Good morning, and welcome to the Allegheny Technologies, Incorporated Second Quarter 2015 Results Conference Call. All participants will be in a listen-only mode. Please note this event is being recorded. I would now like to turn the conference over to Dan Greenfield, Vice President, Investor Relations and Corporate Communications. Please go ahead. Danny L. Greenfield - VP-Investor Relations & Corporate Communications: Thank you, Emily. Good morning, and welcome to the Allegheny Technologies' earnings conference call for the second quarter 2015. This conference call is being broadcast on our website at www.atimetals.com. Members of the media have been invited to listen to this call. Participating in the call today are Rich Harshman, Chairman, President, and Chief Executive Officer; and Pat DeCourcy, Senior Vice President, Finance and Chief Financial Officer. All references to net income and earnings in this conference call mean net income and earnings from continuing op. attributable to ATI. If you have connected to this call via the Internet, you should see slides on your screen. For those who have dialed in, slides are available on our website, www.atimetals.com. After some initial comments, we will ask for questions. During the question-and-answer session, please limit yourself to two questions to be considerate of others on the line. As always, we will make every attempt to reach everyone in the question-and-answer queue within the allotted conference call time. Please note that all forward-looking statements this morning are subject to various assumptions and caveats as noted in the earnings release and on this slide. Actual results may differ materially. Here is Rich Harshman. Richard J. Harshman - Chairman, President & Chief Executive Officer: Thank you, Dan. Good morning to everyone on the call or listening on the Internet. Although business conditions were challenging, we are disappointed in our second quarter results. Being…

Thank you. We will now begin the question-and-answer session. Our first question is from Gautam Khanna of Cowen and Company. Please go ahead.

Hi. Good morning. Richard J. Harshman - Chairman, President & Chief Executive Officer: Good morning, Gautam. How are you?

Pretty well. Thanks. I appreciate the opportunity to ask the question. Hey, I wanted to ask, if you could just comment a little more on what you're seeing in the jet engine channel? In the past, I think you mentioned the mill product demand was a little better, but the forging, the downstream products were lagging. Was there any change within the mix in jet engines? And then I have a follow-up. Richard J. Harshman - Chairman, President & Chief Executive Officer: Okay. No, I don't think so. I think on the mill product side, I think we did as you really sort through the first half, I think, we clearly saw higher demand in the first quarter, largely through the replenishment of the supply chain which had been drained at a low level and really wasn't at a sustainable level to support the rate ramp that was going on. So, we saw that demand for those products moderate a little bit in the second half – in the second quarter. I think, the programs that we're on right now, which are really not shipping in any – the new – the next generation programs aren't shipping in any meaningful way here in the first half of 2015. So the programs that we're on, on the parts and component side are more of the legacy programs. I think as we move through late second half of 2015 and certainly into 2016, so you will see the parts and components business pick up from the new generation, the next generation of jet engine platforms. And I think even on some of the legacy programs, you're still seeing some tightness in the powder supply perhaps for some of the jet engine OEMs that result in isothermal forge products. I mean, one of the reasons why we're making the investment on the powder capabilities is because of the tightness in the market today that will need to be addressed in order to support the OEM build rates going forward over the next five years. So, we saw a little bit of a delay probably in some of the ISO forgings in the second quarter and really in the first half that we don't see correcting itself until probably later this year, but certainly in early 2016.

Okay. That's helpful. And, Rich, I just wanted to ask on the rotary crop shear part you mentioned you're going to get the spares, the replacement parts soon. Have you gone through a full review to make sure that this is not a design flaw? It was just a defective part as opposed to a design flaw that would be maybe more serious. Richard J. Harshman - Chairman, President & Chief Executive Officer: Yes. No, it's a great question and, yes, we have, not only with Siemens and Siemens has been – Siemens now Primetals – has been very supportive throughout the process of the outage. It was their responsibility, it was their design and it was their supply chain that built the component. So they've been very supportive and have lived up to their obligations and we greatly appreciate that. They've done a failure analysis, an engineering analysis. We're also doing an independent one and I think all the indications are that it was not a design failure or a design problem with the RCS. It was a material issue with some of the components, either a material issue or a processing issue on the material, perhaps an annealing issue, but that's what things look like today. That has not yet been finalized, but I think all indications are pointing in that direction.

Thanks a lot. Good luck and appreciate it. Richard J. Harshman - Chairman, President & Chief Executive Officer: Thanks, Gautam.

Our next question is from Richard Safran of Buckingham Research Group. Please go ahead.

Hi. Good morning. Richard J. Harshman - Chairman, President & Chief Executive Officer: Good morning, Rich. How are you?

I'm doing well. Thanks. Rich, this is a bit of conjecture on my part, but one theme that seems to be is that your customers may not be communicating with you as effectively as they have been in the past. Like we saw this with Rolls-Royce and destocking and we seemed to have seen this, this quarter with engineering firms that order oil and gas equipment. So first, I mean do you agree with that conjecture on my part? And could you describe any efforts you're making to try to improve on that communications, because it looks like your customers may be taking a different approach on how they place orders and communicate inventory levels. Richard J. Harshman - Chairman, President & Chief Executive Officer: No, I really don't agree with your bottom line conclusion. I mean I think that in both cases – I mean the fact circumstances are different in both cases and I think that the dynamics of the market and the complexity of the supply chains are such that we have regular dialog and we have very deep discussions with our customers in all end markets. And we challenge them because we try to connect a number of different data points obviously that we're seeing from a macro basis as well as from a micro basis on the supply chains. But in the end, they're far more knowledgeable about the complexity of supply chains than we are. And I think the dialog is always robust, I think it represents the best information available to both parties. I think the challenging of the conclusions are there. I just think that it's a dynamic environment and the complexity of the supply chain is such that information is constantly changing and the information that we heard from our oil and gas customers late last year in terms of what they felt their expectations were and in terms of how it was going to impact our business with them turned out to be probably more optimistic at the time than it ultimately culminated in, and I think that's just due to the quite frankly the complexity of the supply chain and the dynamics of the market.

Okay. Thanks. And just as a follow-up here. Just want to ask a quick question on aerospace. So you noted in the release the mix got a bit worse. So if you said this, I apologize if I missed it. But you noted that the mix got a little bit worse compared to 1Q and I believe you had been thinking that under your PFS agreement with Boeing, you thought the mix might be getting better, more high value-added content alloy for example. So I'd like to know, if you still expect the mix to get better from here? Do your comments today indicate there's been any change in your view with improving mix? Richard J. Harshman - Chairman, President & Chief Executive Officer: Yes, I think year-over-year, I do think that the mix gets better. I think there is some volatility on a quarterly basis. I mean what we have seen on the airframe side is that there are mix changes from quarter-to-quarter as you progress through the year. And the first quarter, first half tends to be more heavily loaded quite frankly from an overall volume standpoint than the second-half. While that's less than ideal, I mean we wish it would be more evenly loaded, we respond to the needs of the customer. So I think on a year-over-year basis, the trend is that way. I think there is some volatility within a quarter, within a year that can be unexpected. It ultimately is what does the customer need and when do they need it. So we aim to be as responsive as we can to that. Makes planning and forecasting a little difficult but that's life.

Thank you very much. Richard J. Harshman - Chairman, President & Chief Executive Officer: Thanks.

Our next question is from Timna Tanners with Bank of America Merrill Lynch. Please go ahead. Timna Beth Tanners - Merrill Lynch, Pierce, Fenner & Smith, Inc.: Hello, good morning. Richard J. Harshman - Chairman, President & Chief Executive Officer: Good morning Timna. Patrick J. DeCourcy - Chief Financial Officer & Senior Vice President: Hi, Timna. Timna Beth Tanners - Merrill Lynch, Pierce, Fenner & Smith, Inc.: Okay, so I have a couple things. Just for starters, where is the CapEx change coming from? What's the reduction coming from? Patrick J. DeCourcy - Chief Financial Officer & Senior Vice President: I think it's largely just a variety of projects that we're looking at that closer and challenging some of the underlying assumptions, given where some of the end-markets are, and I don't think we've necessarily cancelled any of them. We're just delaying them and pushing them out. Timna Beth Tanners - Merrill Lynch, Pierce, Fenner & Smith, Inc.: Okay. And then there's a number of things that you've talked about in the past that I feel like we didn't get an update on, so I'm just going to go through them and ask if you can just give us your latest thinking there? Richard J. Harshman - Chairman, President & Chief Executive Officer: Sure. Timna Beth Tanners - Merrill Lynch, Pierce, Fenner & Smith, Inc.: One is, we've been hearing improvement on GOES and I know, AK Steel has done some exports there. Can you just remind us of if you have any exposure to that improving market or if it has to remain end of year? And then the next one is just on the partnership for the HRPF. You mentioned in a couple conference calls ago you expected that to be finalized this year. And then the trade…

Our next question is from Steve Levenson of Stifel Nicolaus. Please go ahead. Stephen E. Levenson - Stifel, Nicolaus & Co., Inc.: Thanks. Good morning, everybody. Richard J. Harshman - Chairman, President & Chief Executive Officer: Good morning. Patrick J. DeCourcy - Chief Financial Officer & Senior Vice President: Hi, Steve. Stephen E. Levenson - Stifel, Nicolaus & Co., Inc.: In the materials today, you make a number of references to forgings and castings and improvement there. Can you give us an example maybe on the LEAP or B737 MAX. How much of that additional content is coming from forgings and castings as opposed to just coming from metal, no products? Patrick J. DeCourcy - Chief Financial Officer & Senior Vice President: Well, that number that we gave, at least $1 billion in revenue is all parts and components, it's all forgings and castings. Stephen E. Levenson - Stifel, Nicolaus & Co., Inc.: Okay. Again as an example on the LEAP or B737 MAX, you've gone from about $550,000 to $1.1 million, I know you haven't disclosed it, I don't know if you can, but it would be interesting to know how much of that addition is from forgings and castings and which part is metal? Patrick J. DeCourcy - Chief Financial Officer & Senior Vice President: I think most of it, Steve, I see what you are saying, I think most of it is parts and components as opposed to metal. I mean there is some metal because of the Rene 65 and the 718Plus, but when you're talking numbers that big, the majority of that increase is parts and components. Stephen E. Levenson - Stifel, Nicolaus & Co., Inc.: Okay, thanks. Is that something you think you can duplicate on the GE9X and the Trent 7000, which still…

Our next question is from Phil Gibbs of KeyBanc Capital Markets. Please go ahead.

Hey, morning, Rich. Richard J. Harshman - Chairman, President & Chief Executive Officer: Phil, how are you?

Doing well. I just had a question on the oil and gas business. I think before you had mentioned that drilling applications are going to be down 20% to 25% this year. What's the update now on the magnitude of the downside, obviously things have changed? Richard J. Harshman - Chairman, President & Chief Executive Officer: Yeah. I think it's more than 20% to 25%. It feels more like 35% to 40% quite frankly. And the impact of that is obviously not just on that revenue stream, but also on the load factors and the facilities. Including on the forging side, I mean we had a significant piece of the oil and gas business, and forgings not necessarily in what you might think the traditional Cudahy, the former Ladish facilities, but more in the legacy former Teledyne facilities in Portland, Indiana, and Lebanon, Kentucky, so those businesses have been impacted negatively from reduction and obviously impacts the cost absorption and everything going all the way back to melt. So it's impacting us in the high performance materials and component segment. In melt, in our Sheffield, UK operations, which is more heavily involved in oil and gas, the oil and gas market than aerospace, quite frankly, and then in some of our forgings. So I think the depth of the correction continued to worsen and discussions with our customers as we move through the second quarter. I think what we're seeing now is what we expect to see at least through the end of 2015. And I think quite frankly the dialogue we're having and just the assessment of the overall market, I personally don't see that those market conditions improving, absent some geopolitical event which none of us want to see, I don't see the market demand and the fundamentals improving until probably mid-2016 at the earliest.

Okay. And the sequential decline in operating profit in High Performance Metals, any way to characterize how much of that was oil & gas related, load factor related, aerospace, meaning how much of it was kind of associated? Richard J. Harshman - Chairman, President & Chief Executive Officer: I think it was pretty evenly split quite frankly. I think that the oil & gas had a pretty dramatic impact on it, probably more so than just the normal margining off of the revenues because of the load factors and the lower utilization and what happens with those fixed costs. So, we need to replace that business quite frankly and we need to focus on reducing the cost structure and that's what we'll be doing here. And then when the market does come back and it will, quite frankly, the cost structure will be better and the margins will be higher.

Just have a quick one and I'll jump right off, I really appreciate it. The comment that you made on a pre-tax basis for profitability for the stainless business at $0.50 base prices, does that include a more positive resolution to the employment situation? Thanks. Richard J. Harshman - Chairman, President & Chief Executive Officer: Yeah. I think it's an important factor and really what we're trying to do is just – what we're trying to accomplish with our negotiating strategy is really not an overall cost reduction, it's more of a stabilization at the existing level, so that the current all-in rate that we have now doesn't continue to grow. And if we can do that and then capture the benefits of attrition and normal attrition and improve productivity, which is really where some of the language and work rule changes come in, then I think that that's supportive of that, plus what we need to do in other cost areas in that business outside of the represented employees. I think that's where the strategy of $0.50 a pound profitability can work. So, the aim is not to do that 100% on the backs of the United Steelworkers, that's just not the case at all.

The next question is from Jorge Beristain of Deutsche Bank. Please go ahead.

Good morning, Rich and everybody. Jorge Beristain with DB. My question, I guess, was just following up on the HRPF to get that facility sort of maxed out in terms of utilization. You've mentioned bringing in a strategic partner, and now you're saying that there is not really a firm yearend timeline there maybe because of the current state of the carbon steel industry. But could you talk about other options, and at what point would you consider perhaps more of a tolling arrangement just basically to get that utilization filled up? That's my first question. Richard J. Harshman - Chairman, President & Chief Executive Officer: Yeah. Well, I mean I think that the – while our preference is as a joint venture, I mean I think as a temporary basis, would we reconsider tolling for a carbon steel partner on a short-term basis? The answer is sure, we would. I mean the first thing we need to do is get the rotary crop shear replaced, right, which is the end of September. And then we need to – our primary focus has always been to continue to focus on the products that we make and to maximize the learning curve opportunity there, and then at the same time, turn our sights to what we're going to do on the carbon steel side, or what opportunities exist on the carbon steel side. I mean as I've said many times, the return on investment calculation of the HRPF did not assume a carbon steel partner or any type of carbon steel tolling for that matter. We just believed that because of the power and the capabilities and the available capacity of the HRPF that it makes sense and it would make sense for ATI and someone else to use the capabilities of this very unique asset in a very capital efficient way. And we still believe that and quite frankly the dialog that we've had, in one case it was more advanced, in other cases it's very early, is an intriguing proposition to potential carbon steel parties. And I'll just leave it at that. And I'm not going to put a self-imposed – do I have a goal in mind in terms of when we would like to have that completed? Yeah, tomorrow, but we're not going to do it for the sake of doing it, it's going to be with the right partner or the right – if it's a tolling arrangement on an interim basis, the right party that makes sense for them and for us under the right terms and conditions. So, it's not something that we're going to do just to check the box.

Okay. And may be a second question, could you just talk a little bit more about trade cases? Obviously, we've seen this past week some positive news there on some trade cases moving forward, but you haven't really touched on that as potential something that could favorably impact your business. Could you really kind of drill it down a little bit for us in terms of what grades or what products you think would be most beneficial or benefited from any further trade case action? And could you comment how actively involved you're in launching those? Richard J. Harshman - Chairman, President & Chief Executive Officer: Yeah, sure. Well, I think it's mainly targeted towards the more commodity 300 series of stainless, the 304-type stainless mainly, primarily in terms of sheet product form and to a lesser extent in terms of strip product form. I think it's not only us. I think a more successful trade case is representative of industry participation and we work that process quite frankly through a U.S.-based trade association called SSINA. ATI is very important member of SSINA and has been for a very long time. So, if there is any one company or one member of SSINA that tends to drive these types of issues and considerations on the trade side through SSINA, it's probably ATI. So, we take that responsibility seriously. We know what the trade laws are in terms of when you can bring a successful trade case. I think we have worked in partnership, I know we worked in partnership in the past with other affected parties like the United Steelworkers and the leadership of the USW and the support of appropriate trade cases and it's a very facts specific situation, when you look at the trade laws in terms of will a trade case be successful. We think a trade case is required and necessary based upon the behavior of certain importers into the U.S., mainly from China and that data is being collected and I would think the path that we're on, we would expect the trade case to be brought.

This concludes our question-and-answer session. I'd like to turn the conference back over to Rich Harshman for any closing remarks. Richard J. Harshman - Chairman, President & Chief Executive Officer: Okay. Thank you everybody for joining us on the call today, and thank those who asked us questions, they are great questions. And we appreciate your continuing interest in ATI. Danny L. Greenfield - VP-Investor Relations & Corporate Communications: Thank you, Rich, and thanks to all of our listeners for joining us today. That concludes our conference call.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.