Allegheny Technologies Comments On Business Conditions, Earnings Outlook and Growth Opportunities.

Business Editors

PITTSBURGH--(BUSINESS WIRE)--Dec. 19, 2000

Allegheny Technologies Incorporated (NYSE:ATI) today announced that primarily due to the impact of a slowing U.S. economy on its commodity stainless steel business and higher energy costs across most of its businesses, it does not expect to achieve the analysts' consensus fourth quarter 2000 earnings estimate of $0.45 per share.

BUSINESS CONDITIONS AND EARNINGS OUTLOOK

Robert P. Bozzone, Allegheny Technologies' chairman, president and chief executive officer said, "Conditions deteriorated significantly in our commodity stainless steel business as a slowing U.S. economy weakened several end-use markets. This economic slowdown coupled with high levels of inventory at service centers and near record levels of imports resulted in significantly lower prices and softer demand for nearly all commodity stainless steel products. In addition, unusually high energy costs are impacting most of our businesses, especially at our operations located in the Pacific Northwest. As a result, we believe fourth quarter earnings per share before special items will likely be near the lowest current analyst's estimate of $0.32 per share."

Also, in the fourth quarter 2000 Allegheny Technologies expects to record one-time special items, net of taxes, of approximately $20 million, or $0.25 per share, resulting from the impairment of high-cost titanium sponge production assets, a salaried workforce reduction at the Company's Allegheny Ludlum operations, and recent changes in the Company's executive management. It is expected that, when fully implemented, these actions should generate annual pre-tax savings of more than $18 million.

"The slowing U.S. economy and the outlook for continued high energy costs create uncertainty as we look ahead to 2001," added Bozzone. "We believe that difficult conditions in our commodity stainless steel business are likely to pressure earnings well into the first half of 2001. However, the diversification of our products and strength in certain global markets, notably aerospace, power generation, oil and gas, and medical, should offset some of the expected weakness in commodity stainless steel. In addition, we plan to continue our aggressive cost reductions throughout the Company to maintain our competitive strengths."

Allegheny Technologies also indicated that surplus pension income in 2001 could decline by approximately 30 percent from 2000 levels due to lower performance of worldwide equity markets in 2000. However, the Company expects to continue to benefit from its significant pension surplus in 2001. This includes reimbursement from the Company's defined benefit pension plans of the Company's actual expenditures on retiree health care benefits.

STRONG CASH FLOW AND GROWTH OPPORTUNITIES

"We remain optimistic about the market prospects for our high performance specialty materials and Precision Rolled Strip(R) products," Bozzone noted. "We expect our cash flow to remain strong allowing the Company to continue to pay our attractive dividend, make strategic growth-oriented investments to enhance stockholder value, and continue our stock repurchase program, while maintaining a strong balance sheet.

"We intend to focus the majority of our 2001 capital expenditures in our high-growth, high-value added product lines such as Precision Rolled Strip, nickel-based and cobalt-based alloys and superalloys, premium titanium alloys, and high purity niobium alloys. As part of this strategy, the Board of Directors recently approved approximately $50 million in capital expenditures designed to expand the capabilities of our Allvac, Allvac Ltd and Wah Chang operations. We expect these projects to be completed during the first half of 2002."

Allegheny Technologies will conduct a conference call with investors and analysts on December 20, 2000 at 9:00 a.m. EST. The conference call will be broadcast live on www.alleghenytechnologies.com. To access the broadcast, click on "December Conference Call". In addition, the conference call will be available through Investor Broadcast Networks' Vcall website, located at www.vcall.com. The conference call replay will be available on the websites for two weeks.

This news release contains forward-looking statements including those related to anticipated business, economic and market conditions, operational actions, including special charges, taken to respond to market conditions, sales and earnings, financial performance and growth, prices, price competitiveness, product demand, raw material and energy costs, cost reductions, anticipated cost savings, capital investments and the impact of investments on the Company's capabilities, commodity stainless steel service center inventory levels, cash flow, dividends, growth strategy, stock repurchase program, and projected pension surplus, pension income and reimbursement of retiree health care expenditures. 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 the Company's actual results or performance to materially differ from any future results or performance expressed or implied by such statements. Additional information concerning factors that could cause actual results to differ materially from those projected in the forward-looking statements is contained in the Company's filings with the Securities and Exchange Commission, including its Report of Form 10-K for the year ended December 31, 1999 and its Report on Form 10-Q for the quarter ended September 30, 2000.

Allegheny Technologies Incorporated (NYSE:ATI) is one of the largest and most diversified producers of specialty materials in the world. Our talented people use innovative technologies to offer growing global markets a wide range of specialty materials including stainless steel, nickel-based and cobalt-based alloys and superalloys, titanium and titanium-based alloys, specialty steel alloys, zirconium, hafnium, niobium and related alloys, and tungsten-based specialty materials. Our goal is to be the low cost, high quality supplier to global markets. Allegheny Technologies website can be found at www.alleghenytechnologies.com.