Ati Inc's Business Segments

Allegheny Technologies Incorporated ("ATI") is one of the largest and most diversified specialty materials producers in the world. We use innovative technologies to offer global markets a wide range of specialty materials. High-value products include super stainless steel, nickel-based and cobalt-based alloys and superalloys, titanium and titanium alloys, specialty steels, tungsten materials, exotic alloys, which include zirconium, hafnium and niobium, and highly engineered strip and Precision Rolled Strip(R) products. In addition, we produce commodity specialty materials such as stainless steel sheet and plate, silicon electrical and tool steels, and carbon alloy steel impression die forgings and large grey and ductile iron castings.

Specialty materials play a significant role in our lives. Allegheny Technologies is a world leader in the manufacture of both high value and commodity specialty materials products.Specialty materials are produced in a variety of forms, including sheet, strip, foil, plate, slab, ingot, billet, bar, rod, wire, coil, tubing, and shapes, and are selected for use in environments that demand materials having exceptional hardness, toughness, strength, resistance to heat, corrosion or abrasion, or a combination of these characteristics. Common end uses of our products include jet engines, air frames, electrical energy generation and distribution, automotive, chemical processing, oil and gas, construction and mining, machine and cutting tools, appliances and food equipment, transportation, and medical equipment and implants.

COMPETITION

Markets for both our high value and commodity products and services in each of our principal business segments are highly competitive. We compete with many manufacturers who, depending on the product involved, range from large diversified enterprises to smaller companies specializing in particular products. Factors that affect our competitive position are manufacturing costs, industry manufacturing capacity, the quality of our products, services and delivery capabilities, our capabilities to produce a wide range of specialty materials in various unique alloys and product forms, our technological capabilities including our research and development efforts, our marketing strategies and price.

Other major producers of products in each of the business segments are as follows:

FLAT-ROLLED PRODUCTS SEGMENT
Stainless steel
o'AK Steel Corporation
o'J&L Specialty Steel, LLC, owned by Arcelor S.A. (France)
o'North American Stainless (NAS), owned by Acerinox S.A.
(Spain)
o'Nucor Corporation
o'Outokumpu Stainless Plate Products, owned by Outokumpu Oyj
(Finland)
o'Imports from
-'Acesita S.A. (Brazil)
-'Arcelor S.A. (France)
-'Columbus Stainless (Pty) Ltd (S. Africa)
-'Mexinox S.A. de C.V., group member of ThyssenKrupp AG
-'Slater Steel Inc., owns Atlas Stainless (Canada)
-'ThyssenKrupp AG (Germany)
-'Ta Chen International Corporation (Taiwan)

HIGH PERFORMANCE METALS SEGMENT
Nickel-based alloys and specialty steels
o'Carpenter Technology Corporation
o'Special Metals Corporation
o'ThyssenKrupp VDM, a company of ThyssenKrupp Stainless
(Germany)
Titanium
o'Titanium Metals Corporation
o'RMI Titanium, an RTI International Metals Company
o'VSMPO - AVISMA (Russia)
Exotic Alloys
o'Cezus, a group member of AREVA (France)
o'HC Stark, a division of the Bayer Group (Germany)
o'Western Zirconium Plant of Westinghouse Electric Company,
part of the Nuclear Utilities Business Group of British
Nuclear Fuels (BNFL)

ENGINEERED PRODUCTS SEGMENT
Tungsten and Tungsten Carbide Products
o'Kennametal Inc.
o'Iscar (Israel)
o'Sandvik AB (Sweden)
o'Seco Tools AB (Sweden), owned by Sandvik AB (Sweden)

RAW MATERIALS AND SUPPLIES

Substantially all parts and materials required in the manufacture of our products are available from more than one supplier and the sources and availability of raw materials essential to our businesses are adequate.

The principal raw materials we use in the production of our specialty materials are scrap (including iron-, nickel-, chromium-, titanium- and molybdenum-bearing scrap), nickel, titanium sponge, zirconium sand and sponge, ferrochromium, ferrosilicon, molybdenum and molybdenum alloys, ammonium paratungstate, manganese and manganese alloys, cobalt, niobium, vanadium and other alloying materials.

Flat-Rolled Products Segment

Our Flat-Rolled Products segment produces, converts and distributes stainless steel, nickel-based alloys and superalloys, and titanium and titanium-based alloys, in sheet, strip, plate and foil, and Precision Rolled Strip(R) products, as well as silicon electrical steels and tool steels. The operations in this segment are Allegheny Ludlum, Allegheny Rodney, and Allegheny Ludlums 60% interest in the Chinese joint venture company known as Shanghai STAL Precision Stainless Steel Company Limited ("STAL") and our 50% interest in the industrial titanium joint venture known as Uniti LLC. The remaining 40% interest in STAL is owned by the Baosteel Group, a state authorized investment company whose equity securities are publicly traded in the Peoples Republic of China. The remaining 50% interest in Uniti LLC is held by VSMPO-AVISMA, a Russian producer of titanium, aluminum, and specialty steel products.

Stainless steel and nickel-based alloys contain elements such as chromium, nickel and molybdenum for strength and corrosion and heat resistance; titanium and titanium-based alloys provide higher strength-to-weight ratios and are corrosion-resistant; tool steel alloys include carbon, tungsten, molybdenum and other metals to make them both hard and malleable; and electrical steel contains silicon to minimize electrical energy loss when in use. We offer these flat-rolled products in a broad selection of grades, sizes and finishes designed to meet international specifications. We provide technical support for material selection. Our wide array of alloys and product forms provides customers with choices from which to select the optimum alloy for their application.

Sheet. Stainless steel, nickel-based alloy and titanium sheet products are used in a wide variety of consumer and industrial applications such as food preparation, appliance, automotive, aerospace and medical applications that require ease of cleaning and fabrication, as well as corrosion resistance.'

Strip and Precision Rolled Strip(R) Products. Stainless steel, nickel-based alloy and titanium strip products are used in a variety of consumer and industrial products and a wide range of automotive components. We also offer very thin Precision Rolled Strip(R) products which range from 0.015 inch to less than 0.0015 inch (0.38 - 0.038 mm) thick. Our Precision Rolled Strip(R) products include stainless steel, nickel-based alloys, titanium and titanium alloys, and carbon steel that are used by customers to fabricate a variety of different products ranging from automobile components to photographic, computer, building and construction and consumer products. For 2003, approximately 10% by volume of our strip products are sold to independent service centers, with the remainder sold directly to end-use customers directly or through our own distribution network.

Plate. Stainless steel, nickel-based alloy and titanium plate products are primarily used in industrial equipment that requires ease of cleaning or corrosion-resistant capabilities such as pollution control scrubbers, food processing equipment, pulp and paper equipment, chemical processing equipment, power generation equipment and aerospace applications. We process and distribute stainless steel and nickel alloy plate and titanium and titanium alloy plate products in a wide variety of grades and gauges.

Silicon Electrical Steel. Our grain-oriented silicon electrical steel products are used generally in applications in which electrical conductivity and magnetic properties are important. These products are sold directly to end-use customers, including manufacturers of transformers and communications equipment.

High Performance Metals Segment

Our High Performance Metals segment produces, converts and distributes a wide range of high performance alloys, including nickel- and cobalt-based alloys and superalloys, titanium and titanium-based alloys, exotic alloys such as zirconium, hafnium, niobium, tantalum, and their related alloys, and other specialty materials, primarily in slab, ingot, billet, and long product forms, such as bar, rod, wire, coil and seamless tube. The operations in this segment are Allvac, Allvac Ltd (U.K.) and Wah Chang, which also produces and sells zirconium chemicals.

Nickel-, Cobalt- and Titanium-Based Alloys and Superalloys. Our nickel-, iron-, and cobalt-based alloys and superalloys and our titanium and titanium-based alloys are engineered to retain exceptional strength and corrosion resistance at temperatures through 2,000 degrees Fahrenheit (1,093 degrees Celsius) and are used in critical, high-stress applications. These products are designed for the high performance requirements of aerospace, oil and gas, power generation, chemical processing, transportation, biomedical, marine and nuclear industries.

Exotic Alloys - Zirconium, Hafnium, Niobium and Tantalum. We are a leading global producer of zirconium, a highly corrosion-resistant metal that is transparent to neutrons. Zirconium is used for fuel tubes and structural parts in nuclear power reactors and for corrosion-resistant chemical industry applications, and is also used in the jewelry and personal hygiene industries. Hafnium, derived as a by-product of zirconium, is principally used for control rods in nuclear reactors due to its ability to absorb neutrons, and as an alloying addition in aerospace applications. We also produce niobium, also known as columbium, in various forms and alloys. The higher quality grades of niobium we produce are used as an alloying addition in superalloys for jet engines and for aerospace applications such as rocket and fuel nozzles. Niobium and related alloys also are used in applications requiring superconducting characteristics for high-strength magnets, including in medical devices for body scanning, accelerators for high-energy physics, and fusion energy projects for the generation of electricity. We also produce tantalum, one of the most corrosion-resistant metals, which is used for medical implants, chemical process equipment and aerospace engine components.

Engineered Products Segment

The principal business of our Engineered Products segment (formerly called the Industrial Products segment) includes the production of tungsten powder, tungsten heavy alloys, tungsten carbide materials and carbide cutting tools. The segment also produces carbon alloy steel impression die forgings and arge grey and ductile iron castings, and provides precision metals processing services. The operations in this segment are Metalworking Products, Portland Forge, Casting Service and Rome Metals.

Cutting Tools and Tungsten Carbide Products. We produce a line of sintered tungsten carbide products that approach diamond hardness for the metalworking, mining, oil and gas, and other industries requiring tools with extra hardness. Cemented carbide products, which may be coated or uncoated, are used as super-hard cutters in the high-speed machining and cutting of steel, high temperature alloys and other applications where hardness and wear resistance are important. Technical developments related to ceramics, coatings and other disciplines are incorporated in these products.

We also produce tungsten for worldwide markets from numerous and varied tungsten-bearing raw materials to produce tungsten and tungsten carbide powders. Previously used cemented carbide parts are also recycled into tungsten carbide powder.

Forgings and Castings. We forge carbon alloy steels into finished forms that are used in a diverse number of industries. With the latest screw-type forging presses, we produce carbon alloy steel forgings in sizes ranging from one pound to more than 200 pounds.

We also cast grey and ductile iron metals in sizes ranging from 1,000 pounds to 160,000 pounds and in forms ranging from diesel locomotive engine blocks to housings and parts for power generation equipment, tools, and automobiles.

Processing Services. We have precision metals processing capabilities which enable us to provide process services for most metals from ingots to finished product forms, such services include grinding, polishing, blasting, cutting, flattening, and ultrasonic testing.