ATI to take impairment charges in flat-rolled products unit

PITTSBURGH — Allegheny Technologies Inc. on Tuesday said its fourth quarter 2015 results will include $267 million in pre-tax charges, including what it said are $181 million of non-cash, long-lived asset impairment charges for its flat rolled products business, and $76 million of non-cash inventory charges.
The company, which reports fourth-quarter and full-year financial results next week, said its asset impairment charges include the write-off of all $127 million of goodwill in the flat-rolled business segment, where it locked out about 2,000 unionized workers beginning Aug. 15, including about 200 at its Allegheny Ludlum plant in Canton Township.
ATI announced last year that it is taking “rightsizing” actions to better align its FRP operations to the challenging market conditions for its commodity products.
The actions include idling the standard stainless melt shop and sheet finishing operations at its Midland facility, which is expected to be completed by the end of the month; and idling grain-oriented electrical steel operations including the Bagdad, Pa. facility, which is scheduled to be completed by April.
The company said as a result of the idling actions, its fourth-quarter results will include a non-cash impairment charge of about $54 million to reduce the carrying value of long-lived assets at the Midland facility, and a $4 million charge for idling costs.
“The future restart of the Midland and grain-oriented electrical steel operations respectively, will depend on future business conditions and ATI’s ability to earn an acceptable return on invested capital on products produced at the operations,” the company stated.