations of our operations,and global interest in our technology.Due to the evolving nature of cybersecurity threats,the scope and impact of any incident cannot be predicted.We continually work to strengthen our threat coun
242、termeasures,safeguard our systems and mitigate potential risks.Despite our efforts to fortify our cybersecurity and protect sensitive information and confidential and personal data,our facilities and systems and those of our third-party service providers may be vulnerable to security breaches.A sign
243、ificant security breach could lead to unanticipated disclosure,modification or destruction of proprietary and other key information,production downtimes,operational disruptions,and remediation costs,which in turn could adversely affect our reputation,competitiveness and results of operations.RISK RE
244、LATED TO CLIMATE CHANGE AND OTHER ENVIRONMENTAL MATTERSRisks Associated with Climate Change.While the prospect of a lower-carbon economy presents a number of opportunities for our business,the physical impacts of climate change,regulatory efforts to transition to a lower-carbon economy in the region
245、s in which we,our customers and our suppliers operate,and the increased focus and evolving views of our various stakeholders on climate change issues could create risks to our business.Physical Risk.Climate related changes in prevailing weather patterns may impact,among other conditions,changes in s
246、ea levels and the propensity for flooding in coastal and other regions,long-term changes in precipitation patterns leading to flooding,drought or deterioration in water quality,and increases in the frequency and severity of significant storms and other weather events and related natural hazards,such
247、 as wildfire risk.Although we do not believe that our facilities are currently exposed to significant physical risk as a general matter,our operations have at times been,and could in the future be,impacted by adverse climate-related events,such as,for example,unanticipated periods of extreme cold or
248、 heat,acute flooding and wide-spread wildfires such as those experienced in certain regions in the U.S.and elsewhere in recent years.Events such as these could cause damage to critical facilities and equipment,result in significant operational disruption and have meaningfully adverse effects on our
249、employees and the communities in which we operate.Additionally,even to the extent that significant weather events or changes in climate conditions do not directly impact our own facilities and/or operations,our business could be negatively impacted by events or more chronic climate conditions that d
250、isrupt or force longer-term changes in operations for our significant customers or suppliers,which could negatively impact the timing or overall volume of demand for our products or the cost and availability of critical raw materials,among other factors.Over time,widespread physical climate changes
251、and risks could drive increases in other operational costs for our business,such as insurance costs.Regulatory and Other Transition Risks.Increased worldwide focus on climate change has led to legislative and regulatory efforts to combat both potential causes and adverse impacts of climate change.Ne
252、w or more stringent laws and regulations related to greenhouse gas emissions,water usage and other climate change related concerns may adversely affect us,our F-12suppliers and our customers.We have publicly disclosed efforts to reduce certain environmental impacts,including greenhouse gas(GHG)emiss
253、ions of our operations,and provide for our compliance with applicable environmental regulations.Nevertheless,new and evolving laws and regulations could mandate different or more restrictive standards;increase operating costs;require(or cause customers to require that we make)capital investments to
254、transition to low carbon technologies or purchase carbon credits;or otherwise adversely impact our ongoing operations.Our suppliers may face similar challenges and incur additional compliance costs that are passed on to us.These direct and indirect costs may adversely impact our results.Market and R
255、eputational Risks.Technology to support the transition to lower-carbon operations within the timeframe that could be required by future regulation or expected in the future by our customers may not be available at the scale necessary to support our operations,in a timely or cost-effective manner or
256、at all.It is possible that,over time,due to both regulatory action and/or changing customer and societal norms and expectations regarding the causes and importance of climate change issues,demand for products in one or more of our significant end markets could decline or,if we fail to keep pace with
257、 changing demand and technological advancement,shift in favor of products that we do not produce.If we fail to appropriately adapt to the expectations of our customers or other stakeholders,fail to achieve or properly report progress toward our environmental sustainability goals and targets or other
258、wise are perceived as failing to adequately address climate change concerns,the resulting negative perceptions could adversely affect our business,reputation and access to capital.Risks Associated with Other Environmental Compliance Matters.We are subject to various domestic and international enviro
259、nmental laws and regulations that govern the discharge of pollutants and disposal of wastes,and which may require that we investigate and remediate the effects of the release or disposal of materials at sites associated with past and present operations.We could incur substantial cleanup costs,fines
260、and civil or criminal sanctions,third party property damage or personal injury claims as a result of violations or liabilities under these laws or non-compliance with environmental permits required at our facilities.We are currently involved in the investigation and remediation of a number of our cu
261、rrent and former sites as well as third party sites.We also could be subject to future laws and regulations that govern greenhouse gas emissions and various matters related to climate change and other air emissions,which could increase our operating costs.With respect to proceedings brought under th
262、e federal Superfund laws,or similar state statutes,we have been identified as a potentially responsible party(PRP)at 41 of such sites,excluding those at which we believe we have no future liability.Our involvement is limited or de minimis at approximately 19 of these sites,the potential loss exposur
263、e with respect to 14 individual sites is not considered to be material,and the potential loss exposure on the remaining 8 sites could be material.We are a party to various cost-sharing arrangements with other PRPs at many of the sites.The terms of the cost-sharing arrangements are subject to non-dis
264、closure agreements as confidential information.Nevertheless,the cost-sharing arrangements generally require all PRPs to post financial assurance of the performance of the obligations or to pre-pay into an escrow or trust account their share of anticipated site-related costs.In addition,the Federal g
265、overnment,through various agencies,is a party to several such arrangements.From time-to-time,we are a party to lawsuits and other proceedings involving alleged violations of,or liabilities arising from,environmental laws.When our liability is probable and we can reasonably estimate our costs,we reco
266、rd environmental liabilities in our financial statements.In many cases,we are not able to determine whether we are liable or if liability is probable or to reasonably estimate the loss or range of loss.Estimates of our liability remain subject to additional uncertainties,including the nature and ext
267、ent of site contamination,available remediation alternatives,the extent of corrective actions that may be required,and the participation number and financial condition of other PRPs,as well as the extent of their responsibility for the remediation.We intend to adjust our accruals to reflect new info
268、rmation as appropriate.Future adjustments could have a material adverse effect on our results of operations in a given period,but we cannot reliably predict the amounts of such future adjustments.At December 29,2024,our reserves for environmental matters totaled approximately$15 million.Based on cur
269、rently available information,we do not believe that there is a reasonable possibility that a loss exceeding the amount already accrued for any of the sites with which we are currently associated(either individually or in the aggregate)will be an amount that would be material to a decision to buy or
270、sell our securities.Future developments,administrative actions or liabilities relating to environmental matters,however,could have a material adverse effect on our financial condition or results of operations.F-13OTHER OPERATIONAL AND STRATEGIC RISKSRisks Associated with Disruptions to our Manufactu
271、ring Processes.The manufacture of many of our products is a highly exacting and complex process.If we encounter disruptions to our manufacturing processes due to equipment malfunction,failure to follow specific protocols,specifications and procedures,supply chain interruptions,natural disasters,heal
272、th pandemics,labor unrest,or otherwise,it could have an adverse impact on our ability to fulfill orders or on product quality or performance which could result in significant costs to and liability for us that could have a material adverse effect on our business,financial condition or results of ope
273、rations,as well as negative publicity and damage to our reputation,which could adversely impact product demand and customer relationships.Additionally,our operations depend on the continued and efficient functioning of our facilities,including critical equipment.If our operations,particularly one of
274、 our manufacturing facilities,were to be materially disrupted for any reason,we may be unable to effectively meet our obligations to or demand from our customers,which could adversely affect our financial performance.Export Sales and International Trade Matters.We believe that export sales will cont
275、inue to account for a significant percentage of our future revenues.We also import certain raw materials that are important to our business,including nickel,zirconium,niobium,chromium,hafnium,cobalt,vanadium and titanium sponge,among others.Risks associated with such international trade include,amon
276、g others:political and economic instability,including weak conditions in the worlds economies;accounts receivable collection;export controls;trade sanctions;changes in legal and regulatory requirements;policy changes affecting the markets for our products;changes in tax laws,including taxes on repat
277、riation of foreign earnings;and exchange rate fluctuations(which may affect sales to international customers and the value of profits earned on export sales when converted into dollars).Any of these factors could materially adversely affect our results for the period in which they occur.We source so
278、me materials from China,which has and may in the future continue to impose export controls that could limit or significantly delay our access to such materials and could compel us to identify alternative sources,which we may not be able to do in a timely fashion or at all.Additionally,global trade p
279、olicy may,at times,be volatile and unpredictable,and changes in international trade duties and other aspects of international trade policy,both in the U.S.and abroad,could materially impact our business.Tariffs,or other changes in U.S.trade policy,have resulted in and may continue to trigger,retalia
280、tory actions by affected countries.At times,certain foreign governments have instituted or considered imposing trade sanctions on certain U.S.goods,or taking action to deny U.S.companies access to critical raw materials,in response to U.S.trade actions,and these or other foreign governments could co
281、ntinue or expand upon these actions in the future.A“trade war”of this nature or other governmental action related to tariffs or international trade agreements or policies has the potential to adversely impact demand for our products,our costs,customers,suppliers and/or the U.S.economy or certain sec
282、tors thereof and,thus,to adversely impact our businesses.Risks Associated with Strategic Capital Projects and Maintenance Activities.From time to time,we undertake strategic capital projects in order to enhance,expand and/or upgrade our facilities and operational capabilities.Our ability to achieve
283、the anticipated increased revenues or otherwise realize acceptable returns on these investments or other strategic capital projects that we may undertake is subject to a number of risks,many of which are beyond our control,including a variety of market,operational,permitting,and labor-related factor
284、s.In addition,the cost to implement any given strategic capital project ultimately may prove to be greater than originally anticipated.If we are not able to achieve the anticipated results from the implementation of any of our strategic capital projects,or if we incur unanticipated implementation co
285、sts or delays,our results of operations and financial position may be materially adversely affected.Additionally,we periodically undertake maintenance activities,routine or otherwise,involving facilities and pieces of equipment that are key to our operations,and it is possible that unanticipated mai
286、ntenance needs,or unanticipated circumstances arising in connection with planned maintenance activities could result in equipment outages that are longer,or costs that exceed,those originally anticipated.Significant repair delays or unanticipated costs associated with these activities could have a n
287、egative impact on our results of operations and financial condition.Risks Associated with Current or Future Litigation and Claims.A number of lawsuits,claims and proceedings have been or may be asserted against us relating to the conduct of our currently and formerly owned businesses,including those
288、 pertaining to product liability,patent infringement,commercial disputes,government contracting,employment matters,employee and retiree benefits,taxes,environmental matters,health and safety and occupational disease,and stockholder and corporate governance matters.Due to the uncertainties of litigat
289、ion,we can give no assurance that we will prevail on all claims made against us in the lawsuits that we currently face or that additional claims will not be made against us in the future.While the outcome of litigation cannot be predicted with certainty,and some of these lawsuits,claims or proceedin
290、gs may be determined adversely to us,we do not believe that the disposition of any such pending matters is likely to have a material adverse effect on our financial condition or liquidity,although the resolution in any reporting period of one or more of these matters could have a material adverse ef
291、fect on our results of operations for that period.Also,we can give no assurance that any other claims brought in the future will not have a material effect on our financial condition,liquidity or results of operations.F-14In August 2024,the Company received notice that it and certain of its affiliat
292、es are parties to two lawsuits,filed in federal district court for the Western District of Pennsylvania,that assert various claims associated with the Companys October 2023 purchase of group annuity contracts to transfer a portion of its U.S.qualified defined benefit pension plan obligations to Athe
293、ne Annuity and Life Company and Athene Annuity&Life Assurance of New York.These two lawsuits were consolidated in late 2024,and in January 2025,we filed a motion to dismiss the consolidated claims.We intend to vigorously defend against these claims,but given the preliminary nature of these matters,c
294、annot predict their outcome or estimate any range of reasonably possible loss at this time.Risks Associated with Insurance Coverage.We have maintained various forms of insurance,including insurance covering claims related to our properties and risks associated with our operations.Our existing proper
295、ty and liability insurance coverages contain exclusions and limitations on coverage.From time-to-time,in connection with renewals of insurance,we have experienced additional exclusions and limitations on coverage,larger self-insured retentions and deductibles,and significantly higher premiums.As a r
296、esult,in the future,our insurance coverage may not cover claims to the extent that it has in the past and the costs that we incur to procure insurance may increase significantly,either of which could have an adverse effect on our results of operations.Risks Associated with Acquisition and Dispositio
297、n Strategies.We intend to continue to strategically position our businesses to improve our ability to compete.Strategies we employ to accomplish this may include seeking new or expanding existing specialty market niches for our products,expanding our global presence,acquiring businesses complementar
298、y to existing strengths,and continually evaluating the performance and strategic fit of our existing business units and their components.From time-to-time,management holds discussions with management of other companies to explore acquisitions,joint ventures,and other business combination opportuniti
299、es,as well as possible asset acquisitions or dispositions.As a result,the relative makeup of the businesses comprising our Company is subject to change.Acquisitions,joint ventures,and other business combinations involve various inherent risks,such as:the relative accuracy of our assessment of the va
300、lue,strengths,weaknesses,contingent and other liabilities and potential profitability of acquisition or other transaction candidates;the potential loss of key personnel of an acquired business;unanticipated conditions or events that impact our ability to achieve identified financial and operating sy
301、nergies,growth or other benefits anticipated to result from an acquisition or other transaction;and unanticipated changes in business and economic conditions.The relative success of any business or asset acquisitions and other similar transactions,particularly any cross-border transaction,also could
302、 be negatively affected by export controls,exchange rate fluctuations,domestic and foreign trade policy and other geopolitical conditions,changes in tax laws and deterioration in domestic and foreign economic conditions.Risks Associated with Government Contracts.Some of our operating units perform c
303、ontractual work directly or indirectly for the U.S.Government,which requires compliance with laws and regulations relating to the performance of Government contracts.Various claims(whether based on U.S.Government or Company audits and investigations or otherwise)could be asserted against us related
304、to our U.S.Government contract work.Depending on the circumstances and the outcome,such proceedings could result in fines,penalties,compensatory and treble damages or the cancellation or suspension of payments under one or more U.S.Government contracts.Under government regulations,a company,or one o
305、r more of its operating divisions or units,can also be suspended or debarred from government contracts based on the results of investigations.Risks Related to Wide-Spread Public Health Crises.The COVID-19 pandemic,including governmental and other actions taken or restrictions imposed to contain its
306、spread and impact,subjected our operations,financial performance and financial condition to a number of risks.In general,our facilities continued to operate throughout the pandemic with federal and state government approvals because our facilities were deemed essential and critical.However,we experi
307、enced,and may again in the context of future similar events experience,the temporary shut-down of facilities.The significant macroeconomic impact of the COVID-19 pandemic and the measures designed to contain its spread also negatively impacted several of the Companys most significant end markets,and
308、 our sales to customers in those markets.Any future similar event could impact our business,results of operations,financial condition and/or cash flows in similar respects,but the ultimate breadth and duration of any such future event and its impacts on our business are difficult to predict.Politica
309、l and Social Turmoil.The war on terrorism,as well as global political and social turmoil,generally,could put pressure on economic conditions in the U.S.and worldwide.These political,social and economic conditions could make it difficult for us,our suppliers,and our customers to forecast accurately a
310、nd plan future business activities,and could adversely affect the financial condition of our suppliers and customers and affect customer decisions as to the amount and timing of purchases from us.As a result,our business,financial condition and results of operations could be materially adversely aff
311、ected.F-15RISKS ASSOCIATED WITH OUR INDEBTEDNESS;OTHER FINANCIAL AND FINANCIAL ACCOUNTING RISKSRisks Associated with Indebtedness.Our substantial indebtedness could adversely affect our business,financial condition or results of operations and prevent us from fulfilling our obligations under our out
312、standing indebtedness.As of December 29,2024,our total consolidated indebtedness was approximately$1.9 billion.We also had the ability to borrow approximately$525 million under our Asset Based Lending(ABL)credit facility as of December 29,2024.This substantial level of indebtedness increases the ris
313、k that we may be unable to generate enough cash to pay amounts due in respect of our indebtedness.Our substantial indebtedness could have important consequences to our stockholders and significant effects on our business.For example,it could:make it more difficult for us to satisfy our obligations w
314、ith respect to our outstanding indebtedness;increase our vulnerability to general adverse economic and industry conditions;require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness,thereby reducing the availability of our cash flow to fund working
315、capital,capital expenditures,our strategic growth initiatives and development efforts and other general corporate purposes;limit our flexibility in planning for,or reacting to,changes in our business and the industry in which we operate;restrict us from taking advantage of business opportunities;pla
316、ce us at a competitive disadvantage compared to our competitors that have less indebtedness;and limit our ability to borrow additional funds for working capital,capital expenditures,acquisitions,debt service requirements,execution of our business strategy or other general corporate purposes.A portio
317、n of our indebtedness,including amounts outstanding currently or in the future under our ABL,bear interest at variable rates and,accordingly,subject our business to risk,particularly in a rising interest rate environment.In addition,the agreements that govern our current indebtedness contain,and the
318、 agreements that may govern any future indebtedness that we may incur may contain,financial and other restrictive covenants that could limit our ability to engage in activities that may be in our long-term best interests.Our failure to comply with those covenants could result in an event of default
319、that,if not cured or waived,could result in the acceleration of all of our debt.Risks Associated with Retirement Benefits.On October 17,2023,we purchased group annuity contacts from an insurer covering approximately 85%of our U.S.qualified defined benefit plan obligations.Under these contracts,we tr
320、ansferred the pension obligations and associated assets for the significant majority of our remaining plan participants to the selected insurance company.Using our long-term weighted average expected rate of return on pension plan assets and other actuarial assumptions,we do not expect to have any s
321、ignificant minimum cash funding requirements to our pension plan for at least ten years.However,these estimates are based on various assumptions and are subject to significant uncertainty,including with respect to the performance of our pension trust assets,and our expectations therefore could prove
322、 to be inaccurate.Significantly lower than expected returns on our pension assets could result in otherwise unanticipated pension contribution obligations in the future.Depending on the timing and amount,a requirement that we fund the U.S.qualified defined benefit pension plan could have a material
323、adverse effect on our results of operations and financial condition.Goodwill or Long-Lived Asset Impairments.We have various long-lived assets that are subject to impairment testing.We review the recoverability of goodwill annually,or more frequently whenever significant events or changes in circums
324、tances indicate that the recorded goodwill of a reporting unit may be below that reporting units fair value.Our businesses operate in highly cyclical industries,such as commercial aerospace,and as such,our estimates of future cash flows,market demand,the cost of capital,and forecasted growth rates a
325、nd other factors may fluctuate,which may lead to changes in estimated fair value and,therefore,impairment charges in future periods.For the fiscal year 2024 annual goodwill impairment evaluation,both of our reporting units with goodwill had fair values that were in excess of carrying value.Additiona
326、lly,we have a significant amount of property,plant and equipment and acquired intangible assets that may be subject to impairment testing,depending on factors such as market conditions,the demand for our products,and facility utilization levels.Any determination requiring the impairment of a signifi
327、cant portion of goodwill or other long-lived assets has had,and may in the future have,a negative impact on our financial condition and results of operations.Internal Controls Over Financial Reporting.Because of its inherent limitations,internal control over financial reporting may not prevent or de
328、tect misstatements.Also,projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions,or that the degree of compliance with the policies or procedures may deteriorate.F-16Risks Associated with Our Guidanc
329、e and Other Targets and Expectations.From time to time,we may announce earnings guidance and other future targets or goals for our business.Such information,which consists of forward-looking statements,is based on our then current expectations,estimates,forecasts and projections about the operating
330、environment,economies and markets in which we operate.Future targets and goals reflect our beliefs and assumptions and our perception of historical trends,then current conditions and expected future developments,as well as other factors appropriate in the circumstances.As such,while sometime present
331、ed with numerical specificity,earnings guidance and other statements regarding our future targets and goals are inherently speculative in nature and subject to significant business,economic,competitive and other uncertainties and contingencies regarding future events,including the risks discussed he
332、rein.Our actual results can,and likely will,be different,and those differences could be material.There can be no assurance that any targets or goals established by us will be accomplished at the levels or by the dates targeted,if at all.Failure to achieve our targets or goals may have a material adv
333、erse effect on our business,financial condition,results of operations or the market price of our securities.Item 1B.Unresolved Staff CommentsNone.Item 1C.CybersecurityThe Company and its Board recognize the critical significance that cybersecurity has to our operations and the need to continually assess cybersecurity risk and evolve our response in the face of a rapidly and ever-changing environm
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