Jan. 26, 2006 — Allegheny Technologies Inc. reported net income of $120.4 million on sales of $894.4 million for the fourth quarter, and net income of $361.4 million on sales of $3.54 billion for the full year of 2005.

Fourth Quarter Results—ATI’s $120.4 million fourth quarter net income ($1.18 per share) compares to net income of $35.0 million ($0.35 per share) reported in the fourth quarter of 2004. Excluding the previously announced net special gain, net income for the fourth quarter was $97.9 million ($0.96 per share).

Sales of $894.4 million compare to sales of $778.1 million for the fourth quarter of 2004.

Full Year Results—Net income of $361.4 million ($3.58 per share) compares to net income of $19.8 million ($0.22 per share) for 2004. Sales of $3.54 billion compare to sales of $2.73 billion for 2004.

Results for the 2005 fourth quarter and year included a $22.5 million ($0.22 per share) net special gain. This net special gain consisted primarily of the tax benefit associated with the reversal of the company's remaining valuation allowance for U.S. Federal net deferred tax assets, partially offset by asset impairments and charges for legal matters, and the cumulative effect of adopting FASB Interpretation No. 47, "Accounting for Contingent Asset Retirement Obligations." Results for 2004 included a $40.4 million ($0.48 per share) special gain related to actions taken to control certain retiree medical costs, net of costs related to the new ATI Allegheny Ludlum labor agreement and the June 2004 J&L asset acquisition.

Comments—"ATI's fourth quarter 2005 results were strong, concluding a year of accelerating profitability," said L. Patrick Hassey, Chairman, President and CEO. "For the full year 2005, sales increased nearly 30% to $3.5 billion. Operating profit reached $533 million, or 15% of sales. Notably, over 70% of operating profit and approximately 45% of sales were generated by our High Performance Metals and Engineered Products segments, demonstrating the transformation of ATI to a high-value-products driven company. Cash flow was strong in 2005. We continued to invest in the business as sales increased, and we improved the balance sheet with a $100 million voluntary contribution to ATI's defined benefit pension plan. After these investments, cash on hand still increased by 45% to $363 million. We remained focused on reducing costs in 2005 and achieved cost reductions, before the effects of inflation, of $125 million. Our 2005 cost reduction target was $100 million.

"Looking ahead, we see 2006 as a year of continued profitable growth. The outlook remains strong from our major markets, namely aerospace, defense, chemical process industry, oil and gas, electrical energy, and medical. ATI's strategic growth investments in high-value titanium products and nickel-based alloys and superalloys are on schedule and are expected to impact results positively during the second half of the year.

"We expect 2006 to improve on the profitable growth achieved in 2005. We are enthusiastic about our major markets and prospects for growth. We expect cash flow to be strong in 2006 enabling ATI to continue to make strategic investments and improve the balance sheet. We have targeted $225 million of capital investments in 2006 in a self-funded growth strategy. We are focused on cost reductions and have established a 2006 cost reduction goal of $100 million, before the effects of inflation.

"We remain dedicated to our disciplined plan and vision as we move to the profitable growth phase of building the world's best specialty metals company."

Allegheny Technologies Inc. is one of the largest and most diversified specialty metals producers with revenues of over $3.5 billion in 2005. The company’s major markets are aerospace, defense, construction and mining, chemical processing/oil & gas, food equipment and appliance, automotive, electrical energy, machine and cutting tools, and medical. Products include nickel-based alloys and superalloys, titanium and titanium alloys, stainless and specialty steels, zirconium, hafnium, and niobium, tungsten materials, silicon and tool steels, and forgings and castings.