Oct. 26, 2006 — Allegheny Technologies Inc. reported net income of $161.9 million on sales of $1.29 billion for the third quarter, and net income of $404.8 million on sales of $3.54 billion for the first nine months of 2006.

Third Quarter Results—The $161.9 million net income ($1.58 per share) compares to net income of $88.3 million ($0.87 per share) for the third quarter of 2005. Sales of $1.29 billion compare to sales of $861.7 million for the third quarter of 2005. Income before tax was $246.4 million.

Nine Month Results—Net income of $404.8 million ($3.96 per share) compares to net income of $241.0 million ($2.40 per share) for the first nine months of 2005. Sales of $3.54 billion compare to sales of $2.65 billion for the first nine months of 2005. Income before tax was $610.1 million, which compares with $245.0 million income before tax in the first nine months of 2005.

Management Comments—“The velocity of change was apparent in the third quarter as ATI continued to demonstrate strong profitable growth results and future earnings power,” said L. Patrick Hassey, Chairman, President and CEO. “Most of our major markets remained strong and total operating margins continued to expand.

“Sales grew by 50% compared to the third quarter 2005 and were 6% higher than the second quarter 2006. Net income was $161.9 million, or $1.58 per share.

“Segment operating profit reached 22.6% of sales as operational execution continued to improve. Operating profit in our High Performance Metals segment was 38% of sales. In our Flat-Rolled Products segment, operating profit improved to 14.5% of sales. Operating profit in our Engineered Products segment was nearly 12% of sales. These outstanding results were accomplished notwithstanding a LIFO inventory valuation reserve charge of $54 million. Volatility in the cost of certain raw materials, particularly nickel, nickel-bearing scrap, and titanium alloy scrap, has the potential to drive LIFO charges in the fourth quarter 2006 to a similar level as in the third quarter.

“Our key growth markets—namely aerospace and defense, chemical process industry, oil and gas, electrical energy, and medical—remain strong, representing 63% of ATI’s year-to-date 2006 sales. Aerospace and defense was the largest of our markets at 30% of year-to-date 2006 sales.

“Cash on hand at the end of the third quarter was $406 million. Cash flow from operations for the first nine months was $179 million even as we invested $488 million in managed working capital due to significantly higher levels of sales. As a result of our focus on operational execution and lean manufacturing, managed working capital improved to 29% of annualized sales, compared to over 30% at year end 2005.

Mr. Hassey noted that the company’s self-funded growth strategy continued on track. Capital investments for the first nine months of 2006 totaled $160 million, 78% of which were directed towards increasing the company’s high-value products capabilities. Key financial ratios also remained very strong. Annualized return on capital employed was 35%, annualized return on stockholders’ equity was 53%, and net debt to total capitalization improved to less than 11%.

“We remain focused on reducing costs and achieved gross cost reductions of $33.7 million in the third quarter 2006, bringing year-to-date cost reductions to $96.0 million,” noted Mr. Hassey. “ATI will again exceed its yearly cost reduction goal, which was originally set at $100 million for 2006.

“In summary, during the third quarter 2006 our major markets remained strong and total operating margins continued to improve. We are in the process of securing additional long-term supply agreements for our titanium and nickel-based superalloy products to profitably grow ATI’s participation in the robust jet engine and airframe markets, and the strong defense and medical markets.”

Outlook—“Looking ahead, our business remains strong with significant opportunities for profitable growth. We expect to see continued strong growth opportunities for our specialty metals from our key markets, namely aerospace and defense, chemical process industry, oil and gas, electrical energy, and medical. Our strategic capital investments and strong financial position have ATI well-positioned to achieve continued profitable growth in 2007 and beyond.”

Allegheny Technologies Inc. is one of the largest and most diversified specialty metals producers in the world with revenues of $4.4 billion during the most recent four quarters ending September 30, 2006. The company’s major markets are aerospace and defense, chemical process industry/oil and gas, electrical energy, medical, automotive, food equipment and appliance, machine and cutting tools, and construction and mining. Products include titanium and titanium alloys, nickel-based alloys and superalloys, stainless and specialty steels, zirconium, hafnium, and niobium, tungsten materials, grain-oriented silicon electrical steel and tool steels, and forgings and castings.