ALLEGHENY TECHNOLOGIES INC (Form: 10-Q, Received: 05/04/2012 16:31:41)

Large accelerated filer

Accelerated filer

Non-accelerated filer

¨ (Do not check if a smaller reporting company)

Smaller reporting company

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2012

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period From to

Commission File Number 1-12001

ALLEGHENY TECHNOLOGIES INCORPORATED

(Exact name of registrant as specified in its charter)


Delaware		25-1792394
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1000 Six PPG Place Pittsburgh, Pennsylvania		15222-5479
(Address of Principal Executive Offices)		(Zip Code)

(412) 394-2800

(Registrant’s telephone number, including area code)

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 (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨

Indicate by check mark whether the Registrant submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No þ

At April 30, 2012, the registrant had outstanding 107,108,661 shares of its Common Stock.

ALLEGHENY TECHNOLOGIES INCORPORATED

SEC FORM 10-Q

Quarter Ended March 31, 2012

INDEX


			Page No.
PART I. - FINANCIAL INFORMATION

	Item 1.	Financial Statements

	Consolidated Balance Sheets			1

	Consolidated Statements of Income			2

	Consolidated Statements of Comprehensive Income			3

	Consolidated Statements of Cash Flows			4

	Statements of Changes in Consolidated Equity			5

	Notes to Consolidated Financial Statements			6

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		19

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk		29

	Item 4.	Controls and Procedures		31

PART II. - OTHER INFORMATION

	Item 1.	Legal Proceedings		31

	Item 1A.	Risk Factors		31

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		31

	Item 6.	Exhibits		32

SIGNATURES				33

EXHIBIT INDEX				34

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Allegheny Technologies Incorporated and Subsidiaries

Consolidated Balance Sheets

(In millions, except share and per share amounts)

(Current period unaudited)


	March 31, 2012			December 31, 2011
ASSETS
Current Assets:
Cash and cash equivalents	$	250.3		$	380.6
Accounts receivable, net of allowances for doubtful accounts of $5.3 and $5.9 as of March 31, 2012 and December 31, 2011		753.1			709.1
Inventories, net		1,511.4			1,384.3
Prepaid expenses and other current assets		59.9			95.5

Total Current Assets		2,574.7			2,569.5
Property, plant and equipment, net		2,398.1			2,368.8
Cost in excess of net assets acquired		739.0			737.7
Other assets		366.9			370.9

Total Assets	$	6,078.7		$	6,046.9

LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable	$	505.8		$	490.7
Accrued liabilities		324.5			320.3
Deferred income taxes		16.3			23.5
Short term debt and current portion of long-term debt		28.4			27.3

Total Current Liabilities		875.0			861.8
Long-term debt		1,481.5			1,482.0
Accrued postretirement benefits		479.2			488.1
Pension liabilities		502.7			508.9
Deferred income taxes		9.3			9.8
Other long-term liabilities		117.1			124.7

Total Liabilities		3,464.8			3,475.3

Equity:
ATI Stockholders’ Equity:
Preferred stock, par value $0.10: authorized-50,000,000 shares; issued-none		—			—
Common stock, par value $0.10: authorized-500,000,000 shares; issued-109,695,171 shares at March 31, 2012 and December 31, 2011; outstanding- 107,094,065 shares at March 31, 2012 and 106,354,612 shares at December 31, 2011		11.0			11.0
Additional paid-in capital		1,161.4			1,207.1
Retained earnings		2,394.9			2,361.5
Treasury stock: 2,601,106 shares at March 31, 2012 and 3,340,559 shares at December 31, 2011		(126.6	)		(162.7	)
Accumulated other comprehensive loss, net of tax		(925.7	)		(941.6	)

Total ATI stockholders’ equity		2,515.0			2,475.3
Noncontrolling interests		98.9			96.3

Total Equity		2,613.9			2,571.6

Total Liabilities and Equity	$	6,078.7		$	6,046.9

The accompanying notes are an integral part of these statements.

Allegheny Technologies Incorporated and Subsidiaries

Consolidated Statements of Income

(In millions, except per share amounts)

(Unaudited)


	Three Months Ended March 31,
	2012			2011
Sales	$	1,352.5		$	1,227.4
Costs and expenses:
Cost of sales		1,145.5			1,022.0
Selling and administrative expenses		103.4			88.7

Income before interest, other income and income taxes		103.6			116.7
Interest expense, net		(19.9	)		(23.0	)
Other income, net		0.4			0.1

Income before income tax provision		84.1			93.8
Income tax provision		25.8			35.1

Net income		58.3			58.7
Less: Net income attributable to noncontrolling interests		2.1			2.4

Net income attributable to ATI	$	56.2		$	56.3

Basic net income attributable to ATI per common share	$	0.53		$	0.58

Diluted net income attributable to ATI per common share	$	0.50		$	0.54

Dividends declared per common share	$	0.18		$	0.18

The accompanying notes are an integral part of these statements.

Allegheny Technologies Incorporated and Subsidiaries

Consolidated Statements of Comprehensive Income

(In millions)

(Unaudited)


	ATI						Noncontrolling Interests				Total
	Three Months Ended March 31,						Three Months Ended March 31,				Three Months Ended March 31,
	2012			2011			2012		2011		2012			2011
Net Income	$	56.2		$	56.3		$	2.1	$	2.4	$	58.3		$	58.7
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments		8.8			14.0			0.6		1.6		9.4			15.6
Pension plans and other postretirement benefits		16.7			11.4			—		—		16.7			11.4
Change in unrealized gains on available-for-sale securities		0.1			—			—		—		0.1			—
Unrecognized losses on derivatives		(9.7	)		(9.3	)		—		—		(9.7	)		(9.3	)

Other comprehensive income, net of tax		15.9			16.1			0.6		1.6		16.5			17.7

Comprehensive income	$	72.1		$	72.4		$	2.7	$	4.0	$	74.8		$	76.4

The accompanying notes are an integral part of these statements.

Allegheny Technologies Incorporated and Subsidiaries

Consolidated Statements of Cash Flows

(In millions)

(Unaudited)


	Three Months Ended March 31,
	2012			2011
Operating Activities:
Net income	$	58.3		$	58.7
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization		48.0			37.4
Deferred taxes		(12.0	)		(2.4	)
Changes in operating asset and liabilities:
Inventories		(127.1	)		(207.4	)
Accounts receivable		(44.0	)		(148.6	)
Accounts payable		15.2			111.1
Retirement benefits		11.5			3.8
Accrued income taxes		26.8			45.5
Accrued liabilities and other		5.1			51.6

Cash used in operating activities		(18.2	)		(50.3	)

Investing Activities:
Purchases of property, plant and equipment		(69.9	)		(42.2	)
Asset disposals and other		0.9			0.5

Cash used in investing activities		(69.0	)		(41.7	)

Financing Activities:
Issuances of long-term debt		—			500.0
Payments on long-term debt and capital leases		—			(5.2	)
Net borrowings (repayments) under credit facilities		(1.4	)		3.2
Debt issuance costs		—			(5.0	)
Dividends paid to shareholders		(19.1	)		(17.6	)
Purchase of subsidiary shares from noncontrolling interest		(0.1	)		—
Taxes on share-based compensation		0.6			1.5
Exercises of stock options and other		0.2			0.4
Shares repurchased for income tax withholding on share-based compensation		(23.3	)		(1.3	)

Cash provided by (used in) financing activities		(43.1	)		476.0

Increase (decrease) in cash and cash equivalents		(130.3	)		384.0
Cash and cash equivalents at beginning of period		380.6			432.3

Cash and cash equivalents at end of period	$	250.3		$	816.3

The accompanying notes are an integral part of these statements.

Allegheny Technologies Incorporated and Subsidiaries

Statements of Changes in Consolidated Equity

(In millions, except per share amounts)

(Unaudited)


	ATI Stockholders
	Common Stock		Additional Paid-In Capital			Retained Earnings			Treasury Stock			Accumulated Other Comprehensive Income (Loss)			Non- controlling Interests			Total Equity
Balance, December 31, 2010	$	10.2	$	658.9		$	2,224.8		$	(188.0	)	$	(665.1	)	$	88.6		$	2,129.4
Net income		—		—			56.3			—			—			2.4			58.7
Other comprehensive income		—		—			—			—			16.1			1.6			17.7
Cash dividends on common stock ($0.18 per share)		—		—			(17.6	)		—			—			—			(17.6	)
Employee stock plans		—		(5.3	)		0.9			19.3			—			—			14.9

Balance, March 31, 2011	$	10.2	$	653.6		$	2,264.4		$	(168.7	)	$	(649.0	)	$	92.6		$	2,203.1

Balance, December 31, 2011	$	11.0	$	1,207.1		$	2,361.5		$	(162.7	)	$	(941.6	)	$	96.3		$	2,571.6
Net income		—		—			56.2			—			—			2.1			58.3
Other comprehensive income		—		—			—			—			15.9			0.6			16.5
Cash dividends on common stock ($0.18 per share)		—		—			(19.1	)		—			—			—			(19.1	)
Purchase of subsidiary shares from noncontrolling interest		—		—			—			—			—			(0.1	)		(0.1	)
Employee stock plans		—		(45.7	)		(3.7	)		36.1			—			—			(13.3	)

Balance, March 31, 2012	$	11.0	$	1,161.4		$	2,394.9		$	(126.6	)	$	(925.7	)	$	98.9		$	2,613.9

The accompanying notes are an integral part of these statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Unaudited

Note 1. Accounting Policies

The interim consolidated financial statements include the accounts of Allegheny Technologies Incorporated and its subsidiaries. Unless the context requires otherwise, “Allegheny Technologies”, “ATI” and “the Company” refer to Allegheny Technologies Incorporated and its subsidiaries.

These unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and note disclosures required by U.S. generally accepted accounting principles for complete financial statements. In management’s opinion, all adjustments (which include only normal recurring adjustments) considered necessary for a fair presentation have been included. These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2011 Annual Report on Form 10-K. The results of operations for these interim periods are not necessarily indicative of the operating results for any future period. The December 31, 2011 financial information has been derived from the Company’s audited financial statements.

New Accounting Pronouncements Adopted

In June 2011, the Financial Accounting Standards Board (FASB) issued amendments to financial accounting standards related to the presentation of comprehensive income which requires entities to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. Additionally, these amendments require an entity to present on the face of the financial statements reclassification adjustments for items that are reclassified from other comprehensive income to net income in the statement(s) where the components of net income and the components of other comprehensive income are presented. In December 2011, the FASB deferred the requirement for presenting the reclassification adjustments from comprehensive income to net income by component within the face of the financial statements. Finally, no changes were made to the calculation and presentation of earnings per share. These amendments, with retrospective application, are effective for interim and annual periods in fiscal year 2012. A separate consolidated statement of comprehensive income is included in these consolidated financial statements. Other than the change in presentation, these changes did not have an impact on the consolidated financial statements.

Note 2. Inventories

Inventories at March 31, 2012 and December 31, 2011 were as follows (in millions):


	March 31, 2012			December 31, 2011
Raw materials and supplies	$	242.9		$	205.7
Work-in-process		1,217.0			1,150.0
Finished goods		219.8			199.9

Total inventories at current cost		1,679.7			1,555.6
Less allowances to reduce current cost values to LIFO basis		(153.7	)		(153.7	)
Progress payments		(14.6	)		(17.6	)

Total inventories, net	$	1,511.4		$	1,384.3

Inventories are stated at the lower of cost (last-in, first-out (“LIFO”), first-in, first-out (“FIFO”), and average cost methods) or market, less progress payments. Most of the Company’s inventory is valued utilizing the LIFO costing methodology. Inventory of the Company’s non-U.S. operations is valued using average cost or FIFO methods. The effect of using the LIFO methodology to value inventory, rather than FIFO, had no impact on cost of sales for the first three months of 2012 compared to an increase of $3.9 million for the first three months of 2011.

Note 3. Property, Plant and Equipment

Property, plant and equipment at March 31, 2012 and December 31, 2011 was as follows (in millions):


	March 31, 2012			December 31, 2011
Land	$	34.2		$	34.0
Buildings		790.1			757.0
Equipment and leasehold improvements		3,183.1			3,146.2

		4,007.4			3,937.2
Accumulated depreciation and amortization		(1,609.3	)		(1,568.4	)

Total property, plant and equipment, net	$	2,398.1		$	2,368.8

The construction in progress portion of property, plant and equipment at March 31, 2012 was $375.1 million.

Note 4. Debt

Debt at March 31, 2012 and December 31, 2011 was as follows (in millions):


	March 31, 2012		December 31, 2011
Allegheny Technologies 5.95% Notes due 2021	$	500.0	$	500.0
Allegheny Technologies 4.25% Convertible Notes due 2014		402.5		402.5
Allegheny Technologies 9.375% Notes due 2019		350.0		350.0
Allegheny Ludlum 6.95% debentures due 2025		150.0		150.0
Ladish Series B 6.14% Notes due 2016 (a)		31.5		31.8
Ladish Series C 6.41% Notes due 2015 (b)		44.0		44.6
Domestic Bank Group $400 million unsecured credit facility		—		—
Foreign credit facilities		26.0		24.5
Industrial revenue bonds, due through 2020, and other		5.9		5.9

Total short-term and long-term debt		1,509.9		1,509.3
Short-term debt and current portion of long-term debt		28.4		27.3

Total long-term debt	$	1,481.5	$	1,482.0

(a)	Includes fair value adjustments of $2.9 million at March 31, 2012 and $3.2 million at December 31, 2011.

(b)	Includes fair value adjustments of $4.0 million at March 31, 2012 and $4.6 million at December 31, 2011.

On April 4, 2012, ATI amended its $400 million senior unsecured domestic credit facility to reduce costs under the facility, and to extend the expiration date of the facility to April 4, 2017. The Company did not borrow funds under this credit facility during the first three months of 2012, although approximately $7 million has been utilized to support the issuance of letters of credit. The credit facility requires the Company to maintain a leverage ratio (consolidated total indebtedness net of cash on hand in excess of $50 million, divided by consolidated earnings before interest, taxes, depreciation and amortization, and non-cash pension expense) of not greater than 3.25, and maintain an interest coverage ratio (consolidated earnings before interest, taxes, and non-cash pension expense divided by interest expense) of not less than 2.0. For the three months ended March 31, 2012, the leverage ratio was 1.99, and the interest coverage ratio was 5.41.

The Company has an additional separate credit facility for the issuance of letters of credit. As of March 31, 2012, $31 million in letters of credit were outstanding under this facility.

In March 2012, the ATI Ladish Series B and Series C Notes were amended to replace certain reporting requirements specific to these Notes with a Parent Guaranty Agreement by ATI, by which ATI unconditionally guarantees all amounts payable by ATI Ladish LLC for the Series B and Series C Notes. As a result of the March 2012 amendment, the Series B and Series C Notes are equally ranked with all of ATI’s existing and future senior unsecured debt.

In addition, STAL, the Company’s Chinese joint venture company in which ATI has a 60% interest, has a 205 million renminbi (approximately $33 million at March 31, 2012 exchange rates) revolving credit facility with a group of banks, which expires in August 2014. This credit facility is supported solely by STAL’s financial capability without any guarantees from the joint venture partners. As of March 31, 2012, there were no borrowings under this credit facility.

Note 5. Derivative Financial Instruments and Hedging

As part of its risk management strategy, the Company, from time-to-time, utilizes derivative financial instruments to manage its exposure to changes in raw material prices, energy costs, foreign currencies, and interest rates. In accordance with applicable accounting standards, the Company accounts for most of these contracts as hedges. In general, hedge effectiveness is determined by examining the relationship between offsetting changes in fair value or cash flows attributable to the item being hedged, and the financial instrument being used for the hedge. Effectiveness is measured utilizing regression analysis and other techniques to determine whether the change in the fair market value or cash flows of the derivative exceeds the change in fair value or cash flow of the hedged item. Calculated ineffectiveness, if any, is immediately recognized on the statement of income.

The Company sometimes uses futures and swap contracts to manage exposure to changes in prices for forecasted purchases of raw materials, such as nickel and natural gas. Under these contracts, which are generally accounted for as cash flow hedges, the price of the item being hedged is fixed at the time that the contract is entered into and the Company is obligated to make or receive a payment equal to the net change between this fixed price and the market price at the date the contract matures.

The majority of ATI’s products are sold utilizing raw material surcharges and index mechanisms. However, as of March 31, 2012, the Company had entered into financial hedging arrangements primarily at the request of its customers, related to firm orders, representing approximately 9% of its annual nickel requirements. These nickel hedges extend to 2016.

At March 31, 2012, the outstanding financial derivatives used to hedge the Company’s exposure to energy cost volatility included natural gas cost hedges for approximately 70% of its annual forecasted domestic requirements for 2012, approximately 50% for 2013, and approximately 30% for 2014, and electricity hedges for Western Pennsylvania operations of approximately 30% of its forecasted on-peak and off-peak requirements for 2012 and approximately 10% for 2014.

While the majority of the Company’s direct export sales are transacted in U.S. dollars, foreign currency exchange contracts are used, from time-to-time, to limit transactional exposure to changes in currency exchange rates for those transactions denominated in a non-U.S. currency. The Company sometimes purchases foreign currency forward contracts that permit it to sell specified amounts of foreign currencies expected to be received from its export sales for pre-established U.S. dollar amounts at specified dates. The forward contracts are denominated in the same foreign currencies in which export sales are denominated. These contracts are designated as hedges of the variability in cash flows of a portion of the forecasted future export sales transactions which otherwise would expose the Company to foreign currency risk. The Company may also enter into foreign currency forward contracts that are not designated as hedges, which are denominated in the same foreign currency in which export sales are denominated. At March 31, 2012, the outstanding financial derivatives, including both hedges and undesignated derivatives, that are used to manage the Company’s exposure to foreign currency, primarily euros, represented approximately 10% of its forecasted total international sales through 2014. In addition, the Company may also designate cash balances held in foreign currencies as hedges of forecasted foreign currency transactions.

The Company may enter into derivative interest rate contracts to maintain a reasonable balance between fixed- and floating-rate debt. There were no unsettled derivative financial instruments related to debt balances for the periods presented.

The fair values of the Company’s derivative financial instruments are presented below. All fair values for these derivatives were measured using Level 2 information as defined by the accounting standard hierarchy, which includes quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs derived principally from or corroborated by observable market data.


(in millions): Asset derivatives	Balance sheet location	March 31, 2012		December 31, 2011
Derivatives designated as hedging instruments:
Foreign exchange contracts	Prepaid expenses and other current assets	$	3.3	$	9.5
Nickel and other raw material contracts	Prepaid expenses and other current assets		0.2		0.7
Foreign exchange contracts	Other assets		2.5		5.9
Nickel and other raw material contracts	Other assets		0.4		1.1
Natural gas contracts	Other assets		0.1		—

Total derivatives designated as hedging instruments:			6.5		17.2
Derivatives not designated as hedging instruments:
Foreign exchange contracts	Prepaid expenses and other current assets		2.2		3.5

Total derivatives not designated as hedging instruments:			2.2		3.5

Total asset derivatives		$	8.7	$	20.7


Liability derivatives	Balance sheet location
Derivatives designated as hedging instruments:
Natural gas contracts	Accrued liabilities	$	12.1	$	10.1
Nickel and other raw material contracts	Accrued liabilities		2.8		1.6
Electricity contracts	Accrued liabilities		2.2		2.0
Natural gas contracts	Other long-term liabilities		4.4		3.3
Electricity contracts	Other long-term liabilities		0.3		—
Nickel and other raw material contracts	Other long-term liabilities		0.3		0.1

Total derivatives designated as hedging instruments:			22.1		17.1
Derivatives not designated as hedging instruments:
Foreign exchange contracts	Accrued liabilities		0.2		—

Total derivatives not designated as hedging instruments:			0.2		—

Total liability derivatives		$	22.3	$	17.1

For derivative financial instruments that are designated as cash flow hedges, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income (OCI) and reclassified into earnings in the same period or periods during which the hedged item affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current period results. The Company did not use fair value or net investment hedges for the periods presented. The effects of derivative instruments in the tables below are presented net of related income taxes.

Activity with regard to derivatives designated as cash flow hedges for the three month periods ended March 31, 2012 and 2011 was as follows (in millions):


	Amount of Gain (Loss) Recognized in OCI on Derivatives (Effective Portion)						Amount of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) (a)						Amount of Gain (Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing) (b)
Derivatives in Cash Flow Hedging Relationships	Quarter ended March 31,						Quarter ended March 31,						Quarter ended March 31,
Derivatives in Cash Flow Hedging Relationships	2012			2011			2012			2011			2012		2011
Nickel and other raw material contracts	$	(1.6	)	$	0.2		$	(0.1	)	$	1.8		$	—	$	—
Natural gas contracts		(4.5	)		(0.8	)		(2.6	)		(3.5	)		—		—
Electricity contracts		(1.0	)		(0.1	)		(0.7	)		—			—		—
Foreign exchange contracts		(4.1	)		(9.8	)		1.9			0.5			—		—

Total	$	(11.2	)	$	(10.5	)	$	(1.5	)	$	(1.2	)	$	—	$	—

(a)	The gains (losses) reclassified from accumulated OCI into income related to the effective portion of the derivatives are presented in cost of sales.

(b)	The gains recognized in income on derivatives related to the ineffective portion and the amount excluded from effectiveness testing are presented in selling and administrative expenses.

Assuming market prices remain constant with those at March 31, 2012, a loss of $8.5 million is expected to be recognized over the next 12 months.

The disclosures of gains or losses presented above for nickel and other raw material contracts and foreign currency contracts do not take into account the anticipated underlying transactions. Since these derivative contracts represent hedges, the net effect of any gain or loss on results of operations may be fully or partially offset.

Derivatives that are not designated as hedging instruments were as follows:


In millions	Amount of Gain (Loss) Recognized in Income on Derivatives
Derivatives Not Designated as Hedging Instruments	Three Months Ended March 31,
Derivatives Not Designated as Hedging Instruments	2012			2011
Foreign exchange contracts	$	(1.4	)	$	(0.4	)

Changes in the fair value of foreign exchange contract derivatives not designated as hedging instruments are recorded in cost of sales.

There are no credit risk-related contingent features in the Company’s derivative contracts, and the contracts contained no provisions under which the Company has posted, or would be required to post, collateral. The counterparties to the Company’s derivative contracts were substantial and creditworthy commercial banks that are recognized market makers. The Company controls its credit exposure by diversifying across multiple counterparties and by monitoring credit ratings and credit default swap spreads of its counterparties. The Company also enters into master netting agreements with counterparties when possible.

Note 6. Fair Value of Financial Instruments

The estimated fair value of financial instruments at March 31, 2012 was as follows:


			Fair Value Measurements at Reporting Date Using
(In millions)	Total Carrying Amount		Total Estimated Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)
Cash and cash equivalents	$	250.3	$	250.3	$	250.3	$	—
Derivative financial instruments:
Assets		8.7		8.7		—		8.7
Liabilities		22.3		22.3		—		22.3
Debt		1,509.9		1,777.6		1,670.2		107.4

The estimated fair value of financial instruments at December 31, 2011 was as follows:


			Fair Value Measurements at Reporting Date Using
(In millions)	Total Carrying Amount		Total Estimated Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)
Cash and cash equivalents	$	380.6	$	380.6	$	380.6	$	—
Derivative financial instruments:
Assets		20.7		20.7		—		20.7
Liabilities		17.1		17.1		—		17.1
Debt		1,509.3		1,791.3		1,684.5		106.8

In accordance with accounting standards, fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Accounting standards established three levels of a fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 2 – Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

The following methods and assumptions were used by the Company in estimating the fair value of its financial instruments:

Cash and cash equivalents: Fair value was determined using Level 1 information.

Derivative financial instruments: Fair values for derivatives were measured using exchange-traded prices for the hedged items. The fair value was determined using Level 2 information, including consideration of counterparty risk and the Company’s credit risk.

Short-term and long-term debt: The fair values of the Company’s publicly traded debt were based on Level 1 information. The fair values of the other short-term and long-term debt were determined using Level 2 information.

Note 7. Pension Plans and Other Postretirement Benefits

The Company has defined benefit pension plans and defined contribution plans covering substantially all employees. Benefits under the defined benefit pension plans are generally based on years of service and/or final average pay. The Company funds the U.S. pension plans in accordance with the Employee Retirement Income Security Act of 1974, as amended, and the Internal Revenue Code.

The Company also sponsors several postretirement plans covering certain salaried and hourly employees. The plans provide health care and life insurance benefits for eligible retirees. In most plans, Company contributions towards premiums are capped based on the cost as of a certain date, thereby creating a defined contribution. For the non-collectively bargained plans, the Company maintains the right to amend or terminate the plans at its discretion.

For the three month periods ended March 31, 2012 and 2011, the components of pension expense and components of other postretirement benefit expense for the Company’s defined benefit plans included the following (in millions):


	Pension Benefits Three Months Ended March 31,						Other Postretirement Benefits Three Months Ended March 31,
	2012			2011			2012			2011
Service cost - benefits earned during the year	$	8.8		$	7.3		$	0.8		$	0.7
Interest cost on benefits earned in prior years		33.1			32.0			6.5			6.8
Expected return on plan assets		(45.4	)		(45.7	)		(0.2	)		(0.3	)
Amortization of prior service cost (credit)		1.6			2.8			(4.5	)		(4.6	)
Amortization of net actuarial loss		26.3			17.8			3.6			2.5

Total retirement benefit expense	$	24.4		$	14.2		$	6.2		$	5.1

Note 8. Income Taxes

First quarter 2012 results included a provision for income taxes of $25.8 million, or 30.7% of income before tax, compared to $35.1 million for the comparable 2011 period. The first quarter 2012 included a discrete tax benefit of $3.7 million primarily related to state income taxes. Excluding these discrete tax benefits, the first quarter 2012 effective tax rate was 35%. The first quarter 2011 included a discrete tax charge of $2.7 million related to foreign income taxes.

Note 9. Business Segments

Following is certain financial information with respect to the Company’s business segments for the periods indicated (in millions):


	Three Months Ended March 31,
	2012			2011
Total sales:
High Performance Metals	$	607.7		$	433.1
Flat-Rolled Products		643.2			719.0
Engineered Products		143.8			129.2

		1,394.7			1,281.3
Intersegment sales:
High Performance Metals		26.4			33.7
Flat-Rolled Products		7.2			8.4
Engineered Products		8.6			11.8

		42.2			53.9
Sales to external customers:
High Performance Metals		581.3			399.4
Flat-Rolled Products		636.0			710.6
Engineered Products		135.2			117.4

	$	1,352.5		$	1,227.4

Operating profit:
High Performance Metals	$	104.1		$	85.6
Flat-Rolled Products		46.8			63.4
Engineered Products		12.3			13.4

Total operating profit		163.2			162.4

Corporate expenses		(21.7	)		(25.8	)
Interest expense, net		(19.9	)		(23.0	)
Closed company and other expenses		(6.9	)		(0.5	)
Retirement benefit expense		(30.6	)		(19.3	)

Income before income taxes	$	84.1		$	93.8

Retirement benefit expense represents defined benefit plan pension expense, and other postretirement benefit expense for both defined benefit and defined contribution plans. Operating profit with respect to the Company’s business segments excludes any retirement benefit expense. The increase in the current period, when compared to the prior year, was primarily due to the utilization of a lower discount rate to value the retirement benefit obligations and lower than expected returns on plan assets.

Corporate expenses for the three months ended March 31, 2012 were $21.7 million compared to $25.8 million for the three months ended March 31, 2011. The decrease in corporate expenses was primarily related to the prior year’s accelerated recognition of equity-based compensation expense due to executive retirements.

Closed company and other expenses primarily includes charges incurred in connection with closed operations and other non-operating income or expense. These items are presented primarily in selling and administrative expenses and in other expense in the statement of operations. These items resulted in net charges of $6.9 million for the three months ended March 31, 2012 and $0.5 million for the three months ended March 31, 2011. The increase over the prior year quarter was primarily related to an increase of $3.2 million in environmental and legal expenses associated with closed operations, and $1.9 million in franchise taxes, insurance and unfavorable foreign currency exchange losses.

Note 10. Per Share Information

The following table sets forth the computation of basic and diluted net income per common share:


	Three Months Ended
(in millions, except per share amounts):	March 31,
	2012		2011
Numerator for basic net income per common share - Net income attributable to ATI	$	56.2	$	56.3
Effect of dilutive securities:
4.25% Convertible Notes due 2014		2.3		2.5

Numerator for diluted net income per common share - Net income available to ATI after assumed conversions	$	58.5	$	58.8

Denominator for basic net income per common share-weighted average shares		105.9		97.6
Effect of dilutive securities:
Share-based compensation		0.9		1.8
4.25% Convertible Notes due 2014		9.6		9.6

Denominator for diluted net income per common share – adjusted weighted average shares assuming conversions		116.4		109.0

Basic net income attributable to ATI per common share	$	0.53	$	0.58

Diluted net income attributable to ATI per common share	$	0.50	$	0.54

Common stock that would be issuable upon the assumed conversion of the 2014 Convertible Notes and other option equivalents and contingently issuable shares are excluded from the computation of contingently issuable shares, and therefore, from the denominator for diluted earnings per share, if the effect of inclusion is anti-dilutive. There were no anti-dilutive shares for the periods presented.

The Company issued 7.3 million shares of common stock as part of the Ladish acquisition consideration completed on May 9, 2011. These shares were included in the weighted average shares outstanding for the period ended March 31, 2012, but were not included in the weighted average outstanding shares for the period ended March 31, 2011.

Note 11. Financial Information for Subsidiary and Guarantor Parent

The payment obligations under the $150 million 6.95% debentures due 2025 issued by Allegheny Ludlum, LLC (formerly known as Allegheny Ludlum Corporation) (the “Subsidiary”) are fully and unconditionally guaranteed by Allegheny Technologies Incorporated (the “Guarantor Parent”). In accordance with positions established by the Securities and Exchange Commission, the following financial information sets forth separately financial information with respect to the Subsidiary, the non-guarantor subsidiaries and the Guarantor Parent. The principal elimination entries eliminate investments in subsidiaries and certain intercompany balances and transactions. Investments in subsidiaries, which are eliminated in consolidation, are included in other assets on the consolidated balance sheets.

Allegheny Technologies is the plan sponsor for the U.S. qualified defined benefit pension plan (the “Plan”) which covers certain current and former employees of the Subsidiary and the non-guarantor subsidiaries. As a result, the balance sheets presented for the Subsidiary and the non-guarantor subsidiaries do not include any Plan assets or liabilities, or the related deferred taxes. The Plan assets, liabilities and related deferred taxes and pension income or expense are recognized by the Guarantor Parent. Management and royalty fees charged to the Subsidiary and to the non-guarantor subsidiaries by the Guarantor Parent have been excluded solely for purposes of this presentation.

Cash flows related to intercompany activity between the Guarantor Parent, the Subsidiary, and the non-guarantor subsidiaries are presented as financing activities on the condensed statements of cash flows.

Allegheny Technologies Incorporated

Financial Information for Subsidiary and Guarantor Parent

Balance Sheets

March 31, 2012


	Guarantor				Non-guarantor
(In millions)	Parent		Subsidiary		Subsidiaries		Eliminations			Consolidated
Assets:
Cash and cash equivalents	$	2.0	$	86.7	$	161.6	$	—		$	250.3
Accounts receivable, net		0.1		252.9		500.1		—			753.1
Inventories, net		—		324.9		1,186.5		—			1,511.4
Prepaid expenses and other current assets		2.5		19.6		37.8		—			59.9

Total current assets		4.6		684.1		1,886.0		—			2,574.7
Property, plant and equipment, net		2.9		656.8		1,738.4		—			2,398.1
Cost in excess of net assets acquired		—		112.1		626.9		—			739.0
Investments in subsidiaries and other assets		5,267.6		1,548.8		1,058.0		(7,507.5	)		366.9

Total assets	$	5,275.1	$	3,001.8	$	5,309.3	$	(7,507.5	)	$	6,078.7

Liabilities and stockholders’ equity:
Accounts payable	$	5.1	$	242.1	$	258.6	$	—		$	505.8
Accrued liabilities		918.4		57.3		650.4		(1,301.6	)		324.5
Deferred income taxes		16.3		—		—		—			16.3
Short-term debt and current portion of long-term debt		—		0.1		28.3		—			28.4

Total current liabilities		939.8		299.5		937.3		(1,301.6	)		875.0
Long-term debt		1,252.5		350.7		78.3		(200.0	)		1,481.5
Accrued postretirement benefits		—		208.5		270.7		—			479.2
Pension liabilities		435.0		5.6		62.1		—			502.7
Deferred income taxes		9.3		—		—		—			9.3
Other long-term liabilities		24.6		18.3		74.2		—			117.1

Total liabilities		2,661.2		882.6		1,422.6		(1,501.6	)		3,464.8

Total stockholders’ equity		2,613.9		2,119.2		3,886.7		(6,005.9	)		2,613.9

Total liabilities and stockholders’ equity	$	5,275.1	$	3,001.8	$	5,309.3	$	(7,507.5	)	$	6,078.7

Allegheny Technologies Incorporated

Financial Information for Subsidiary and Guarantor Parent

Statements of Income and Comprehensive Income

For the three months ended March 31, 2012


	Guarantor						Non-guarantor
(In millions)	Parent			Subsidiary			Subsidiaries			Eliminations			Consolidated
Sales	$	—		$	557.0		$	795.5		$	—		$	1,352.5
Cost of sales		13.3			508.5			623.7			—			1,145.5
Selling and administrative expenses		43.1			10.5			49.8			—			103.4

Income (loss) before interest, other income and income taxes		(56.4	)		38.0			122.0			—			103.6
Interest expense, net		(17.0	)		(2.6	)		(0.3	)		—			(19.9	)
Other income including equity in income of unconsolidated subsidiaries		157.5			1.6			1.5			(160.2	)		0.4

Income before income tax provision		84.1			37.0			123.2			(160.2	)		84.1
Income tax provision		25.8			14.0			40.8			(54.8	)		25.8

Net income		58.3			23.0			82.4			(105.4	)		58.3
Less: Net income attributable to noncontrolling interests		2.1			—			2.1			(2.1	)		2.1

Net income attributable to ATI	$	56.2		$	23.0		$	80.3		$	(103.3	)	$	56.2

Comprehensive income attributable to ATI	$	72.1		$	22.7		$	89.6		$	(112.3	)	$	72.1

Condensed Statements of Cash Flows

For the three months ended March 31, 2012


	Guarantor						Non-guarantor
(In millions)	Parent			Subsidiary			Subsidiaries			Eliminations			Consolidated
Cash flows provided by (used in) operating activities	$	(12.5	)	$	3.1		$	(1.0	)	$	(7.8	)	$	(18.2	)
Cash flows used in investing activities		(0.1	)		(51.6	)		(17.3	)		—			(69.0	)
Cash flows provided by (used in) financing activities		13.8			5.5			(70.2	)		7.8			(43.1	)

Increase (decrease) in cash and cash equivalents	$	1.2		$	(43.0	)	$	(88.5	)	$	—		$	(130.3	)

Allegheny Technologies Incorporated

Financial Information for Subsidiary and Guarantor Parent

Balance Sheets

December 31, 2011


	Guarantor				Non-guarantor
(In millions)	Parent		Subsidiary		Subsidiaries		Eliminations			Consolidated
Assets:
Cash and cash equivalents	$	0.8	$	129.7	$	250.1	$	—		$	380.6
Accounts receivable, net		0.1		220.6		488.4		—			709.1
Inventories, net		—		299.0		1,085.3		—			1,384.3
Prepaid expenses and other current assets		10.5		20.0		65.0		—			95.5

Total current assets		11.4		669.3		1,888.8		—			2,569.5
Property, plant and equipment, net		3.0		614.9		1,750.9		—			2,368.8
Cost in excess of net assets acquired		—		112.1		625.6		—			737.7
Investments in subsidiaries and other assets		5,287.3		1,579.0		996.6		(7,492.0	)		370.9

Total assets	$	5,301.7	$	2,975.3	$	5,261.9	$	(7,492.0	)	$	6,046.9

Liabilities and stockholders’ equity:
Accounts payable	$	4.1	$	222.5	$	264.1	$	—		$	490.7
Accrued liabilities		961.8		66.7		736.2		(1,444.4	)		320.3
Deferred income taxes		23.5		—		—		—			23.5
Short-term debt and current portion of long-term debt		—		0.1		27.2		—			27.3

Total current liabilities		989.4		289.3		1,027.5		(1,444.4	)		861.8
Long-term debt		1,252.5		350.7		78.8		(200.0	)		1,482.0
Accrued postretirement benefits		—		215.5		272.6		—			488.1
Pension liabilities		441.6		5.7		61.6		—			508.9
Deferred income taxes		9.8		—		—		—			9.8
Other long-term liabilities		36.8		17.2		70.7		—			124.7

Total liabilities		2,730.1		878.4		1,511.2		(1,644.4	)		3,475.3

Total stockholders’ equity		2,571.6		2,096.9		3,750.7		(5,847.6	)		2,571.6

Total liabilities and stockholders’ equity	$	5,301.7	$	2,975.3	$	5,261.9	$	(7,492.0	)	$	6,046.9

Allegheny Technologies Incorporated

Financial Information for Subsidiary and Guarantor Parent

Statements of Income and Comprehensive Income

For the three months ended March 31, 2011


	Guarantor						Non-guarantor
(In millions)	Parent			Subsidiary			Subsidiaries			Eliminations			Consolidated
Sales	$	—		$	619.1		$	608.3		$	—		$	1,227.4
Cost of sales		8.6			557.4			456.0			—			1,022.0
Selling and administrative expenses		42.9			8.5			37.3			—			88.7

Income (loss) before interest, other income and income taxes		(51.5	)		53.2			115.0			—			116.7
Interest expense, net		(20.5	)		(2.2	)		(0.3	)		—			(23.0	)
Other income including equity in income of unconsolidated subsidiaries		165.8			0.8			0.5			(167.0	)		0.1

Income before income tax provision		93.8			51.8			115.2			(167.0	)		93.8
Income tax provision		35.1			19.7			40.1			(59.8	)		35.1

Net income		58.7			32.1			75.1			(107.2	)		58.7
Less: Net income attributable to noncontrolling interests		2.4			—			2.4			(2.4	)		2.4

Net income attributable to ATI	$	56.3		$	32.1		$	72.7		$	(104.8	)	$	56.3

Comprehensive income attributable to ATI	$	72.4		$	31.3		$	86.8		$	(118.1	)	$	72.4

Condensed Statements of Cash Flows

For the three months ended March 31, 2011


	Guarantor						Non-guarantor
(In millions)	Parent			Subsidiary			Subsidiaries			Eliminations			Consolidated
Cash flows provided by (used in) operating activities	$	27.8		$	(104.9	)	$	26.3		$	0.5		$	(50.3	)
Cash flows used in investing activities		—			(18.3	)		(23.4	)		—			(41.7	)
Cash flows provided by (used in) financing activities		(21.7	)		242.1			256.1			(0.5	)		476.0

Increase in cash and cash equivalents	$	6.1		$	118.9		$	259.0		$	—		$	384.0

Note 12. Commitments and Contingencies

The Company is subject to various domestic and international environmental laws and regulations that govern the discharge of pollutants and disposal of wastes, and which may require that it investigate and remediate the effects of the release or disposal of materials at sites associated with past and present operations. The Company could incur substantial cleanup costs, fines, and civil or criminal sanctions, third party property damage or personal injury claims as a result of violations or liabilities under these laws or noncompliance with environmental permits required at its facilities. The Company is currently involved in the investigation and remediation of a number of its current and former sites, as well as third party sites.

Environmental liabilities are recorded when the Company’s liability is probable and the costs are reasonably estimable. In many cases, however, the Company is not able to determine whether it is liable or, if liability is probable, to reasonably estimate the loss or range of loss. Estimates of the Company’s liability remain subject to additional uncertainties, including the nature and extent of site contamination, available remediation alternatives, the extent of corrective actions that may be required, and the number, participation, and financial condition of other

potentially responsible parties (“PRPs”). The Company expects that it will adjust its accruals to reflect new information as appropriate. Future adjustments could have a material adverse effect on the Company’s results of operations in a given period, but the Company cannot reliably predict the amounts of such future adjustments.

Based on currently available information, the Company does not believe that there is a reasonable possibility that a loss exceeding the amount already accrued for any of the sites with which the Company is currently associated (either individually or in the aggregate) will be an amount that would be material to a decision to buy or sell the Company’s securities. Future developments, administrative actions or liabilities relating to environmental matters, however, could have a material adverse effect on the Company’s financial condition or results of operations.

At March 31, 2012, the Company’s reserves for environmental remediation obligations totaled approximately $16 million, of which $9 million was included in other current liabilities. The reserve includes estimated probable future costs of $5 million for federal Superfund and comparable state-managed sites; $8 million for formerly owned or operated sites for which the Company has remediation or indemnification obligations; $2 million for owned or controlled sites at which Company operations have been discontinued; and $1 million for sites utilized by the Company in its ongoing operations. The Company continues to evaluate whether it may be able to recover a portion of past and future costs for environmental liabilities from third parties and to pursue such recoveries where appropriate.

The timing of expenditures depends on a number of factors that vary by site. The Company expects that it will expend present accruals over many years and that remediation of all sites with which it has been identified will be completed within thirty years.

See Note 17. Commitments and Contingencies to the Company’s consolidated financial statements in the Company’s Annual Report on Form 10-K for its fiscal year ended December 31, 2011 for a discussion of legal proceedings affecting the Company.

A number of other lawsuits, claims and proceedings have been or may be asserted against the Company relating to the conduct of its currently and formerly owned businesses, including those pertaining to product liability, patent infringement, commercial, government contract work, employment, employee and retiree benefits, taxes, environmental, health and safety, occupational disease, and stockholder matters. While the outcome of litigation cannot be predicted with certainty, and some of these lawsuits, claims or proceedings may be determined adversely to the Company, management does not believe that the disposition of any such pending matters is likely to have a material adverse effect on the Company’s financial condition or liquidity, although the resolution in any reporting period of one or more of these matters could have a material adverse effect on the Company’s results of operations for that period.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

Allegheny Technologies is one of the largest and most diversified specialty metals producers in the world. We use innovative technologies to offer global markets a wide range of specialty metals solutions. Our products include titanium and titanium alloys, nickel-based alloys and superalloys, zirconium, hafnium, and niobium, advanced powder alloys, stainless and specialty steel alloys, grain-oriented electrical steel, tungsten-based materials and cutting tools, forgings, castings, and fabrication and machining capabilities. Our specialty metals are produced in a wide range of alloys and product forms and are selected for use in applications that demand metals having exceptional hardness, toughness, strength, resistance to heat, corrosion or abrasion, or a combination of these characteristics. ATI is a fully integrated supplier, from raw material (for titanium) and melt (for other specialty alloy systems) through highly engineered finished components.

Sales for the first quarter 2012 increased 10.2% to $1.35 billion, compared to the first quarter 2011, primarily as a result of the acquisition of Ladish in May 2011 and improving demand in our key global growth markets. Compared to the first quarter 2011, sales increased 46% in the High Performance Metals segment and 15% in the Engineered Products segment, while sales decreased 10% in the Flat-Rolled Products segment. Compared to the fourth quarter 2011, sales increased 8.1%, with all business segments showing sales growth. High Performance Metals segment sales increased 11%, Flat-Rolled Products segment sales increased 6% and Engineered Products segment sales increased 5%.

Demand from the global aerospace and defense, electrical energy, oil and gas, chemical process industry, and medical markets represented 68% of ATI first quarter 2012 sales. Sales to the aerospace and defense market, our largest key global market, increased 44% compared to the first quarter 2011 and increased 17% compared to the fourth quarter 2011, and represented 32% of first quarter 2012 sales, as the acquisition of Ladish augmented organic growth. Sales to the oil and gas/chemical process industry market decreased 2% compared to the first quarter 2011 but increased 14% compared to the fourth quarter 2011, and represented 21% of first quarter 2012 sales. While shipment volume growth was realized, our revenue from this market was relatively flat in the first quarter 2012 compared to the first quarter 2011, due to lower raw material surcharges and indices as a result of much lower nickel prices.

Comparative information for our overall revenues (in millions) by market and their respective percentages of total revenues for the three month periods ended March 31, 2012 and 2011 were as follows:


Market	Three Months Ended March 31, 2012				Three Months Ended March 31, 2011
Aerospace & Defense	$	436.5	32	%	$	303.6	25	%
Oil & Gas/Chemical Process Industry		277.4	21	%		281.7	23	%
Electrical Energy		146.9	11	%		197.7	16	%
Medical		57.8	4	%		68.6	6	%

Subtotal - Key Markets		918.6	68	%		851.6	70	%

Automotive		105.9	8	%		113.1	9	%
Construction/Mining		103.4	8	%		71.2	6	%
Food Equipment & Appliances		55.2	4	%		64.7	5	%
Transportation		54.1	4	%		45.8	4	%
Electronics/Computers/Communication		45.3	3	%		37.0	3	%
Machine & Cutting Tools		36.2	3	%		27.3	2	%
Conversion Services & Other		33.8	2	%		16.7	1	%

Total	$	1,352.5	100	%	$	1,227.4	100	%

For the first quarter 2012, direct international sales increased $118.6 million, or 30%, compared to the first quarter 2011, and represented nearly 38% of total sales. Sales of our high-value products (titanium and titanium alloys, nickel-based alloys and specialty alloys, exotic alloys, precision forgings and castings, grain-oriented electrical steel, precision and engineered strip, and tungsten materials) represented 80% of total sales.

Total titanium mill product shipments for the first quarter 2012, including ATI-produced products for our Uniti titanium joint venture, were 10 million pounds, a 13% decrease compared to the first quarter 2011, due primarily to timing of major project awards for desalination and oil and gas applications primarily affecting flat-rolled products.

Segment operating profit for the first quarter 2012 was $163.2 million, or 12.1% of sales, compared to $162.4 million, or 13.2% of sales for the first quarter 2011. Compared to first quarter 2011, segment operating profit improved in the High Performance Metals segment due to the acquisition of Ladish and increased shipments of titanium and nickel-based alloys. This improvement in operating profit for the High Performance Metals segment was partially offset by approximately $6 million in higher raw material costs, primarily nickel, which did not align with raw material surcharges due to the length of the production cycle and the rapid decline of nickel prices in the second half of 2011. Flat-Rolled Products segment operating profit in the first quarter 2012 was impacted by lower shipments and base prices for standard stainless products compared to the first quarter 2011. There was no change in our LIFO inventory valuation reserve in the first quarter 2012. The first quarter 2011 included a LIFO inventory valuation reserve charge of $3.9 million. The first quarter 2012 results included $28.8 million in gross cost reductions, before the effects of inflation.

Segment operating profit as a percentage of sales for the three months ended March 31, 2012 and 2011 was:


	Three Months Ended March 31,
	2012			2011
High Performance Metals		17.9	%		21.4	%
Flat-Rolled Products		7.4	%		8.9	%
Engineered Products		9.1	%		11.4	%

Our measure of segment operating profit, which we use to analyze the performance and results of our business segments, excludes income taxes, corporate expenses, net interest income or expense, retirement benefit expense, and closed company and other expenses. We believe segment operating profit, as defined, provides an appropriate measure of controllable operating results at the business segment level.

Income before tax for the first quarter 2012 was $84.1 million, or 6.2% of sales, compared to $93.8 million, or 7.6% of sales for the first quarter 2011. Higher retirement benefit expense, primarily due to the utilization of a lower discount rate to value retirement benefit obligations and lower than expected returns on plan assets, more than offset lower corporate expenses and lower interest expense.

Net income attributable to ATI for the first quarter 2012 was $56.2 million, or $0.50 per share, compared to $56.3 million, or $0.54 per share for the first quarter 2011. Results for the first quarter 2012 were impacted by higher retirement benefit expense of $7.3 million, net of tax, or $0.06 per share, compared to the same period of 2011. In addition, first quarter 2012 earnings per share reflects a 7.45 million increase in average diluted shares outstanding, compared to the first quarter 2011, primarily as a result of the shares issued in association with the acquisition of Ladish in May 2011. Results for the first quarter 2011 included a charge of $3.1 million, net of tax, related to the accelerated recognition of equity-based compensation expense due to executive retirements. Excluding this charge, first quarter 2011 net income was $59.4 million, or $0.57 per share.

At March 31, 2012, we had cash on hand of $250.3 million, a decrease of $130.3 million from year-end 2011. Cash flow used in operations for the first quarter 2012 was $18.2 million. During the first quarter 2012, we invested $155.0 million in managed working capital due to increased business activity and invested $69.9 million in capital expenditures primarily related to the Flat-Rolled Products segment’s Hot-Rolling and Processing Facility. Net debt to total capitalization was 33.4% and total debt to total capitalization was 37.5% at March 31, 2012. At December 31, 2011, net debt to total capitalization was 31.3% and total debt to total capitalization was 37.9%.

We remain focused on long-term value creation for our stockholders while delivering superior value for our customers. Our industry-leading specialty metals technologies, diversified alloy systems and product forms, global and diversified market focus, unsurpassed manufacturing capabilities, and integrated capabilities from alloy development to raw materials (titanium sponge) to melting and hot-working, to finished value-added components and parts are unique in the world. This strategy has ATI well-positioned to achieve significant revenue and earnings growth over the next three to five years. We expect strong secular growth in our key global markets of aerospace, oil and gas/chemical process industry, electrical energy, and medical. We have identified and targeted nearly $2 billion in potential new annual revenue growth within the next five years from our new manufacturing capabilities and innovative new products.

As we focus on 2012, in our High Performance Metals segment, we expect to benefit from strong growth in demand from our key global markets, a full year of results and increasing synergies from ATI Ladish, a lower cost structure at our Rowley titanium sponge facility, which has now completed the standard-grade qualification (SQ) process, additional premium-titanium melt capacity from our new PAM 4 furnace, and the growth in demand for new products. In our Flat-Rolled Products segment, we expect to benefit from the growth in demand for our high-value products. We now expect the benefits from several upcoming large projects in the oil and gas/chemical process industry market, including desalination, to begin in the third quarter 2012, a delay of about one quarter. We are cautiously optimistic of sustained demand growth for standard stainless products. In our Engineered Products segment, we see continued growth in demand for our tungsten-based products and our industrial forgings and castings.

While uncertainties remain about the euro-zone debt crisis, and the pace of GDP growth in the U.S. and China, ATI’s diversification and focus on high-value global markets with strong secular growth results in our continued expectation of revenue growth of at least 10% in 2012, compared to 2011, and segment operating profit in the range of 13% to 14% of sales.

Business Segment Results

We operate in three business segments: High Performance Metals, Flat-Rolled Products, and Engineered Products. These segments represented the following percentages of our total revenues and segment operating profit for the first three months of 2012 and 2011:


	2012						2011
	Revenue			Operating Profit			Revenue			Operating Profit
High Performance Metals		43	%		64	%		33	%		53	%

Flat-Rolled Products		47	%		29	%		58	%		39	%

Engineered Products		10	%		7	%		9	%		8	%

High Performance Metals Segment

First quarter 2012 sales increased 46% to $581.3 million compared to the first quarter 2011, primarily as a result of the acquisition of Ladish in May 2011 and improving demand from commercial aerospace and oil and gas markets. Mill product shipments increased 22% for nickel-based and specialty alloys, and 4% for titanium and titanium alloys. On a pro forma comparison basis, sales of forged and cast components from ATI Ladish increased 26% compared to the first quarter 2011. Exotic alloys shipments decreased 14% in the first quarter 2012 compared to the prior year’s first quarter primarily due to lower demand from the nuclear electrical energy and the chemical process industry markets. Average mill products selling prices increased 3% for titanium and titanium alloys primarily due to a favorable product mix and improving base prices compared to the first quarter 2011. Average mill products selling prices increased 2% for nickel-based and specialty alloys, as a favorable product mix was partially offset by lower raw material indices. Average selling prices for exotic alloys increased 14% primarily due to a favorable mix.

Comparative information for our High Performance Metals segment revenues (in millions) by market and their respective percentages of the segment’s overall revenues for the three month periods ended March 31, 2012 and 2011 is as follows:


Market	Three Months Ended March 31, 2012				Three Months Ended March 31, 2011
Aerospace:
Jet Engines	$	201.9	35	%	$	128.0	32	%
Airframes		105.9	18	%		68.5	17	%
Government		53.2	9	%		29.6	7	%

Total Aerospace		361.0	62	%		226.1	56	%

Defense		21.2	4	%		23.3	6	%
Oil & Gas/Chemical Process Industry		54.4	9	%		47.1	12	%
Electrical Energy		36.9	6	%		36.3	9	%
Medical		49.7	9	%		44.6	11	%
Construction/Mining		19.8	3	%		0.3	0	%
Other		38.3	7	%		21.7	6	%

Total	$	581.3	100	%	$	399.4	100	%

Segment operating profit in the first quarter 2012 increased to $104.1 million, or 17.9% of sales, compared to $85.6 million, or 21.4% of sales, for the first quarter 2011. The increase in operating profit primarily resulted from the acquisition of Ladish, higher shipment volumes and base prices for most products, and the benefits of gross cost reductions. First quarter 2012 operating profit margins were negatively impacted by approximately $6 million in higher raw material costs, primarily nickel, which did not align with raw material surcharges due to the length of the production cycle and the rapid decline of nickel prices in the second half of 2011.

Our Rowley, UT titanium sponge production facility achieved a significant milestone in March 2012 with the completion of the standard-grade (SQ) qualification process. Titanium sponge produced at the Rowley facility can now be applied to many products used for aerospace airframe, medical and industrial applications. Production

volumes are increasing and costs are decreasing. Segment operating profit in the first quarter 2012 included $5.8 million of start-up and idle facility costs, primarily for the titanium sponge operations, compared to $10.2 million in the first quarter 2011. Idle facility costs in both periods relate mostly to our Albany, OR titanium sponge facility, which is positioned to be back in production when warranted by market conditions. There was no change in our LIFO inventory valuation reserve in the first quarter 2012. The first quarter 2011 segment operating profit included a LIFO inventory valuation reserve charge of $4.2 million. Results benefited from $13.9 million in gross cost reductions in the first quarter 2012.

Certain comparative information on the segment’s mill products for the three months ended March 31, 2012 and 2011 is provided in the following table. Mill products volume and average price information includes shipments to ATI Ladish for all periods presented.


	Three Months Ended March 31,				% Change
	2012		2011		% Change
Mill Products Volume (000’s pounds):
Titanium		7,027		6,753		4	%
Nickel-based and specialty alloys		14,410		11,824		22	%
Exotic alloys		929		1,079		(14	%)
Mill Products Average Prices (per pound):
Titanium	$	21.93	$	21.25		3	%
Nickel-based and specialty alloys	$	15.18	$	14.86		2	%
Exotic alloys	$	70.02	$	61.18		14	%

Flat-Rolled Products Segment

First quarter 2012 sales decreased 10% compared to the first quarter 2011, to $636.0 million, primarily due to lower raw material surcharges and lower volumes. Shipments of high-value products were essentially flat, and shipments of standard stainless products (sheet and plate) decreased 8%. Demand remained strong for high-value products from the aerospace and oil and gas markets, which included several large oil and gas projects. Demand for grain-oriented electrical steel continued to be impacted by the weak housing construction market. First quarter 2012 Flat-Rolled Products segment titanium shipments, including Uniti joint venture conversion, were 3.0 million pounds, a 16% decrease compared to the first quarter 2011 and a 23% decrease compared to the fourth quarter 2011, due primarily to timing delays in expected projects for desalination and oil and gas applications. Average transaction prices for all products, which include surcharges, were 6% lower due to lower raw material surcharges and lower base prices for standard stainless products.

Comparative information for our Flat-Rolled Products revenues (in millions) by market and their respective percentages of the segment’s overall revenues for the three month periods ended March 31, 2012 and 2011 is as follows:


Market	Three Months Ended March 31, 2012				Three Months Ended March 31, 2011
Oil & Gas/Chemical Process Industry	$	185.3	29	%	$	200.0	28	%
Electrical Energy		102.0	16	%		151.2	21	%
Automotive		96.2	15	%		102.7	14	%
Construction/Mining		63.5	10	%		56.1	8	%
Food Equipment & Appliances		54.6	8	%		62.5	9	%
Aerospace & Defense		42.3	7	%		45.5	6	%
Electronics/Computers/Communication		41.8	7	%		34.9	5	%
Transportation		23.2	4	%		24.7	4	%
Medical		5.4	1	%		21.5	3	%
Other		21.7	3	%		11.5	2	%

Total	$	636.0	100	%	$	710.6	100	%

Segment operating profit for the first quarter 2012 was $46.8 million, or 7.4% of sales, compared to $63.4 million, or 8.9% of sales, for the first quarter 2011 primarily due to lower shipment volumes and lower base prices

for standard stainless products. There was no change in our LIFO inventory valuation reserve in the first quarter 2012. The first quarter 2011 included a LIFO inventory valuation reserve benefit of $2.5 million. Segment results for the first quarter 2012 benefited from $12.3 million in gross cost reductions.

Comparative information on the segment’s products for the three months ended March 31, 2012 and 2011 is provided in the following table:


	Three Months Ended March 31,				% Change
	2012		2011		% Change
Volume (000’s pounds):
High value		120,504		122,027		(1	)%
Standard		157,320		170,328		(8	)%

Total		277,824		292,355		(5	)%
Average prices (per lb.):
High value	$	3.21	$	3.19		1	%
Standard	$	1.56	$	1.87		(17	)%
Combined Average	$	2.28	$	2.42		(6	)%

Engineered Products Segment

Sales for the first quarter 2012 were $135.2 million, an increase of 15% compared to the same first quarter 2011. Demand was strong from the construction and mining, cutting tools, aerospace, transportation and oil and gas markets.

Comparative information for our Engineered Products revenues (in millions) by market and their respective percentages of the segment’s overall revenues for the three month periods ended March 31, 2012 and 2011 is as follows:


Market	Three Months Ended March 31, 2012				Three Months Ended March 31, 2011
Oil & Gas/Chemical Process Industry	$	37.7	28	%	$	34.5	29	%
Machine & Cutting Tools		23.2	17	%		17.2	15	%
Transportation		22.9	17	%		19.6	17	%
Construction/Mining		20.1	15	%		14.8	13	%
Aerospace & Defense		11.9	9	%		8.6	7	%
Electrical Energy		7.9	6	%		10.1	9	%
Automotive		7.4	5	%		7.5	6	%
Medical		2.7	2	%		2.5	2	%
Other		1.3	1	%		2.6	2	%

Total	$	135.1	100	%	$	117.4	100	%

Segment operating profit for the first quarter 2012 was $12.3 million, compared to $13.4 million in the first quarter 2011. Segment operating profit for the first quarter 2012 was negatively impacted by $1.5 million in start-up costs associated with our new ATI Fabricated Components business. There was no change in our LIFO inventory valuation reserve in the first quarter 2012. Results for the first quarter 2011 included a LIFO inventory valuation reserve charge of $2.2 million. Results benefited from $2.6 million in gross cost reductions in the first quarter 2012.

Corporate Items

Corporate expenses for the first quarter 2012 were $21.7 million, compared to $25.8 million in the first quarter 2011. The decrease in corporate expenses was primarily related to the prior year’s accelerated recognition of equity-based compensation expense due to executive retirements.

Interest expense, net of interest income, in the first quarter 2012 was $19.9 million, compared to interest expense of $23.0 million in the first quarter 2011. The decrease in interest expense was primarily due to lower debt levels and increased capitalized interest on major strategic projects. Interest expense benefited from the capitalization of interest costs on strategic capital projects of $4.5 million in the first quarter 2012 and by $2.6 million in the first quarter 2011.

Other expenses, which include charges incurred in connection with closed operations, and other non-operating income or expense, for the first quarter 2012 was $6.9 million, compared to $0.5 million for the first quarter 2011. The increase over the prior year quarter was primarily related to an increase of $3.2 million in environmental and legal expenses associated with closed operations, and $1.9 million in franchise taxes, insurance and unfavorable foreign currency exchange losses. These items are presented primarily in selling and administrative expenses, and in other income (expense) in the consolidated statement of operations.

Retirement benefit expense, which includes pension expense and other postretirement expense, increased to $30.6 million in the first quarter 2012, compared to $19.3 million in the first quarter 2011. This increase was primarily due to the utilization of a lower discount rate to value retirement benefit obligations and lower than expected returns on plan assets, and represented additional expense of $7.3 million, net of tax, or $0.06 per share, compared to the first quarter 2011. For the first quarter 2012, retirement benefit expense of $22.0 million was included in cost of sales and $8.6 million was included in selling and administrative expenses. For the first quarter 2011, the amount of retirement benefit expense included in cost of sales was $13.8 million, and the amount included in selling and administrative expenses was $5.5 million.

Income Taxes

The first quarter 2012 provision for income taxes was $25.8 million, or 30.7% of income before tax, compared to the 2011 provision for income taxes of $35.1 million, or 37.4% of income before tax. The first quarter 2012 included discrete tax benefits of $3.7 million primarily related to state income taxes. Excluding these items, the effective tax rate was 35.0%. The first quarter 2011 included discrete tax charges of $2.7 million primarily related to foreign income taxes. Excluding these items, the effective tax rate was 34.5%.

Financial Condition and Liquidity

We believe that internally generated funds, current cash on hand, and available borrowings under existing credit lines will be adequate to meet foreseeable liquidity needs, including a substantial expansion of our production capabilities over the next few years and scheduled debt maturities. We did not borrow funds under our domestic senior unsecured credit facility during the first three months of 2012. However, as of March 31, 2012, approximately $7 million of this facility was utilized to support letters of credit.

If we needed to obtain additional financing using the credit markets, the cost and the terms and conditions of such borrowings may be influenced by our credit rating. Changes in our credit rating do not impact our access to, or the cost of, our existing credit facilities.

We have no off-balance sheet arrangements as defined in Item 303(a)(4) of SEC Regulation S-K.

Cash Flow and Working Capital

For the three months ended March 31, 2012, cash flow used in operations for 2012 was $18.2 million, resulting from an investment of $155.0 million in managed working capital, primarily due to increased business activity. Cash used in investing activities was $69.0 million in the first quarter 2012 and consisted primarily of capital expenditures. Cash used in financing activities was $43.1 million in the first quarter 2012 and included dividend payments of $19.1 million and $22.7 million of tax payments on share-based compensation associated with performance-based plans. At March 31, 2012, cash and cash equivalents on hand totaled $250.3 million, a decrease of $130.3 million from year end 2011. As of March 31, 2012, $115.3 million of cash and cash equivalents were held by our foreign subsidiaries.

As part of managing the liquidity of our business, we focus on controlling managed working capital, which is defined as gross accounts receivable and gross inventories, less accounts payable. In measuring performance in controlling this managed working capital, we exclude the effects of LIFO inventory valuation reserves, excess and obsolete inventory reserves, and reserves for uncollectible accounts receivable which, due to their nature, are

managed separately. At March 31, 2012, managed working capital decreased to 35.0% of annualized sales, compared to 37.8% of annualized sales at December 31, 2011. During the first three months of 2012, managed working capital increased by $155.0 million, to $2.0 billion. The growth in managed working capital from December 31, 2011 resulted from increased accounts receivable of $43.6 million and increased inventory of $125.4 million, partially offset by increased accounts payable of $14.0 million. While accounts receivable balances increased in the first quarter 2012, days sales outstanding, which measures actual collection timing for accounts receivable, improved by 7% compared to year end 2011. Gross inventory turns, which exclude the effect of LIFO inventory valuation reserves, remained unchanged at March 31, 2012 compared to year end 2011.

The Components of managed working capital were as follows:


(in millions)	March 31, 2012			December 31, 2011
Accounts receivable	$	753.1		$	709.1
Inventory		1,511.4			1,384.3
Accounts payable		(505.8	)		(490.7	)

Subtotal		1,758.7			1,602.7
Allowance for doubtful accounts		5.3			5.9
LIFO reserve		153.7			153.7
Corporate and other		60.5			60.9

Managed working capital		1,978.2			1,823.2

Annualized prior 2 months sales	$	5,654.3		$	4,820.6

Managed working capital as a % of annualized sales		35.0	%		37.8	%
Change in managed working capital from December 31, 2011	$	155.0

Capital Expenditures

We have significantly expanded, and continue to expand, our manufacturing capabilities to meet expected intermediate and long-term demand from the aerospace (engine and airframe) and defense, chemical process industry, oil and gas, electrical energy, and medical markets, especially for titanium and titanium-based alloys, nickel-based alloys and superalloys, specialty alloys, and exotic alloys. We expect capital expenditures for 2012 will be approximately $485 million, all of which we expect to fund from operating cash flow and available cash on hand. Capital expenditures were $69.9 million for the first quarter 2012.

Our self-funded, on-going strategic capital investments include the new advanced specialty metals Hot-Rolling and Processing Facility at our existing Flat-Rolled Products segment Brackenridge, PA site for approximately $1.1 billion. The facility construction is progressing on schedule and on budget, with construction expected to be completed by the end of 2013 and commissioning occurring during the first half of 2014. The new advanced hot-rolling and processing facility is designed to be the most powerful mill in the world for production of specialty metals. It is designed to produce exceptional quality, thinner, and wider hot-rolled coils at reduced cost with shorter lead times, and require lower working capital requirements. When completed, we believe ATI’s new hot-rolling and processing facility will provide unsurpassed manufacturing capability and versatility in the production of a wide range of flat-rolled specialty metals. We expect improved productivity, lower costs, and higher quality for our diversified product mix of flat-rolled specialty metals, including nickel-based and specialty alloys, titanium and titanium alloys, zirconium alloys, Precision Rolled Strip ^® products, and stainless sheet and coiled plate products. It is designed to roll and process exceptional quality hot bands of up to 78.62 inches, or 2 meters, wide.

Debt

At March 31, 2012, we had $1,509.9 million in total outstanding debt, compared to $1,509.3 million at December 31, 2011.

In managing our overall capital structure, some of the measures on which we focus are net debt to total capitalization, which is the percentage of our debt, net of cash that may be available to reduce borrowings, to our total invested and borrowed capital, and total debt to total capitalization, which excludes cash balances. Net debt as

a percentage of total capitalization was 33.4% at March 31, 2012, compared to 31.3% at December 31, 2011. The net debt to total capitalization was determined as follows:


($ in millions)	March 31, 2012			December 31, 2011
Total debt	$	1,509.9		$	1,509.3
Less: Cash		(250.3	)		(380.6	)

Net debt	$	1,259.6		$	1,128.7

Net debt	$	1,259.6		$	1,128.7
Total ATI stockholders’ equity		2,515.0			2,475.3

Net ATI total capital	$	3,774.6		$	3,604.0
Net debt to ATI total capital		33.4	%		31.3	%

Total debt to total capitalization increased to 37.5% at March 31, 2012 from 37.9% December 31, 2011.

Total debt to total capitalization was determined as follows:


($ in millions)	March 31, 2012			December 31, 2011
Total debt	$	1,509.9		$	1,509.3
Total ATI stockholders’ equity		2,515.0			2,475.3

Total ATI capital	$	4,024.9		$	3,984.6
Total debt to total ATI capital		37.5	%		37.9	%

On April 4, 2012, we amended our $400 million senior unsecured domestic credit facility to reduce costs under this facility, and to extend the expiration date of the facility to April 4, 2017. We did not borrow funds under this credit facility during the first three months of 2012, although approximately $7 million has been utilized to support the issuance of letters of credit. The unsecured facility requires us to maintain a leverage ratio (consolidated total indebtedness net of cash on hand in excess of $50 million, divided by consolidated earnings before interest, taxes, depreciation and amortization, and non-cash pension expense) of not greater than 3.25, and maintain an interest coverage ratio (consolidated earnings before interest, taxes, and non-cash pension expense divided by interest expense) of not less than 2.0. For the twelve months ended March 31, 2012, our leverage ratio was 1.99 and our interest coverage ratio was 5.41.

We have an additional, separate credit facility for the issuance of letters of credit. As of March 31, 2012, $31 million in letters of credit was outstanding under this facility.

In addition, STAL, the Company’s Chinese joint venture company in which ATI has a 60% interest, has a 205 million renminbi (approximately $33 million at March 31, 2012 exchange rates) revolving credit facility with a group of banks which expires in August 2014. This credit facility is supported solely by STAL’s financial capability without any guarantees from the joint venture partners. As of March 31, 2012, there were no borrowings under this credit facility.

Retirement Benefits

At December 31, 2011, the measurement date for ERISA funding, our U.S. qualified pension defined benefit pension plan (U.S. Plan) was approximately 84% funded. Based upon current regulations and actuarial studies, we are not required to make a cash contribution to the U.S. Plan for 2012. However, we may elect, depending upon investment performance of the pension plan assets and other factors, to make voluntary cash contributions to this plan in the future.

Dividends

A regular quarterly dividend of $0.18 per share of common stock was paid on March 28, 2012 to stockholders of record at the close of business on March 14, 2012. The payment of dividends and the amount of such dividends depends upon matters deemed relevant by our Board of Directors, such as our results of operations, financial condition, cash requirements, future prospects, any limitations imposed by law, credit agreements or senior securities, and other factors deemed relevant and appropriate.

Critical Accounting Policies

Inventory

At March 31, 2012, we had net inventory of $1,511.4 million. Inventories are stated at the lower of cost (last-in, first-out (LIFO), first-in, first-out (FIFO) and average cost methods) or market, less progress payments. Costs include direct material, direct labor and applicable manufacturing and engineering overhead, and other direct costs. Most of our inventory is valued utilizing the LIFO costing methodology. Inventory of our non-U.S. operations is valued using average cost or FIFO methods. Under the LIFO inventory valuation method, changes in the cost of raw materials and production activities are recognized in cost of sales in the current period even though these material and other costs may have been incurred at significantly different values due to the length of time of our production cycle. The prices for many of the raw materials we use have been extremely volatile during the past four years. Since we value most of our inventory utilizing the LIFO inventory costing methodology, a rise in raw material costs has a negative effect on our operating results, while, conversely, a fall in material costs results in a benefit to operating results. For example, in 2011, the effect of falling raw material costs on our LIFO inventory valuation method resulted in cost of sales which were $9.3 million lower than would have been recognized had we utilized the FIFO methodology to value our inventory. Conversely, in 2010, the effect of rising raw material costs on our LIFO inventory valuation reserve methodology resulted in cost of sales which were $60.2 million higher than would have been recognized had we used the FIFO methodology to value our inventory. In a period of rising prices, cost of sales expense recognized under LIFO is generally higher than the cash costs incurred to acquire the inventory sold. Conversely, in a period of declining raw material prices, cost of sales recognized under LIFO is generally lower than cash costs incurred to acquire the inventory sold.

Since the LIFO inventory valuation methodology is designed for annual determination, interim estimates of the annual LIFO valuation are required. We recognize the effects of the LIFO inventory valuation method on an interim basis by projecting the expected annual LIFO cost and allocating that projection to the interim quarters equally. These projections of annual LIFO inventory valuation reserve changes are updated quarterly and are evaluated based upon material, labor and overhead costs and projections for such costs at the end of the year plus projections regarding year-end inventory levels. There was no change in our LIFO inventory valuation reserve in the first quarter 2012.

The LIFO inventory valuation methodology is not utilized by many of the companies with which we compete, including foreign competitors. As such, our results of operations may not be comparable to those of our competitors during periods of volatile material costs due, in part, to the differences between the LIFO inventory valuation method and other acceptable inventory valuation methods.

We evaluate product lines on a quarterly basis to identify inventory values that exceed estimated net realizable value. The calculation of a resulting reserve, if any, is recognized as an expense in the period that the need for the reserve is identified. At March 31, 2012, no significant reserves were required. It is our general policy to write-down to scrap value any inventory that is identified as obsolete and any inventory that has aged or has not moved in more than twelve months. In some instances this criterion is up to twenty-four months due to the longer manufacturing and distribution process for such products.

Other Critical Accounting Policies

A summary of other significant accounting policies is discussed in Management’s Discussion and Analysis of Financial Condition and Results of Operations and in Note 1 to the consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2011.

The preparation of the financial statements in accordance with U.S. generally accepted accounting principles requires us to make judgments, estimates and assumptions regarding uncertainties that affect the reported amounts of assets and liabilities. Significant areas of uncertainty that require judgments, estimates and assumptions include the accounting for derivatives, retirement plans, income taxes, environmental and other contingencies as well as asset impairment, inventory valuation and collectability of accounts receivable. We use historical and other

information that we consider to be relevant to make these judgments and estimates. However, actual results may differ from those estimates and assumptions that are used to prepare our financial statements.

New Accounting Pronouncement Adopted

Forward-Looking and Other Statements

From time to time, we have made and may continue to make “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Certain statements in this report relate to future events and expectations and, as such, constitute forward-looking statements. Forward-looking statements include those containing such words as “anticipates,” “believes,” “estimates,” “expects,” “would,” “should,” “will,” “will likely result,” “forecast,” “outlook,” “projects,” and similar expressions. Forward-looking statements are based on management’s current expectations and include known and unknown risks, uncertainties and other factors, many of which we are unable to predict or control, that may cause our actual results, performance or achievements to materially differ from those expressed or implied in the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include: (a) material adverse changes in economic or industry conditions generally, including global supply and demand conditions and prices for our specialty metals; (b) material adverse changes in the markets we serve, including the aerospace and defense, electrical energy, chemical process industry, oil and gas, medical, automotive, construction and mining, and other markets; (c) our inability to achieve the level of cost savings, productivity improvements, synergies, growth or other benefits anticipated by management, from strategic investments and the integration of acquired businesses, whether due to significant increases in energy, raw materials or employee benefits costs, the possibility of project cost overruns or unanticipated costs and expenses, or other factors; (d) volatility of prices and availability of supply of the raw materials that are critical to the manufacture of our products; (e) declines in the value of our defined benefit pension plan assets or unfavorable changes in laws or regulations that govern pension plan funding; (f) significant legal proceedings or investigations adverse to us; and (g) other risk factors summarized in our Annual Report on Form 10-K for the year ended December 31, 2011, and in other reports filed with the Securities and Exchange Commission. We assume no duty to update our forward-looking statements

Item 3. Quantitative and Qualitative Disclosures About Market Risk

As part of our risk management strategy, we utilize derivative financial instruments, from time to time, to hedge our exposure to changes in raw material prices, energy prices, foreign currencies, and interest rates. We monitor the third-party financial institutions which are our counterparty to these financial instruments on a daily basis and diversify our transactions among counterparties to minimize exposure to any one of these entities. Fair values for derivatives were measured using exchange-traded prices for the hedged items including consideration of counterparty risk and the Company’s credit risk.

Interest Rate Risk. We attempt to maintain a reasonable balance between fixed- and floating-rate debt to keep financing costs as low as possible. At March 31, 2012, we had approximately $26 million of floating rate debt outstanding with a weighted average interest rate of approximately 1.5%. Since the interest rate on floating rate debt changes with the short-term market rate of interest, we are exposed to the risk that these interest rates may increase, raising our interest expense in situations where the interest rate is not capped. For example, a hypothetical 1% increase in the rate of interest on the $26 million of our outstanding floating rate debt not subjected to a cap would result in increased annual financing costs of approximately $0.3 million.

Volatility of Energy Prices. Energy resources markets are subject to conditions that create uncertainty in the prices and availability of energy resources. 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 affected by political and economic factors beyond our control. Increases in energy costs, or changes in costs relative to energy costs paid by competitors, have 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. We use approximately 8 to 10 million MMBtu’s of natural gas annually, depending upon business conditions, in the manufacture of our products. These purchases of natural gas expose us to risk of higher gas prices. For example, a hypothetical $1.00 per MMBtu increase in the price of natural gas would result in increased annual energy costs of approximately $8 to $10 million. We use several approaches to minimize any material adverse effect on our financial condition or results of operations from volatile energy prices. These approaches include incorporating an energy surcharge on many of our products and using financial derivatives to reduce exposure to energy price volatility.

At March 31, 2012, the outstanding financial derivatives used to hedge our exposure to energy cost volatility included both natural gas and electricity hedges. For natural gas, approximately 70% of our forecasted domestic requirements are hedged for 2012, approximately 50% for 2013, and about 30% for 2014. The net mark-to-market valuation of these outstanding natural gas hedges at March 31, 2012 was an unrealized pre-tax loss of $16.4 million, comprised of $12.1 million in accrued liabilities, $4.4 million in other long-term liabilities, and $0.1 million of other assets on the balance sheet. For the three months ended March 31, 2012, the effects of natural gas hedging activity increased cost of sales by $4.3 million. For electricity usage in our Western Pennsylvania operations, we have hedged approximately 30% of our on-peak and off-peak forecasted requirements for 2012 and approximately 10% for 2014. The net mark-to-market valuation of the electricity hedges was an unrealized pre-tax loss of $2.5 million, comprised of $2.2 million in accrued liabilities, and $0.3 million in other long-term liabilities on the balance sheet. The effects of the hedging activity are recognized in income over the designated hedge periods.

Volatility of Raw Material Prices. We use raw materials surcharge and index mechanisms to offset the impact of increased raw material costs; however, competitive factors in the marketplace can limit our ability to institute such mechanisms, and there can be a delay between the increase in the price of raw materials and the realization of the benefit of such mechanisms. For example, in 2011 we used approximately 95 million pounds of nickel; therefore, a hypothetical change of $1.00 per pound in nickel prices would result in increased costs of approximately $95 million. In addition, in 2011 we also used approximately 810 million pounds of ferrous scrap in the production of our flat-rolled products and a hypothetical change of $0.01 per pound would result in increased costs of approximately $8 million. While we enter into raw materials futures contracts from time-to-time to hedge exposure to price fluctuations, such as for nickel, 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.

The majority of our products are sold utilizing raw material surcharges and index mechanisms. However as of March 31, 2012, we had entered into financial hedging arrangements primarily at the request of our customers related to firm orders for approximately 9% of our total annual nickel requirements. These nickel hedges extend to 2016. Any gain or loss associated with these hedging arrangements is included in cost of sales. At March 31, 2012, the net mark-to-market valuation of our outstanding raw material hedges was an unrealized pre-tax loss of $2.5 million, comprised of $0.2 million included in prepaid expenses and other current assets, $0.4 million in other long-term assets, $2.8 million in accrued liabilities and $0.3 million in long-term other liabilities on the balance sheet.

Foreign Currency Risk. Foreign currency exchange contracts are used, from time-to-time, to limit transactional exposure to changes in currency exchange rates. We sometimes purchase foreign currency forward contracts that permit us to sell specified amounts of foreign currencies expected to be received from our export sales for pre-established U.S. dollar amounts at specified dates. The forward contracts are denominated in the same foreign currencies in which export sales are denominated. These contracts are designated as hedges of the variability in cash flows of a portion of the forecasted future export sales transactions which otherwise would expose the Company to foreign currency risk. We may also enter into foreign currency forward contracts that are not designated as hedges, which are denominated in the same foreign currency in which export sales are denominated. At March 31, 2012, the outstanding financial derivatives, including both hedges and undesignated derivatives, that are used to manage our exposure to foreign currency, primarily euros, represented approximately 10% of our forecasted total international sales through 2014. In addition, we may also designate cash balances held in foreign currencies as hedges of forecasted foreign currency transactions. At March 31, 2012, the net mark-to-market valuation of the outstanding foreign currency forward contracts was a net asset of $7.8 million, of which $5.5 million is included in prepaid

expenses and other current assets, $2.5 million was included other long-term assets, and $0.2 million in accrued liabilities on the balance sheet.

Item 4.

Controls and Procedures

(a)

Evaluation of Disclosure Controls and Procedures

Our Chief Executive Officer and Chief Financial Officer have evaluated the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) or Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of March 31, 2012, and they concluded that these disclosure controls and procedures are effective.

(b)

Changes in Internal Controls

There was no change in our internal control over financial reporting identified in connection with the evaluation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) or Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of March 31, 2012, conducted by our Chief Executive Officer and Chief Financial Officer, that occurred during the quarter ended March 31, 2012 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1.

Legal Proceedings

A number of lawsuits, claims and proceedings have been or may be asserted against the Company relating to the conduct of its business, including those pertaining to product liability, patent infringement, commercial, government contract work, employment, employee and retiree benefits, taxes, environmental, health and safety, occupational disease, and stockholder matters. Certain of such lawsuits, claims and proceedings are described in our Annual Report on Form 10-K for the year ended December 31, 2011, and addressed in Note 12 to the unaudited interim financial statements included herein. While the outcome of litigation cannot be predicted with certainty, and some of these lawsuits, claims or proceedings may be determined adversely to the Company, management does not believe that the disposition of any such pending matters is likely to have a material adverse effect on the Company’s financial condition or liquidity, although the resolution in any reporting period of one or more of these matters could have a material adverse effect on the Company’s results of operations for that period.

Item 1A.

Risk Factors

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2011, which could materially affect our business, financial condition or future results. The risks described in our Annual Report on Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

Set forth below is information regarding the Company’s stock repurchases during the period covered by this report, comprising shares repurchased by ATI from employees to satisfy employee-owed taxes on share-based compensation.


Period	Total Number of Shares (or Units) Purchased		Average Price Paid per Share (or Unit)		Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs		Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
January 1-31, 2012		497,695	$	46.90		—	$	—
February 1-29, 2012		—		—		—		—
March 1-31, 2012		—		—		—		—

Total		497,695	$	46.90		—	$	—

Item 6.

Exhibits

(a)

Exhibits


4.1		Fourth Amendment to Note Purchase Agreement, dated as of March 16, 2012, by and between ATI Ladish LLC (as successor by merger to Ladish Co., Inc.) and the purchasers listed therein (filed herewith).

10.1		Fifth Amendment to Credit Agreement, dated April 4, 2012, by and among ATI Funding Corporation, TDY Holdings, LLC, the guarantors party thereto, the lenders party thereto and PNC Bank, National Association, as Administrative Agent for the lenders (filed herewith).

10.2		2012 Annual Incentive Plan (filed herewith).

10.3		Form of Performance/Restricted Stock Agreement dated February 22, 2012 (filed herewith).

10.4		Form of Total Shareholder Return Incentive Compensation Program Award Agreement effective as of January 1, 2012 (filed herewith).

10.5		Form of Key Executive Performance Plan Agreement dated February 22, 2012, including Key Executive Performance Plan as amended February 22, 2012 (filed herewith).

10.6		Form of Clawback Agreement regarding incentive payments under the Annual Incentive Plan dated March 15, 2012 (filed herewith).

10.7		Form of Clawback Agreement regarding incentive payments under the long-term incentive plans dated March 15, 2012 (filed herewith).

12.1		Computation of the Ratio of Earnings to Fixed Charges (filed herewith).

31.1		Certification of Chief Executive Officer required by Securities and Exchange Commission Rule 13a – 14(a) or 15d – 14(a) (filed herewith).

31.2		Certification of Chief Financial Officer required by Securities and Exchange Commission Rule 13a – 14(a) or 15d – 14(a) (filed herewith).

32.1		Certification pursuant to 18 U.S.C. Section 1350 (filed herewith).

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

ALLEGHENY TECHNOLOGIES INCORPORATED

(Registrant)



Date: May 4, 2012	By	/s/ Dale G. Reid
		Dale G. Reid
		Executive Vice President, Finance and
		Chief Financial Officer
		(Principal Financial Officer and Duly Authorized Officer)

Date: May 4, 2012	By	/s/ Karl D. Schwartz
		Karl D. Schwartz
		Controller and Chief Accounting Officer (Principal Accounting Officer)

EXHIBIT INDEX


4.1		Fourth Amendment to Note Purchase Agreement, dated as of March 16, 2012, by and between ATI Ladish LLC (as successor by merger to Ladish Co., Inc.) and the purchasers listed therein (filed herewith).

10.1		Fifth Amendment to Credit Agreement, dated April 4, 2012, by and among ATI Funding Corporation, TDY Holdings, LLC, the guarantors party thereto, the lenders party thereto and PNC Bank, National Association, as Administrative Agent for the lenders (filed herewith).

10.2		2012 Annual Incentive Plan (filed herewith).

10.3		Form of Performance/Restricted Stock Agreement dated February 22, 2012 (filed herewith).

10.4		Form of Total Shareholder Return Incentive Compensation Program Award Agreement effective as of January 1, 2012 (filed herewith).

10.5		Form of Key Executive Performance Plan Agreement dated February 22, 2012, including Key Executive Performance Plan as amended February 22, 2012 (filed herewith).

10.6		Form of Clawback Agreement regarding incentive payments under the Annual Incentive Plan dated March 15, 2012 (filed herewith).

10.7		Form of Clawback Agreement regarding incentive payments under the long-term incentive plans dated March 15, 2012 (filed herewith).

12.1		Computation of the Ratio of Earnings to Fixed Charges (filed herewith).

31.1		Certification of Chief Executive Officer required by Securities and Exchange Commission Rule 13a – 14(a) or 15d – 14(a).

31.2		Certification of Chief Financial Officer required by Securities and Exchange Commission Rule 13a – 14(a) or 15d – 14(a).

32.1		Certification pursuant to 18 U.S.C. Section 1350.

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

Exhibit 4.1

ATI L ADISH LLC

F OURTH A MENDMENT

Dated as of March 16, 2012

Note Purchase Agreements dated as of July 20, 2001

Re: 6.14% Senior Notes, Series B, due May 16, 2016

6.41% Senior Notes, Series C, due September 2, 2015

T ABLE OF C ONTENTS

(Not a part of this Fourth Amendment)


S ECTION	H EADING	P AGE

S ECTION 1.	A MENDMENTS TO N OTE P URCHASE A GREEMENTS	2

S ECTION 2.	C ONDITIONS P RECEDENT	4

S ECTION 3.	R EPRESENTATIONS AND W ARRANTIES	6

S ECTION 4.	M ISCELLANEOUS	7

S CHEDULE I — Name of Holders and Principal Amount of Series B Notes and Series C

Notes

E XHIBIT 2( C ) — Form of Parent Guaranty Agreement

-i-

Dated as of

March 16, 2012

To each of the holders

listed in Schedule I to

this Fourth Amendment

Ladies and Gentlemen:

Reference is made to the separate Note Purchase Agreements, each dated as of July 20, 2001, as amended by a First Amendment thereto dated as of May 15, 2006, as supplemented by a Series B Terms Agreement dated as of May 16, 2006, as further supplemented by a Series C Terms Agreement dated as of September 2, 2008, and as further amended by a Second Amendment thereto dated as of September 2, 2008 and by a Third Amendment thereto dated as of December 21, 2009 (said Note Purchase Agreements, as so amended and supplemented, the “Note Purchase Agreements” ), by and between ATI Ladish LLC (successor by merger to Ladish Co., Inc.), a Wisconsin limited liability company (the “Company” ), and each of the purchasers of the $40,000,000 aggregate principal amount of 6.14% Senior Notes, Series B, due May 16, 2016 (the “Series B Notes” ) and each of the purchasers of the $50,000,000 aggregate principal amount of 6.41% Senior Notes, Series C, due September 2, 2015 (the “Series C Notes,” and together with the Series B Notes, the “Notes” ) of the Company issued pursuant thereto. Capitalized terms used in this Fourth Amendment (this “Fourth Amendment” ) without definition shall have the meanings given such terms in the Note Purchase Agreements.

Pursuant to an Agreement and Plan of Merger, dated as of November 26, 2010 (the “ Merger Agreement ”), by and among the Company, Allegheny Technologies Incorporated, a Delaware Corporation (“ ATI ” or the “ Guarantor ”), LPAD Co., a Wisconsin corporation and a wholly owned subsidiary of ATI (“ LPAD ”), PADL LLC, a Wisconsin limited liability company and a wholly owned subsidiary of ATI (“ PADL ”), LPAD merged with and into the Company (the “ Merger ”), with the Company surviving the Merger as a wholly owned subsidiary of ATI. Immediately after the completion of the Merger, the Company merged with and into PADL, with PADL surviving as a wholly owned subsidiary of ATI and being renamed “ATI Ladish LLC” The transactions contemplated by the Merger were completed on May 9, 2011.

In connection with the Merger, the Company has requested certain amendments to the Note Purchase Agreements (as set forth herein).

In consideration of the holders of the Notes approving such amendments, ATI has agreed to guaranty the obligations of the Company under the Note Purchase Agreements and the Notes and be bound by certain covenants and agreements, all as provided in the Parent Guaranty Agreement (as defined below).

For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company requests the amendment of certain provisions of the Note Purchase Agreements as hereinafter provided.


ATI Ladish LLC		Fourth Amendment

Upon your acceptance hereof in the manner hereinafter provided and upon satisfaction of all conditions to the effectiveness hereof and receipt by the Company of similar acceptances from each of the holders of Notes, this Fourth Amendment shall be effective, but only in the respects hereinafter set forth:

S ECTION 1. A MENDMENTS T O N OTE P URCHASE A GREEMENTS .

Section 1.1. All references in the Note Purchase Agreements, or any other related agreement, to the term “Ladish Co., Inc.” shall be amended to refer to the term “ATI Ladish LLC”. The Company for good and valuable consideration, the receipt of which is hereby acknowledged, for the benefit of each of the holders from time to time of the Notes, hereby irrevocably and unconditionally assumes and agrees to be bound by, and comply with, each of the covenants, terms and provisions of the Note Purchase Agreements, as amended hereby, and the Notes, including without limitation the payment in full of the principal of, interest on, and Make-Whole Amount, if any, from time to time due thereon and outstanding thereunder as fully and as completely as if the Company were the original issuer thereunder and a party thereto.

Section 1.2. Section 7.1(a) and 7.1(b) of the Note Purchase Agreements shall be and are hereby amended and restated as follows:

“(a) Quarterly Statements — within 45 days after the end of each quarterly fiscal period in each fiscal year of the Company (other than the last quarterly fiscal period of each such fiscal year), duplicate copies of:

(i) a consolidated balance sheet of the Company and its Subsidiaries as at the end of such quarter, and

(ii) consolidated statements of income of the Company and its Subsidiaries for such quarter and (in the case of the second and third quarters) for the portion of the fiscal year ending with such quarter,

setting forth in each case in comparative form the figures for the corresponding periods in the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP applicable to quarterly financial statements generally, and certified by a Senior Financial Officer as fairly presenting, in all material respects, the financial position of the companies being reported on and their results of operations, subject to changes resulting from year-end adjustments;

(b) Annual Statements — within 90 days after the end of each fiscal year of the Company, duplicate copies of,

(i) a consolidated balance sheet of the Company and its Subsidiaries, as at the end of such year, and

- 2 -


ATI Ladish LLC		Fourth Amendment

(ii) consolidated statements of income of the Company and its Subsidiaries, for such year,

setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP applicable to annual financial statements generally, and accompanied by (x) a certification of a Senior Financial Officer that such financial statement fairly presents, in all material respects, the financial position of the companies being reported on and their results of operations, and (y) a management report, in reasonable detail, signed by a Senior Financial Officer, describing the operations and financial condition of the Company and its Subsidiaries for the fiscal year then ended together with and an overview of how the Company and its Subsidiaries fared in the fiscal year and also addressing any significant events, conditions, trends and contingencies that may affect future operations and financial condition of the Company and its Subsidiaries.”

Section 1.3. Section 8.7(h) of the Note Purchase Agreements shall be and is hereby amended and restated as follows:

“ (h) Change in Control Definition. “Change in Control” shall be deemed to have occurred if any person (as such term is used in Section 13(d) and Section 14(d)(2) of the Exchange Act as in effect on the date of the Closing) or related persons constituting a group (as such term is used in Rule 13d 5 under the Exchange Act):

(i) become the “beneficial owners” (as such term is used in Rule 13d-3 under the Exchange Act as in effect on the date of the Closing), directly or indirectly, of more than 50% of the total voting power of all classes then outstanding of the voting stock or membership or other equity interests of the Company, or

(ii) acquire the power to elect, appoint or cause the election or appointment of at least a majority of the members of the board of directors of the Company, through beneficial ownership of the capital stock of the Company or otherwise.

For clarification, in determining a Change in Control (x) the reference to “person” in this paragraph (h) shall exclude the Guarantor and one or more of its Wholly-Owned Subsidiaries and (y) the reference to “indirectly” in this paragraph (h) shall include any change in beneficial ownership of the capital stock or membership or other equity interests of any parent of the Company

- 3 -


ATI Ladish LLC		Fourth Amendment

(including, without limitation, the Guarantor) if the same would result in a Change in Control of the Company.”

For avoidance of doubt, the Company hereby confirms that the Change in Control provision in Section 8.7 of the Note Purchase Agreements continues in effect and is applicable with respect to any Change in Control that occurs on or after the date of this Fourth Amendment notwithstanding that the holders previously rejected the offer of prepayment of the Notes contemplated by Section 8.7 of the Note Purchase Agreements in connection with the Change in Control resulting from the Merger.

Section 1.4. Section 11 of the Note Purchase Agreements shall be and is hereby amended by adding a new paragraph (k) at the end thereof to read as follows:

“(k) An Event of Default (as defined in the Parent Guaranty) shall occur and be continuing under the Parent Guaranty.”

Section 1.5. The following new definitions are hereby added as of the date hereof to Schedule B of the Note Purchase Agreements, in proper alphabetical order, as follows:

“ Guarantor ” means Allegheny Technologies Incorporated, a Delaware Corporation, and its successors and assigns.

“ Parent Guaranty Agreement ” means the Parent Guaranty Agreement dated as of March 16, 2012, executed and delivered by the Guarantor to and in favor of the holders of Notes”

S ECTION 2. C ONDITIONS P RECEDENT .

This Fourth Amendment shall not become effective until, and shall become effective on, the Business Day when each of the following conditions shall have been satisfied:

(a) Each holder shall have received this Fourth Amendment, duly executed by the Company.

(b) The Required Holders of each Series of Notes shall have consented to this Fourth Amendment as evidenced by their execution thereof.

(c) The Guarantor shall have executed and delivered the Parent Guaranty Agreement, attached hereto as Exhibit 2(c) hereto (the “Parent Guaranty Agreement” ), pursuant to which it will absolutely and unconditionally guaranty the payment and performance by the Company of all amounts due with respect to the Notes and the performance by the Company of its obligations under the Note Purchase Agreements.

- 4 -


ATI Ladish LLC		Fourth Amendment

(d) The representations and warranties of the Company set forth in Section 3 hereof and of the Guarantor set forth in Section 9 of the Parent Guaranty Agreement shall be true and correct as of the date of the execution and delivery of this Fourth Amendment and the Parent Guaranty Agreement, respectively, and on the effective date of this Fourth Amendment.

(e) Any consents or approvals from any holder or holders of any outstanding security or indebtedness of the Company or the Guarantor and any amendments of agreements pursuant to which any such securities or indebtedness may have been issued which shall be necessary to permit the consummation of the transactions contemplated hereby and by the Parent Guaranty Agreement shall have been obtained and all such consents or amendments shall be reasonably satisfactory in form and substance to the holders and their special counsel.

(f) All corporate and other proceedings in connection with the transactions contemplated by this Fourth Amendment and the Parent Guaranty Agreement and all documents and instruments incident to such transactions shall be satisfactory to you and your special counsel, and you and your special counsel shall have received all such counterpart originals or certified or other copies of such documents as you or they may reasonably request.

(g) Each holder shall have received such certificates of officers of the Company and the Guarantor as it may reasonably request with respect to this Fourth Amendment and the Parent Guaranty Agreement and the transactions contemplated hereby and thereby.

(h) Each holder shall have received an opinion in form and substance satisfactory to such Purchaser from K&L Gates LLP, special counsel for the Guarantor, covering such matters incident to the transactions contemplated by the Parent Guaranty Agreement as such holder or its counsel may reasonably request.

(i) Each holder of Notes shall have received from the Company a fully earned, non-refundable amendment fee equal to the sum of the outstanding principal balance of the Notes held by such holder as of the date hereof multiplied by 0.05%.

(j) The Company shall have paid the fees and disbursements of the holders’ special counsel, Chapman and Cutler LLP, incurred in connection with the negotiation, preparation, execution and delivery of this Fourth Amendment and the Parent Guaranty Agreement and the transactions contemplated hereby and thereby, which reasonable fees and disbursements are reflected in the statement of such special counsel delivered to the Company at the time of the execution and delivery of this Fourth Amendment.

- 5 -


ATI Ladish LLC		Fourth Amendment

S ECTION 3. R EPRESENTATIONS AND W ARRANTIES .

The Company hereby represents and warrants that as of the date hereof and as of the date of execution and delivery of this Fourth Amendment:

(a) The Company is duly organized, validly existing and in active status under the laws of its jurisdiction of organization.

(b) This Fourth Amendment, the Note Purchase Agreements, as amended hereby, and the transactions contemplated hereby are within the limited liability company power of the Company, have been duly authorized by all necessary corporate action on the part of the Company, and this Fourth Amendment and the Note Purchase Agreements, as amended hereby, have been duly executed and delivered by the Company and constitute legal, valid and binding obligations of the Company enforceable in accordance with their respective terms.

(c) Immediately prior to and after giving effect to this Fourth Amendment, there are no Defaults or Events of Default under the Note Purchase Agreements, as amended hereby.

(d) The execution, delivery and performance of this Fourth Amendment and the Note Purchase Agreements, as amended hereby, by the Company do not and will not result in a violation of or default under (i) the articles of organization or limited liability company agreement of the Company, (ii) any agreement to which the Company is a party or by which it is bound or to which the Company or any of its properties, as applicable, is subject, (iii) any order, writ, injunction or decree binding on the Company or (iv) any statute, regulation, rule or other law applicable to the Company.

(e) No consent, approval or authorization of, or registration, filing or declaration with, any Governmental Authority is required, in connection with the execution, delivery or performance by the Company of this Fourth Amendment and the Note Purchase Agreements, as amended hereby, other than routine filings by the Guarantor with the Securities and Exchange Commission.

(f) The Company has not paid or agreed to pay any fees or other consideration, or given any additional security or collateral, or shortened the maturity or average life of any indebtedness or permanently reduced any borrowing capacity, in each case, in connection with the obtaining of any consents or approvals of any Person in connection with the transactions contemplated hereby, other than to the holders of the Notes of the amendment fee described in Section 2(i) hereof.

(g) Other than this Fourth Amendment and the amendments and supplements identified in the Preamble to this Fourth Amendment, there are no

- 6 -


ATI Ladish LLC		Fourth Amendment

other amendments, modifications, supplements or waivers to the Note Purchase Agreements or the Notes.

S ECTION 4. M ISCELLANEOUS .

Section 4.1 . Except as amended herein, all terms and provisions of the Note Purchase Agreements, the Notes and related agreements and instruments are hereby ratified, confirmed and approved in all respects.

Section 4.2 . Each reference in the Note Purchase Agreements to “this Agreement,” “hereunder,” “hereof,” or words of similar import in instruments or documents provided for in the Note Purchase Agreements or delivered or to be delivered thereunder or in connection therewith, shall, except where the context otherwise requires, be deemed a reference to the Note Purchase Agreement, as amended hereby.

Section 4.3. This Fourth Amendment shall be governed by and construed in accordance with the internal laws of the State of Wisconsin.

Section 4.4 . This Fourth Amendment and all covenants herein contained shall be binding upon and inure to the benefit of the respective successors and assigns of the parties hereunder and all holders of additional Series of Notes. All representations, warranties and covenants made by the Company herein shall survive the closing and the delivery of this Fourth Amendment.

Section 4.5. This Fourth Amendment may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which, taken together, shall constitute but one and the same Fourth Amendment. Delivery of an executed counterpart of this Fourth Amendment by facsimile shall be as effective as delivery of a manually executed counterpart of this Fourth Amendment.

[ Signature Page Follows ]

- 7 -

The execution hereof by the holders shall constitute a contract among the Company and the holders for the uses and purposes hereinabove set forth.


ATI L ADISH LLC, ( AS SUCCESSOR BY MERGER TO L ADISH C O ., I NC .).

By:		/s/ Dale G. Reid
		Name: Dale G. Reid
		Title: Executive Vice President

[Signature page to Fourth Amendment]

This foregoing Fourth Amendment is hereby accepted and agreed to as of the date aforesaid. The execution by each holder listed below shall constitute its respective several and not joint confirmation that it is the owner and holder of the Notes set opposite its name on Schedule I hereto.

Accepted as of the date first written above.


T EACHERS I NSURANCE AND A NNUITY A SSOCIATION OF A MERICA

By		/s/ Ho Young Lee
		Name: Ho Young Lee
		Title: Managing Director

[Signature page to Fourth Amendment]


ATI Ladish LLC		Fourth Amendment

Accepted as of the date first written above.


F IRST G REAT -W EST L IFE & A NNUITY I NSURANCE C OMPANY

By		/s/ Paul Runnalls
		Name: Paul Runnalls
		Title: Manager, Investments



By		/s/ Eve Hampton
		Name: Eve Hampton
		Title: VP, Investments

[Signature page to Fourth Amendment]


ATI Ladish LLC		Fourth Amendment

Accepted as of the date first written above.


L ONDON L IFE I NSURANCE C OMPANY

By		/s/ W. J. Sharman
		Name: W. J. Sharman
		Title: Authorized Signatory



By		/s/ D. B. E. Ayers
		Name: D. B. E. Ayers
		Title: Authorized Signatory

[Signature page to Fourth Amendment]


ATI Ladish LLC		Fourth Amendment

Accepted as of the date first written above.


T HRIVENT F INANCIAL FOR L UTHERANS

By		/s/ Patricia Eitrheim
		Name: Patricia Eitrheim
		Title: Director

[Signature page to Fourth Amendment]


ATI Ladish LLC		Fourth Amendment

Accepted as of the date first written above.


THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

By:		/s/ William Engelking
		Vice President


PRUCO LIFE INSURANCE COMPANY

By:		/s/ William Engelking
		Vice President


UNITED OF OMAHA LIFE INSURANCE COMPANY

By:		Prudential Private Placement Investors,
		L.P. (as Investment Advisor)

By:		Prudential Private Placement Investors, Inc.
		(as its General Partner)


By:		/s/ William Engelking
		Vice President

[Signature page to Fourth Amendment]


N AME OF H OLDER	O UTSTANDING P RINCIPAL A MOUNT OF S ERIES B N OTES H ELD AS OF M ARCH 16, 2012
London Life Insurance Company	$	5,357,143
Teachers Assurance and Annuity Association of America	$	17,857,144
First Great-West Life & Annuity Insurance Company	$	5,357,143
Total	$	28,571,428


N AME OF H OLDER	O UTSTANDING P RINCIPAL A MOUNT OF S ERIES C N OTES H ELD AS OF M ARCH 16, 2012
Swanbird & Co (as nominee for Thrivent Financial for Lutherans)	$	18,400,000
The Prudential Insurance Company of America	$	12,200,000
Pruco Life Insurance Company	$	4,000,000
United of Omaha Life Insurance Company	$	5,400,000
Total	$	40,000,000

S CHEDULE I

(to Fourth Amendment)

F ORM OF P ARENT G UARANTY A GREEMENT

P ARENT G UARANTY A GREEMENT

D ATED AS OF M ARCH 16, 2012

FROM

A LLEGHENY T ECHNOLOGIES I NCORPORATED

FOR THE BENEFIT OF

T HE H OLDERS OF THE N OTES

ATI L ADISH LLC

E XHIBIT 2(C)

(to Fourth Amendment)

T ABLE OF C ONTENTS


S ECTION	H EADING	P AGE
S ECTION 1.	G UARANTY 2
S ECTION 2.	G UARANTOR ’ S O BLIGATIONS U NCONDITIONAL	2
S ECTION 3.	F ULL R ECOURSE O BLIGATIONS ; P ARI P ASSU R ANKING	8
S ECTION 4.	W AIVER	8
S ECTION 5.	W AIVER OF S UBROGATION	9
S ECTION 6.	S UBORDINATION	9
S ECTION 7.	E FFECT OF B ANKRUPTCY P ROCEEDINGS , E TC	10
S ECTION 8.	T ERM OF G UARANTY	10
S ECTION 9.	R EPRESENTATIONS AND W ARRANTIES	11
S ECTION 10.	A FFIRMATIVE C OVENANTS	12
S ECTION 11.	N EGATIVE C OVENANTS	13
S ECTION 12.	M OST F AVORED L ENDER	14
S ECTION 13.	R EPORTING R EQUIREMENTS	15
S ECTION 14.	E VENTS OF D EFAULT	16
S ECTION 15.	R EMEDIES ON D EFAULT , E TC	18
S ECTION 16.	D EFINITIONS AND T ERMS G ENERALLY	20
S ECTION 17.	N OTICES	26
S ECTION 18.	A MENDMENT AND W AIVER	26
S ECTION 19.	E XPENSES , E TC	27
S ECTION 20.	C ONSENT TO J URISDICTION ; S ERVICE OF P ROCESS	28
S ECTION 21.	W AIVER OF J URY T RIAL	29

E XHIBIT 2(C)

(to Fourth Amendment)

E XHIBIT 2(C)

(to Fourth Amendment)

P ARENT G UARANTY A GREEMENT , dated as of March 16, 2012 (this “Guaranty” ), from Allegheny Technologies Incorporated, a Delaware corporation (the “ Guarantor” ), for the benefit of the holders from time to time of the Notes (as defined below) (such holders, together with their successors, assigns or any other future holder of the Notes, the “Holders” ). Capitalized terms used herein are defined in Section 16 hereof or the Note Purchase Agreements referred to below.

W HEREAS , ATI Ladish LLC (successor by merger to Ladish Co., Inc.), a Wisconsin limited liability company (the “Company” ), has issued and sold (i) $40,000,000 aggregate principal amount of its 6.14% Senior Notes, Series B, due May 16, 2016 (the “Series B Notes” ) and (ii) $50,000,000 aggregate principal amount of its 6.41% Senior Notes, Series C, due September 2, 2015 (the “Series C Notes” ), pursuant to the separate Note Purchase Agreements, each dated as of July 20, 2001, as amended by a First Amendment thereto dated as of May 15, 2006, as supplemented by a Series B Terms Agreement dated as of May 16, 2006, as further supplemented by a Series C Terms Agreement dated as of September 2, 2008, as further amended by a Second Amendment thereto dated as of September 2, 2008, as further amended by a Third Amendment thereto dated as of December 21, 2009, and as further amended by a Fourth Amendment thereto dated as of March 16, 2012 (the “ Fourth Amendment ”) (said Note Purchase Agreements, as so amended and supplemented and as may be further amended, supplemented or otherwise modified from time to time, the “Note Purchase Agreements” ), by and between the Company and the purchasers of the Notes.

W HEREAS , the Company is authorized to issue additional Series of unsecured promissory notes pursuant to Section 13.4 of the Note Purchase Agreements.

W HEREAS , any such additional Series of unsecured promissory notes issued pursuant to Section 13.4 of the Note Purchase Agreements together with the Series B Notes and Series C Notes are collectively referred to herein as the “Notes” (such term shall also include any such notes issued in substitution therefor pursuant to Section 13 of the Note Purchase Agreements).

W HEREAS , the Guarantor is the parent of the Company.

W HEREAS , pursuant to the terms and conditions of the Fourth Amendment, the Company has agreed that the Guarantor will guaranty its obligations under the Notes and the Note Purchase Agreements.

W HEREAS , the Guarantor, by its execution and delivery hereof, acknowledges that it will derive substantial benefits from the issuance of the Notes.

N OW , T HEREFORE , in consideration of the premises and to induce the Holders to purchase the Notes, the Guarantor, intending to be legally bound, hereby agrees for the benefit of the Holders, as follows:

2( C )-1

S ECTION

1. G UARANTY .

The Guarantor hereby absolutely, unconditionally and irrevocably guarantees, jointly and severally, as a primary obligor and not merely as a surety, to each Holder and its successors and assigns, the full and punctual payment and performance when due, whether at stated maturity, by acceleration or otherwise, of the principal of and Make-Whole Amount and interest on (including, without limitation, interest, whether or not an allowable claim, accruing after the date of filing of any petition in bankruptcy, or the commencement of any bankruptcy, insolvency or similar proceeding relating to the Company) the Notes and all other amounts under the Note Purchase Agreements and all other obligations, agreements and covenants of the Company now or hereafter existing under the Note Purchase Agreements whether for principal, Make-Whole Amount, interest (including interest accruing or becoming owing both prior to and subsequent to the commencement of any proceeding against or with respect to the Company under any chapter of the Bankruptcy Code), indemnification payments, expenses (including reasonable attorneys’ fees and expenses) or otherwise, and all reasonable costs and expenses, if any, incurred by any Holder in connection with enforcing any rights under this Guaranty (all such obligations being the “Guaranteed Obligations” ), and agrees to pay any and all reasonable expenses incurred by each Holder in enforcing this Guaranty. This Guaranty is an absolute, unconditional, present and continuing guaranty of payment and not of collectibility and is in no way conditioned upon any attempt to collect from the Company or any other action, occurrence or circumstance whatsoever.

Notwithstanding any stay, injunction or other prohibition preventing such action against the Company, if for any reason whatsoever the Company shall fail or be unable to duly, punctually and fully perform and (in the case of the payment of Guaranteed Obligations) pay such amounts as and when the same shall become due and (in the case of the payment of Guaranteed Obligations) payable or to perform or comply with any other Guaranteed Obligation, whether or not such failure or inability shall constitute an “Event of Default” under the Note Purchase Agreements or the Notes, the Guarantor will forthwith (in the case of the payment of Guaranteed Obligations) pay or cause to be paid such amounts to the Holders, in lawful money of the United States of America, at the place specified in the Note Purchase Agreements, or perform or comply with such Guaranteed Obligations or cause such Guaranteed Obligations to be performed or complied with, (in the case of the payment of Guaranteed Obligations) together with interest (in the amounts and to the extent required under such Notes) on any amount due and owing.

S ECTION

2 G UARANTOR ’ S O BLIGATIONS U NCONDITIONAL .

(a) This Guaranty shall constitute a guarantee of payment, performance and compliance and not of collection, and the Guarantor specifically agrees that it shall not be necessary, and that the Guarantor shall not be entitled to require, before or as a condition of enforcing the liability of the Guarantor under this Guaranty or requiring payment or performance of the Guaranteed Obligations by the Guarantor hereunder, or at any time thereafter, that any Holder: (a) file suit or proceed to obtain or assert a claim for personal judgment against the Company or any other Person that may be liable for or with respect to any Guaranteed

2(c)-2

Obligation; (b) make any other effort to obtain payment or performance of any Guaranteed Obligation from the Company or any other Person that may be liable for or with respect to such Guaranteed Obligation, except for the making of the demands, when appropriate, described in Section 1; (c) foreclose against, or seek to realize upon security now or hereafter existing for such Guaranteed Obligations; (d) except to the extent set forth in Section 1, exercise or assert any other right or remedy to which such Holder is or may be entitled in connection with any Guaranteed Obligation or any security or other guaranty therefor; or (e) assert or file any claim against the assets of the Company or any other Person liable for any Guaranteed Obligation. The Guarantor agrees that this Guaranty shall be continuing, and that the Guaranteed Obligations will be paid and performed in accordance with their terms and the terms of this Guaranty, and are the primary, absolute and unconditional obligations of the Guarantor, irrespective of the value, genuineness, validity, legality, regularity or enforceability or lack thereof of any part of the Guaranteed Obligations or any agreement or instrument relating to the Guaranteed Obligations or this Guaranty, or the existence of any indemnities with respect to the existence of any other guarantee of or security for any of the Guaranteed Obligations, or any substitution, release or exchange of any other guarantee of or security for any of the Guaranteed Obligations, and, to the fullest extent permitted by applicable law, irrespective of any other circumstance whatsoever that might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor, it being the intent of this Section 2 that the obligations of the Guarantor hereunder shall be irrevocable, primary, absolute and unconditional under any and all circumstances.

(b) The Guarantor hereby expressly waives notice of acceptance of and reliance upon this Guaranty, diligence, presentment, demand of payment or performance, protest and all other notices (except as otherwise provided for in Section 1) whatsoever, any requirement that the Holders exhaust any right, power or remedy or proceed against the Company or against any other Person under any other guarantee of, or security for, or any other agreement, regarding any of the Guaranteed Obligations. The Guarantor further agrees that, subject solely to the requirement of making demands under Section 1, the occurrence of any event or other circumstance that might otherwise vary the risk of the Company or the Guarantor or constitute a defense (legal or equitable) available to, or a discharge of, or a counterclaim or right of set-off by, the Company or the Guarantor (other than the full and indefeasible due payment and performance of the Guaranteed Obligations), shall not affect the liability of the Guarantor hereunder.

(c) The obligations of the Guarantor under this Guaranty are not subject to any counterclaim, set-off, deduction, diminution, abatement, recoupment, suspension, deferment or defense based upon any claim the Guarantor or any other Person may have against the Company, any Holder or any other Person, and shall remain in full force and effect without regard to, and shall not be released, discharged or in any way affected by, any circumstances or condition whatsoever (whether or not the Guarantor or the Company shall have any knowledge or notice thereof), including:

(i) any renewal, extension, modification, increase, decrease, alteration or rearrangement of all or any part of the Guaranteed Obligations or any instrument executed in connection therewith, or any contract or understanding with the Company, the Holders, or any of them, or any other Person, pertaining to the Guaranteed Obligations;

2(c)-3

(ii) any adjustment, indulgence, forbearance or compromise that might be granted or given by any Holder to the Company or any other Person liable on the Guaranteed Obligations, or the failure of any Holder to assert any claim or demand or to exercise any right or remedy against the Company or any other Person under the provisions of the Note Purchase Agreements, the Notes or otherwise; or any rescission, waiver, amendment or modification of, or any release from any of the terms or provisions of, the Note Purchase Agreements, the Notes, any guarantee or any other agreement;

(iii) the insolvency, bankruptcy arrangement, adjustment, composition, liquidation, disability, dissolution or lack of power of the Company or any other Person at any time liable for the payment of all or part of the Guaranteed Obligations; or any dissolution of the Company or any other such Person, or any change, restructuring or termination of the partnership structure or existence of the Company or any other such Person, or any sale, lease or transfer of any or all of the assets of the Company or any other such Person, or any change in the shareholders, partners, or members of the Company or any other such Person; or any default, failure or delay, willful or otherwise, in the performance of the Guaranteed Obligations;

(iv) the invalidity, illegality or unenforceability of all or any part of the Guaranteed Obligations, or any document or agreement executed in connection with the Guaranteed Obligations, for any reason whatsoever, including the fact that the Guaranteed Obligations, or any part thereof, exceed the amount permitted by law, the act of creating the Guaranteed Obligations or any part is ultra vires , the officers or representatives executing the documents or otherwise creating the Guaranteed Obligations acted in excess of their authority, the Guaranteed Obligations violate applicable usury laws, the Company or any other Person has valid defenses, claims or offsets (whether at law, in equity or by agreement) which render the Guaranteed Obligations wholly or partially uncollectible from the Company or any other Person, the creation, performance or repayment of the Guaranteed Obligations (or the execution, delivery and performance of any document or instrument representing part of the Guaranteed Obligations or executed in connection with the Guaranteed Obligations or given to secure the repayment of the Guaranteed Obligations) is illegal, uncollectible, legally impossible or unenforceable, or the documents or instruments pertaining to the Guaranteed Obligations have been forged or otherwise are irregular or not genuine or authentic;

(v) any full or partial release of the liability of the Company on the Guaranteed Obligations or any part thereof, of any co-guarantors, or of any other Person now or hereafter liable, whether directly or indirectly, jointly, severally, or jointly and severally, to pay, perform, guarantee or assure the payment of the Guaranteed Obligations or any part thereof, it being recognized, acknowledged and agreed by the Guarantor that the Guarantor may be required to pay the Guaranteed Obligations in full without assistance or support of any other Person, and the Guarantor has not been induced to enter into this Guaranty on the basis of a contemplation, belief, understanding or agreement that any parties other than the Company will be liable to perform the

2(c)-4

Guaranteed Obligations, or that the Holders will look to other parties to perform the Guaranteed Obligations;

(vi) the taking or accepting of any other security, collateral or guaranty, or other assurance of payment, for all or any part of the Guaranteed Obligations;

(vii) any release, surrender, exchange, subordination, deterioration, waste, loss or impairment (including negligent, unreasonable or unjustifiable impairment) of any collateral, property or security, at any time existing in connection with, or assuring or securing payment of, all or any part of the Guaranteed Obligations;

(viii) the failure of any Holder or any other Person to exercise diligence or reasonable care in the preservation, protection, enforcement, sale or other handling or treatment of all or any part of such collateral, property or security;

(ix) the fact that any collateral, security, security interest or lien contemplated or intended to be given, created or granted as security for the repayment of the Guaranteed Obligations shall not be properly perfected or created, or shall prove to be unenforceable or subordinate to any other security interest or lien, it being recognized and agreed by the Guarantor that the Guarantor is not entering into this Guaranty in reliance on, or in contemplation of the benefits of, the validity, enforceability, collectibility or value of any of the collateral;

(x) any payment by the Company to any Holder being held to constitute a preference under any fraudulent conveyance law, or for any reason any Holder being required to refund such payment or pay such amount to the Company or someone else;

(xi) any other action taken or omitted to be taken with respect to the Guaranteed Obligations, or the security and collateral therefor, whether or not such action or omission prejudices the Guarantor or increases the likelihood that the Guarantor will be required to pay the Guaranteed Obligations pursuant to the terms hereof, it being the unambiguous and unequivocal intention of the Guarantor that it shall be obligated to pay the Guaranteed Obligations when due, notwithstanding any occurrence, circumstance, event, action or omission whatsoever, whether or not contemplated, and whether or not otherwise or particularly described herein, except for the full and final payment and satisfaction of the Guaranteed Obligations in cash;

(xii) the fact that all or any of the Guaranteed Obligations cease to exist by operation of law, including by way of a discharge, limitation or tolling thereof under applicable bankruptcy laws;

(xiii) any other circumstance (including any statute of limitations) that might in any manner or to any extent otherwise constitute a defense available to, vary the risk of, or operate as a discharge of, the Company or any Person as a matter of law or equity;

2(c)-5

(xiv) any merger or consolidation of the Company or any Guarantor into or with any other Person or any sale, lease or transfer of any of the assets of the Company to any other Person;

(xv) any change in the ownership of any shares of capital stock of the Company, or any change in the relationship between the Company and the Guarantor or any termination of any such relationship;

(xvi) any default, failure or delay, willful or otherwise, in the performance by the Company, the Guarantor or any other Person of any obligations of any kind or character whatsoever under the Note Purchase Agreements or any other agreement;

(xvii) any merger or consolidation of the Company or the Guarantor or any other Person into or with any other Person or any sale, lease, transfer or other disposition of any of the assets of the Company, the Guarantor or any other Person to any other Person, or any change in the ownership of any shares or partnership interests of the Company, the Guarantor or any other Person;

(xviii) in respect of the Company, the Guarantor or any other Person, any change of circumstances, whether or not foreseen or foreseeable, whether or not imputable to the Company, the Guarantor or any other Person, or other impossibility of performance through fire, explosion, accident, labor disturbance, floods, droughts, embargoes, wars (whether or not declared), civil commotion, acts of God or the public enemy, delays or failure of suppliers or carriers, inability to obtain materials, action of any Federal or state regulatory body or agency, change of law or any other causes affecting performance, or any other force majeure , whether or not beyond the control of the Company, the Guarantor or any other Person and whether or not of the kind hereinbefore specified; or

(xix) any other occurrence, circumstance, or event whatsoever, whether similar or dissimilar to the foregoing, whether foreseen or unforeseen, and any other circumstance which might otherwise constitute a legal or equitable defense or discharge of the liabilities of a guarantor or surety or which might otherwise limit recourse against the Guarantor;

provided that the specific enumeration of the above-mentioned acts, failures or omissions shall not be deemed to exclude any other acts, failures or omissions, though not specifically mentioned above, it being the purpose and intent of this Guaranty and the parties hereto that the obligations of the Guarantor shall be absolute and unconditional and shall not be discharged, impaired or varied except by the payment and performance of all obligations of the Company under the Note Purchase Agreements and the Notes in accordance with their respective terms as each may be amended or modified from time to time. Without limiting the foregoing, it is understood that repeated and successive demands may be made and recoveries may be had hereunder as and when, from time to time, the Company or the Guarantor shall default under or in respect of the terms of the Note Purchase Agreements and that notwithstanding recovery hereunder for or in respect of any given default or defaults by the Company or the Guarantor under the Note Purchase Agreements, this Guaranty shall remain in full force and effect and shall apply to each

2(c)-6

and every subsequent default. All waivers herein contained shall be without prejudice to the Holders at their respective options to proceed against the Company, the Guarantor or other Person, whether by separate action or by joinder.

(d) The Guarantor hereby consents and agrees that any Holder or Holders from time to time, with or without any further notice to or assent from the Guarantor may, without in any manner affecting the liability of the Guarantor under this Guaranty, and upon such terms and conditions as any such Holder or Holders may deem advisable:

(i) extend in whole or in part (by renewal or otherwise), modify, change, compromise, release or extend the duration of the time for the performance or payment of any debt, liability or obligation of the Company or the Guarantor or of any other Person secondarily or otherwise liable for any debt, liability or obligations of the Company on the Note Purchase Agreements or the Notes, or waive any Default or Event of Default with respect thereto, or waive, modify, amend or change any provision of any other agreement or waive this Guaranty; or

(ii) sell, release, surrender, modify, impair, exchange or substitute any and all property, of any nature and from whomsoever received, held by, or for the benefit of, any such Holder as direct or indirect security for the payment or performance of any debt, liability or obligation of the Company, the Guarantor or of any other Person secondarily or otherwise liable for any debt, liability or obligation of the Company on the Note Purchase Agreements or the Notes; or

(iii) settle, adjust or compromise any claim of the Company or the Guarantor against any other Person secondarily or otherwise liable for any debt, liability or obligation of the Company on the Note Purchase Agreements or the Notes; or

(iv) purchase Additional Notes from time to time from the Company pursuant to the terms and provisions of the Note Purchase Agreements.

The Guarantor hereby ratifies and confirms any such extension, renewal, change, sale, release, waiver, surrender, exchange, modification, amendment, impairment, substitution, settlement, adjustment, compromise or purchase Additional Notes and that the same shall be binding upon it, and hereby waives, to the fullest extent permitted by law, any and all defenses, counterclaims or offsets which it might or could have by reason thereof, it being understood that the Guarantor shall at all times be bound by this Guaranty and remain liable hereunder.

(e) All rights of any Holder may be transferred or assigned at any time in accordance with the Note Purchase Agreements and shall be considered to be transferred or assigned at any time or from time to time upon the transfer of such Note in accordance with the Note Purchase Agreements without the consent of or notice to the Guarantor under this Guaranty.

(f) No Holder shall be under any obligation: (i) to marshal any assets in favor of the Guarantor or in payment of any or all of the liabilities of the Company or the Guarantor under or in respect of the Notes or the obligations of the Company and the Guarantor under the Note

2(c)-7

Purchase Agreements or (ii) to pursue any other remedy that the Guarantor may or may not be able to pursue themselves and that may lighten the Guarantor’ burden, any right to which the Guarantor hereby expressly waives.

S ECTION

3. F ULL R ECOURSE O BLIGATIONS ; P ARI P ASSU R ANKING .

The obligations of the Guarantor set forth herein constitute the full recourse obligations of the Guarantor enforceable against it to the full extent of all its assets and properties.

The obligations under this Guaranty of the Guarantor are and at all times shall remain direct and unsecured obligations of the Guarantor ranking pari passu as against the assets of the Guarantor without any preference among themselves and pari passu with all other present and future unsecured Indebtedness (actual or contingent) of the Guarantor which is not expressed to be subordinate or junior in rank to any other unsecured Indebtedness of the Guarantor.

S ECTION

4. W AIVER .

The Guarantor unconditionally waives, to the extent permitted by applicable law:

(a) notice of any of the matters referred to in Section 2;

(b) notice to the Guarantor of the incurrence of any of the Guaranteed Obligations, notice to the Guarantor of any breach or default by the Company or the Guarantor with respect to any of the Guaranteed Obligations or any other notice that may be required, by statute, rule of law or otherwise, to preserve any rights of any Holder against the Guarantor;

(c) presentment to the Company or the Guarantor or of payment from the Company or the Guarantor with respect to any Note or other Guaranteed Obligation or protest for nonpayment or dishonor;

(d) any right to the enforcement, assertion, exercise or exhaustion by any Holder of any right, power, privilege or remedy conferred in any Note, the Note Purchase Agreement or otherwise;

(e) any requirement of diligence on the part of any Holder;

(f) any requirement to mitigate the damages resulting from any default under the Notes or the Note Purchase Agreements;

(g) any notice of any sale, transfer or other disposition of any right, title to or interest in any Note or other Guaranteed Obligation by any Holder, assignee or participant thereof, or in the Note Purchase Agreements;

(h) any release of the Guarantor from its obligations hereunder resulting from any loss by it of its rights of subrogation hereunder; and

2(c)-8

(i) any other circumstance whatsoever which might otherwise constitute a legal or equitable discharge, release or defense of a guarantor or surety or which might otherwise limit recourse against the Guarantor.

S ECTION

5. W AIVER OF S UBROGATION .

Notwithstanding any payment or payments made by the Guarantor hereunder, or any application by any Holder of any security or of any credits or claims, the Guarantor will not assert or exercise any rights of any Holder or of the Guarantor against the Company to recover the amount of any payment made by the Guarantor to any Holder hereunder by way of any claim, remedy or subrogation, reimbursement, exoneration, contribution, indemnity, participation or otherwise arising by contract, by statute, under common law or otherwise, and the Guarantor shall not have any right of recourse to or any claim against assets or property of the Company, in each case unless and until the Guaranteed Obligations have been paid in full. Until such time (but not thereafter), the Guarantor hereby expressly waives any right to exercise any claim, right or remedy which the Guarantor may now have or hereafter acquire against the Company or any other Person that arises under the Notes, the Note Purchase Agreement or from the performance by the Guarantor of the guaranty hereunder including any claim, remedy or right of subrogation, reimbursement, exoneration, contribution, indemnification or participation in any claim, right or remedy of any Holder against the Company or the Guarantor, or any security that any Holder now has or hereafter acquires, whether or not such claim, right or remedy arises in equity, under contract, by statute, under common law or otherwise. If any amount shall be paid to the Guarantor by the Company or another Person after payment in full of the Guaranteed Obligations, and all or any portion of the Guaranteed Obligations shall thereafter be reinstated in whole or in part and any Holder is required to repay any sums received by any of them in payment of the Guaranteed Obligations, this Guaranty shall be automatically reinstated and such amount shall be held in trust for the benefit of the Holders and shall forthwith be paid to the Holders to be credited and applied to the Guaranteed Obligations, whether matured or unmatured. The provisions of this paragraph shall survive the termination of this Guaranty, and any satisfaction and discharge of the Company by virtue of any payment, court order or any Federal or state law.

S ECTION

6. S UBORDINATION .

If the Guarantor becomes the holder of any indebtedness payable by the Company or a Subsidiary Guarantor, the Guarantor hereby subordinates all indebtedness owing to it from the Company or such Subsidiary Guarantor to all indebtedness of the Company or such Subsidiary Guarantors to the Holders, and agrees that, during the continuance of any Event of Default, it shall not accept any payment on the same until payment in full of the Guaranteed Obligations and shall in no circumstance whatsoever attempt to set-off or reduce any obligations hereunder because of such indebtedness. If any amount shall nevertheless be paid in violation of the foregoing to the Guarantor by the Company or such Subsidiary Guarantor prior to payment in full of the Guaranteed Obligations, such amount shall be held in trust for the benefit of the Holders and shall forthwith be paid to the Holders to be credited and applied to the Guaranteed Obligations, whether matured or unmatured.

2(c)-9

S ECTION

7. E FFECT OF B ANKRUPTCY P ROCEEDINGS , E TC .

(a) If after receipt of any payment of, or proceeds of any security applied (or intended to be applied) to the payment of all or any part of, the Guaranteed Obligations, any Holder is for any reason compelled to surrender or voluntarily surrenders (under circumstances in which it believes it could reasonably be expected to be so compelled if it did not voluntarily surrender), such payment or proceeds to any Person (i) because such payment or application of proceeds is or may be avoided, invalidated, declared fraudulent, set aside, determined to be void or voidable as a preference, fraudulent conveyance, fraudulent transfer, impermissible set-off or a diversion of trust funds or (ii) for any other similar reason, including, without limitation, (x) any judgment, decree or order of any court or administrative body having jurisdiction over any Holder or any of their respective properties or (y) any settlement or compromise of any such claim effected by any Holder with any such claimant (including the Company), then the Guaranteed Obligations or part thereof intended to be satisfied shall be reinstated and continue, and this Guaranty shall continue in full force as if such payment or proceeds had not been received, notwithstanding any revocation thereof or the cancellation of any Note or any other instrument evidencing any Guaranteed Obligations or otherwise, and the Guarantor shall be liable to pay the Holders, and hereby do indemnify the Holders and hold them harmless for, the amount of such payment or proceeds so surrendered and all expenses (including reasonable attorneys’ fees, court costs and expenses attributable thereto) incurred by any Holder in defense of any claim made against any of them that any payment or proceeds received by any Holder in respect of all or part of the Guaranteed Obligations must be surrendered. The provisions of this paragraph shall survive the termination of this Guaranty, and any satisfaction and discharge of the Company by virtue of any payment, court order or any Federal or state law.

(b) If an event permitting the acceleration of the maturity of any of the Guaranteed Obligations shall at any time have occurred and be continuing, and such acceleration shall at such time be prevented by reason of the pendency against the Company or any other Person of any case or proceeding contemplated by Section 7(a) hereof, then, for the purpose of defining the obligation of the Guarantor under this Guaranty, the maturity of the principal amount of the Guaranteed Obligations shall be deemed to have been accelerated with the same effect as if an acceleration had occurred in accordance with the terms of such Guaranteed Obligations, and the Guarantor shall forthwith pay such principal amount, all accrued and unpaid interest thereon, and all other Guaranteed Obligations, due or that would have become due but for such case or proceeding, without further notice or demand.

S ECTION

8. T ERM OF G UARANTY .

This Guaranty and all guarantees, covenants and agreements of the Guarantor contained herein shall continue in full force and effect and shall not be discharged until such time as all of the principal of and interest on the Notes, the other Guaranteed Obligations and other independent payment obligations of the Guarantor under this Guaranty shall be paid in cash and performed in full.

2(c)-10

S ECTION

9. R EPRESENTATIONS AND W ARRANTIES .

The Guarantor hereby represents and warrants as of the date of this Guaranty as follows:

Section 9.1. Organization and Qualification; Power and Authority; Event of Default . The Guarantor (i) is a corporation, partnership or limited liability company duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, (ii) is duly licensed or qualified and in good standing in all other jurisdictions where the property owned or leased by it or the nature of the business transacted by it or both makes such licensing or qualification necessary except where the failure to be so duly licensed or qualified or in good standing could not reasonably be expect to result in a Material Adverse Change and (iii) has full corporate power to enter into, execute, deliver and carry out this Guaranty, to incur the Indebtedness contemplated by this Guaranty and to perform its obligations under this Guaranty, and all such actions have been duly authorized by all necessary proceedings on its part. No Event of Default or Potential Default exists or is continuing.

Section 9.2. Validity and Binding Effect . This Guaranty (i) has been duly and validly executed and delivered by the Guarantor and (ii) constitutes, or will constitute, the legal, valid and binding obligation of the Guarantor, enforceable against the Guarantor in accordance with its terms.

Section 9.3. No Conflict; Material Agreements; Consents . Neither the execution and delivery of this Guaranty by the Guarantor nor the consummation of the transactions herein contemplated or compliance with the terms and provisions hereof will conflict with, constitute a default under or result in any breach of (i) the terms and conditions of the certificate of incorporation or bylaws of the Guarantor (ii) any Law or any material agreement or instrument or order, writ, judgment, injunction or decree to which the Guarantor or any of its Domestic Subsidiaries is a party or by which it or any of its Domestic Subsidiaries is bound or to which it is subject, or result in the creation or enforcement of any Lien, charge or encumbrance whatsoever upon any property (now or hereafter acquired) of the Guarantor or any of its Domestic Subsidiaries. No consent, approval, exemption, order or authorization of, or a registration or filing with, any Official Body or any other Person is required by any Law or any agreement in connection with the execution, delivery and carrying out of this Guaranty other than consents, approvals, exemptions, orders or authorizations already obtained as of the date of this Guaranty and routine filings under the Securities and Exchange Act of 1934 which may be required to be made by the Guarantor with respect to entry into this Guaranty (but which filings are not required or a condition to the Guarantor’s entry or performance of this Guaranty).

Section 9.4. Full Disclosure . This Guaranty, the Guarantor’s public filings with the Securities and Exchange Commission, and the certificates, statements, agreements or other documents furnished to the Holders in connection herewith or therewith, do not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained herein and therein, in light of the circumstances under which they were made, not misleading. There is no fact known to the Guarantor which materially adversely affects the business, property, assets, financial condition or results of operations of the Guarantor or any Subsidiary which has not been set forth in this Guaranty, the Guarantor’s public filings

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with the Securities and Exchange Commission or in the certificates, statements, agreements or other documents furnished in writing to the Holders prior to or at the date hereof in connection with the transactions contemplated hereby.

Section 9.5. Senior Debt Status . The obligations of the Guarantor under this Guaranty do rank and will rank at least pari passu in priority of payment with all other unsecured and unsubordinated Indebtedness of the Guarantor.

Section 9.6. Solvency . After giving effect to the transactions contemplated by this Guaranty the Guarantor shall be Solvent.

Section 9.7. Anti-Terrorism Laws . The Guarantor is not (i) a Person with whom any Holder is restricted from doing business under Executive Order No. 13224 or any other Anti-Terrorism Law, (ii) engaged in any business involved in making or receiving any contribution of funds, goods or services to or for the benefit of such a Person or in any transaction that evades or avoids, or has the purpose of evading or avoiding, the prohibitions set forth in any Anti-Terrorism Law, or (iii) otherwise in violation of any Anti-Terrorism Law.

Section 9.8. Decision to Enter Into This Guaranty . The Guarantor has, independently and without reliance upon the Holders and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Guaranty. The Guarantor has investigated fully the benefits and advantages which will be derived by it from execution of this Guaranty, and the Board of Directors of the Guarantor has decided that a direct and/or an indirect benefit will accrue to the Guarantor by reason of the execution of this Guaranty.

S ECTION 10. A FFIRMATIVE C OVENANTS .

The Guarantor covenants so long as any of the Guaranteed Obligations are outstanding:

Section 10.1. Preservation of Existence, Etc. The Guarantor shall maintain its legal existence as a corporation and its license or qualification and good standing in each jurisdiction in which its ownership or lease of property or the nature of its business makes such license or qualification necessary, except as otherwise expressly permitted in Section 11.1 or except where the failure to be duly licensed or qualified or in good standing could not reasonably be expected to result in a Material Adverse Change.

Section 10.2. Visitation Rights . The Guarantor shall, and shall cause each of its Domestic Subsidiaries to, permit any of the officers or authorized employees or representatives of the Holders to visit and inspect any of its properties and to examine and make excerpts from its books and records and discuss its business affairs, finances and accounts with its officers, all in such detail and at such times and as often as any of the Holders may reasonably request with reasonable written notice prior to any visit or inspection; provided , however , that prior to the occurrence of an Event of Default or Potential Default that is continuing, such visits or inspections (i) shall be limited to the executive offices of the Parent Guarantor in Pittsburgh, Pennsylvania (or such other place where it shall then have its corporate headquarters) and (ii)

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shall not exceed once per calendar year by the Holders as a whole.

Section 10.3. Anti-Terrorism Laws . The Guarantor shall not be (i) a Person with whom any Holder is restricted from doing business under Executive Order No. 13224 or any other Anti-Terrorism Law, (ii) engaged in any business involved in making or receiving any contribution of funds, goods or services to or for the benefit of such a Person or in any transaction that evades or avoids, or has the purpose of evading or avoiding, the prohibitions set forth in any Anti-Terrorism Law, or (iii) otherwise in violation of any Anti-Terrorism Law. The Guarantor shall provide to the Holders any certifications or information that a Holder requests to confirm compliance by the Holder with Anti-Terrorism Laws.

S ECTION 11. N EGATIVE C OVENANTS .

The Guarantor covenants so long as any of the Guaranteed Obligations are outstanding:

Section 11.1. Merger, Consolidation, Etc. The Guarantor will not consolidate with or merge with any other Person or convey, transfer or lease all or substantially all of its assets in a single transaction or series of transactions to any Person, unless:

(a) the successor formed by such consolidation or the survivor of such merger or the Person that acquires by conveyance, transfer or lease all or substantially all of the assets of the Guarantor as an entirety, as the case may be (the “Successor Corporation” ), shall be a solvent corporation or limited liability company organized and existing under the laws of the United States or any State thereof (including the District of Columbia), and, if the Guarantor is not such corporation, such Successor Corporation shall have executed and delivered to each Holder its assumption of the due and punctual performance and observance of each covenant and condition of all of this Guaranty; and

(b) immediately after giving effect to such transaction, no Event of Default or Potential Default shall have occurred and be continuing.

No such conveyance, transfer or lease of substantially all of the assets of the Guarantor shall have the effect of releasing the Guarantor or any successor corporation that shall theretofore have become such in the manner prescribed in this Section 11.1 from its liability under this Guaranty.

Section 11.2. Maximum Leverage Ratio. The Guarantor shall not at any time permit the Leverage Ratio, calculated as of the end of each fiscal quarter for the period equal to the four (4) consecutive fiscal quarters then ended, to exceed 3.25 to 1.0. It is hereby agreed that the Leverage Ratio is deemed to be a Financial Covenant incorporated into this Guaranty as of the date hereof in accordance with Section 12(a) and, as such, will be subject to all the terms and conditions of Section 12.

Section 11.3. Minimum Interest Coverage Ratio . The Guarantor shall not permit the Interest Coverage Ratio, calculated as of the end of the each fiscal quarter for the period equal to the four (4) consecutive fiscal quarters then ended, to be less than 2.00 to 1.0. It is hereby agreed

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that the Interest Coverage Ratio is deemed to be a Financial Covenant incorporated into this Guaranty as of the date hereof in accordance with Section 12(a) and, as such, will be subject to all the terms and conditions of Section 12.

S ECTION 12. M OST F AVORED L ENDER .

(a) If at any time the Credit Agreement shall contain any financial covenant that relates specifically to one or more numerical measures of the financial condition or results of operations of the Guarantor or the Guarantor and its Subsidiaries on a consolidated basis (however expressed and whether stated as a ratio, as a fixed threshold, as an event of default, or otherwise) (or any thereof shall be amended, restated or otherwise modified) and such financial covenant is not contained in this Guaranty or would be more beneficial to the Holders than the Leverage Ratio or the Interest Coverage Ratio, as applicable, incorporated into this Guaranty as of the date hereof (any such financial covenant, a “Financial Covenant” ), then the Guarantor shall promptly (but in any event within ten Business Days from the occurrence thereof) provide written notice thereof to the Holders, which notice shall refer specifically to this Section 12 and shall describe in reasonable detail the Financial Covenant and the relevant ratios or thresholds contained therein. Thereupon, such Financial Covenant shall be deemed automatically incorporated by reference into this Guaranty, mutatis mutandis , as if set forth fully herein, without any further action required on the part of any Person, effective as of the date when such Financial Covenant became effective under such Credit Agreement. Upon the request of the Required Holders, the Guarantor and the Required Holders shall enter into an additional agreement or an amendment to this Guaranty (as the Required Holders may request), evidencing the incorporation of such Financial Covenant into this Guaranty substantially as provided for in the Credit Agreement.

(b) Provided that no Potential Default or Event of Default is in existence at such time, any Financial Covenant incorporated into this Guaranty pursuant to Section 12(a) shall automatically without any action required to be taken by the Guarantor or any Holder (i) be subject to any subsequent waiver of the correlative covenant to such Financial Covenant under the Credit Agreement for the same time period as waived thereunder, (ii) be deemed amended, restated or otherwise modified in this Guaranty to the same effect as the correlative covenant to such Financial Covenant shall be amended, restated or otherwise modified under the Credit Agreement and (iii) be deemed deleted from this Agreement at such time as the correlative covenant to such Financial Covenant shall be deleted from the Credit Agreement or at such time as the applicable Credit Agreement shall be terminated and, in the case of any such termination, no amounts of principal or interest shall be outstanding thereunder (and in any such case under clauses (i), (ii) or (iii) above, the Guarantor shall promptly (but in any event within five Business Days from the occurrence thereof) provide written notice thereof to the Holders, which notice shall refer specifically to this Section 12, shall include a statement that no Potential Default or Event of Default is then in existence and shall describe in reasonable detail the relevant waiver, amendment, restatement, modification or deletion of such Financial Covenant. Upon the request of the Guarantor, the Holders shall enter into an additional agreement, waiver or an amendment to this Guaranty (as the Guarantor may request), evidencing such waiver, amendment, restatement, modification or deletion of such Financial Covenant in the Credit Agreement.

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any remuneration, by way of fee, additional interest or otherwise, as consideration for or as an inducement to the entering into by any financier under any Credit Agreement of any waiver, amendment, restatement, modification or deletion of any Financial Covenant under such Credit Agreement, the Guarantor shall pay equivalent consideration on the same terms, ratably to each Holder (based, in the case of the Holders, on the outstanding balance of the Notes, and in the case of the lenders under the Credit Agreement, the commitments of such lenders under the Credit Agreement).

S ECTION 13. R EPORTING R EQUIREMENTS .

The Guarantor shall deliver to each Holder:

Section 13.1. Quarterly Financial Statements . As soon as available and in any event within forty-five (45) calendar days after the end of each of the first three (3) fiscal quarters in each fiscal year, financial statements of the Guarantor, consisting of a consolidated balance sheet as of the end of such fiscal quarter and related consolidated statements of income, stockholders’ equity and cash flows for the fiscal quarter then ended and the fiscal year through that date, all in reasonable detail and certified (subject to normal year-end audit adjustments) by the Chief Executive Officer, President, Chief Financial Officer or Chief Accounting Officer of the Guarantor as having been prepared in accordance with GAAP, consistently applied, and setting forth in comparative form the respective financial statements for the corresponding date and period in the previous fiscal year. Delivery within the time period specified above of copies of the Guarantor’s Quarterly Report on Form 10-Q prepared in compliance with the requirements therefor and filed with the Securities and Exchange Commission shall be deemed to satisfy the requirements of this Section 13.1.

Section 13.2. Annual Financial Statements . As soon as available and in any event within ninety (90) days after the end of each fiscal year of the Guarantor, financial statements of the Guarantor consisting of a consolidated balance sheet as of the end of such fiscal year, and related consolidated statements of income, stockholders’ equity and cash flows for the fiscal year then ended, all in reasonable detail and setting forth in comparative form the financial statements as of the end of and for the preceding fiscal year, and audited and certified by independent certified public accountants of nationally recognized standing satisfactory to the Required Holders. The certificate or report of accountants shall be free of qualifications (other than any consistency qualification that may result from a change in the method used to prepare the financial statements as to which such accountants concur) and shall not indicate the occurrence or existence of any event, condition or contingency which would materially impair the prospect of payment or performance of any covenant, agreement or duty of the Guarantor under this Guaranty. Delivery within the time period specified above of the Guarantor’s Annual Report on Form 10-K for such fiscal year (together with the Company’s annual report to shareholders, if any, prepared pursuant to Rule 14a-3 under the Exchange Act) prepared in accordance with the requirements therefor and filed with the Securities and Exchange Commission, together with the accountant’s certificate or report described above, shall be deemed to satisfy the requirements of this Section 13.2.

The financial statement described in Section 13.1 and Section 13.2 shall be deemed be

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delivered on a timely basis if such financial statements are available on the EDGAR system maintained by the United States Securities and Exchange Commission on or prior to the delivery dates described in Section 13.1 and Section 13.2 and notice of availability thereof has been furnished to the Holders.

Section 13.3. Certificate of Guarantor . Concurrently with the financial statements of the Guarantor furnished to the Holders pursuant to Sections 13.1 and 13.2, a certificate (each a “Compliance Certificate” ) of the Guarantor signed by the Chief Executive Officer, President, Chief Financial Officer or Chief Accounting Officer of the Guarantor, setting forth:

(a) Covenant Compliance — the information (including detailed calculations) required in order to establish whether the Guarantor was in compliance with the requirements of Section 11.2 and 11.3 hereof and any Financial Covenant incorporated herein pursuant to Section 12, during the quarterly or annual period covered by the statements then being furnished (including with respect to each such Section, where applicable, the calculations of the maximum or minimum amount, ratio or percentage, as the case may be, permissible under the terms of such Sections, and the calculation of the amount, ratio or percentage then in existence); and

(b) Event of Default — a statement that such officer has reviewed the relevant terms hereof and has made, or caused to be made, under his or her supervision, a review of the transactions and conditions of the Guarantor and its Subsidiaries from the beginning of the quarterly or annual period covered by the statements then being furnished to the date of the certificate and that such review shall not have disclosed the existence during such period of any condition or event that constitutes an Event of Default or, if any such condition or event existed or exists, specifying the nature and period of existence thereof and what action the Guarantor shall have taken or proposes to take with respect thereto.

Section 13.4. Notices.

(a) Default . Promptly after any officer of the Guarantor has learned of the occurrence of an Event of Default or Potential Default, a certificate signed by an Authorized Officer setting forth the details of such Event of Default or Potential Default and the action which the Guarantor proposes to take with respect thereto.

(b) Erroneous Financial Information . Immediately in the event that the Guarantor or its accountants conclude or advise that any previously issued financial statement, audit report or interim review should no longer be relied upon or that disclosure should be made or action should be taken to prevent future reliance.

S ECTION 14. E VENTS OF D EFAULT .

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An “Event of Default” shall exist if any of the following conditions or events shall occur and be continuing (whatever the reason therefor and whether voluntary, involuntary or effected by operation of Law):

(a) Payments Under Guaranty . The Guarantor shall fail to pay any of the Guaranteed Obligations or any other amount under this Guaranty on the date on which the Guaranteed Obligations or such other amount becomes due in accordance with the terms hereof;

(b) Breach of Warranty . Any representation or warranty made at any time by the Guarantor herein, or in any certificate, other instrument or statement furnished pursuant to the provisions hereof or thereof, shall prove to have been false or misleading in any material respect as of the time it was made or furnished;

(c) Breach of Negative Covenants . The Guarantor shall default in the observance or performance of any covenant contained in Section 11 or any Financial Covenant incorporated herein pursuant to Section 12;

(d) Breach of Other Covenants . (i) The Guarantor shall default in the observance or performance of the covenant contained in Section 10.2 and such default shall continue unremedied for a period of fifteen (15) days or longer; or (ii) the Guarantor shall default in the observance or performance of any other covenant, condition or provision hereof (other than those referred to in Section 14(c) and 14(d)(i)) and such default shall continue unremedied for a period of thirty (30) days;

(e) Defaults in Other Agreements or Indebtedness . A default or event of default shall occur at any time under the terms of any other agreement involving borrowed money or the extension of credit or any other Indebtedness under which the Guarantor or any Subsidiary may be obligated as a borrower or guarantor in excess of Fifty Million and 00/100 Dollars ($50,000,000.00) in the aggregate, and such breach, default or event of default consists of the failure to pay (beyond any period of grace permitted with respect thereto, whether waived or not) any Indebtedness when due (whether at stated maturity, by acceleration or otherwise) or if such breach or default permits or causes the acceleration of any Indebtedness (whether or not such right shall have been exercised or waived) or the termination of any commitment to lend;

(f) Default under the Note Purchase Agreements . An Event of Default (as defined in the Note Purchase Agreements) shall occur and be continuing under the Note Purchase Agreements;

(g) Final Judgments or Orders . Any judgment or judgments are rendered or judgment liens filed against the Guarantor for an aggregate amount in excess of Seventy Five Million and 00/100 Dollars ($75,000,000.00) in excess of available insurance (i) which within thirty (30) days of such rendering or filing is not either appealed, satisfied, stayed or discharged of record and (ii) for which the Guarantor has not established sufficient reserves in accordance with GAAP;

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(h) Guaranty Unenforceable . This Guaranty shall cease to be legal, valid and binding agreements enforceable against the Guarantor in accordance with the terms hereof or shall in any way be terminated (except in accordance with its terms) or become or be declared ineffective or inoperative or shall in any way be challenged or contested or cease to give or provide the rights, titles, interests, remedies, powers or privileges intended to be created hereby;

(i) Uninsured Losses; Proceedings Against Assets . There shall occur any material uninsured damage to or loss, theft or destruction of the Guarantor’s or any of its Domestic Subsidiaries’ assets in excess of Fifty Million and 00/100 Dollars ($50,000,000.00) or any of the Guarantor’s or any of its Domestic Subsidiaries’ assets in excess of Fifty Million and 00/100 Dollars ($50,000,000.00) are attached, seized, levied upon or subjected to a writ or distress warrant; or such come within the possession of any receiver, trustee, custodian or assignee for the benefit of creditors and the same is not cured within thirty (30) days thereafter;

(j) Events Relating to Plans and Benefit Arrangements . (i) An ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan which has resulted or could reasonably be expected to result in liability of the Guarantor under Title IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC which would constitute a Material Adverse Change, or (ii) the Guarantor or any ERISA Affiliate fails to pay when due, after the expiration of any applicable grace period, any installment payment with respect to its withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan which constitutes a Material Adverse Change; or

(k) Relief Proceedings . (i) A Relief Proceeding shall have been instituted against the Guarantor or any Domestic Subsidiary and such Relief Proceeding shall remain undismissed and in effect for a period of thirty (30) consecutive days or such court shall enter a decree or order granting any of the relief sought in such Relief Proceeding, (ii) the Guarantor or any Domestic Subsidiary institutes, or takes any action in furtherance of, a Relief Proceeding, or (iii) the Guarantor or any Domestic Subsidiary ceases to be solvent or admits in writing its inability to pay its debts as they mature or ceases operation of its present business.

S ECTION 15. R EMEDIES ON D EFAULT , E TC .

Section 15.1. Acceleration . (a) If an Event of Default with respect to the Guarantor described in paragraph (k) of Section 14 has occurred, all the Guaranteed Obligations then outstanding shall automatically become immediately due and payable.

(b) If any other Event of Default has occurred and is continuing, any Holder or Holders of more than 51% in principal amount of any Series of Notes at the time outstanding may at any time at its or their option, by notice or notices to the Guarantor, declare all the Guaranteed Obligations of such Series then outstanding to be immediately due and payable.

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(c) If any Event of Default described in paragraph (a) of Section 14 has occurred and is continuing, any Holder or Holders of Notes at the time outstanding affected by such Event of Default may at any time, at its or their option, by notice or notices to the Guarantor, declare all Guaranteed Obligations held by it or them to be immediately due and payable.

Upon any of the Guaranteed Obligations becoming due and payable under this Section 15.1, whether automatically or by declaration, such Guaranteed Obligations will forthwith mature and the Guaranteed Obligations shall all be immediately due and payable, in each and every case without presentment, demand, protest or further notice, all of which are hereby waived. The Guarantor acknowledges that each Holder has the right to maintain its investment in the Notes free from repayment by the Company or the Guarantor (except as specifically provided for herein or in the Note Purchase Agreements), and that the provision for payment of a Make-Whole Amount by the Company (and guaranteed by the Guarantor) in the event that the Notes are prepaid or are accelerated as a result of an Event of Default, is intended to provide compensation for the deprivation of such right under such circumstances.

Section 15.2. Other Remedies . If any Default or Event of Default has occurred and is continuing, and irrespective of whether any Guaranteed Obligations have become or have been declared immediately due and payable under Section 15.1, any Holder may proceed to protect and enforce the rights of such Holder (other than the payment of any Guaranteed Obligations, unless they have become due, by declaration or otherwise) by an action at law, suit in equity or other appropriate proceeding, whether for the specific performance of any agreement contained herein, or for an injunction against a violation of any of the terms hereof, or in aid of the exercise of any power granted hereby or by law or otherwise.

Section 15.3. Rescission . At any time after any Guaranteed Obligations have been declared due and payable pursuant to clause (b) or (c) of Section 15.1, the Holders of not less than 50% in principal amount of each Series of Notes then outstanding, by written notice to the Guarantor, may rescind and annul any such declaration and its consequences with respect to such Series if (a) the Company or the Guarantor has paid all overdue interest on the Notes, all principal of and Make-Whole Amount, if any, on any such Notes that are due and payable and are unpaid other than by reason of such declaration, and all interest on such overdue principal and Make-Whole Amount, if any, and (to the extent permitted by applicable law) any overdue interest in respect of the Notes, at the Default Rate, (b) all Events of Default and Potential Defaults, other than non-payment of amounts that have become due solely by reason of such declaration, have been cured or have been waived, and (c) no judgment or decree has been entered for the payment of any monies due pursuant hereto or to the Notes. No rescission and annulment under this Section 15.3 with respect to any Series of Notes will extend to or affect any subsequent Event of Default or Default or impair any right consequent thereon or extend to or affect any Notes of any other Series.

Section 15.4. No Waivers or Election of Remedies, Expenses, Etc . No course of dealing and no delay on the part of any Holder in exercising any right, power or remedy shall operate as a waiver thereof or otherwise prejudice such holder’s rights, powers or remedies. No right, power or remedy conferred by this Guaranty upon any Holder shall be exclusive of any other right, power or remedy referred to herein or now or hereafter available at law, in equity, by

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statute or otherwise. Without limiting the obligations of the Guarantor under Section 19, the Guarantor will pay to each Holder on demand such further amount as shall be sufficient to cover all costs and expenses of such Holder incurred in any enforcement or collection under this Section 15, including, without limitation, reasonable attorneys’ fees, expenses and disbursements.

S ECTION 16. D EFINITIONS AND T ERMS G ENERALLY .

(a) Unless otherwise defined herein, capitalized terms defined in the Note Purchase Agreement are used herein as defined therein. In addition, the following terms shall have the following meanings.

“Anti-Terrorism Laws” shall mean any Laws relating to terrorism or money laundering, including Executive Order No. 13224, the USA Patriot Act, the Laws comprising or implementing the Bank Secrecy Act, and the Laws administered by the United States Treasury Department’s Office of Foreign Asset Control (as any of the foregoing Laws may from time to time be amended, renewed, extended, or replaced).

“Authorized Officer” shall mean the Chief Executive Officer, President, Chief Financial Officer or Chief Accounting Officer of the Guarantor or such other individuals, designated by written notice to the Holders from the Guarantor authorized to execute notices, reports and other documents on behalf of the Guarantor required hereunder. The Guarantor may amend such list of individuals from time to time by giving written notice of such amendment to the Holders.

“Consolidated EBIT” for any period of determination shall mean the sum of (i) net income (or loss) (excluding extraordinary gains or losses including, without limitation, those items created by mandated changes in accounting treatment), plus (ii) net interest expense, (iii) plus all charges against or minus credits to income for federal, state and local taxes, (iv) plus or minus, as applicable, any other non-cash non-recurring items of gain or loss with respect to such fiscal period not already excluded hereunder, (v) plus or minus, as applicable, any non-cash pension expense or income, provided, however , that voluntary pension contributions shall not be included in calculating pension expense or income, in each case of the Guarantor and its Subsidiaries for such period determined and consolidated in accordance with GAAP.

“ Consolidated EBITDA ” for any period of determination shall mean the sum of (i) Consolidated EBIT, plus (ii) depreciation, plus (iii) amortization, in each case of the Guarantor and its Subsidiaries for such period determined and consolidated in accordance with GAAP.

“Consolidated Net Indebtedness” shall mean (a) Consolidated Total Indebtedness minus (b) (i) cash that is not subject to a Lien, plus (ii) Permitted Investments that are not subject to a Lien, minus (iii) Fifty Million and 00/100 Dollars ($50,000,000.00), in each case determined and consolidated for the Guarantor and its Subsidiaries in accordance with GAAP.

“ Consolidated Total Indebtedness ” as of any date, means any and all Indebtedness of the Guarantor and its Subsidiaries, in each case determined and consolidated in accordance with GAAP.

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“ Credit Agreement ” means the $400,000,000 Revolving Credit Facility, dated July 31, 2007, as amended, by and among ATI Funding Corporation, TDY Holdings, LLC, the guarantors party thereto, the lenders party thereto, PNC Bank, National Association, as administrative agent, Citibank, N.A., as co-syndication agent, JPMorgan Chase Bank, N.A., as co-syndication agent, Bank of America, N.A., as co-documentation agent, Bank of Tokyo-Mitsubishi UFJ Trust Company, as co-documentation agent, Credit Suisse, Cayman Islands Branch, as co-managing agent, Wachovia Bank, National Association, as co-managing agent, National City Bank, as co-managing agent, The Bank of New York, as co-managing agent, and PNC Capital Markets LLC, as lead arranger, as amended, restated, supplemented, refinanced, replaced or substituted from time to time.

“Domestic Subsidiary” shall mean any Subsidiary organized under the laws of any state of the United States of America or the District of Columbia.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as the same may be amended or supplemented from time to time, and any successor statute of similar import, and the rules and regulations thereunder, as from time to time in effect.

“ERISA Affiliate” shall mean, at any time, any trade or business (whether or not incorporated) under common control with the Guarantor and are treated as a single employer under Section 414 of the Code.

“ERISA Event” means (a) a reportable event (under Section 4043 of ERISA and regulations thereunder) with respect to a Pension Plan; (b) a withdrawal by the Guarantor or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the Guarantor or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Plan amendment as a termination under Sections 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Guarantor or any ERISA Affiliate.

“Event of Default” has the meaning specified in Section 14 hereof.

“Executive Order No. 13224” shall mean the Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001, as the same has been, or shall hereafter be, renewed, extended, amended or replaced.

“Guaranteed Obligations” has the meaning specified in Section 1 hereof.

“Guarantor” has the meaning specified in the introduction hereto.

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“Guaranty” has the meaning specified in the introduction hereto.

“Holders” has the meaning specified in the introduction hereto.

“Indebtedness” shall mean, as to any Person at any time, without duplication, any and all indebtedness, obligations or liabilities (whether matured or unmatured, liquidated or unliquidated, direct or indirect, absolute or contingent, or joint or several) of such Person for or in respect of: (i) borrowed money, (ii) amounts raised under or liabilities in respect of any note purchase or acceptance credit facility, (iii) reimbursement obligations (contingent or otherwise) under any letter of credit, currency swap agreement, interest rate swap, cap, collar or floor agreement or other interest rate management device, (iv) any other transaction (including forward sale or purchase agreements, capitalized leases and conditional sales agreements) having the commercial effect of a borrowing of money entered into by such Person to finance its operations or capital requirements (but not including trade payables and accrued expenses incurred in the ordinary course of business which are not represented by a promissory note or other evidence of indebtedness and which are not more than ninety (90) days past due), (v) any Guaranty of Indebtedness for borrowed money, or (vi) a Receivables Financing.

“Interest Coverage Ratio” means, as of any date of determination, the ratio of Consolidated EBIT to interest expense, in each case determined and consolidated for the Guarantor and its Subsidiaries in accordance with GAAP.

“Law” shall mean any law (including common law), constitution, statute, treaty, regulation, rule, ordinance, opinion, release, ruling, order, injunction, writ, decree, bond, judgment, authorization or approval, lien or award of or settlement agreement with any Official Body.

“Leverage Ratio” shall mean as of the date of determination, the ratio of (A) Consolidated Net Indebtedness on such date to (B) Consolidated EBITDA (i) for the four (4) fiscal quarters ending if such date is a fiscal quarter end or (ii) for the four (4) fiscal quarters most recently ended if such date is not a fiscal quarter end.

“Material Adverse Change” shall mean any set of circumstances or events which (a) has or could reasonably be expected to have any material adverse effect whatsoever upon the validity or enforceability of this Guaranty, (b) is or could reasonably be expected to be material and adverse to the business, properties, assets, financial condition or results of operations of the Guarantor, (c) impairs materially or could reasonably be expected to impair materially the ability of the Guarantor to duly and punctually pay or perform its Indebtedness, or (d) impairs materially or could reasonably be expected to impair materially the ability of the Holders, to the extent permitted, to enforce their legal remedies pursuant to this Guaranty.

“ Moody’s” shall mean Moody’s Investors Service, Inc. and its successors.

“Multiemployer Plan” shall mean any employee benefit plan which is a “multiemployer plan” within the meaning of Section 4001(a)(3) of ERISA and to which the Guarantor or any member of the ERISA Group is then making or accruing an obligation to make contributions or,

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within the preceding five Plan years, has made or had an obligation to make such contributions.

“Note Purchase Agreements” has the meanings specified in the Recitals hereto.

“Notes” has the meanings specified in the Recitals hereto.

“Official Body” shall mean the government of the United States of America or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).

“PBGC” shall mean the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA or any successor.

“Pension Plan” means any “employee pension benefit plan” (as such term is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and is sponsored or maintained by the Guarantor or any ERISA Affiliate or to which the Guarantor or any ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple employer or other plan described in Section 4064(a) of ERISA, has made contributions at any times during the immediately preceding five plan years.

“Potential Default” shall mean any event or condition which with notice or passage of time, or a determination by the Required Holders, or any combination of the foregoing, would constitute an Event of Default.

“ Permitted Investments ” means

(i) direct obligations of the United States of America or any agency or instrumentality thereof or obligations backed by the full faith and credit of the United States of America;

(ii) commercial paper domestic or foreign (A) rated not lower than A-1, by Standard & Poor’s or P-1 by Moody’s on the date of acquisition or (B) issued by any of the administrative agent or any lender under the Credit Agreement;

(iii) demand deposits, time deposits or certificates of deposit and other obligations issued by any lender under the Credit Agreement, or any other domestic or foreign commercial bank that has stockholders’ equity of One Hundred Million and 00/100 Dollars ($100,000,000.00) or more on the date of acquisition;

(iv) obligations of any foreign government or obligations that possess a guaranty of the full faith and credit of any foreign government;

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(v) obligations of any United States government-sponsored enterprises, federal agencies, and federal financing banks that are not otherwise authorized including, but not limited to, the following:

(a) United States government-sponsored enterprises such as instrumentalities of the Federal Credit System (Bank for Cooperatives, Federal Land Banks), Federal Home Loan Banks and Federal National Mortgage Association; and

(b) Federal agencies such as instrumentalities of the Department of Housing and Urban Development (Federal Housing Administration, Government National Mortgage Association), Export-Import Bank, Farmers Home Administration and Tennessee Valley Authority;

(vi) obligations of states, counties, and municipalities of the United States;

(vii) debt obligations (other than commercial paper obligations) of domestic or foreign corporations;

(viii) preferred stock obligations with a floating rate dividend that is reset periodically at auction;

(ix) investments in repurchase agreements collateralized by any of the above securities eligible for outright purchase, provided the collateral is delivered to a bank custody account in accordance with the terms of a written repurchase agreement with a dealer or bank; and

(x) investments in shares of institutional mutual funds whose investment policies are essentially in agreement with the above type and criteria for investments otherwise set forth in this definition of Permitted Investments,

provided that investments described in clauses (i), (iv), (v), (vi), (vii), (viii), (ix) and (x) above are restricted to obligations rated no lower than investment grade by Moody’s or Standard & Poor’s.

“ Receivables Financing” shall mean the sale and/or pledge of all or a portion of the accounts receivables of the Guarantor and each of its Subsidiaries in connection with an “asset securitization” or similar transaction.

“Relief Proceeding” shall mean any proceeding seeking a decree or order for relief in respect of the Guarantor or any Subsidiary in a voluntary or involuntary case under any applicable bankruptcy, insolvency, reorganization or other similar law now or hereafter in effect, or for the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator, conservator (or similar official) of the Guarantor or any Subsidiary for any substantial part of its property, or for the winding-up or liquidation of its affairs, or an assignment for the benefit of its creditors.

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“Solvent” shall mean, with respect to any Person on a particular date, that on such date (i) the fair value of the property of such Person is greater than the total amount of liabilities, including, without limitation, contingent liabilities, of such Person, (ii) the present fair saleable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (iii) such Person is able to realize upon its assets and pay its debts and other liabilities, contingent obligations and other commitments as they mature in the normal course of business, (iv) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay as such debts and liabilities mature, and (v) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s property would constitute unreasonably small capital after giving due consideration to the prevailing practice in the industry in which such Person is engaged. In computing the amount of contingent liabilities at any time, it is intended that such liabilities will be computed at the amount which, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

“Standard & Poor’s” shall mean Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc. and its successors.

“Subsidiary” of any Person at any time shall mean any corporation, trust, partnership, any limited liability company or other business entity (i) of which more than fifty percent (50%) of the outstanding voting securities or other interests normally entitled to vote for the election of one or more directors or trustees (regardless of any contingency which does or may suspend or dilute the voting rights) is at such time owned directly or indirectly by such Person or one or more of such Person’s Subsidiaries, or (ii) which is controlled by such Person or one or more of such Person’s Subsidiaries. Unless the context otherwise clearly requires, any reference to a “Subsidiary” herein is a reference to a Subsidiary of the Guarantor.

“USA Patriot Act” shall mean the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56, as the same has been, or shall hereafter be, renewed, extended, amended or replaced.

(b) Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” All references herein to Articles, Sections, Exhibits and Schedules shall be deemed references to Articles and Sections of, and Exhibits and Schedules to, this Guaranty unless the context shall otherwise require.

(c) For purposes of determining compliance with the covenants contained in this Guaranty and with any Financial Covenant added to this Guaranty pursuant to Section 12, any election by the Guarantor to measure an item of Indebtedness using fair value (as permitted by Accounting Standard Codification Topic No. 825-10-25 – Fair Value Option or any similar accounting standard) shall be disregarded and such determination shall be made as if such election had not been made.

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S ECTION 17. N OTICES .

All notices under the terms and provisions hereof shall be in writing (with charges prepaid), and shall be delivered or sent by hand, by telecopy, by express courier service or by registered or certified mail, return receipt requested, postage prepaid, addressed,

(a) if to any Holder, at the address set forth in the Note Purchase Agreement, or at such other address as any such Holder shall from time to time designate to the Company,

(b) if to the Guarantor, at the address of the Guarantor set forth on the signature pages hereto or at such other address as the Guarantor shall from time to time designate in writing to each Holder.

A notice or communication shall be deemed to have been duly given and effective:

(a)

when delivered (whether or not accepted), if personally delivered;

(b)

five business days after being deposited in the mail, postage prepaid, if delivered by first-class mail (whether or not accepted);

(c)

when sent, if sent via facsimile;

(d)

when delivered if sent by registered or certified mail (whether or not accepted); and

(e)

on the next Business Day if timely delivered by an overnight air courier, with charges prepaid (whether or not accepted).

S ECTION 18. A MENDMENT AND W AIVER .

Section 18.1. Requirements. This Guaranty may be amended, and the observance of any term hereof may be waived (either retroactively or prospectively), with (and only with) the written consent of the Guarantor and the Holders of at least 51% in principal amount of each Series of Notes at the time outstanding (exclusive of Notes then owned by the Guarantor, the Company or any Affiliates), except that no such amendment or waiver may, without the written consent of the Holder of each Series of Notes at the time outstanding affected thereby, (i) change the percentage of the principal amount of the Series of Notes the holders of which are required to consent to any such amendment or waiver, or (ii) amend any of Sections 1, 8, and 14(a).

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Section 18.2. Solicitation of Holders of Notes.

(a) Solicitation. The Guarantor will provide each Holder (irrespective of the amount of Notes then owned by it) with sufficient information, sufficiently far in advance of the date a decision is required, to enable such holder to make an informed and considered decision with respect to any proposed amendment, waiver or consent in respect of any of the provisions hereof. The Guarantor will deliver executed or true and correct copies of each amendment, waiver or consent effected pursuant to the provisions of this Section 18 to each Holder of outstanding Notes affected thereby promptly following the date on which it is executed and delivered by, or receives the consent or approval of, the requisite Holders of such Notes.

(b) Payment. The Guarantor will not directly or indirectly pay or cause to be paid any remuneration, whether by way of supplemental or additional interest, fee or otherwise, or grant any security, to any Holder of Notes of a Series as consideration for or as an inducement to the entering into by any such Holder of Notes or any waiver or amendment of any of the terms and provisions hereof unless such remuneration is concurrently paid, or security is concurrently granted, on the same terms, ratably to each Holder of Notes of such Series then outstanding even if such holder did not consent to such waiver or amendment. With respect to any such proposed amendment or waiver, the Guarantor will not, directly or indirectly, purchase or offer to purchase any Note of a Series unless such offer is currently made, on the same terms, ratably to each Holder of Notes of such Series then outstanding.

Section 18.3. Binding Effect, Etc. Any amendment or waiver consented to as provided in this Section 18 by a Series of Notes applies equally to all Holders of Notes of such Series and is binding upon them and upon each future Holder of any Note of such Series and upon the Guarantor without regard to whether such Note has been marked to indicate such amendment or waiver. No such amendment or waiver will extend to or affect any obligation, covenant, agreement, Potential Default or Event of Default not expressly amended or waived or impair any right consequent thereon. No course of dealing between the Guarantor and any Holder nor any delay in exercising any rights hereunder shall operate as a waiver of any rights of any such Holder.

Section 18.4. Notes Held by Guarantor, Etc. Solely for the purpose of determining whether the Holders of the requisite percentage of the aggregate principal amount of Notes then outstanding approved or consented to any amendment, waiver or consent to be given under this Guaranty, or have directed the taking of any action provided herein to be taken upon the direction of the Holders of a specified percentage of the aggregate principal amount of Notes then outstanding, Notes directly or indirectly owned by the Guarantor, the Company or any of their Affiliates shall be deemed not to be outstanding.

S ECTION 19. E XPENSES , E TC .

Section 19.1. Transaction Expenses. Whether or not the transactions contemplated hereby are consummated, the Guarantor will pay all costs and expenses (including reasonable attorneys’ fees of a special counsel and, if reasonably required, local or other counsel) incurred by each Holder in connection with such transactions and in connection with any amendments,

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waivers or consents under or in respect of this Guaranty (whether or not such amendment, waiver or consent becomes effective), including, without limitation: (a) the costs and expenses incurred in enforcing or defending (or determining whether or how to enforce or defend) any rights under this Guaranty or in responding to any subpoena or other legal process or informal investigative demand issued in connection with this Guaranty, or by reason of being a Holder of any Note, and (b) the costs and expenses, including financial advisors’ fees, incurred in connection with the insolvency or bankruptcy of the Guarantor or any Subsidiary or in connection with any work-out or restructuring of the transactions contemplated hereby.

Section 19.2. Survival. The obligations of the Guarantor under this Section 19 will survive the payment or the transfer of the Guaranteed Obligations, the enforcement, amendment or waiver of any provision of this Guaranty, and the termination of this Guaranty.

S ECTION 20. C ONSENT TO J URISDICTION ; S ERVICE OF P ROCESS .

(a) The Guarantor irrevocably submits to the nonexclusive in personam jurisdiction of any New York State or federal court sitting in the Borough of Manhattan, the city of New York, over any suit, action or proceeding arising out of or relating to this Guaranty. To the fullest extent it may effectively do so under applicable law, the Guarantor irrevocably waives and agrees not to assert, by way of motion, as a defense or otherwise, any claim that it is not subject to the in personam jurisdiction of any such court, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.

(b) The Guarantor agrees, to the fullest extent it may effectively do so under applicable law, that a final judgment in any suit, action or proceeding of the nature referred to in paragraph (a) of this Section 20 brought in any such court shall be conclusive and binding upon such party, subject to rights of appeal and may be enforced in the courts of the United States of America or the State of Wisconsin (or any other courts to the jurisdiction of which such party is or may be subject) by a suit upon such judgment.

(c) The Guarantor consents to process being served in any suit, action or proceeding of the nature referred to in paragraph (a) of this Section 20 by mailing a copy thereof by registered or certified mail, postage prepaid, return receipt requested, to the address of the Guarantor specified in Section 17 or at such other address of which you shall then have been notified pursuant to said Section or to any agent for service of process appointed pursuant to the provisions of Section 27. The Guarantor agrees that such service upon receipt (i) shall be deemed in every respect effective service of process upon it in any such suit, action or proceeding and (ii) shall, to the full extent permitted by law, be taken and held to be valid personal service upon and personal delivery to such party. Notices hereunder shall be conclusively presumed received as evidenced by a delivery receipt furnished by the United States Postal Service or any reputable commercial delivery service.

(d) Nothing in this Section 20 shall affect the right of any Holder to serve process in any manner permitted by law, or limit any right that the Holders may have to bring proceedings

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against the Guarantor in the courts of any appropriate jurisdiction or to enforce in any lawful manner a judgment obtained in one jurisdiction in any other jurisdiction.

S ECTION 21. W AIVER OF J URY T RIAL .

T HE G UARANTOR AND BY ITS ACCEPTANCE HEREOF EACH HOLDER , TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW , IRREVOCABLY AND UNCONDITIONALLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY LEGAL OR EQUITABLE ACTION , SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS G UARANTY OR ANY TRANSACTION CONTEMPLATED HEREBY OR THE SUBJECT MATTER OF ANY OF THE FOREGOING .

S ECTION 22. S URVIVAL .

All warranties, representations and covenants made by the Guarantor herein or in any written certificate or other instrument required to be delivered by it or on its behalf hereunder or under the Note Purchase Agreement shall be considered to have been relied upon by the Holders and shall survive the execution and delivery of this Guaranty, regardless of any investigation made by any Holder or on such Holder’s behalf. All statements in any such certificate or other instrument shall constitute warranties and representations by the Guarantor hereunder.

S ECTION 23. S EVERABILITY .

Any provision of this Guaranty which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by applicable law, the Guarantor hereby waives any provision of law that renders any provisions hereof prohibited or unenforceable in any respect.

S ECTION 24. S UCCESSORS AND A SSIGNS .

The terms of this Guaranty shall be binding upon the Guarantor and its successors and assigns and shall inure to the benefit of the Holders and their respective successors and assigns.

S ECTION 25. T ABLE OF C ONTENTS ; H EADINGS .

The section and paragraph headings in this Guaranty and the table of contents are for convenience of reference only and shall not modify, define, expand or limit any of the terms or provisions hereof, and all references herein to numbered sections, unless otherwise indicated, are to sections in this Guaranty.

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S ECTION 26. G OVERNING L AW .

This Guaranty shall in all respects be governed by, and construed and interpreted in accordance with, the laws of the State of New York, without regard to the conflicts of laws principles of such state.

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I N W ITNESS W HEREOF , the Guarantor has caused this Guaranty to be duly executed as of the date first above written.


A LLEGHENY T ECHNOLOGIES I NCORPORATED

By:
		Name:
		Title:

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Exhibit 10.1

FIFTH AMENDMENT TO CREDIT AGREEMENT

This Fifth Amendment to Credit Agreement is dated April 4, 2012, by and among ATI Funding Corporation, a Delaware corporation (“ATI Funding”), TDY Holdings, LLC, a Delaware limited liability company (“TDYH”) (ATI Funding and TDYH are each, a “Borrower” and collectively, the “Borrowers”), the Guarantors (as defined in the Credit Agreement (as hereinafter defined)) party hereto, the Lenders (as hereinafter defined) party hereto and PNC Bank, National Association (“PNC Bank”) as administrative agent for the Lenders (in such capacity, the “Administrative Agent”) (the “Fifth Amendment”).

W I T N E S S E T H :

WHEREAS, the Borrowers, the Guarantors, PNC Bank and various other financial institutions party thereto (PNC Bank and such other financial institutions are each, a “Lender” and collectively, the “Lenders”) and the Administrative Agent entered into that certain Credit Agreement, dated July 31, 2007, as amended by that certain First Amendment to Credit Agreement, dated May 29, 2009, among the Borrowers, the Guarantors, the Lenders and the Administrative Agent, as further amended by that certain Second Amendment to Credit Agreement, dated December 22, 2010, among the Borrowers, the Guarantors, the Lenders and the Administrative Agent, as further amended by that certain Third Amendment to Credit Agreement, dated March 11, 2011, among the Borrowers, the Guarantors, the Lenders and the Administrative Agent, and as further amended by that certain Fourth Amendment to Credit Agreement, dated November 9, 2011, among the Borrowers, the Guarantors, the Lenders and the Administrative Agent (as further amended, restated, modified or supplemented from time to time, the “Credit Agreement”); and

WHEREAS, the Borrowers and the Guarantors desire to amend certain provisions of the Credit Agreement and the Lenders and the Administrative Agent shall permit such amendments pursuant to the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the premises contained herein and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto agree as follows:

1. All capitalized terms used herein that are defined in the Credit Agreement shall have the same meaning herein as in the Credit Agreement unless the context clearly indicates otherwise.

2. Section 1.1 of the Credit Agreement is hereby amended by inserting the following defined term in appropriate alphabetical order:

Fifth Amendment Closing Date shall mean April 4, 2012.

3. Section 1.1 of the Credit Agreement is hereby further amended by restating the following definitions in their entirety as set forth below:

Change in Law shall mean the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any Law, (b) any change in any Law or in the administration, interpretation or application thereof by any Official Body or (c) the making or issuance of any request, guideline or directive (whether or not having the force of Law) by any Official Body; provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, regulations, guidelines, interpretations or directives thereunder or issued in connection therewith (whether or not having the force of Law) and (y) all requests, rules, regulations, guidelines, interpretations or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities (whether or not having the force of Law), in each case pursuant to Basel III, shall in each case be deemed to be a Change in Law regardless of the date enacted, adopted, issued, promulgated or implemented.

Expiration Date shall mean, with respect to the Revolving Credit Commitments, April 4, 2017.

Non-Complying Lender shall mean any Lender that (a) has failed, within two (2) Business Days of the date required to be funded or paid, to (i) fund any portion of its Loans, (ii) fund any portion of its participations in Letters of Credit or Swing Loans or (iii) pay over to the Administrative Agent, the Issuing Lender, PNC Bank (as the Swing Loan Lender) or any Lender any other amount required to be paid by it hereunder, unless, in the case of clause (i) above, such Lender notifies the Administrative Agent in writing that such failure is the result of such Lender’s good faith determination that a condition precedent to funding (specifically identified and including the particular default, if any) has not been satisfied, (b) has notified the Borrowers or the Administrative Agent in writing, or has made a public statement to the effect, that it does not intend or expect to comply with any of its funding obligations under this Agreement (unless such writing or public statement indicates that such position is based on such Lender’s good faith determination that a condition precedent (specifically identified and including the particular default, if any) to funding a loan under this Agreement cannot be satisfied) or generally under other agreements in which it commits to extend credit, (c) has failed, within two (2) Business Days after request by the Administrative Agent, acting in good faith, to provide a certification in writing from an authorized officer of such Lender that it will comply with its obligations (and is financially able to

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meet such obligations) to fund prospective Loans and participations in then-outstanding Letters of Credit and Swing Loans under this Agreement, provided that such Lender shall cease to be a Non-Complying Lender pursuant to this clause (c) upon the Administrative Agent’s receipt of such certification in form and substance satisfactory to the Administrative Agent, (d) has become the subject of a Bankruptcy Event or (e) has failed at any time to comply with the provisions of Section 4.3 with respect to purchasing participations from the other Lenders, whereby such Lender’s share of any payment received, whether by setoff or otherwise, is in excess of its Ratable Share of such payments due and payable to all of the Lenders.

As used in this definition and in Section 2.11 [Non-Complying Lenders], the term “Bankruptcy Event” means, with respect to any Person, such Person or such Person’s direct or indirect parent company becomes the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with the reorganization or liquidation of its business appointed for it, or, in the good faith determination of the Administrative Agent, has taken any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any such proceeding or appointment, provided that a Bankruptcy Event shall not result solely by virtue of any ownership interest, or the acquisition of any ownership interest, in such Person or such Person’s direct or indirect parent company by an Official Body or instrumentality thereof if, and only if, such ownership interest does not result in or provide such Person with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Person (or such Official Body or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or agreements made by such Person.

Official Body shall mean the government of the United States of America or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank) and any group or body charged with setting financial accounting or regulatory capital rules or standards (including, without limitation, the Financial Accounting Standards Board, the Bank for International

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Settlements or the Basel Committee on Banking Supervision or any successor or similar authority to any of the foregoing).

Ratable Share shall mean the proportion that a Lender’s Commitment (excluding the Swing Loan Commitment) bears to the Commitments (excluding the Swing Loan Commitment) of all of the Lenders, provided that in the case of Section 2.11 [Non-Complying Lenders] when a Non-Complying Lender shall exist, “Ratable Share” shall mean the percentage of the aggregate Commitments (disregarding any Non-Complying Lender’s Commitment) represented by such Lender’s Commitment. If the Commitments have terminated or expired, the Ratable Share shall be determined based upon the Commitments (excluding the Swing Loan Commitment) most recently in effect, giving effect to any assignments.

4. The following new Section 2.11 of the Credit Agreement is hereby added immediately after Section 2.10 of the Credit Agreement:

2.11 Non-Complying Lenders .

Notwithstanding any provision of this Agreement to the contrary, if any Lender becomes a Non-Complying Lender, then the following provisions shall apply for so long as such Lender is a Non-Complying Lender:

2.11.1 fees shall cease to accrue on the unfunded portion of the Commitment of such Non-Complying Lender pursuant to Section 2.3 [Commitment Fees];

2.11.2 the Commitment and outstanding Loans of such Non-Complying Lender shall not be included in determining whether the Required Lenders have taken or may take any action hereunder (including any consent to any amendment, waiver or other modification pursuant to Section 10.1 [Modifications, Amendments or Waivers]); provided, that this clause (ii) shall not apply to the vote of a Non-Complying Lender in the case of an amendment, waiver or other modification requiring the consent of such Lender or each Lender directly affected thereby;

2.11.3 if any Swing Loans are outstanding or any Letter of Credit Obligations exist at the time such Lender becomes a Non-Complying Lender, then:

2.11.3.1 all or any part of the outstanding Swing Loans and Letter of Credit Obligations of such Non-Complying Lender shall be reallocated among the Complying Lenders in accordance with their respective Ratable Shares but

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only to the extent that (x) the Revolving Facility Usage does not exceed the total of all Complying Lenders’ Revolving Credit Commitments, and (y) no Potential Default or Event of Default has occurred and is continuing at such time;

2.11.3.2 if the reallocation described in Section 2.11.3.1 above cannot, or can only partially, be effected, the Borrowers shall within one (1) Business Day following notice by the Administrative Agent (x) first , prepay such outstanding Swing Loans, and (y) second , cash collateralize for the benefit of the Issuing Lender the Borrowers’ obligations corresponding to such Non-Complying Lender’s Letter of Credit Obligations (after giving effect to any partial reallocation pursuant to Section 2.11.3.1 above) in a deposit account held at the Administrative Agent for so long as such Letter of Credit Obligations are outstanding;

2.11.3.3 if the Borrowers cash collateralize any portion of such Non-Complying Lender’s Letter of Credit Obligations pursuant to Section 2.11.3.2 above, the Borrowers shall not be required to pay any fees to such Non-Complying Lender pursuant to Section 2.10.2 [Letter of Credit Fees] with respect to such Non-Complying Lender’s Letter of Credit Obligations during the period such Non-Complying Lender’s Letter of Credit Obligations are cash collateralized;

2.11.3.4 if the Letter of Credit Obligations of the Complying Lenders are reallocated pursuant to Section 2.11.3.1 above, then the fees payable to the Lenders pursuant to Section 2.10.2 shall be adjusted in accordance with such Complying Lenders’ respective Ratable Shares; and

2.11.3.5 if all or any portion of such Non-Complying Lender’s Letter of Credit Obligations are neither reallocated nor cash collateralized pursuant to Section 2.11.3.1 or 2.11.3.2 above, then, without prejudice to any rights or remedies of the Issuing Lender or any other Lender hereunder, all Letter of Credit Fees payable under Section 2.10.2 with respect to such Non-Complying Lender’s Letter of Credit Obligations shall be payable to the Issuing Lender (and not to such Non-Complying Lender) until and to the extent that such Letter of Credit Obligations are reallocated and/or cash collateralized; and

2.11.4 so long as such Lender is a Non-Complying Lender, PNC Bank shall not be required to fund any Swing Loans and the Issuing Lender shall not be required to issue, amend or increase any Letter of Credit, unless such Issuing Lender is satisfied that the

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related exposure and the Non-Complying Lender’s then-outstanding Letter of Credit Obligations will be 100% covered by the Revolving Credit Commitments of the Complying Lenders and/or cash collateral will be provided by the Borrowers in accordance with Section 2.11.3, and participating interests in any newly made Swing Loan or any newly issued or increased Letter of Credit shall be allocated among Complying Lenders in a manner consistent with Section 2.11.3.1 (and such Non-Complying Lender shall not participate therein).

If (i) a Bankruptcy Event with respect to a parent company of any Lender shall occur following the date hereof and for so long as such event shall continue, or (ii) PNC Bank or the Issuing Lender has a good faith belief that any Lender has defaulted in fulfilling its obligations under one or more other agreements in which such Lender commits to extend credit, PNC Bank shall not be required to fund any Swing Loan and the Issuing Lender shall not be required to issue, amend or increase any Letter of Credit, unless PNC Bank or the Issuing Lender, as the case may be, shall have entered into arrangements with the Borrowers or such Lender, satisfactory to PNC Bank or the Issuing Lender, as the case may be, to defease any risk to it in respect of such Lender hereunder.

In the event that the Administrative Agent, the Borrowers, PNC Bank and the Issuing Lender agree in writing that a Non-Complying Lender has adequately remedied all matters that caused such Lender to be a Non-Complying Lender, then the Administrative Agent will so notify the parties hereto, and the Ratable Share of the Swing Loans and Letter of Credit Obligations of the Lenders shall be readjusted to reflect the inclusion of such Lender’s Commitment, and on such date such Lender shall purchase at par such of the Loans of the other Lenders (other than Swing Loans) as the Administrative Agent shall determine may be necessary in order for such Lender to hold such Loans in accordance with its Ratable Share.

5. Schedule 1.1(A) to the Credit Agreement is hereby deleted in its entirety and in its stead is inserted Schedule 1.1(A) attached hereto.

6. The provisions of Sections 2 through 5 of this Fifth Amendment shall not become effective until the Administrative Agent has received the following items, each in form and substance acceptable to the Administrative Agent and its counsel:

(a) this Fifth Amendment, duly executed by each of the Loan Parties and the Lenders;

- 6 -

(b) payment of all fees and expenses owed to the Lenders, the Administrative Agent, and the Administrative Agent’s counsel in connection with this Fifth Amendment; and

7. Each Loan Party hereby reconfirms and reaffirms all representations and warranties, agreements and covenants made by it pursuant to the terms and conditions of the Credit Agreement, except as such representations and warranties, agreements and covenants may have heretofore been amended, modified or waived in writing in accordance with the Credit Agreement.

8. Each Loan Party acknowledges and agrees that each and every document, instrument or agreement, which at any time has secured the Obligations including, without limitation, the Guaranty Agreements, hereby continues to secure the Obligations.

9. Each Loan Party hereby represents and warrants to the Lenders and the Administrative Agent that (i) such Loan Party has the legal power and authority to execute and deliver this Fifth Amendment, (ii) the officers of such Loan Party executing this Fifth Amendment have been duly authorized to execute and deliver the same and bind such Loan Party with respect to the provisions hereof, (iii) the execution and delivery hereof by such Loan Party and the performance and observance by such Loan Party of the provisions hereof and of the Credit Agreement and all documents executed or to be executed in connection herewith or therewith, do not violate or conflict with the organizational agreements of such Loan Party or any law applicable to such Loan Party or result in a breach of any provision of or constitute a default under any other agreement, instrument or document binding upon or enforceable against such Loan Party, and (iv) this Fifth Amendment, the Credit Agreement and the documents executed or to be executed by such Loan Party in connection herewith or therewith constitute valid and binding obligations of such Loan Party in every respect, enforceable in accordance with their respective terms.

10. Each Loan Party represents and warrants that (i) no Event of Default exists under the Credit Agreement, nor will any occur as a result of the execution and delivery of this Fifth Amendment or the performance or observance of any provision hereof, (ii) the schedules attached to and made a part of the Credit Agreement, are true and correct in all material respects as of the date hereof, except as such schedules may have heretofore been amended or modified or updated in writing in accordance with the Credit Agreement, and (iii) it presently has no known claims or actions of any kind at law or in equity against any Lender or the Administrative Agent arising out of or in any way relating to the Credit Agreement or the other Loan Documents.

11. Each reference to the Credit Agreement that is made in the Credit Agreement or any other document executed or to be executed in connection therewith shall hereafter be construed as a reference to the Credit Agreement as amended hereby.

- 7 -

12. The agreements contained in this Fifth Amendment are limited to the specific agreements made herein. Except as amended hereby, all of the terms and conditions of the Credit Agreement and the other Loan Documents shall remain in full force and effect. This Fifth Amendment amends the Credit Agreement and is not a novation thereof.

13. This Fifth Amendment may be executed in any number of counterparts and by the different parties hereto on separate counterparts each of which, when so executed, shall be deemed to be an original, but all such counterparts shall constitute but one and the same instrument.

14. This Fifth Amendment shall be governed by, and shall be construed and enforced in accordance with, the Laws of the Commonwealth of Pennsylvania without regard to the principles of the conflicts of law thereof. Each Loan Party hereby consents to the jurisdiction and venue of the Court of Common Pleas of Allegheny County, Pennsylvania and the United States District Court for the Western District of Pennsylvania with respect to any suit arising out of or mentioning this Fifth Amendment.

[INTENTIONALLY LEFT BLANK]

- 8 -

IN WITNESS WHEREOF, and intending to be legally bound, the parties hereto have caused this Fifth Amendment to be duly executed by their duly authorized officers the day and year first above written.


	BORROWERS:

WITNESS:	ATI FUNDING CORPORATION

/s/ Jason R. Suslak	By:	/s/ Rose Marie Manley
	Name:	Rose Marie Manley
	Title:	President

WITNESS:	TDY HOLDINGS, LLC

/s/ Jason R. Suslak	By:	/s/ Rose Marie Manley
	Name:	Rose Marie Manley
	Title:	President

	GUARANTORS:

WITNESS:	ALLEGHENY TECHNOLOGIES INCORPORATED

/s/ M. P. Earnest	By:	/s/ Dale G. Reid
	Name:	Dale G. Reid
	Title:	Executive Vice President

WITNESS:	ATI OPERATING HOLDINGS, LLC

/s/ M. P. Earnest	By:	/s/ Dale G. Reid
	Name:	Dale G. Reid
	Title:	President

WITNESS:	OREGON METALLURGICAL, LLC (formerly known as “OREGON METALLURGICAL CORPORATION”)

/s/ M. P. Earnest	By:	/s/ Dale G. Reid
	Name:	Dale G. Reid
	Title:	President


WITNESS:	ALLEGHENY LUDLUM, LLC (formerly known as “ALLEGHENY LUDLUM CORPORATION”)

/s/ M. P. Earnest	By:	/s/ Dale G. Reid
	Name:	Dale G. Reid
	Title:	Executive Vice President

WITNESS:	ATI PROPERTIES, INC.

/s/ M. P. Earnest	By:	/s/ Patrick J. Viccaro
	Name:	Patrick J. Viccaro
	Title:	Vice President

WITNESS:	TDY INDUSTRIES, LLC (formerly known as “TDY INDUSTRIES, INC.”)

/s/ M. P. Earnest	By:	/s/ Dale G. Reid
	Name:	Dale G. Reid
	Title:	President

WITNESS:	ALC FUNDING CORPORATION

/s/ Jason R. Suslak	By:	/s/ Rose Marie Manley
	Name:	Rose Marie Manley
	Title:	President

WITNESS:	JEWEL ACQUISITION, LLC

/s/ M. P. Earnest	By:	/s/ Dale G. Reid
	Name:	Dale G. Reid
	Title:	President

WITNESS:	JESSOP STEEL, LLC

/s/ M. P. Earnest	By:	/s/ Dale G. Reid
	Name:	Dale G. Reid
	Title:	President


WITNESS:	INTERNATIONAL HEARTH MELTING, LLC

	By:	OREGON METALLURGICAL, LLC, its Sole Manager

/s/ M. P. Earnest	By:	/s/ Dale G. Reid
	Name:	Dale G. Reid
	Title:	President

WITNESS:	ATI PRECISION FINISHING, LLC (formerly known as “ROME METALS, LLC”)

/s/ M. P. Earnest	By:	/s/ Dale G. Reid
	Name:	Dale G. Reid
	Title:	Executive Vice President

WITNESS:	TI OREGON, INC.

/s/ M. P. Earnest	By:	/s/ Dale G. Reid
	Name:	Dale G. Reid
	Title:	President

WITNESS:	TITANIUM WIRE CORPORATION

/s/ M. P. Earnest	By:	/s/ Dale G. Reid
	Name:	Dale G. Reid
	Title:	President

WITNESS:	ATI CANADA HOLDINGS, INC.

/s/ M. P. Earnest	By:	/s/ Dale G. Reid
	Name:	Dale G. Reid
	Title:	President


WITNESS:	ALLEGHENY TECHNOLOGIES INTERNATIONAL, INC.

/s/ M. P. Earnest	By:	/s/ Dale G. Reid
	Name:	Dale G. Reid
	Title:	President

WITNESS:	AII INVESTMENT CORP.

/s/ Jason R. Suslak	By:	/s/ Rose Marie Manley
	Name:	Rose Marie Manley
	Title:	President

WITNESS:	ENVIRONMENTAL, INC.

/s/ M. P. Earnest	By:	/s/ Dale G. Reid
	Name:	Dale G. Reid
	Title:	President

WITNESS:	AII ACQUISITION, LLC

/s/ M. P. Earnest	By:	/s/ Dale G. Reid
	Name:	Dale G. Reid
	Title:	President

WITNESS:	ATI TITANIUM LLC

/s/ M. P. Earnest	By:	/s/ Dale G. Reid
	Name:	Dale G. Reid
	Title:	President


AGENTS AND LENDERS: PNC BANK, NATIONAL ASSOCIATION, as a Lender and as Administrative Agent

By:		/s/ Susan J. Dimmick
Name:		Susan J. Dimmick
Title:		Senior Vice President


CITIBANK, N.A., as a Lender and as Co-Syndication Agent

By:		/s/ Irina Lurye
Name:		Irina Lurye
Title:		Vice President


JPMORGAN CHASE BANK, N.A., as a Lender and as Co-Syndication Agent

By:		/s/ Peter S. Predun
Name:		Peter S. Predun
Title:		Executive Director


BANK OF AMERICA N.A., for itself, as a Lender and as Co-Documentation Agent, and as successor by merger to LASALLE BANK NATIONAL ASSOCIATION, as a Lender

By:		/s/ James B. Meanor II
Name:		James B. Meanor II
Title:		Director


THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., as a Lender and as Co-Documentation Agent

By:		/s/ Joanne Nasuti
Name:		Joanne Nasuti
Title:		Vice President


CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as a Lender and as a Co-Managing Agent

By:		/s/ Alain Doust
Name:		Alain Doust
Title:		Director



By:		/s/ Rahul Parmar
Name:		Rahul Parmar
Title:		Associate


WELLS FARGO BANK, NATIONAL ASSOCIATION, as a Lender and as Co-Managing Agent

By:		/s/ James Travagline
Name:		James Travagline
Title:		Director


THE BANK OF NEW YORK, as a Lender and as Co-Managing Agent

By:		/s/ William M. Feathers
Name:		William M. Feathers
Title:		Vice President


MORGAN STANLEY BANK, N.A., as a Lender

By:		/s/ Michael King
Name:		Michael King
Title:		Authorized Signatory


HSBC BANK USA, NATIONAL ASSOCIATION, as a Lender

By:		/s/ Christopher S. Helmeci
Name:		Christopher S. Helmeci
Title:		Senior Relationship Manager

SCHEDULE 1.1(A)

PRICING GRID—

VARIABLE PRICING AND FEES BASED ON LEVERAGE RATIO

(PRICING EXPRESSED IN BASIS POINTS)


Level	Leverage Ratio	Commitment Fee	Letter of Credit Fee	Revolving Credit Base Rate Spread	Revolving Credit LIBOR Rate Spread
I	Less than or equal to 1.0 to 1.0	15.0	100.0	0.0	100.0

II	Greater than 1.0 to 1.0 but less than or equal to 1.5 to 1.0	17.5	125.0	25.0	125.0

III	Greater than 1.5 to 1.0 but less than or equal to 2.0 to 1.0	20.0	150.0	50.0	150.0

IV	Greater than 2.0 to 1.0	25.0	175.0	75.0	175.0

For purposes of determining the Applicable Margin, the Applicable Commitment Fee Rate and the Applicable Letter of Credit Fee Rate:

(a) The Applicable Margin, the Applicable Commitment Fee Rate and the Applicable Letter of Credit Fee Rate shall be based on Level III of the Pricing Grid above as of the Fifth Amendment Closing Date.

(b) The Applicable Margin, the Applicable Commitment Fee Rate and the Applicable Letter of Credit Fee Rate shall be recomputed as of the end of each fiscal quarter ending after the Fifth Amendment Closing Date based on the Leverage Ratio as of such quarter end. Any increase or decrease in the Applicable Margin, the Applicable Commitment Fee Rate or the Applicable Letter of Credit Fee Rate computed as of a quarter end shall be effective on the date on which the Compliance Certificate evidencing such computation is due to be delivered under Section 7.3.3 [Compliance Certificate].

(c) If, as a result of any restatement of or other adjustment to the financial statements of ATI or for any other reason, ATI or the Lenders determine that (i) the Leverage Ratio as calculated by ATI as of any applicable date was inaccurate and (ii) a proper calculation of the Leverage Ratio would have resulted in higher pricing for such period, the Borrowers shall immediately and retroactively be obligated to pay to the Administrative Agent for the account of the applicable Lenders, promptly on demand by the Administrative Agent (or, after the occurrence of an actual or deemed entry of an order for relief with respect to the Borrowers

SCHEDULE 1.1(A)-1

under the Bankruptcy Code of the United States, automatically and without further action by the Administrative Agent, any Lender or the Issuing Lender), an amount equal to the excess of the amount of interest and fees that should have been paid for such period over the amount of interest and fees actually paid for such period. This paragraph shall not limit the rights of the Administrative Agent, any Lender or the Issuing Lender, as the case may be, under Section 2.10 [Letter of Credit Subfacility] or 3.3 [Interest After Default] or 8 [Default]. The Borrowers’ obligations under this paragraph shall survive the termination of the Commitments and the repayment of all other Obligations hereunder.

SCHEDULE 1.1(A)-2

Exhibit 10.2

LOGO

The Annual Incentive Plan

For Year 2012


Contents	Page
At a Glance		1
What is the Annual Incentive Plan?		1
Who is Eligible for This Plan?		1
How Does the Annual Incentive Plan Work?		1

Calculation of the Annual Incentive Plan Award		2
Target Bonus Percentage		2
2012 Performance Goals		3

How the AIP Incentive Award is Calculated When All Goals		4
Are 100% Achieved

How the AIP Incentive Award is Calculated for Other Achievement Levels		5
Maximums and Minimums		5

Additional Guidelines for the Annual Incentive Plan		6
Adjustments		6
Some Special Circumstances		6
Making Payments		6

Administration Details		7

At a Glance

What is the Annual Incentive Plan?

The Annual Incentive Plan (the “AIP” or the “Plan”) provides participants of Allegheny Technologies Incorporated (“Allegheny Technologies” or the “Company”) and its operating companies with the opportunity to earn an incentive award when certain pre-established goals are met at the corporate and operating company levels.

Who is Eligible for This Plan?

Generally, participants who have a significant impact on the Company’s operations will be eligible to participate in the Plan. Individuals eligible for participation are determined annually , based on recommendations of the operating company presidents, if applicable, and the Company’s chief executive officer and the Company’s vice president, human resources, with the approval of the Personnel and Compensation Committee of the Company’s Board of Directors.

How Does the Annual Incentive Plan Work?

Under the Plan, participants may earn an incentive award based on a percentage of their base salary, depending on the extent to which pre-established operating company and/or corporate performance goals have been achieved.

•

For purposes of the Plan, base salary is generally the participant’s annual base salary rate as of the end of the year, excluding any commission or other incentive pay. For some special circumstances affecting the amount of base salary used in the Plan, see page 6.

•

A target bonus percentage for each participant is used in calculating the incentive award and is explained on page 2.

•

The bonus percentage will be adjusted (upward or downward) based on the extent to which various performance goals are achieved.

Incentive award payments will be distributed in cash after the year-end audit is complete and the awards have been approved by the Personnel and Compensation Committee.

Page 1

Calculation of the Annual Incentive Plan Award

Target Bonus Percentage

The Plan establishes an incentive opportunity for each Plan participant, calculated as a percentage of the participant’s base salary. Each participant will be provided with an initial percentage, referred to as a “target bonus percentage.”

Generally, the target bonus percentage is the percentage of base salary that can be earned as an award under the Plan if 100% of the various performance goals are achieved. For 2012, if 100% of the performance goals are achieved, 100% of the target bonus percentage can be earned.

Generally, if there is a change in a participant’s target bonus percentage during the year, the newly adjusted target bonus percentage will be used to calculate the individual’s award for the full year. If an individual becomes a participant in AIP during the year, the individual’s award for the year will be based on a pro rata calculation.

For business unit presidents who are members of the Corporate Executive Committee, 65% of the goals’ overall weight will be based on the performance of the business unit president’s operating company, and 35% of the goals’ overall weight will be based on corporate-wide performance.

At the end of the year, the Company will measure actual performance against each of the pre-established objectives.

The achievements attributable to each performance goal as noted above, then will be added together, and that sum will be multiplied by:

Base Salary

as of

December 31, 2012

Target Annual

Incentive Percentage

Performance

Achievement

(0-200%)

2012 Annual

Incentive Payout

($)

Page 2

2012 Performance Goals

For 2012, AIP awards will be measured based on a weighted formula that takes into account several different factors as measurable indices of performance, as indicated in the pie chart below.

LOGO

Targeted achievements as to each performance goal above have been established for each operating company and for corporate participants. Together the above goals comprise 100% of the target bonus percentage.

No annual incentive will be paid if the achievement of Operating Earnings is less than the established applicable minimum of Operating Earnings, notwithstanding the achievements as to the other applicable performance goals for 2012.

A prerequisite to any AIP award is compliance with ATI’s Corporate Guidelines for Business Conduct and Ethics .

Page 3

How the AIP Incentive Award is Calculated When All Goals are 100% Achieved

For the Year 2012, if 100% of the performance goals are achieved, then 100% of the target bonus percentage will be credited to the participant:


Goals	Goal % Target			Goal % Achieved			Earned % of Target *
Operating Earnings		40	%		100	%		40	%
Operating Cash Flow		30	%		100	%		30	%
Manufacturing Improvements		10	%		100	%		10	%
Safety and Environmental Compliance		10	%		100	%		10	%
Customer Responsiveness		10	%		100	%		10	%
TOTAL		100	%					100	%

*	Earned % of Target = Goal % of Target X Goal Achieved %

In this example, assume that the participant’s target bonus percentage is 15%.

The target bonus percentage of 15% is then multiplied by 100% to produce a bonus award equal to 15% of base salary:

Earned Percentage

of Target

100%

Target Bonus

Percent

15%

Percentage of

Salary for Incentive

Award

15%

The sections below discuss the impact of achieving more or less than 100% of various goals, and they also discuss the impact of other potential adjustments.

Page 4

How the AIP Incentive Award is Calculated for Other Achievement Levels

The percentage of a goal achieved will determine the earned percentage of target for that particular goal. The earned percentage of target will be extrapolated for achievement between the established minimum level and the established target level for a particular goal. Similarly, the earned percentage of target will be extrapolated for achievement between the established target level and the established maximum level for a particular goal.

Maximums and Minimums

•

Generally, the maximum percentage calculated as an earned percentage of target for any goal is 200%, and the overall maximum incentive award that a participant can earn under the weighting formula is 200% of the participant’s target bonus percentage.

•

Where the established minimum of a performance goal is achieved, only 50% of that goal’s share will be allocated to the participant’s target bonus percentage.

•

Where less than the established minimum of a performance goal is achieved, no amount of that goal will be allocated to the participant’s target bonus percentage.

Page 5

Additional Guidelines for the Annual Incentive Plan

Adjustments

Under the Plan qualitative performance factors of an individual’s performance up to +20% or –20% of an individual’s calculated award. However, generally, the sum of qualitative adjustments for all eligible participants cannot exceed +5% of the aggregate calculated awards.

Some Special Circumstances

The above formulas generally determine the amount of the incentive award for the year. Other factors that may affect the actual award follow:

•

If a participant leaves the Company due to retirement, death, or disability, an award will be calculated based on the actual base salary earned during the year in which the participant left—so long as the participant worked at least six months of that year.

•

If a participant leaves the Company before the end of the plan year for any other reason, the participant will not receive a bonus award for that year.

•

If a participant voluntarily leaves the Company after the end of the year but before the award is paid, the participant would receive any bonus due unless the employment is terminated for cause. If employment is terminated for cause, the participant would not be entitled to receive an award under the Plan.

•

Participant’s who are hired mid-year may earn a pro-rated award for that year, based on the salary earned during that year. However, managers with less than two months service in a plan year (i.e. hired after October 31) would not be eligible for an award for that year.

•

A prerequisite to any AIP award is compliance with ATI’s Corporate Guidelines for Business Conduct and Ethics .

Making Payments

All incentive award payments will be paid in cash, less applicable withholding taxes, after the year-end audit is complete and payment has been considered and approved by the Personnel and Compensation Committee.

Page 6

Administration Details

This summary relates to the Annual Incentive Plan (AIP) of Allegheny Technologies Incorporated and its subsidiaries. The Plan is administered by the Personnel and Compensation Committee, which has full authority to:

•

Interpret the Plan;

•

Designate eligible participants and categories of eligible participants;

•

Set the terms and conditions of incentive awards; and

•

Establish and modify administrative rules for the Plan.

Plan participants may obtain additional information about the plan and the Committee from:

Mary Beth Moore

Vice President, Human Resources

Allegheny Technologies Incorporated

1000 Six PPG Place

Pittsburgh, PA 15222-5479

Phone: 412-394-2935

Fax: 412-394-3017

The Plan will remain in effect until terminated by the Personnel and Compensation Committee. The Personnel and Compensation Committee may also amend the Plan at its sole discretion.

The Plan is not subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA) and is not “qualified” under Section 401(a) of the Internal Revenue Code.

Page 7

Exhibit 10.3

PERFORMANCE/RESTRICTED STOCK AGREEMENT

This Performance/Restricted Stock Agreement (the “Agreement”) made as of the 22 ^nd day of February 2012 by and between ALLEGHENY TECHNOLOGIES INCORPORATED, a Delaware corporation (the “Corporation”) and [NAME] (the “Employee”).

WHEREAS, the Corporation sponsors and maintains the Allegheny Technologies Incorporated Stock 2007 Incentive Plan (the “Incentive Plan”);

WHEREAS, the Corporation desires to encourage the Employee to remain an employee of the Corporation and, during such employment, to contribute substantially to the financial performance of the Corporation and, to provide that incentive, the Corporation has awarded, subject to the performance and employment restrictions described herein, the Employee an aggregate of [NUMBER OF SHARES] shares of the common stock of the Corporation, $0.10 par value per share (“Common Stock”);

WHEREAS, half of the Shares Subject to Restrictions are subject to the Corporation’s attainment of the performance requirements set forth in Paragraph 3(b) (the “Performance Criteria”); and half of the Shares Subject to Restrictions are subject to the Employee’s remaining an Employee (except in instances of death, disability or Retirement as described below) during the Restriction Period set forth in Paragraph 3(c), subject to accelerated termination of the Restriction in the event of attainment of the Performance Criteria; and

WHEREAS, the Corporation and the Employee desire to evidence the award of the Shares Subject to Restrictions and the terms and conditions applicable thereto in this Restricted Stock Agreement.

NOW THEREFORE, in consideration of the mutual promises and covenants contained herein and intending to be legally bound, the Corporation and the Employee agree as follows:

1. Grant of Shares Subject to Restrictions . The Corporation hereby grants to the Employee, as of the date first written above, the Shares Subject to Restrictions subject to the restrictions and other terms and conditions set forth herein. Simultaneously with the execution and delivery of this Agreement, the Employee shall deliver to the Corporation a stock power endorsed in blank relating to the Shares Subject to Restrictions (including in such power any increases or adjustments to the Shares Subject to Restrictions). As soon as practicable after the Date of Grant, the Corporation shall direct that the Shares Subject to Restrictions be registered in the name of and issued to the Employee and initially bearing the legend described in Paragraph 6. The Shares Subject to Restrictions and any certificate or certificates representing the Shares Subject to Restrictions shall be held in the custody of the Corporation or its designee until the expiration of the applicable Restrictions. Upon any forfeiture in accordance with Paragraph 4 of the Shares Subject to Restrictions, the forfeited

shares and any certificate or certificates representing the forfeited Shares Subject to Restrictions shall be canceled.

2. Restrictions . Employee shall have all rights and privileges of a stockholder of the Corporation with respect to the Shares Subject to Restrictions, except that the following restrictions shall apply:

(a) None of the Shares Subject to Restrictions may be sold, transferred, assigned, pledged or otherwise encumbered or disposed of during the “Restriction Period” as defined below, except to the extent of the Corporation’s earlier attainment of the Performance Criteria, as defined below.

(b) The Shares Subject to Restrictions are subject to forfeiture during the Restriction Period in accordance with Paragraph 4 of this Agreement.

(c) The Shares Subject to Restrictions and any certificate representing the Shares Subject to Restrictions shall be held in custody by the Corporation or its designee until such time as either the Performance Criteria are attained or the Restriction Period shall have been completed.

(d) Dividends paid with respect to the Shares Subject to Restrictions during the Restriction Period shall not be paid to the Employee and, instead, shall be converted into additional shares of Restricted Stock at the price at which shares of common stock of the Corporation are purchased under the Corporation’s outstanding dividend reinvestment program and on the date such purchases are made and such shares of Restricted Stock shall be additions to the shares subject to the Restrictions hereunder.

3. Term of Restriction .

(a) Subject to the forfeiture provisions of Paragraph 4 of this Agreement, the Restrictions shall lapse (i) with respect to half of the Shares Subject to Restrictions on the earlier of (x) February 23, 2017 if the Employee is an employee of the Corporation on February 23, 2017, unless the Employee’s cessation of employment was due to the Employee’s death, disability or Retirement (as defined below), or (y) as soon after the completion of the audit of the Corporation for the 2014 fiscal year as it may be determined that the Performance Criteria have been attained and (ii) with respect to half of the Shares Subject to Restrictions, as soon after the completion of the audit of the Corporation for the 2014 fiscal year as it may be determined that the Performance Criteria have been. With respect to the half of the Shares Subject to Restrictions subject only to the Performance Criteria, if the Corporation does not attain the Performance Criteria on or before the three year measurement period ending December 31, 2014, such half of the Shares Subject to Restrictions shall be forfeited immediately upon the completion of that three-year measurement period.

(b) For purposes of this Agreement, the “Performance Criteria” shall mean that the net income of the Corporation, measured under GAAP, shall exceed $350 million, in the aggregate, for the 2012, 2013 and 2014 fiscal years of the Corporation. The period for measuring the Performance Criteria shall end as of December 31, 2014 and the Personnel and Compensation Committee shall as promptly as possible following the completion of the audit of the Corporation for the 2014 fiscal year determine whether the Performance Criteria have been met.

(c) The period from the Date of Grant until the lapse of the applicable Restrictions with respect to the Shares Subject to Restrictions is the “Restriction Period” for purposes of this Agreement.

(d) As soon as administratively practicable following the lapse of the Restrictions without a forfeiture of the applicable Shares Subject to Restrictions, and upon the satisfaction of all other applicable conditions as to such Shares Subject to Restrictions, including, but not limited to, the payment by the Employee of all applicable withholding taxes, if any, the Corporation shall deliver or cause to be delivered to the Employee shares of Common Stock, which may be in the form of a certificate or certificates for such shares, equal in number to the applicable Shares Subject to Restrictions, which shall not be subject to the transfer restrictions set forth above and shall not bear the legend described in Paragraph 6. Without limiting the foregoing, (i) if the Performance Criteria are met, all Shares Subject to Restrictions shall become non-forfeitable and such Shares or the certificate representing such non-forfeitable shares of common stock of the Corporation shall be delivered as described above and (ii) if the Performance Criteria are not met, (x) half of the Shares Subject to Restrictions shall be forfeited immediately after the end of the measurement period for such Performance Criteria and (y) the remaining half of the Shares Subject to Restrictions shall be non-forfeitable, if at all, at the end of the Restriction Period.

4. Forfeiture of Shares Subject to Restrictions . If Employee’s employment with the Corporation and all of its direct or indirect subsidiaries is terminated by either party for any reason, including, but not limited to, the involuntary termination of the Employee’s employment with the Corporation for any reason, with or without cause, other than the Employee’s death, disability or retirement with the consent of the Corporation when the Employee is at least 55 years of age with at least five years of service (“Retirement”), (i) all rights of the Employee to the Shares Subject to Restrictions which remain subject to the Restrictions shall terminate immediately and be forfeited in their entirety, and (ii) the forfeited Shares Subject to Restrictions and any stock certificate or certificates representing the forfeited Shares Subject to Restrictions shall be canceled. If the Employee dies or becomes disabled during the Restriction Period, the Shares Subject to Restrictions will immediately vest. If the Employee retires with the consent of the Corporation when the Employee is at least 55 years of age with at least five years of service, the Employee (or the Employee’s beneficiary) shall receive the Shares Subject to Restrictions when, if and to the extent, the Restrictions lapse under Paragraph 3.

5. Change of Control . All Shares Subject to Restrictions shall fully vest in the event of a Change of Control as defined in the Incentive Plan.

6. Legend . During the Restriction Period, the shares of Restricted Stock and any share certificate or certificates evidencing the Shares Subject to Restrictions shall be endorsed with the following legend (in addition to any legend required under applicable securities laws or any agreement by which the Corporation is bound):

THE TRANSFERABILITY OF THE SHARES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE TERMS AND CONDITIONS OF A RESTRICTED STOCK AGREEMENT ENTERED INTO BY AND BETWEEN ALLEGHENY TECHNOLOGIES INCORPORATED AND THE HOLDER OF THIS CERTIFICATE. A COPY OF SUCH AGREEMENT IS ON FILE AT THE OFFICE OF THE CORPORATION.

7. Withholding . The Corporation or its direct or indirect subsidiary may withhold from the number of Shares Subject to Restrictions or from any cash amount payable hereunder or any other cash payments due to Employee all taxes, including social security taxes, which the Corporation or its direct or indirect subsidiary is required or otherwise authorized to withhold with respect to the Shares Subject to Restrictions.

8. Adjustments to Number of Shares . Any shares issued to Employee with respect to the Shares Subject to Restrictions in the event of any change in the number of outstanding common stock of the Corporation through the declaration of a stock dividend or a stock split or combination of shares or any other similar capitalization change shall be deemed to be Shares Subject to Restrictions subject to all the terms set forth in this Agreement.

9. No Right to Continued Employment; Effect on Benefit Plans . This Agreement shall not confer upon Employee any right with respect to continuance of his or her employment or other relationship, nor shall it interfere in any way with the right of the Corporation or its direct or indirect subsidiary to terminate his or her employment or other relationship at any time. Income realized by Employee pursuant to this Agreement shall not be included in Employee’s earnings for the purpose of any benefit plan in which Employee may be enrolled or for which Employee may become eligible unless otherwise specifically provided for in such plan.

10. Employee Representations . In connection with the issuance of the Shares Subject to Restrictions, Employee represents the following:

Employee (and not the Corporation) shall be responsible for Employee’s own tax liability that may arise as a result of this Agreement and the transactions contemplated hereby.

(b) Employee has received, read and understood this Agreement and the Incentive Plan and agrees to abide by and be bound by their respective terms and conditions.

11. Miscellaneous .

(a) Governing Law . This Agreement shall be governed and construed in accordance with the domestic laws of the Commonwealth of Pennsylvania without regard to such Commonwealth’s principles of conflicts of laws.

(b) Successors and Assigns . The provisions of this Agreement shall inure to the benefit of, and be binding upon, the successors, permitted assigns, heirs, executors and administrators of the parties hereto. Neither this Agreement nor any rights hereunder shall be assignable or otherwise subject to hypothecation without the consent of all parties hereto.

(c) Entire Agreement; Amendment . This Agreement contain the entire understanding between the parties hereto with respect to the subject matter of this Agreement and supersedes all prior and contemporaneous agreements and understandings, inducements or conditions, express or implied, oral or written, with respect to the subject matter of this Agreement. This Agreement may not be amended or modified without the written consent of the Corporation and Employee.

(d) Counterparts . This Agreement may be executed simultaneously in any number of counterparts, each of which when so executed and delivered shall be taken to be an original and all of which together shall constitute one document.

(e) Definitions . Initially capitalized terms not otherwise defined in this Restricted Stock Agreement shall have the meanings ascribed thereto in the Incentive Plan.

IN WITNESS WHEREOF, the parties have executed this Shares Subject to Restrictions Agreement as of the date first written above.


ALLEGHENY TECHNOLOGIES INCORPORATED

By:		/s/ Elliot S. Davis
Name:		Elliot S. Davis
Title:		Senior Vice President, General Counsel, Chief Compliance Officer and Corporate Secretary


PARTICIPANT				WITNESS

Exhibit 10.4

TOTAL SHAREHOLDER RETURN INCENTIVE COMPENSATION PROGRAM

AWARD AGREEMENT

This Total Shareholder Return Incentive Compensation Program Award Agreement (the “Agreement”) effective as of January 1, 2012 by and between ALLEGHENY TECHNOLOGIES INCORPORATED, a Delaware corporation (the “Company”) and [NAME] (the “Employee”).

WHEREAS, the Company has adopted the Allegheny Technologies Incorporated 2007 Incentive Plan (the “Plan”) and, in accordance with the Plan, has adopted Administrative Rules for the Total Shareholder Return Incentive Compensation Program, as amended (the “TSRP”) as a portion of the Plan to (i) assist the Company retain and motivate key management employees; (ii) reward key management employees for the overall success of the Company; and (iii) provide a means of encouraging key management employees to acquire and hold shares of Company Common Stock.

WHEREAS, the TSRP provides that each TSR Target Award made under the TSRP shall be evidenced by an Award Agreement between the Company and the key management employee who receives a TSR Target Award under the TSRP setting forth the terms and conditions of such TSR Target Award;

WHEREAS, the Company desires to make a TSR Target Award to the Participant and evidence such TSR Target Award by this Award Agreement and the Participant, having read and understood the Plan and the TSRP, is willing to enter into this Award Agreement on the terms and conditions set forth herein.

NOW THEREFORE, in consideration of the covenants and agreements herein contained and intending to be legally bound, the parties hereto agree with each other as follows:

Subject to the attainment of the Performance Levels described below and to the terms and conditions of the Plan, the TSRP and the Terms and Conditions of Award attached hereto and incorporated herein by reference, by which Participant agrees to be bound, the Company awards to Participant the Award described below, with respect to the Performance Period described below:

PERFORMANCE PERIOD: January 1, 2012 through December 31, 2014

TSR TARGET AWARD: [NUMBER OF SHARES] of Company Common Stock, equals applicable base salary times [PERCENTAGE] (which is the Participant’s target award opportunity as a percent of salary) divided by $46.92 (which is the average of the high and low trading prices of stock for the 30 trading days prior to January 1, 2012).

PERFORMANCE LEVELS: The following table shows the performance award relationship under the TSRP for the 2012-2014 performance period:


	Outcome Relative to Peer Group TSR
Level of Performance	Three-Year Percentile Ranking in TSR	Percent of Target Award Earned
Below Threshold	Below 25 ^th percentile		0	%
Threshold	25 ^th percentile		50	%
Target	50 ^th percentile		100	%
Outstanding	90 ^th percentile		200	%

Note: Interpolation between points will be made on a straight line basis on each scale. Below the 25 ^th percentile and above the 90 ^th percentile, there will be no extrapolation.

THE ACTUAL AWARD UNDER THE TSRP WILL EQUAL THE TSR TARGET AWARD TIMES THE APPLICABLE PERCENT OF TARGET AWARD EARNED.

IN WITNESS WHEREOF, the parties hereto have executed this Total Shareholder Return Incentive Compensation Program Award Agreement effective the day and year first above written.


ALLEGHENY TECHNOLOGIES INCORPORATED

By:		/s/ Elliot S. Davis
Name:		Elliot S. Davis
Title:		Senior Vice President, General Counsel,
		Chief Compliance Officer
		and Corporate Secretary


PARTICIPANT				WITNESS

TERMS AND CONDITIONS OF TSRP AWARD

Section 1: Definitions

Capitalized words used but not defined below or elsewhere in these Terms and Conditions shall have the meanings ascribed to them in the Plan.

“ Administrative Rules ” or “ TSRP ” shall mean the Administrative Rules for the TSRP adopted by the Committee effective January 1, 2001, as amended effective February 24, 2005 and as amended effective February 21, 2008 and as further amended effective December 9, 2011, as the same may be amended from time to time.

“ Award ” shall mean the grant of a TSR Target Award evidenced by this Award Agreement.

“ Committee ” means the Personnel and Compensation Committee of the Board of Directors.

“ Common Stock ” shall mean the common stock, $0.10 par value per share, of Allegheny Technologies Incorporated.

“ Company ” shall mean Allegheny Technologies Incorporated and its subsidiaries, unless the context requires otherwise.

“ Disability ” shall mean the total and permanent disability of Participant as determined by the Committee in its sole discretion.

“ Outstanding ” shall mean a relative standing of the Company’s TSR as against the TSR for the Peer Group, in each case for the TSR Performance Period, equal to or greater than 90%.

“ Peer Group ” shall mean the corporations listed on Exhibit 1 to this Award Agreement, subject to the adjustments to such group as permitted under the Administrative Rules.

“ Retirement ” means a termination of employment with the Company and each of its subsidiaries, with the consent of the Company, at or after (i) attaining age 55 and (ii) completing five years of employment with the Company and/or any subsidiary of the Company.

“ Target ” shall mean a relative standing of the Company’s TSR as against the TSR of the Peer Group, in each case for the TSR Performance Period, of equal to or greater than 50% but less than 75%.

“ Threshold ” shall mean a relative standing of the Company’s TSR as against the TSR of the Peer Group, in each case for the TSR Performance Period, of equal to or greater than 25% but less than 50%.

“TSR Performance Level ” means the measure of Company TSR performance relative to the Peer Group, as set forth on page 2 of this Award Agreement. In determining the final Performance Level, the Committee shall use straight-line interpolation between Threshold and Target, and between Target and Outstanding. No TSR Reward will be earned for a Performance

Level less than Threshold. No additional TSR Reward above Outstanding will be earned for a Performance Level greater than Outstanding.

Section 2: TSRP Award

2.1 Subject to the attainment of the TSR Performance Levels and to the terms and conditions otherwise set forth in the Plan, the TSRP and this Award Agreement, the Company awards to Participant the TSRP Award described in the first two pages of this Award Agreement with respect to the Performance Period described therein.

Section 3: Payment

3.1 Subject to the withholding obligations and any requirements of Section 4 then applicable, the Company shall deliver to the Participant certificates representing the TSR Rewards, if any, for the TSR Performance Period within 75 days after the end of the TSR Performance Period.

3.2 If the Participant terminates employment with the Company and each subsidiary of the Company during a then uncompleted TSR Performance Period for reasons other than death, Disability or Retirement, any TSR Target Award for any then uncompleted TSR Performance Period shall be forfeited automatically and the shares represented by such TSR Target Awards shall again be eligible for awards under the Rules.

3.3 If the Participant terminates employment with the Company and each Subsidiary of the Company during a then uncompleted TSR Performance Period due to the Participant’s death, Disability, or Retirement, a pro rata award based on the number of full months worked by the Participant during that Performance Period will be calculated, based on goal achievement over the entire performance period. Any award determined to be payable shall be paid after the end of the applicable Performance Period.

Section 4: Miscellaneous

4.1 General Restriction . To the extent any TSR Target Award is denominated in Common Stock under this Award Agreement, it shall be subject to the requirement that if at any time the Committee shall determine that any listing or registration of the shares of Common Stock or any consent or approval of any governmental body or any other agreement or consent is necessary or desirable as a condition of the issuance of shares of Common Stock or cash in satisfaction thereof, such issuance of shares of Common Stock may not be consummated unless such requirement is satisfied in a manner acceptable to the Committee. The Company shall in no event be obligated to register any securities pursuant to the Securities Act of 1933 (as the same shall be in effect from time to time) or to take any other affirmative action to cause the issuance of shares pursuant to the distribution of TSR Rewards to comply with any law or regulation of any governmental authority.

4.2 Non-Assignability . No TSR Target Award granted under this Award Agreement shall be assignable or transferable by the Participant, except by will or by the laws of descent and distribution. During the life of the Participant, any TSR Rewards shall be payable only to the Participant. No assignment or transfer of a TSR Target Award or of the rights represented thereby, whether voluntary or involuntary, by operation of law or otherwise (except by will or

the laws of descent and distribution), shall vest in the assignee or transferee any interest or right herein whatsoever, and immediately upon such purported assignment or transfer, the TSR Target Awards shall terminate and become of no further effect.

4.3 Withholding Obligations . Whenever the Company makes delivery under the Plan, in whole or in part, the Company shall notify the Participant of the amount of withholding for tax, if any, which must be paid under federal and, where applicable, state and local law. The Company shall, in the discretion of the Company, but with the consent of the Committee, arrange for payment for such withholding for taxes in any one or combination of the following ways: (i) acceptance of an amount in cash paid by the Participant; or (ii) reduction in the number of shares to be issued by that number of shares which, in aggregate, have a value equal to such withholding amount. If the full amount of the required withholding is not recovered in the above manner, the Participant shall, forthwith upon receipt of notice, remit the deficiency to the Company. No shares of Common Stock shall be issued or delivered to the Participant (and/or the Participant’s designee) until all applicable withholding obligations shall have been satisfied in full.

4.4 Delivery of Certificates . As soon as practicable after compliance by the Participant with all applicable conditions including, but not limited to, the satisfaction of the Withholding Obligations described in Section 4.3 hereof, the Company will issue and deliver by mail, or cause delivery by mail, to the Participant at the address of the Company’s records, certificates registered in the name of the Participant (and/or the Participant’s designee) for the number of shares of Common Stock which the Participant is entitled to receive (subject to reduction for withholding as provided in Section 4.3 hereof) under the provisions of this Award Agreement.

4.5 No Right to Employment . Nothing in the Plan or in this Award Agreement shall confer upon the Participant the right to continue in the employ of the Company or any subsidiary or affect any right that the Company or a subsidiary may have to terminate the employment of the Participant.

4.6 Amendment or Termination of the Plan . The Plan, or any part thereof (including the TSRP and/or Administrative Rules) may be terminated or may, from time to time, be amended, each in accordance with the Plan, TSRP or Administrative Rules, as applicable, provided, however, the termination or amendment of the Plan, the Administrative Rules or TSRP shall not, without the consent of the Participant, affect Participant’s rights under this Award Agreement.

4.7 Investment Representation . Under the federal and/or state securities laws, the Participant may be required to deliver, and, if so, shall deliver, to the Committee, upon demand by the Committee, at the time of any payment of Common Stock, a written representation that the shares to be acquired are to be acquired for investment and not for resale or with a view to the distribution thereof. Upon such demand, delivery of such representation prior to delivery of any shares shall be a condition precedent to the right of the Participant to receive any shares.

4.8 No Rights as Shareholder . The Participant shall have no rights as a stockholder of the Company with respect to shares of Common Stock subject to the Award evidenced this Award

Agreement unless and until a certificate for shares of Common Stock is issued to the Participant.

4.9 Adjustment of Award . In the event of any change or changes in the outstanding Common Stock of the Company by reason of any stock dividend, recapitalization, reorganization, merger, consolidation, split-up, combination or exchange of shares or any rights offering to purchase a substantial amount of Common Stock at a price substantially below fair market value or of any similar change affecting the Common Stock, any of which takes effect after the first grant of a TSR Target Award under this Award Agreement, the Committee may, in its discretion, appropriately adjust the number of shares of Common Stock which may be issued under this Award Agreement, the number of shares of Common Stock subject to TSR Target Awards under this Award Agreement and any and all other adjustments deemed appropriate by the Committee to prevent substantial dilution or enlargement of the rights granted to the Participant in such manner as the Committee shall deem appropriate. Any adjustment so made shall be final and binding upon the Participant.

4.10 Awards Not a Bar to Corporate Event . The existence of the TSR Target Awards granted hereunder shall not affect in any way the right or the power of the Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the Company’s capital structure or its business, or any merger or consolidation of the Company, or any issue of bonds, debentures, preferred or prior preference stocks ahead of or affecting the Common Stock or the rights thereof, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.

4.11 Not Income for Qualified Plans . No amounts of income received by a Participant pursuant to this Award Agreement shall be considered compensation for purposes of any pension or retirement plan, insurance plan or any other employee benefit plan of the Company or any of its affiliates.

4.12 Meaning of Participant . Whenever the word “Participant” is used in any provision of this Award Agreement under circumstances where the provision should logically be construed to apply to the executors, the administrators, or the person or persons to whom the TSR Target Awards may be transferred by will or by the laws of descent and distribution, the word “Participant” shall be deemed to include such person or persons.

4.13 Determinations of Committee . The actions taken and determinations of the Committee made pursuant to this Award Agreement and of the Committee pursuant to the Plan, the TSRP and the Administrative Rules shall be final, conclusive and binding upon the Company and upon the Participant. No member of the Committee shall be liable for any action taken or determination made relating to this Award Agreement, the Plan, the TSRP, or the Administrative Rules if made in good faith.

Exhibit 1: List of Peer Companies (2012-2014 Performance Period)

Alcoa Inc.

AK Steel Holding Corp.

Carpenter Technology Corp.

Castle (A M) & Co.

Commercial Metals

Kennametal Inc.

Materion Corp.

Nucor Corp.

Precision Castparts Corp.

Reliance Steel & Aluminum Co.

RTI International Metals Inc.

Schnitzer Steel Industries, Inc.

Steel Dynamics Inc.

Timken Co.

Titanium Metals Corp.

United States Steel Corp.

Universal Stainless & Alloy Products

Worthington Industries

Exhibit 10.5

KEY EXECUTIVE PERFORMANCE PLAN AGREEMENT

This Key Executive Performance Plan Agreement (the “Agreement”) made as of the 22 ^nd day of February, 2012 by and between ALLEGHENY TECHNOLOGIES INCORPORATED, a Delaware corporation (the “Corporation”) and [NAME] (the “Employee”).

WHEREAS, the Corporation sponsors and maintains the Allegheny Technologies Incorporated Key Executive Performance Plan (the “KEPP”);

WHEREAS, the Corporation desires to encourage the Employee to remain an employee of the Corporation and, during the KEPP Performance Period measuring calendar years 2012, 2013 and 2014 (the “2012-2014 Performance Period”) to contribute substantially to the financial performance of the Corporation and, to provide that incentive, the Corporation has awarded the Employee the opportunity to participate in the KEPP for the 2012-2014 Performance Period, subject to the terms and conditions set forth in the KEPP and in this Agreement; and

WHEREAS, the Corporation and the Employee desire to evidence the Award of the opportunity to participate in the KEPP for the 2012-2014 Performance Period and the terms and conditions applicable thereto in this KEPP Agreement.

NOW THEREFORE, in consideration of the mutual promises and covenants contained herein and intending to be legally bound, the Corporation and the Employee agree as follows:

1. KEPP Document Controls; Definitions . In the event of any conflict between the provisions of the KEPP document and this Agreement, the provisions of the KEPP document shall control. Initially capitalized terms not specifically defined in this Agreement shall have the meanings ascribed thereto under the KEPP document, which is attached hereto as Exhibit I and made a part hereof.

2. Grant of Award for 2012-2014 Performance Period . The Corporation hereby grants an Award under KEPP to the Employee to participate in the KEPP for the 2012-2014 Performance Period. The Employee’s opportunity is measured as a multiple of his annual base salary at the rate in effect on the Date of Award, which for the Employee for the 2012-2014 Performance Period is [BASE SALARY] (the “Base Amount”). For each gradation of achievement of Earnings in Level I and/or for each gradation determined by the Personnel and Compensation Committee (the “Committee”) under Level II, the Base Amount shall be multiplied by the designated gradation of achievement as set forth under Section 3 or as determined by the Committee under Section 4 of this Agreement.

3. Level I Earnings Gradations . For the 2012-2014 Performance Period, Earnings shall be measured in aggregate income before taxes as reported by the Corporation for

calendar years 2012, 2013 and 2014. The gradations and amounts shall be as follows for the 2012-2014 Performance Period:


Gradation	Earnings
	(in income before taxes of the Corporation, in millions)
1X	$	1,050
2X	$	1,175
3X	$	1,300
4X	$	1,425
5X	$	1,625
6X	$	1,825
7X	$	2,025
8X	$	2,300
9X	$	2,575
10X	$	2,850

No KEPP Payments will be made under Level I if aggregate income before taxes of the Corporation for 2012, 2013 and 2014 is less than $1,050 million. No KEPP payment in excess of 10X will be made if aggregate income before taxes of the Corporation for 2012, 2013 and 2014 is in excess of $2,850 million.

4. Level II Opportunities . The Employee shall have an opportunity to receive a KEPP Payment under Level II in an amount determined appropriate by the Committee, and subject to its negative discretion, based on the Committee’s determination of applicable factors and the Committee’s perception of the relative degree of the Corporation’s achievement of and implementation of the Operational Goals provided to the Employee and other participants in KEPP for the 2012-2014 Performance Period. The Committee is not required to make a KEPP payment under Level II under any circumstances and can make a Level II Payment if the minimum Earnings under KEPP Level I are not attained.

5. Termination of Employment . If Employee’s employment with the Corporation and all of its direct or indirect subsidiaries is terminated by either party for any reason prior to January 1, 2015 (except if such date is preceded by a Change in Control as provided in Section 6 below, including, but not limited to, the involuntary termination of the Employee’s employment with the Corporation for any reason, with or without cause, other than the Employee’s death, disability or retirement with the consent of the Corporation when the Employee is at least 55 years of age with at least five years of service (“Retirement”)), all rights of the Employee to the Award made under this Agreement shall terminate immediately and be forfeited in their entirety. Without limiting the foregoing, the Employee will not be considered for any KEPP Payment under Level II. If the Employee dies, has a Retirement or becomes disabled during the 2012-2014 Performance Period, the Employee shall be entitled to a KEPP Payment equal to the greater of (i) a pro rata KEPP Award determined by multiplying (a) the gradation of earnings under Level I actually

achieved by the Corporation for the 2012-2014 Performance Period by (b) the Employee’s Base Amount and then by (c) a fraction of which the numerator is the number of months beginning on January 1, 2012 and ending on the effective date of the Employee’s death, Disability or Retirement and the denominator is 36 and (ii) the amount reserved in the Participant Retention Achievement Bank as of the last day of the calendar year immediately preceding the date of the Employee’s death, Disability or Retirement. Any KEPP Payment due to the Employee if he becomes Disabled or has a Retirement or to the Beneficiary of the Employee if he dies shall be paid after the end of the 2012-2014 Performance Period when KEPP Payments are made to other participants in KEPP for the 2012-2014 Performance Period.

6. Change of Control . In the event of a Change in Control, the Employee shall be entitled to receive an amount determined under Section 8.01 of the KEPP Document.

7. Withholding . The Corporation or its direct or indirect subsidiary may withhold from amount of any KEPP Payment due to Employee all taxes, including social security taxes, which the Corporation or its direct or indirect subsidiary is required or otherwise authorized to withhold with respect to any KEPP Payment.

8. No Right to Continued Employment; Effect on Benefit Plans . This Agreement shall not confer upon Employee any right with respect to continuance of his or her employment or other relationship, nor shall it interfere in any way with the right of the Corporation or its direct or indirect subsidiary to terminate his or her employment or other relationship at any time. Income realized by Employee pursuant to this Agreement shall not be included in Employee’s earnings for the purpose of any benefit plan, qualified or non-qualified, in which Employee may be enrolled or for which Employee may become eligible unless otherwise specifically provided for in such plan.

9. Employee Representations . In connection with this Award, the Employee represents the following:

(a) Employee has reviewed with Employee’s own tax advisors, the federal, state, local and foreign tax consequences of this Agreement and the transactions contemplated hereby. Employee is relying solely on such advisors and not on any statements or representations of the Corporation or any of its agents. Employee understands that Employee (and not the Corporation) shall be responsible for Employee’s own tax liability that may arise as a result of this Agreement and the transactions contemplated hereby.

(b) Employee has received, read and understood this Agreement and KEPP and agrees to abide by and be bound by their respective terms and conditions.

10. Miscellaneous .

IN WITNESS WHEREOF, the parties have executed this Key Executive Performance Plan Agreement as of the date first written above.


ALLEGHENY TECHNOLOGIES INCORPORATED

By:		/s/ Elliot S. Davis
Name:		Elliot S. Davis
Title:		Senior Vice President, General Counsel, Chief Compliance Officer and Corporate Secretary

EXHIBIT I

A LLEGHENY T ECHNOLOGIES I NCORPORATED

K EY E XECUTIVE P ERFORMANCE P LAN

Effective as of January 1, 2004

And as amended February 24, 2005

and as further amended on February 22, 2006

and as further amended on February 21, 2007

and as further amended on February 21, 2008

and as further amended on February 18, 2009

and as further amended on February 24, 2010

and as further amended on February 24, 2011

and as further amended on February 22, 2012

Article I. Adoption and Purpose of the Key Executive Performance Plan

1.01 Adoption. This Key Executive Performance Plan is adopted by the Personnel and Compensation Committee of the Board of Directors as a part of the Allegheny Technologies Incorporated executive compensation program effective January 1, 2004. The KEPP Payments, if any, earned under this Plan are intended as performance based compensation within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended, as incentive compensation determined solely with reference to attainment in predetermined levels of Earnings and Operational Goals within the relevant Performance Period.

1.02 Purpose. The purposes of the KEPP are (i) to direct the focus of key management employees to the achievement of goals deemed necessary for the success of the Corporation, (ii) to assist the Corporation in retaining and motivating selected key management employees of the Corporation and its subsidiaries who will contribute to the success of the Corporation and (iii) to reward key management employees for the overall success of the Corporation as determined with reference to predetermined levels of Earnings of the Corporation and attainment of Operational Goals. The KEPP is intended to act as an incentive to participating key management employees to achieve long-term objectives that will inure to the benefit of all stockholders of the Corporation measured in terms of achievement of predetermined levels of Earnings of the Corporation and attainment of Operational Goals.

1.03 Plan Document. This KEPP plan document is intended as the plan document as adopted by the Committee, which will govern all Performance Periods of the KEPP beginning in or after 2004 and after 2007 as the Incentive Plan was reapproved.

EX.1

Article II. Definitions

For purposes of this Plan, the capitalized terms set forth below shall have the following meanings:

2.01 Award means an opportunity to earn a KEPP Payment in a particular Performance Period. Each Award shall be denominated in dollars that can be earned upon attainment of predetermined Earnings thresholds (Level 1) and the maximum amount that may be paid with respect to Operational Goals before the application of Negative Discretion (Level 2).

2.02 Award Agreement means a written agreement between the Corporation and a Participant or a written acknowledgment from the Corporation specifically setting forth the terms and conditions of a KEPP Award granted to a Participant pursuant to Article VI of this Plan.

2.03 Board means the Board of Directors of the Corporation.

2.04 Cause means a determination by the Committee that a Participant has engaged in conduct that is dishonest or illegal, involves moral turpitude or jeopardizes the Corporation’s right to operate its business in the manner in which it is now operated.

2.05 Change in Control means any of the events set forth below:

(a) The acquisition in one or more transactions, other than from the Corporation, by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of a number of Corporation Voting Securities in excess of 25% of the Corporation Voting Securities unless such acquisition has been approved by the Board; or

(b) Any election has occurred of persons to the Board that causes two-thirds of the Board to consist of persons other than (i) persons who were members of the Board on January 1, 2001 and (ii) persons who were nominated for election as members of the Board at a time when two-thirds of the Board consisted of persons who were members of the Board on January 1, 2001; provided, however , that any person nominated for election by the Board at a time when at least two-thirds of the members of the Board were persons described in clauses (i) and/or (ii) or by persons who were themselves nominated by such Board shall, for this purpose, be deemed to have been nominated by a Board composed of persons described in clause (i); or

(c) Approval by the stockholders of the Corporation of a reorganization, merger or consolidation, unless, following such reorganization, merger or consolidation, all or substantially all of the individuals and entities who were the respective beneficial owners

EX.2

of the Outstanding Stock and Corporation Voting Securities immediately prior to such reorganization, merger or consolidation, following such reorganization, merger or consolidation beneficially own, directly or indirectly, more than 60% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors or trustees, as the case may be, of the entity resulting from such reorganization, merger or consolidation in substantially the same proportion as their ownership of the Outstanding Stock and Corporation Voting Securities immediately prior to such reorganization, merger or consolidation, as the case may be; or

(d) Approval by the stockholders of the Corporation of (i) a complete liquidation or dissolution of the Corporation or (ii) a sale or other disposition of all or substantially all the assets of the Corporation.

2.06 Committee means the Personnel and Compensation Committee of the Board.

2.07 Corporation means Allegheny Technologies Incorporated, a Delaware corporation, and its successors.

2.08 Corporation Voting Securities means the combined voting power of all outstanding voting securities of the Corporation entitled to vote generally in the election of the Board.

2.09 Date of Award means the date as of which an Award is granted in accordance with Article VI of this Plan.

2.10 Disability means any physical or mental injury or disease of a permanent nature which renders a Participant incapable of meeting the requirements of the employment performed by such Participant immediately prior to the commencement of such disability. The determination of whether a Participant is disabled shall be made by the Committee in its sole and absolute discretion. Notwithstanding the foregoing, if a Participant’s employment by the Corporation or an applicable subsidiary terminates by reason of a disability, as defined in an Employment Agreement between such Participant and the Corporation or an applicable subsidiary, such Participant shall be deemed to be disabled for purposes of the KEPP.

2.11 Earnings means the earnings of the Corporation determined in accordance with generally accepted accounting principles, provided, however, for the 2005 through 2007, the 2006 through 2008, the 2007 through 2009, the 2008 through 2010, the 2009 through 2011, the 2010 through 2012 the 2011 through 2013, and the 2012 through 2014 Performance Periods, Earnings shall be expressed in terms of income before taxes.

2.12 Effective Date means January 1, 2004.

EX.3

2.13 Exchange Act means the Securities Exchange Act of 1934, as amended.

2.14 KEPP Payment means the amount actually earned by a Participant in a particular Performance Period. Each KEPP Payment shall be the sum of the amounts earned by a Participant during a Performance Period as Level 1 and Level 2 achievement or, for the 2006-2008, 2007-2009, 2008-2010, 2009-2011, 2010-2012, 2011-2013 and 2012-2014 Performance Period, the amount under the Participant Retention Achievement Bank under Section 8.04.

2.15 Level 1 means that portion of an Award that may be earned based on attainment of Earnings.

2.16 Level 2 means that portion of an Award that may be earned, after application of Negative Discretion by the Committee, based on the relative attainment of Operational Goals. The Level 2 portion of any Award shall be denominated in the maximum amount that may be earned with respect to Operational Goals prior to the application of Negative Discretion.

2.17 Negative Discretion means the power of the Committee to be exercised solely in the Committee’s discretion to reduce the Level 2 portion of any Award. It is anticipated that the Committee will review with the Chief Executive Officer of the Corporation the relative attainment of Operational Goals during a particular Performance Period before the Committee exercises its Negative Discretion.

2.18 Operational Goals means the goals set by the Committee at the commencement of a Performance Period to be attained by the Participants during the course of a particular Performance Period. Operational Goals will be set forth in terms of operating objectives and/or criteria, which may or may not be earnings measures that, in the judgment of the Committee after consultation with the Chief Executive Officer of the Corporation, will enhance the success of the Corporation during and beyond a particular Performance Period.

2.19 Participant means any key management employee selected by the Committee, pursuant to Section 5.01 of this Plan, as eligible to participate under the KEPP for any one or more Performance Period.

2.20 Performance Period means a period of more than one fiscal year of the Corporation over which the attainment of Earnings and Operational Goals shall be measured.

2.21 Plan or KEPP means the Key Executive Performance Plan as set forth in this plan document or as the same may be amended from time to time.

EX.4

2.22 Retirement means, a termination of employment with the Corporation and each subsidiary of the Corporation at or after (i) attaining age 55 and (ii) completing five years of employment with the Corporation and/or any subsidiary of the Corporation.

2.23 Withholding Obligations means the amount of federal, state and local income and payroll taxes the Corporation determines in good faith must be withheld with respect to a KEPP Payment. Withholding Obligations may be settled by the Participant, as permitted by the Committee in its discretion, in cash, previously owned shares of common stock of the Corporation or any combination of the foregoing.

Article III. Administration

In addition to any power reserved to the Committee under the governing documents of the Corporation, the KEPP shall be administered by the Committee, which shall have exclusive and final authority and discretion in each determination, interpretation or other action affecting the KEPP and its Participants. The Committee shall have the sole and absolute authority and discretion to interpret the KEPP, to amend or modify this Plan for the KEPP, to select, in accordance with Section 5.01 of this Plan, the persons who will be Participants hereunder, to set all Earnings thresholds and Operational Goals, to determine all performance criteria, levels of Awards and KEPP Payments payable, to determine, after review of the Corporation’s financial reports, the degree to which any threshold of Earnings has been achieved for a Performance Period with respect to the Level 1 portion of any Award, to review the attainment of Operational Goals and exercise Negative Discretion with respect to the Level 2 portion of any Award, to impose such conditions and restrictions as it determines appropriate and to take such other actions and make such other determinations in connection with the KEPP as it may deem necessary or advisable.

Article IV. Overview of KEPP

4.01 Cash Bonus Plan. KEPP is designed to pay cash bonuses to participating key executives after the end of a Performance Period based on the level (i) of achievement of predetermined Earnings thresholds and (ii) attainment of Operational Goals (to which the Committee may exercise Negative Discretion).

4.02 Levels of Awards. KEPP Awards are granted with two levels. The first level, Level 1, is a cash bonus payment based on achievement of Earnings that the Committee has no discretion to reduce. KEPP Payments earned under Level 1 will be earned solely with reference to Earnings attained during the Performance Period. The second level, Level 2, is a cash bonus payment based on level of attainment of Operational Goals that the Committee has the Negative Discretion to reduce. The Committee’s judgment in exercising its Negative Discretion to arrive at a KEPP Payment under Level 2 is expected to be guided by the degree to which the Corporation generally or the participating key executives in particular have attained predetermined Operational Goals. The Committee is expected to review the level of attainment of Operational Goals with the Chief Executive Officer of the

EX.5

Corporation before exercising any Negative Discretion. For the 2006-2008, the 2007-2009 the 2008-2010, 2009-2011, 2010-2012, 2011-2013 and the 2012-2014 Performance Period, the Committee has established the Participant Retention Achievement Bank under Section 8.04.

4.03 Participating Key Executives. It is intended that the number of participating key executives shall be limited to those key executives with the most direct influence on the attainment of Earnings and operational goals.

Article V. Participation

5.01 Designation of Participants. Participants in the KEPP shall be such key management employees of the Corporation or of its subsidiaries as the Committee, in its sole discretion, may designate as eligible to participate in the KEPP for any one or more Performance Periods. No later than 90 days after the commencement of each Performance Period during the term of the KEPP, the Committee shall designate the Participants who are eligible to participate in the KEPP during such Performance Period. The Committee’s designation of a Participant with respect to any Performance Period shall not require the Committee to designate such person as a Participant with respect to any other Performance Period. The Committee shall consider such factors as it deems pertinent in selecting Participants. The Committee shall promptly provide to each person selected as a Participant written notice of such selection.

Article VI. Grants under the KEPP

6.01 Annual Determination Regarding Performance Period . No later than the 60 ^th day of each calendar year, the Committee shall determine whether to establish a Performance Period, provided, however, for a Performance Period established in calendar year 2004, the Committee may make a determination under this Section 6.01 at any time prior to the 90 ^th day of calendar year 2004.

6.02 Determination of Grants, Awards (both Level 1 and Level 2) and Performance Criteria. For each Performance Period, the Committee shall take the following actions no later than the 90 ^th day of the first calendar year of that Performance Period:

(a) Identify Participants for that Performance Period.

(b) Establish the level of Level 1 and Level 2 opportunities for each Participant.

EX.6

(d) Set the Operational Goals and relative weightings after discussing such goals and weighting with the Chief Executive Officer in order to bring the Operational Goals as closely as possible in line with the Corporation’s business plans.

6.03 Termination of Employment . If a Participant terminates employment with the Corporation and each subsidiary of the Corporation during a then uncompleted Performance Period for reasons other than death, Disability or Retirement, any KEPP Award for any then uncompleted Performance Period shall be forfeited automatically. If a Participant terminates employment with the Corporation and each subsidiary of the Corporation for reasons of death, Disability or Retirement during a then uncompleted Performance Period, the Participant shall be entitled to receive a pro rata KEPP Payment for each then uncompleted Performance Period determined:

(a) when the KEPP Payments for all other Participants in such Performance Period(s) are determined; and

(b) based on the actual level of achievement of Earnings for that Performance Period and the attainment of Operational Goals, after the application of Negative Discretion.

Article VII. Determination of Achievement of Earnings and Operational Goals

7.01 Determination of Earnings and Operational Goals. As promptly as administratively feasible but in no event later than the March 1st of the calendar year following last calendar year of each Performance Period, the Committee shall determine Earnings of the Corporation and the attainment of Operational Goals and the degree, if any, to which the Committee will exercise Negative Discretion.

7.02 Determination of KEPP Payments . KEPP Payments for a particular Performance Period for a particular Participant shall be the result of adding (i) the amount earned by a particular Participant under Level 1 based on the Corporation’s actual Earnings during the Performance Period and (ii) the amount earned by a particular Participant under Level 2 based on attainment of Operational Goals and after the application, if any, by the Committee of Negative Discretion or, for the 2006-2008, for the 2007-2009, for the 2008-2010, for the 2009-2011, for the 2010-2012 for the 2011-2013 and for the 2012-2014 Performance Period, the Participant Retention Achievement Bank amount determined under Section 8.04.

Article VIII. Miscellaneous

8.01 Change in Control. In the event of a Change in Control, KEPP Payments shall be determined for all then uncompleted Performance Periods as of the date of the Change in Control at the highest level Earnings for each such uncompleted Performance Period and

EX.7

KEPP Payments shall be delivered to the Participant as soon after the Change in Control as is administratively feasible.

8.02 Non-Uniform Determinations. The actions and determinations of the Committee need not be uniform and may be taken or made by the Committee selectively among employees or Participants, whether or not similarly situated.

8.03 Amendment and Termination of the Plan. The Committee shall have complete power and authority to amend or terminate this Plan at any time it is deemed necessary or appropriate. No termination or amendment of the Plan may, without the consent of the Participant to whom any award shall theretofore have been granted under the KEPP, adversely affect the right of such individual under such award; provided, however , that the Committee may, in its sole discretion, make such provision in the Award Agreement for amendments which, in its sole discretion, it deems appropriate.

8.04 Participant Retention Achievement Bank. In order to retain participants designated as eligible to participate in KEPP for the 2006-2008, the 2007-2009, the 2008-2010, the 2009-2011, the 2010-2012 the 2011-2013 and the 2012-2014 Performance Period (“Banking Performance Period(s)”), for those Performance Periods, KEPP Payments will be made under this Participant Retention Achievement Bank provision if greater than the KEPP Payment otherwise due under the KEPP for the relevant Banking Performance Periods. The aggregate amount in the Participant Retention Achievement Bank shall be equal to the sum of the three amounts (none less than 0) determined as of the close of each year in the relevant Banking Performance Period by taking the amount of Earnings for that year multiplied by three and determining the Level 1 amount due for that level of achievement for the entire three year, relevant Banking Performance Period(s) and then dividing the KEPP Payment due under the foregoing clause by three. The resulting amount will be one of the three amounts added together (one for each year in the relevant Banking Performance Period) to comprise the aggregate Participant Retention Achievement Bank. The amount of the KEPP Payment due to any individual Participant for the relevant Banking Performance Period will be equal to the amount determined by multiplying the Participant Retention Achievement Bank by a fraction, the numerator of which is the Level 1 KEPP Payment due to that Participant if actual performance for the relevant Banking Performance Period was at the 1X Threshold Reference and the denominator of which is the sum of all payments due at Level 1 for 1X achievement for all Participants for the relevant Banking Performance Period.

EX.8

Exhibit 10.6

March 15, 2012

[NAME]

[ADDRESS]

Re:

Clawback of Incentive Payments under the Annual Incentive Plan

Dear [NAME]:

In connection with its February 22, 2012 meeting, the Personnel & Compensation Committee of the Board of Directors (the “Committee”) of Allegheny Technologies Incorporated (the “Company”) is considering including you as a participant in the Company’s Annual Incentive Plan (“AIP”) for calendar year 2012 and to become eligible for an annual incentive payment under the AIP based on the degree to which the performance criteria for 2012 are met. You may be considered for participation in the AIP for years after 2012.

It is a condition of your participation in the AIP in 2012 and subsequent years that you agree to repay the Company any amount determined to be an Overpayment, as defined below, for any year of the AIP for which an Overpayment is determined to have occurred. This agreement will be in effect not only for 2012 but also for each subsequent year in which you are included as a participant in the AIP unless specifically revoked in writing by you or the Company. If you revoke this agreement without an acceptable substitute agreement being in place, your eligibility for participation in a then current or subsequent year of the AIP will end.

The payments under the AIP (“Payments”) are generally made within 75 days of the end of the calendar year for which performance is measured. The Committee determines the amount of the Payments to the respective participants in the AIP based on the financial statements and other records of the Company presented to the Committee, generally at the Committee’s January meeting. While the information available to the Committee is appropriately reviewed and is believed to be accurate and complete when presented to the Committee, subsequent review or audit could disclose errors.

This agreement is to evidence your obligation to promptly repay to the Company any “Overpayment.” For purposes of this agreement, an “Overpayment” is the amount reasonably determined by the Committee as that portion of the Payments approved by the Committee for any year of your participation in the AIP and paid to you that the Committee would not have approved and would not have been paid to you if the Committee knew at the time of authorization that the information then available to it was inaccurate in a material way and that

[NAME]

March 15, 2012

Page 2

material inaccuracy, if known when the Committee authorized the Payments, would have resulted in a lower Payment or Payments.

You hereby agree to repay to the Company any Overpayment within thirty (30) days of written notice to you of the Committee’s determination of the Overpayment.

You should also know that federal legislation generally known as Dodd-Frank is being implemented at this time. If the Company determines that a new agreement on this subject or an amendment to this agreement is required for the Company to comply with Dodd-Frank, you agree to consider a new agreement or an amendment to this agreement in a form the Company determines as appropriate to comply with Dodd-Frank.

Please execute this agreement and promptly return it to me. Once I receive it, any award opportunities made to you under the AIP will be promptly processed.

Very truly yours,

/s/ Elliot S. Davis

Elliot S. Davis

CONSENTED AND AGREED:

By:

Print Name:

Date:

Exhibit 10.7

March 15, 2012

[NAME]

[ADDRESS]

Re:

Clawback of Incentive Payments under the Long-Term Incentive Plans

Dear [NAME]:

In connection with its February 22, 2012 meeting, the Personnel & Compensation Committee of the Board of Directors (the “Committee”) of Allegheny Technologies Incorporated (the “Company”) is considering including you as a participant in one or more of the Company’s 2007 Annual Incentive Plan, which governs the Company’s Performance/Restricted Stock Plan and the Total Shareholder Return Plan, and/or the Key Executive Performance Plan (collectively, the “Plans”) for the three year measurement period beginning in 2012 and running to December 31, 2014. You may be considered for participation in one or more of the Plans for measurement periods after 2012.

It is a condition of your participation in the Plans for the 2012-2014 measurement periods and subsequent measurement periods that you agree to repay the Company any amount determined to be an Overpayment, as defined below, for any measurement period of the Plans for which an Overpayment is determined to have occurred. This agreement will be in effect not only for the 2012-2014 measurement period but also for each subsequent measurement period in which you are included as a participant in any one or more of the Plans unless specifically revoked in writing by you or the Company. If you revoke this agreement without an acceptable substitute agreement being in place, your eligibility for participation in a then current or subsequent measurement period of the Plans will end.

The payments of cash or delivery of shares, as the case may be, under the Plans (“Payments”) are generally made within 75 days of the end of the last calendar year in the applicable measurement period. The Committee determines the amount of the Payments to the respective participants in the Plans based on the relative stock prices and financial statements and other records of the Company presented to the Committee, generally at the Committee’s January meeting. While the information available to the Committee is appropriately reviewed and is believed to be accurate and complete when presented to the Committee, subsequent review or audit could disclose errors.

[NAME]

March 15, 2012

Page 2

This agreement is to evidence your obligation to promptly repay to the Company any “Overpayment.” For purposes of this agreement, an “Overpayment” is the amount reasonably determined by the Committee as that portion of the Payments approved by the Committee for any measurement period of your participation in the Plans and paid or delivered to you that the Committee would not have approved and would not have been paid or delivered to you if the Committee knew at the time of authorization that the information then available to it was inaccurate in a material way and that material inaccuracy, if known when the Committee authorized the Payments, would have resulted in a lower Payment or Payments.

You hereby agree to repay to the Company any Overpayment within thirty (30) days of written notice to you of the Committee’s determination of the Overpayment.

Please execute this agreement and promptly return it to me. Once I receive it, any awards made to you under the Plans will be promptly processed and appropriate agreements delivered to you.

Very truly yours,

/s/ Elliot S. Davis

Elliot S. Davis

CONSENTED AND AGREED:

By:

Print Name:

Date:

Exhibit 12.1

Allegheny Technologies Incorporated

Computation of Ratio of Earnings to Fixed Charges

(Dollars in millions)


	Three Months Ended 3/31/2012
Income before income tax provision and cumulative effect of change in accounting principle	$	84.1
(Income) loss recognized on less than fifty percent owned persons		(2.2	)
Noncontrolling interest in the income of subsidiary with fixed charges		(2.1	)

	$	79.8
Fixed Charges:
Interest expense	$	19.2
Portion of rents deemed to be interest		2.3
Capitalized interest		4.5
Amortization of debt expense		0.8

Fixed charges excluding capitalized interest		26.8
Earnings adjustments:
Capitalized interest		(4.5	)

Earnings, as adjusted	$	102.1

Ratio of earnings to fixed charges		3.8

EXHIBIT 31.1

CERTIFICATIONS

I, Richard J. Harshman certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Allegheny Technologies Incorporated;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 4, 2012

/s/ Richard J. Harshman

Richard J. Harshman

Chairman, President and Chief Executive Officer

EXHIBIT 31.2

CERTIFICATIONS

I, Dale G. Reid certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Allegheny Technologies Incorporated;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(a)

(b)

(c)

(d)

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 4, 2012

/s/ Dale G. Reid

Dale G. Reid

Executive Vice President, Finance

and Chief Financial Officer

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Allegheny Technologies Incorporated (the “Company”) on Form 10-Q for the period ended March 31, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned, in the capacities and on the dates indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


Date: May 4, 2012				/s/ Richard J. Harshman
				Richard J. Harshman
				Chairman, President and Chief Executive Officer


Date: May 4, 2012				/s/ Dale G. Reid
				Dale G. Reid
				Executive Vice President, Finance and Chief Financial Officer