Howmet Aerospace Reports Third Quarter 2025 Results
- None.
- None.
Insights
Howmet delivered stronger-than-expected Q3 results, raised guidance, returned cash, and signalled continued revenue growth into 2026.
The company reported record revenue of
The core business showed broad-based strength: commercial aerospace, defense aerospace, and industrial markets drove growth, while commercial transportation lagged. The company raised full-year 2025 guidance across metrics and guided 2026 revenue to approximately
Record Revenue, Growth Accelerated to
Full Year 2025 Guidance: Raised on All Metrics
Full Year 2026 Revenue Guidance: Approximately
Third Quarter 2025 GAAP Financial Results
- Revenue of
$2.09 billion 14% year over year, driven by Commercial Aerospace, up15% - Operating Income Margin of
25.9% , up 300 basis points year over year - Net Income of
$385 million $332 million $0.95 $0.81 - Generated
$531 million $314 million $104 million - Share repurchases of
$200 million $0.12 20% increase from the second quarter 2025
Third Quarter 2025 Adjusted Financial Results
- Adjusted EBITDA excluding special items of
$614 million 26% year over year - Adjusted EBITDA margin excluding special items of
29.4% , up 290 basis points year over year - Adjusted Operating Income Margin excluding special items of
25.9% , up 310 basis points year over year - Adjusted Earnings Per Share excluding special items of
$0.95 34% year over year - Generated
$423 million
2025 Guidance
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Q4 2025 Guidance |
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FY 2025 Guidance |
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Low |
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Baseline |
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High |
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Low |
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Baseline |
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High |
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Revenue |
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Adj. EBITDA *1 |
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Adj. EBITDA Margin*1 |
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28.9 % |
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29.0 % |
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29.1 % |
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29.0 % |
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29.0 % |
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29.0 % |
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Adj. Earnings per Share*1 |
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Free Cash Flow1 |
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* Excluding special items |
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1 Reconciliations of the forward-looking non-GAAP measures to the most directly comparable GAAP measures, as well as the directly comparable GAAP measures, are not available without unreasonable efforts due to the variability and complexity of the charges and other components excluded from the non-GAAP measures – for further detail, see "2025 Guidance" below. |
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Key Announcements
- Repurchased
$200 million $182.20 - Repurchased an additional
$100 million $191.86 - Increased the third quarter dividend by
20% quarter over quarter to$0.12 - Paid down remaining
$63 million $4 million - S&P upgraded Howmet Aerospace's long-term issuer credit rating from BBB to BBB+ on September 8, 2025
- Full Year 2025 Guidance: Raised on all metrics
- Full Year 2026 Revenue Guidance: Approximately
$9 billion 10% year over year
Howmet Aerospace reported Net Income of
Third quarter 2025 Operating Income and Operating Income excluding special items were both
Third quarter 2025 Adjusted EBITDA excluding special items was
Howmet Aerospace Executive Chairman and Chief Executive Officer John Plant said, "The Howmet team drove a very strong third quarter, with results exceeding the high end of guidance on all metrics. Notably, revenue growth accelerated to
Mr. Plant continued, "Strong cash generation supported continued return of cash to shareholders, with
"Turning to 2026, the outlook across most of our major end markets remains solid. Air traffic continues to grow and the backlog of commercial aircraft extends through the decade, providing for both solid commercial aerospace original equipment demand and growing demand for engine spares. The defense aerospace market remains strong across F-35 demand in addition to legacy fighters. Growing power demand to support data center builds bolsters the industrial gas turbine and aeroderivative market. However, the commercial transportation market remains weak. Our 2026 outlook envisions revenue of approximately
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* Excluding special items |
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Third Quarter 2025 Segment Performance
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Engine Products |
3Q24 |
4Q24 |
1Q25 |
2Q25 |
3Q25 |
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(in |
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Third-party sales |
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Inter-segment sales |
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Provision for depreciation and amortization |
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Segment Adjusted EBITDA |
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Segment Adjusted EBITDA Margin |
32.5 % |
31.1 % |
32.6 % |
33.0 % |
33.3 % |
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Restructuring and other (credits) charges |
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$ — |
$ — |
$ — |
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Capital expenditures |
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Engine Products reported third quarter 2025 revenue of
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Fastening Systems |
3Q24 |
4Q24 |
1Q25 |
2Q25 |
3Q25 |
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(in |
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Third-party sales |
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Inter-segment sales |
$ — |
$ 1 |
$ — |
$ — |
$ — |
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Provision for depreciation and amortization |
$ 12 |
$ 11 |
$ 12 |
$ 12 |
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Segment Adjusted EBITDA |
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Segment Adjusted EBITDA Margin |
26.0 % |
27.7 % |
30.8 % |
29.2 % |
30.8 % |
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Restructuring and other charges |
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$ — |
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$ — |
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Capital expenditures |
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Fastening Systems reported revenue of
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Engineered Structures |
3Q24 |
4Q24 |
1Q25 |
2Q25 |
3Q25 |
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(in |
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Third-party sales |
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Inter-segment sales |
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Provision for depreciation and amortization |
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Segment Adjusted EBITDA |
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Segment Adjusted EBITDA Margin |
15.0 % |
18.5 % |
21.3 % |
21.4 % |
20.1 % |
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Restructuring and other charges (credits) |
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$ — |
$ — |
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Capital expenditures |
$ 5 |
$ 4 |
$ 5 |
$ 6 |
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Engineered Structures reported revenue of
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Forged Wheels |
3Q24 |
4Q24 |
1Q25 |
2Q25 |
3Q25 |
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(in |
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Third-party sales |
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Provision for depreciation and amortization |
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Segment Adjusted EBITDA |
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Segment Adjusted EBITDA Margin |
26.1 % |
27.2 % |
27.0 % |
27.5 % |
29.6 % |
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Restructuring and other charges (credits) |
$ — |
$ — |
$ — |
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$ — |
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Capital expenditures |
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Forged Wheels reported revenue of
Repurchased
In the third quarter 2025, Howmet Aerospace repurchased
Quarterly Common Stock Dividend Increases
On July 29, 2025, the Board of Directors declared a dividend of
Paid Down Remaining
In the third quarter 2025, the Company paid down the remaining
S&P Upgraded Howmet Aerospace Rating to BBB+
S&P upgraded Howmet Aerospace's long-term issuer credit rating from BBB to BBB+ on September 8, 2025. All three major credit rating agencies rate Howmet Aerospace three notches into Investment Grade.
2025 Guidance
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Q4 2025 Guidance |
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FY 2025 Guidance |
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Low |
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Baseline |
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High |
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Low |
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Baseline |
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High |
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Revenue |
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Baseline Change |
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Adj. EBITDA*1 |
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Adj. EBITDA Margin*1 |
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28.9 % |
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29.0 % |
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29.1 % |
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29.0 % |
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29.0 % |
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29.0 % |
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Baseline Change |
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+50 bps |
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Adj. Earnings per Share*1 |
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Baseline Change |
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Free Cash Flow1 |
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Baseline Change |
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* Excluding Special Items |
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1 Reconciliations of the forward-looking non-GAAP financial measures to the most directly comparable GAAP financial measures, as well as the directly comparable GAAP measures, are not available without unreasonable efforts due to the variability and complexity of the charges and other components excluded from the non-GAAP measures, such as gains or losses on sales of assets, taxes, and any future restructuring or impairment charges. In addition, there is inherent variability already included in the GAAP measures, including, but not limited to, price/mix and volume. Howmet Aerospace believes such reconciliations would imply a degree of precision that would be confusing or misleading to investors. |
Howmet Aerospace will hold its quarterly conference call at 10:00 AM Eastern Time on Thursday, October 30, 2025. The call will be webcast via www.howmet.com. The press release and presentation materials will be available at approximately 7:00 AM ET on October 30, via the "Investors" section of the Howmet Aerospace website.
About Howmet Aerospace
Howmet Aerospace Inc., headquartered in
Dissemination of Company Information
Howmet Aerospace intends to make future announcements regarding Company developments and financial performance through its website at www.howmet.com.
Forward-Looking Statements
This release contains statements that relate to future events and expectations and as such constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include those containing such words as "anticipates", "believes", "could", "envisions", "estimates", "expects", "forecasts", "goal", "guidance", "intends", "may", "outlook", "plans", "poised", "projects", "seeks", "sees", "should", "targets", "will", "would", or other words of similar meaning. All statements that reflect Howmet Aerospace's expectations, assumptions or projections about the future, other than statements of historical fact, are forward-looking statements, including, without limitation, statements, forecasts and outlook relating to the condition of markets; future financial results or operating performance; future strategic actions; Howmet Aerospace's strategies, outlook, and business and financial prospects; and any future dividends, debt issuances, debt reduction and repurchases of its common stock. These statements reflect beliefs and assumptions that are based on Howmet Aerospace's perception of historical trends, current conditions and expected future developments, as well as other factors Howmet Aerospace believes are appropriate in the circumstances. Forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and changes in circumstances that are difficult to predict, which could cause actual results to differ materially from those indicated by these statements. Such risks and uncertainties include, but are not limited to: (a) deterioration in global economic and financial market conditions generally, or unfavorable changes in the markets served by Howmet Aerospace, including due to escalating tariff and other trade policies and the resulting impacts on Howmet Aerospace's supply and distribution chains, as well as on market volatility and global trade generally; (b) the impact of potential cyber attacks and information technology or data security breaches; (c) the loss of significant customers or adverse changes in customers' business or financial conditions; (d) manufacturing difficulties or other issues that impact product performance, quality or safety; (e) inability of suppliers to meet obligations due to supply chain disruptions or otherwise; (f) failure to attract and retain a qualified workforce and key personnel, labor disputes or other employee relations issues; (g) the inability to achieve improvement in or strengthening of financial performance, operations or competitiveness anticipated or targeted; (h) inability to meet increased demand, production targets or commitments; (i) competition from new product offerings, disruptive technologies or other developments; (j) geopolitical, economic, and regulatory risks relating to Howmet Aerospace's global operations, including geopolitical and diplomatic tensions, instabilities, conflicts and wars, as well as compliance with
Non-GAAP Financial Measures
Some of the information included in this release is derived from Howmet Aerospace's consolidated financial information but is not presented in Howmet Aerospace's financial statements prepared in accordance with accounting principles generally accepted in
Other Information
In this press release, the acronym "FY" means "full year"; "Q" means "quarter"; "YoY" means year over year; "Adj." means adjusted; Howmet, Howmet Aerospace, or the Company means Howmet Aerospace Inc.; and references to performance by Howmet Aerospace or its segments as "record" mean its best result since April 1, 2020 when Howmet Aerospace Inc. (previously named Arconic Inc.) separated from Arconic Corporation.
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Howmet Aerospace Inc. and subsidiaries Statement of Consolidated Operations (unaudited)
(in
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Quarter ended |
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September 30, 2025 |
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June 30, 2025 |
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September 30, 2024 |
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Sales |
$ 2,089 |
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$ 2,053 |
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$ 1,835 |
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Cost of goods sold (exclusive of expenses below) |
1,365 |
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1,365 |
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1,253 |
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Selling, general administrative, and other expenses |
100 |
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89 |
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85 |
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Research and development expenses |
10 |
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9 |
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9 |
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Provision for depreciation and amortization |
72 |
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69 |
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68 |
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Restructuring and other credits |
— |
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— |
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(1) |
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Operating income |
542 |
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521 |
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421 |
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Loss on debt redemption |
— |
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— |
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6 |
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Interest expense, net |
37 |
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38 |
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44 |
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Other expense, net |
10 |
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14 |
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17 |
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Income before income taxes |
495 |
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469 |
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354 |
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Provision for income taxes |
110 |
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62 |
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22 |
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Net income |
$ 385 |
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$ 407 |
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$ 332 |
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Amounts Attributable to Howmet Aerospace Common Shareholders: |
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Earnings per share - basic(1): |
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Net income per share |
$ 0.96 |
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$ 1.01 |
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$ 0.81 |
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Average number of shares(2)(3) |
403 |
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404 |
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408 |
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Earnings per share - diluted(1): |
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Net income per share |
$ 0.95 |
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$ 1.00 |
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$ 0.81 |
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Average number of shares(2)(3) |
405 |
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406 |
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410 |
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Common stock outstanding at the end of the period |
403 |
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404 |
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407 |
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(1) |
In order to calculate both basic and diluted earnings per share, preferred stock dividends declared of less than |
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(2) |
For the quarters presented, the difference between the diluted average number of shares and the basic average number of shares relates to share equivalents associated with outstanding restricted stock unit awards and employee stock options. |
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(3) |
As average shares outstanding are used in the calculation of both basic and diluted earnings per share, the full impact of share repurchases is not fully realized in earnings per share ("EPS") in the period of repurchase since share repurchases may occur at varying points during a period. |
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Howmet Aerospace Inc. and subsidiaries Consolidated Balance Sheet (unaudited)
(in
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September 30, 2025 |
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December 31, 2024 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
$ 659 |
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$ 564 |
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Receivables from customers, less allowances of $— in both 2025 and 2024 |
884 |
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689 |
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Other receivables |
17 |
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20 |
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Inventories |
1,975 |
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1,840 |
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Prepaid expenses and other current assets |
289 |
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249 |
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Total current assets |
3,824 |
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3,362 |
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Properties, plants, and equipment, net |
2,551 |
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2,386 |
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Goodwill |
4,058 |
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4,010 |
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Deferred income taxes |
31 |
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35 |
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Intangibles, net |
462 |
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475 |
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Other noncurrent assets |
251 |
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251 |
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Total assets |
$ 11,177 |
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$ 10,519 |
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Liabilities |
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Current liabilities: |
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Accounts payable, trade |
$ 957 |
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$ 948 |
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Accrued compensation and retirement costs |
314 |
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305 |
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Taxes, including income taxes |
71 |
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60 |
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Accrued interest payable |
32 |
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59 |
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Other current liabilities |
250 |
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171 |
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Long-term debt due within one year |
1 |
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6 |
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Total current liabilities |
1,625 |
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1,549 |
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Long-term debt |
3,188 |
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3,309 |
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Accrued pension benefits |
597 |
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625 |
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Accrued other postretirement benefits |
50 |
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54 |
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Other noncurrent liabilities and deferred credits |
574 |
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428 |
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Total liabilities |
6,034 |
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5,965 |
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Equity |
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Howmet Aerospace shareholders' equity: |
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Preferred stock |
55 |
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55 |
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Common stock |
403 |
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405 |
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Additional capital |
2,717 |
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3,206 |
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Retained earnings |
3,722 |
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2,766 |
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Accumulated other comprehensive loss |
(1,754) |
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(1,878) |
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Total equity |
5,143 |
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4,554 |
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Total liabilities and equity |
$ 11,177 |
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$ 10,519 |
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Howmet Aerospace Inc. and subsidiaries Statement of Consolidated Cash Flows (unaudited)
(in
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Nine months ended September 30, |
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2025 |
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2024 |
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Operating activities |
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Net income |
$ 1,136 |
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$ 841 |
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Adjustments to reconcile net income to cash provided from operations: |
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Depreciation and amortization |
210 |
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204 |
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Deferred income taxes |
75 |
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39 |
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Restructuring and other (credits) charges |
(4) |
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21 |
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Net realized and unrealized losses |
17 |
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18 |
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Net periodic pension cost |
31 |
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31 |
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Stock-based compensation |
59 |
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54 |
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Loss on debt redemption |
— |
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6 |
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Other |
3 |
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4 |
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Changes in assets and liabilities, excluding effects of acquisitions, divestitures, and foreign currency translation adjustments: |
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Increase in receivables |
(180) |
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(97) |
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Increase in inventories |
(95) |
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(139) |
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(Increase) decrease in prepaid expenses and other current assets |
(11) |
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9 |
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Increase (decrease) in accounts payable, trade |
17 |
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(67) |
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Decrease in accrued expenses |
(2) |
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(42) |
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Decrease in taxes, including income taxes |
(3) |
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(5) |
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Pension contributions |
(30) |
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(33) |
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Increase in noncurrent assets |
(6) |
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(6) |
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Increase (decrease) in noncurrent liabilities |
13 |
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(20) |
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Cash provided from operations |
1,230 |
|
818 |
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Financing Activities |
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Additions to debt |
— |
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500 |
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Repurchases and payments on debt |
(140) |
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(805) |
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Debt issuance costs |
— |
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(5) |
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Premiums paid on early redemption of debt |
— |
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(5) |
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Repurchases of common stock |
(500) |
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(310) |
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Proceeds from exercise of employee stock options |
1 |
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7 |
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Dividends paid to shareholders |
(131) |
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(76) |
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Taxes paid for net share settlement of equity awards |
(45) |
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(48) |
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Other |
(5) |
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— |
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Cash used for financing activities |
(820) |
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(742) |
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Investing Activities |
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Capital expenditures |
(329) |
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(219) |
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Proceeds from the sale of assets and businesses |
9 |
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9 |
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Additions to investments |
(9) |
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— |
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Sale of investments |
13 |
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— |
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Other |
— |
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1 |
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Cash used for investing activities |
(316) |
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(209) |
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Effect of exchange rate changes on cash, cash equivalents and restricted cash |
1 |
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(2) |
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Net change in cash, cash equivalents and restricted cash |
95 |
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(135) |
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Cash, cash equivalents and restricted cash at beginning of period |
565 |
|
610 |
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Cash, cash equivalents and restricted cash at end of period |
$ 660 |
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$ 475 |
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Howmet Aerospace Inc. and subsidiaries Calculation of Financial Measures (unaudited), continued
(in |
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Reconciliation of Free cash flow |
Quarter ended |
Nine months ended |
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1Q25 |
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2Q25 |
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3Q25 |
3Q25 |
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Cash provided from operations |
$ 253 |
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$ 446 |
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$ 531 |
$ 1,230 |
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Capital expenditures |
(119) |
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(102) |
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(108) |
(329) |
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Free cash flow |
$ 134 |
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$ 344 |
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$ 423 |
$ 901 |
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The Accounts Receivable Securitization program remains unchanged at |
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Free cash flow is a non-GAAP financial measure. Management believes that this measure is meaningful to investors because management reviews cash flows generated from operations after taking into consideration capital expenditures (due to the fact that these expenditures are considered necessary to maintain and expand the Company's asset base and are expected to generate future cash flows from operations). It is important to note that Free cash flow does not represent the residual cash flow available for discretionary expenditures since other non-discretionary expenditures, such as mandatory debt service requirements, are not deducted from the measure. |
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Howmet Aerospace Inc. and subsidiaries Segment Information (unaudited)
(in
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1Q24 |
2Q24 |
3Q24 |
4Q24 |
2024 |
1Q25 |
2Q25 |
3Q25 |
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Engine Products |
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Third-party sales |
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|
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$ 3,735 |
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$ 1,056 |
$ 1,105 |
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Inter-segment sales |
$ 2 |
$ 1 |
$ 3 |
$ 1 |
$ 7 |
$ 2 |
$ 2 |
$ 1 |
|
|
Provision for depreciation and amortization |
$ 33 |
$ 33 |
$ 34 |
$ 39 |
|
$ 34 |
$ 35 |
$ 38 |
|
|
Segment Adjusted EBITDA |
|
|
|
|
$ 1,150 |
|
|
|
|
|
Segment Adjusted EBITDA Margin |
28.1 % |
31.3 % |
32.5 % |
31.1 % |
30.8 % |
32.6 % |
33.0 % |
33.3 % |
|
|
Restructuring and other (credits) charges |
$ — |
$ (1) |
$ 1 |
$ 1 |
$ 1 |
$ — |
$ — |
$ — |
|
|
Capital expenditures |
$ 55 |
$ 33 |
$ 55 |
$ 76 |
|
$ 86 |
$ 75 |
$ 74 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Fastening Systems |
|
|
|
|
|
|
|
|
|
|
Third-party sales |
|
|
|
|
$ 1,576 |
|
|
|
|
|
Inter-segment sales |
$ — |
$ — |
$ — |
$ 1 |
$ 1 |
$ — |
$ — |
$ — |
|
|
Provision for depreciation and amortization |
$ 11 |
$ 13 |
$ 12 |
$ 11 |
$ 47 |
$ 12 |
$ 12 |
$ 12 |
|
|
Segment Adjusted EBITDA |
$ 92 |
|
|
|
|
|
|
|
|
|
Segment Adjusted EBITDA Margin |
23.7 % |
25.6 % |
26.0 % |
27.7 % |
25.8 % |
30.8 % |
29.2 % |
30.8 % |
|
|
Restructuring and other charges |
$ — |
$ 2 |
$ 1 |
$ 2 |
$ 5 |
$ — |
$ 1 |
$ — |
|
|
Capital expenditures |
$ 7 |
$ 5 |
$ 5 |
$ 9 |
$ 26 |
$ 10 |
$ 9 |
$ 13 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Engineered Structures |
|
|
|
|
|
|
|
|
|
|
Third-party sales |
|
|
|
|
$ 1,065 |
|
|
|
|
|
Inter-segment sales |
$ 1 |
$ 3 |
$ 3 |
$ 3 |
$ 10 |
$ 3 |
$ 3 |
$ 2 |
|
|
Provision for depreciation and amortization |
$ 11 |
$ 11 |
$ 10 |
$ 10 |
$ 42 |
$ 12 |
$ 10 |
$ 9 |
|
|
Segment Adjusted EBITDA |
$ 37 |
$ 40 |
$ 38 |
$ 51 |
|
$ 60 |
$ 62 |
$ 58 |
|
|
Segment Adjusted EBITDA Margin |
14.1 % |
14.5 % |
15.0 % |
18.5 % |
15.6 % |
21.3 % |
21.4 % |
20.1 % |
|
|
Restructuring and other charges (credits) |
$ — |
$ 18 |
$ (3) |
$ (3) |
$ 12 |
$ (4) |
$ — |
$ — |
|
|
Capital expenditures |
$ 6 |
$ 5 |
$ 5 |
$ 4 |
$ 20 |
$ 5 |
$ 6 |
$ 9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Forged Wheels |
|
|
|
|
|
|
|
|
|
|
Third-party sales |
|
|
|
|
$ 1,054 |
|
|
|
|
|
Provision for depreciation and amortization |
$ 10 |
$ 10 |
$ 10 |
$ 12 |
$ 42 |
$ 10 |
$ 10 |
$ 11 |
|
|
Segment Adjusted EBITDA |
$ 82 |
$ 75 |
$ 64 |
$ 66 |
|
$ 68 |
$ 76 |
$ 73 |
|
|
Segment Adjusted EBITDA Margin |
28.5 % |
27.0 % |
26.1 % |
27.2 % |
27.2 % |
27.0 % |
27.5 % |
29.6 % |
|
|
Restructuring and other charges (credits) |
$ — |
$ 1 |
$ — |
$ — |
$ 1 |
$ — |
$ (1) |
$ — |
|
|
Capital expenditures |
$ 12 |
$ 9 |
$ 14 |
$ 10 |
$ 45 |
$ 15 |
$ 8 |
$ 9 |
|
|
Differences between the total segment and consolidated totals are in Corporate. |
|
Howmet Aerospace Inc. and subsidiaries Calculation of Financial Measures (unaudited)
(in
|
|
||||||||
|
Reconciliation of Total Segment Adjusted EBITDA to Consolidated Income Before Income Taxes |
|
||||||||
|
|
1Q24 |
2Q24 |
3Q24 |
4Q24 |
2024 |
1Q25 |
2Q25 |
3Q25 |
|
|
Income before income taxes |
$ 303 |
$ 334 |
$ 354 |
$ 392 |
|
$ 446 |
$ 469 |
$ 495 |
|
|
Loss on debt redemption |
— |
— |
6 |
— |
6 |
— |
— |
— |
|
|
Interest expense, net |
49 |
49 |
44 |
40 |
182 |
39 |
38 |
37 |
|
|
Other expense, net |
17 |
15 |
17 |
13 |
62 |
9 |
14 |
10 |
|
|
Operating income |
$ 369 |
$ 398 |
$ 421 |
$ 445 |
|
$ 494 |
$ 521 |
$ 542 |
|
|
Segment provision for depreciation and amortization |
65 |
67 |
66 |
72 |
270 |
68 |
67 |
70 |
|
|
Unallocated amounts: |
|
|
|
|
|
|
|
|
|
|
Restructuring and other charges (credits) |
— |
22 |
(1) |
— |
21 |
(4) |
— |
— |
|
|
Corporate expense(1) |
26 |
21 |
25 |
13 |
85 |
22 |
25 |
25 |
|
|
Total Segment Adjusted EBITDA |
$ 460 |
$ 508 |
$ 511 |
$ 530 |
|
$ 580 |
$ 613 |
$ 637 |
|
|
|
|
Total Segment Adjusted EBITDA is a non-GAAP financial measure. Management believes that this measure is meaningful to investors because Total Segment Adjusted EBITDA provides additional information with respect to the Company's operating performance and the Company's ability to meet its financial obligations. The Total Segment Adjusted EBITDA presented may not be comparable to similarly titled measures of other companies. Howmet's definition of Total Segment Adjusted EBITDA (Earnings before interest, taxes, depreciation, and amortization) is net margin plus an add-back for depreciation and amortization. Net margin is equivalent to Sales minus the following items: Cost of goods sold; Selling, general administrative, and other expenses; Research and development expenses; and Provision for depreciation and amortization. Special items, including Restructuring and other charges (credits), are excluded from net margin and Segment Adjusted EBITDA. Differences between the total segment and consolidated totals are in Corporate. |
|
(1) Pre-tax special items included in Corporate expense |
|
|
|
|
|
|
|||
|
|
1Q24 |
2Q24 |
3Q24 |
4Q24 |
2024 |
1Q25 |
2Q25 |
3Q25 |
|
|
Plant fire reimbursements, net |
$ — |
$ (6) |
$ — |
$ (12) |
$ (18) |
$ — |
$ — |
$ — |
|
|
Costs (benefits) associated with closures, supply chain disruptions, and other items |
1 |
— |
(1) |
1 |
1 |
1 |
(1) |
— |
|
|
Total Pre-tax special items included in Corporate expense |
$ 1 |
$ (6) |
$ (1) |
$ (11) |
$ (17) |
$ 1 |
$ (1) |
$ — |
|
|
Howmet Aerospace Inc. and subsidiaries Calculation of Financial Measures (unaudited), continued
(in |
|||||
|
Reconciliation of Net income excluding Special items |
Quarter ended |
||||
|
|
3Q24 |
|
2Q25 |
|
3Q25 |
|
Net income |
$ 332 |
|
$ 407 |
|
$ 385 |
|
|
|
|
|
|
|
|
Diluted earnings per share ("EPS") |
$ 0.81 |
|
$ 1.00 |
|
$ 0.95 |
|
|
|
|
|
|
|
|
Average number of diluted shares |
410 |
|
406 |
|
405 |
|
|
|
|
|
|
|
|
Special items: |
|
|
|
|
|
|
Restructuring and other (credits) charges |
(1) |
|
— |
|
— |
|
Loss on debt redemption |
6 |
|
— |
|
— |
|
(Benefits) costs associated with closures, supply chain disruptions, and other items |
(1) |
|
(1) |
|
— |
|
Subtotal: Pre-tax special items |
4 |
|
(1) |
|
— |
|
Tax impact of Pre-tax special items(1) |
(1) |
|
— |
|
— |
|
Subtotal |
3 |
|
(1) |
|
— |
|
|
|
|
|
|
|
|
Discrete and other tax special items(2) |
(45) |
|
(35) |
|
— |
|
Total: After-tax special items |
(42) |
|
(36) |
|
— |
|
Net income excluding Special items |
$ 290 |
|
$ 371 |
|
$ 385 |
|
|
|
|
|
|
|
|
Diluted EPS excluding Special items |
$ 0.71 |
|
$ 0.91 |
|
$ 0.95 |
|
|
|
Net income excluding Special items and Diluted EPS excluding Special items are non-GAAP financial measures. Management believes that these measures are meaningful to investors because management reviews the operating results of the Company excluding the impacts of Restructuring and other charges (credits), Discrete tax items, and Other special items (collectively, "Special items"). There can be no assurances that additional Special items will not occur in future periods. To compensate for this limitation, management believes that it is appropriate to consider both Net income and Diluted EPS determined under GAAP as well as Net income excluding Special items and Diluted EPS excluding Special items. |
|
(1) The Tax impact of Pre-tax special items is based on the applicable statutory rates whereby the difference between such rates and the Company's consolidated estimated annual effective tax rate is itself a Special item. |
|
(2) Discrete tax items for each period included the following: |
|
• for 3Q24, a net benefit related to additional
of the Company's R&D study ( |
|
• for 2Q25, benefits related to
compensation ( |
|
• for 3Q25, a net benefit for other small items of ( |
|
Howmet Aerospace Inc. and subsidiaries Calculation of Financial Measures (unaudited), continued
(in |
|||||||||||
|
Reconciliation of Operational tax rate |
3Q25 |
|
Nine months ended 3Q25 |
||||||||
|
|
Effective tax rate, as reported |
|
Special items(1)(2) |
|
Operational tax rate, as adjusted |
|
Effective tax rate, as reported |
|
Special items(1)(2) |
|
Operational tax rate, as adjusted |
|
Income before income taxes |
$ 495 |
|
$ — |
|
$ 495 |
|
$ 1,410 |
|
$ (4) |
|
$ 1,406 |
|
Provision for income taxes |
$ 110 |
|
$ — |
|
$ 110 |
|
$ 274 |
|
$ 25 |
|
$ 299 |
|
Tax rate |
22.2 % |
|
|
|
22.2 % |
|
19.4 % |
|
|
|
21.3 % |
|
|
|
Operational tax rate is a non-GAAP financial measure. Management believes that this measure is meaningful to investors because management reviews the operating results of the Company excluding the impacts of Special items. There can be no assurances that additional Special items will not occur in future periods. To compensate for this limitation, management believes that it is appropriate to consider both the Effective tax rate determined under GAAP as well as the Operational tax rate. |
|
(1) There were no pre-tax special items in Q325. Pre-tax special items for the nine months ended 3Q25 included Restructuring and other credits ( |
|
(2) Tax Special items include discrete tax items, the tax impact on Special items based on the applicable statutory rates, the difference between such rates and the Company's consolidated estimated annual effective tax rate and other tax related items. Discrete tax items for each period included the following: |
|
• for 3Q25, a net benefit for other small items of ( |
|
• for the nine months ended 3Q25, benefits related to
excess benefit for stock compensation (
a net charge related to the expiration of a tax holiday in
items |
|
Howmet Aerospace Inc. and subsidiaries Calculation of Financial Measures (unaudited), continued
(in |
|||||
|
Reconciliation of Adjusted EBITDA and Adjusted EBITDA margin excluding Special items |
Quarter ended |
||||
|
|
3Q24 |
|
2Q25 |
|
3Q25 |
|
Sales |
$ 1,835 |
|
$ 2,053 |
|
$ 2,089 |
|
Operating income |
$ 421 |
|
$ 521 |
|
$ 542 |
|
Operating income margin |
22.9 % |
|
25.4 % |
|
25.9 % |
|
|
|
|
|
|
|
|
Net income |
$ 332 |
|
$ 407 |
|
$ 385 |
|
Add: |
|
|
|
|
|
|
Provision for income taxes |
$ 22 |
|
$ 62 |
|
$ 110 |
|
Other expense, net |
17 |
|
14 |
|
10 |
|
Loss on debt redemption |
6 |
|
— |
|
— |
|
Interest expense, net |
44 |
|
38 |
|
37 |
|
Restructuring and other (credits) charges |
(1) |
|
— |
|
— |
|
Provision for depreciation and amortization |
68 |
|
69 |
|
72 |
|
Adjusted EBITDA |
$ 488 |
|
$ 590 |
|
$ 614 |
|
|
|
|
|
|
|
|
Add: |
|
|
|
|
|
|
(Benefits) costs associated with closures, supply chain disruptions, and other items |
(1) |
|
(1) |
|
— |
|
Adjusted EBITDA excluding Special items |
$ 487 |
|
$ 589 |
|
$ 614 |
|
|
|
|
|
|
|
|
Adjusted EBITDA margin excluding Special items |
26.5 % |
|
28.7 % |
|
29.4 % |
|
|
|
Adjusted EBITDA, Adjusted EBITDA excluding Special items, and Adjusted EBITDA margin excluding Special items are non-GAAP financial measures. Management believes that these measures are meaningful to investors because they provide additional information with respect to the Company's operating performance and the Company's ability to meet its financial obligations. The Adjusted EBITDA presented may not be comparable to similarly titled measures of other companies. The Company's definition of Adjusted EBITDA (Earnings before interest, taxes, depreciation, and amortization) is net margin plus an add-back for depreciation and amortization. Net margin is equivalent to Sales minus the following items: Cost of goods sold, Selling, general administrative, and other expenses, Research and development expenses, and Provision for depreciation and amortization. Special items, including Restructuring and other (credits) charges, are excluded from Adjusted EBITDA. |
|
Howmet Aerospace Inc. and subsidiaries Calculation of Financial Measures (unaudited), continued
(in |
|||||
|
Reconciliation of Adjusted Operating Income Excluding Special Items and Adjusted Operating Income Margin Excluding Special Items |
Quarter ended |
||||
|
|
3Q24 |
|
2Q25 |
|
3Q25 |
|
Sales |
$ 1,835 |
|
$ 2,053 |
|
$ 2,089 |
|
Operating income |
$ 421 |
|
$ 521 |
|
$ 542 |
|
Operating income margin |
22.9 % |
|
25.4 % |
|
25.9 % |
|
|
|
|
|
|
|
|
Add: |
|
|
|
|
|
|
Restructuring and other (credits) charges |
$ (1) |
|
$ — |
|
$ — |
|
(Benefits) costs associated with closures, supply chain disruptions, and other items |
(1) |
|
(1) |
|
— |
|
Adjusted operating income excluding Special items |
$ 419 |
|
$ 520 |
|
$ 542 |
|
|
|
|
|
|
|
|
Adjusted operating income margin excluding Special items |
22.8 % |
|
25.3 % |
|
25.9 % |
|
|
|
Adjusted operating income excluding Special items and Adjusted operating income margin excluding Special items are non-GAAP financial measures. Special items, including Restructuring and other (credits) charges, are excluded from Adjusted operating income. Management believes that these measures are meaningful to investors because management reviews the operating results of the Company excluding the impacts of Special items. There can be no assurances that additional Special items will not occur in future periods. To compensate for this limitation, management believes that it is appropriate to consider both Operating income determined under GAAP as well as Operating income excluding Special items. |
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SOURCE Howmet Aerospace Inc.
