## Quantitative and Qualitative Disclosures About Market Risk and Other Matters 

## Board of Directors 

On May 28, 2003, we announced that Brian P. Simmons resigned from our Board of Directors. On January 6, 2004, we announced that George J. Kourpias resigned from our Board of Directors for health reasons, effective December 31, 2003. 

On July 10, 2003, L. Patrick Hassey became a member of the Board of Directors. On that date, ATI’s Board of Directors selected Mr. Hassey to become President and Chief Executive Officer, effective October 1, 2003, succeeding James. L. Murdy, who retired effective September 30, 2003. Effective upon his retirement on September 30, 2003, Mr. Murdy resigned from our Board of Directors. 

On January 14, 2004, we announced that Robert P. Bozzone would retire as of Chairman of the Board of Directors, effective after the Annual Meeting of Stockholders in May 2004. Upon Mr. Bozzone’s retirement, the Board of Directors plans to name L. Patrick Hassey, 58, Chairman, in addition to his responsibilities as President and Chief Executive Officer. Mr. Bozzone will remain a director of ATI. 

## J&L Specialty Steel Transaction 

On February 17, 2004, we announced that an Asset Purchase Agreement was signed with Arcelor S. A. (“Arcelor”) and J&L Specialty Steel, LLC under which a wholly owned ATI subsidiary will acquire substantially all of the assets of J&L Specialty Steel. The transaction, which is targeted for closing on May 3, 2004, is conditioned upon completion of due diligence, the successful negotiation of new collective bargaining agreements with the USWA at both Allegheny Ludlum and J&L Specialty Steel, approval by ATI’s secured lenders, and customary regulatory approvals. J&L Specialty Steel is a leading manufacturer of flat-rolled stainless steel products, and is a wholly owned subsidiary of Arcelor. The purchase price for the assets acquired will be determined under the Asset Purchase Agreement based upon the net working capital of J&L Specialty Steel, and will include $7.5 million in cash at closing, up to $7.5 million payable in one year, and the remaining amount payable in installments through 2011. 

## Forward-Looking Statements 

From time to time, the Company has 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. Such forward-looking statements are based on management’s current expectations and include known and unknown risks, uncertainties and other factors, many of which the Company is unable to predict or control, that may cause our actual results or performance to materially differ from any future results or performance expressed or implied by such statements. Various of these factors are described from time to time in the Company filings with the Securities and Exchange Commission, including Reports on Form 10-Q. We assume no duty to update our forward-looking statements. 

Factors that could cause actual results to differ from those in such forward-looking statements include the following: 

Cyclical Demand for Products. The cyclical nature of the industries in which our customers operate cause demand for our products to be cyclical, creating uncertainty regarding future profitability. Various changes in general economic conditions affect the industries in which our customers operate. These changes include decreases in the rate of consumption or use of our customers’ products due to economic downturns. Other factors causing fluctuation in our customers’ positions are changes in market demand, lower overall pricing due to domestic and international overcapacity, currency fluctuations, lower priced imports and increases in use or decreases in prices of substitute materials. As a result of these factors, our profitability has been and may in the future be subject to significant fluctuation. Partly as a result of weak general economic conditions in the markets we serve that have caused demand for our products to decrease, we have experienced operating and net losses, and our financial condition has been adversely affected. These conditions could continue, adversely affecting our ability to produce and sell our products profitably. 

A significant portion of the sales of our High Performance Metals segment represent products sold to customers in the commercial aerospace industry. Economic and other factors, including the September 11, 2001 terrorist attacks, that have been adversely affecting the airline industry have resulted in overall reduced demand 

