Earnings jump at Howmet Aerospace (NYSE: HWM) on 19% Q1 2026 revenue growth
Rhea-AI Filing Summary
Howmet Aerospace delivered a strong first quarter of 2026, with revenue of $2.31 billion, up 19% year over year, driven by commercial and defense aerospace and gas turbines. GAAP diluted EPS rose to $1.44 from $0.84, while adjusted EPS increased 42% to $1.22.
Adjusted EBITDA grew 32% to $740 million with margin expanding to 32.0%. Free cash flow climbed to $359 million, supporting $300 million of share repurchases in the quarter and another $150 million in April. The company completed the $1.8 billion CAM acquisition, bought Brunner Manufacturing for $120 million, sold a Savannah forging facility for $230 million, and raised full-year 2026 guidance for revenue, adjusted EBITDA, adjusted EPS, and free cash flow. Fitch also upgraded its long‑term credit rating to A-.
Positive
- Strong Q1 2026 beat and margin expansion: Revenue grew 19% year over year to $2.313 billion, GAAP EPS rose 71% to $1.44, adjusted EPS increased 42% to $1.22, and adjusted EBITDA margin expanded 320 basis points to 32.0%.
- Raised full-year 2026 outlook: Baseline guidance increased to $9.65 billion revenue, $3.06 billion adjusted EBITDA, $4.94 adjusted EPS, and $1.75 billion free cash flow, signaling higher expected performance for the year.
- Strategic portfolio moves and stronger balance sheet perception: Closed the approximately $1.8 billion CAM acquisition and $120 million Brunner deal, sold the Savannah forging facility for about $230 million, and received a Fitch long‑term rating upgrade to A-.
Negative
- None.
Insights
Q1 2026 showed broad-based growth, margin expansion, higher cash generation, and raised guidance.
Howmet Aerospace posted Q1 2026 revenue of $2.313B, up 19% year over year, with strength in commercial aerospace, defense, and gas turbines. GAAP EPS rose to $1.44 and adjusted EPS to $1.22, both well above prior-year levels.
Profitability improved meaningfully: adjusted EBITDA reached $740M, up 32%, and margin expanded to 32.0%. Engine Products, Fastening Systems, and Forged Wheels all delivered higher segment adjusted EBITDA and margin expansion, while Engineered Structures held margins despite modest revenue decline from product rationalization.
Cash generation was strong with free cash flow of $359M, enabling $300M of Q1 share repurchases and another $150M in April. The company completed the $1.8B CAM acquisition and a $120M Brunner deal, funded partly by new notes totaling $1.2B and a $230M asset sale. Full-year 2026 guidance for revenue, adjusted EBITDA, adjusted EPS, and free cash flow was increased, and Fitch upgraded the long‑term rating to A-, underscoring a stronger credit profile.
8-K Event Classification
Key Figures
Key Terms
Adjusted EBITDA financial
Free cash flow financial
Non-GAAP financial measures financial
Operational tax rate financial
Earnings Snapshot
FY 2026 baseline guidance raised to $9.65B revenue, $3.06B adjusted EBITDA, $4.94 adjusted EPS, and $1.75B free cash flow, with baseline increases of $550M, $300M, $0.49, and $150M respectively.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
May 7, 2026 (
(Exact name of registrant as specified in its charter)
| (State of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
| (Address of Principal Executive Offices) | (Zip Code) |
Office of Investor Relations (412) 553-1950
Office of the
Secretary (
(Registrant’s telephone numbers, including area code)
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 2.02. Results of Operations and Financial Condition.
On May 7, 2026, Howmet Aerospace Inc. issued a press release announcing its financial results for the first quarter of 2026. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
In accordance with General Instruction B.2 of Form 8-K, the information in Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| 99.1 | Howmet Aerospace Inc. press release dated May 7, 2026. |
| 104 | The cover page of this Current Report on Form 8-K, formatted in Inline XBRL. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| HOWMET AEROSPACE INC. | ||
| Dated: May 7, 2026 | By: | /s/ Jonathan A. Arena |
| Name: | Jonathan A. Arena | |
| Title: | Executive Vice President, Chief Legal and Compliance Officer and Secretary | |
Exhibit 99.1
FOR IMMEDIATE RELEASE
| Investor Contact | Media Contact |
| Paul T. Luther | Rob Morrison |
| (412) 553-1950 | (412) 553-2666 |
| Paul.Luther@howmet.com | Rob.Morrison@howmet.com |
Howmet Aerospace Reports First Quarter 2026 Results
Revenue up 19% Year over Year; GAAP EPS $1.44, Adjusted EPS $1.22
Record First Quarter Cash Generation; $300 Million Deployed for Common Stock Repurchases
Full Year 2026 Guidance Increased
Summary Financial Results
| First Quarter | ||||
| Dollars in Millions; Per share amounts in dollars, diluted | 2026 | 2025 | Change | |
| Revenue | $2,313 | $1,942 | 19% | |
| GAAP Metrics | ||||
| Operating Income | $753 | $494 | 52% | |
| Operating Income Margin | 32.6% | 25.4% | 720 | bps |
| Earnings per Share (EPS) | $1.44 | $0.84 | 71% | |
| Cash from Operations | $453 | $253 | 79% | |
| Non-GAAP Metrics1 | ||||
| Adjusted EBITDA | $740 | $560 | 32% | |
| Adjusted EBITDA Margin | 32.0% | 28.8% | 320 | bps |
| Adjusted Operating Income | $666 | $491 | 36% | |
| Adjusted Operating Income Margin | 28.8% | 25.3% | 350 | bps |
| Adjusted Earnings per Share (EPS) | $1.22 | $0.86 | 42% | |
| Free Cash Flow | $359 | $134 | 168% | |
1 For more information, see “Non-GAAP Financial Measures” and the schedules to this release.
Key Activity
| · | Secured financing for the acquisition of Consolidated Aerospace Manufacturing, LLC (CAM) |
| · | Completed acquisition of CAM on April 6, 2026 for approximately $1.8 billion |
| · | Sold disk forging facility in Savannah, GA on March 31, 2026 for approximately $230 million |
PITTSBURGH, PA, May 7, 2026 – Howmet Aerospace (NYSE: HWM) announced results today for the first quarter 2026.
Howmet Aerospace Executive Chairman and Chief Executive Officer John Plant said, “The Howmet team delivered a strong start to 2026, with revenue, adjusted EBITDA, adjusted EBITDA margin, and adjusted earnings per share all exceeding the high end of guidance. Revenue growth accelerated to 19% year over year, driven by strong growth across our key end markets, and adjusted EBITDA margin expanded 320 basis points year over year to 32.0%. Free cash flow performance was outstanding at $359 million after spending $94 million in capital expenditures, supporting the future growth rate of the Company. The free cash flow also enabled $300 million in common stock repurchases.”
| 1 |
Mr. Plant continued, “Looking ahead, we see a robust growth outlook in the key markets Howmet serves with its differentiated products and solutions. Commercial aerospace OEM customers continue to target production rate increases supported by record backlogs. Engine spares needs continue to increase, although an effect could be felt from the Iranian conflict. Defense markets remain healthy, while the gas turbines market is also very active. We see signs of demand improvement in commercial transportation, although we remain cautious.”
"The beginning of 2026 was very active regarding the Howmet portfolio, and our updated guidance reflects these changes. We closed the CAM and Brunner acquisitions, adding revenue to Fastening Systems, while also divesting a disk forging business within Engineered Structures. These transactions followed our stated strategy of allocating capital to the businesses that demonstrate higher growth and margin potential. The net revenue effect of the portfolio adjustments in the year's guidance adds approximately $275 million, and the EPS effect is insignificant in 2026 with accretion expected in 2027."
2026 Guidance
| Dollars in Millions; Per share amounts in dollars, diluted | Q2 2026 Guidance | FY 2026 Guidance | |||||
| Low | Baseline | High | Low | Baseline | High | ||
| Revenue | $2,390 | $2,400 | $2,410 | $9,575 | $9,650 | $9,725 | |
| Baseline Change | +$550 | ||||||
| Adj. EBITDA1 | $760 | $765 | $770 | $3,025 | $3,060 | $3,095 | |
| Adj. EBITDA Margin1 | 31.8% | 31.9% | 32.0% | 31.6% | 31.7% | 31.8% | |
| Baseline Change |
+$300 + 140 bps |
||||||
| Adj. Earnings per Share1 | $1.22 | $1.23 | $1.24 | $4.88 | $4.94 | $5.00 | |
| Baseline Change | +$0.49 | ||||||
| Free Cash Flow1 | $1,700 | $1,750 | $1,800 | ||||
| Baseline Change | +$150 | ||||||
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.
Consolidated Results
Howmet Aerospace reported first quarter 2026 revenue of $2.31 billion, up 19% year over year, and Adjusted EPS of $1.22, up 42% year over year. Revenue was driven by 20% growth in the commercial aerospace market, 10% growth in the defense aerospace market and 39% growth in the gas turbines market.
The Company reported adjusted EBITDA of $740 million, up 32% year over year. The year-over-year increase was driven by strong growth in the commercial aerospace market and the gas turbines market. Adjusted EBITDA margin was up approximately 320 basis points year over year at 32.0%.
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Segment Results
Engine Products
| Dollars in Millions | First Quarter | |||
| 2026 | 2025 | Change | ||
| Third-party sales | $1,253 | $974 | 29% | |
| Segment adjusted EBITDA | $458 | $318 | 44% | |
| Segment adjusted EBITDA margin | 36.6% | 32.6% | 400 | bps |
| Provision for depreciation and amortization | $38 | $33 | ||
Engine Products reported first quarter 2026 revenue of $1.25 billion, an increase of 29% year over year, driven by growth in the commercial aerospace, defense aerospace, and gas turbines markets. Segment Adjusted EBITDA was $458 million, up 44% year over year, driven by growth in the commercial aerospace, defense aerospace and gas turbines markets. The Segment absorbed approximately 235 net headcount in the quarter in support of expected revenue increases. Segment Adjusted EBITDA margin increased approximately 400 basis points year over year to 36.6%.
Fastening Systems
| Dollars in Millions | First Quarter | |||
| 2026 | 2025 | Change | ||
| Third-party sales | $471 | $412 | 14% | |
| Segment adjusted EBITDA | $150 | $127 | 18% | |
| Segment adjusted EBITDA margin | 31.8% | 30.8% | 100 | bps |
| Provision for depreciation and amortization | $13 | $12 | ||
Fastening Systems reported revenue of $471 million, an increase of 14% year over year driven by growth in the commercial aerospace and defense aerospace markets. Segment Adjusted EBITDA was $150 million, up 18% year over year, driven by growth in the commercial aerospace and defense aerospace markets. Segment Adjusted EBITDA margin increased approximately 100 basis points year over year to 31.8%.
Engineered Structures
| Dollars in Millions | First Quarter | |||
| 2026 | 2025 | Change | ||
| Third-party sales | $294 | $304 | (3%) | |
| Segment adjusted EBITDA | $66 | $67 | (1%) | |
| Segment adjusted EBITDA margin | 22.4% | 22.0% | 40 | bps |
| Provision for depreciation and amortization | $10 | $13 | ||
Engineered Structures reported revenue of $294 million, a decrease of 3% year over year, driven by further product rationalization. Segment Adjusted EBITDA was $66 million, flat year over year. Segment Adjusted EBITDA margin increased approximately 40 basis points year over year to 22.4%.
Forged Wheels
| Dollars in Millions | First Quarter | |||
| 2026 | 2025 | Change | ||
| Third-party sales | $295 | $252 | 17% | |
| Segment adjusted EBITDA | $90 | $68 | 32% | |
| Segment adjusted EBITDA margin | 30.5% | 27.0% | 350 | bps |
| Provision for depreciation and amortization | $11 | $10 | ||
| 3 |
Forged Wheels reported revenue of $295 million, an increase of 17% year over year, with 11% lower volumes in the commercial transportation market more than offset by an increase in aluminum and other inflationary cost pass through. Segment Adjusted EBITDA was $90 million and increased 32% year over year, driven by cost reductions, including lower net headcount, in response to lower volumes in the commercial transportation market. Segment Adjusted EBITDA margin increased approximately 350 basis points year over year to 30.5%.
Secured Acquisition Financing for Consolidated Aerospace Manufacturing, LLC (CAM)
On March 3, 2026, the Company issued $400 million aggregate principal amount of 3.75% notes due 2028, $300 million aggregate principal amount of 3.90% notes due 2029, and $500 million aggregate principal amount of 4.75% notes due 2036. The Company secured the financing for the acquisition of CAM with these note issuances, combined with $450 million borrowed under its commercial paper program and approximately $150 million in cash sourced from the sale of the Savannah disk forging facility.
Completed Acquisition of CAM for approximately $1.8 Billion
On April 6, 2026, the Company completed the acquisition of CAM for approximately $1.8 billion from Stanley Black & Decker, Inc. CAM is a leading global designer and manufacturer of precision fasteners, fluid fittings, and other complex, highly engineered products for demanding aerospace and defense applications.
Acquired Brunner Manufacturing Co. Inc.
On February 6, 2026, the Company acquired Brunner Manufacturing Co. Inc., a privately held producer of high-quality fastener products based in Mauston, WI in an all-cash transaction for approximately $120 million. The transaction will enhance Howmet Aerospace’s product offerings and market opportunities with larger-size fasteners.
Sold Disk Forging Facility in Savannah, GA
On March 31, 2026, the Company sold its Savannah, GA disk forging facility that operated within the Engineered Structures segment for approximately $230 million. The sale resulted in a $93 million pre-tax gain that was treated as a special item.
Titanium Alloy Operation Moved from Engine Products to Engineered Structures
In the first quarter 2026, the Company moved a titanium alloy production operation from Engine Products to Engineered Structures for better operational alignment. The comparable periods of Engine Products and Engineered Structures have been recast to reflect the new alignment. The recasting had no impact on the Company's consolidated results, financial position, or cash flows.
Repurchased $300 Million of Common Stock in First Quarter 2026, $150 Million in April 2026
In the first quarter 2026, Howmet Aerospace repurchased $300 million of common stock at an average price of $230.43 per share, retiring approximately 1.3 million shares. In April 2026, the Company repurchased an additional $150 million of common stock at an average price of $246.18 per share, retiring approximately 0.6 million shares. As of May 4, 2026, total share repurchase authorization available was $1,047 million.
Quarterly Common Stock Dividend of $0.12 Per Share Paid in First Quarter 2026
On February 25, 2026, the Company paid a quarterly dividend of $0.12 per share on its common stock, up 20% from the $0.10 per share dividend paid in the first quarter 2025. The Board of Directors declared a quarterly dividend of $0.12 per share on the Company’s common stock to be paid on May 26, 2026 to the holders of record of the common stock at the close of business on May 8, 2026.
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Fitch Ratings upgraded Howmet Aerospace to A-
On February 13, 2026, Fitch Ratings upgraded its Long-Term Issuer Default Rating of Howmet Aerospace from BBB+ to A-, four notches into investment grade. All three major credit rating agencies rate Howmet Aerospace at least three notches into Investment Grade.
Howmet Aerospace will hold its quarterly conference call at 10:00 AM Eastern Time on Thursday, May 7, 2026. 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 May 7, via the “Investors” section of the Howmet Aerospace website.
About Howmet Aerospace
Howmet Aerospace Inc., headquartered in Pittsburgh, Pennsylvania, is a leading global provider of advanced engineered solutions for the aerospace, gas turbine, and transportation industries. The Company’s primary businesses focus on engine components, fastening systems, and airframe structural components necessary for mission-critical performance and efficiency, including in aerospace, defense, and gas turbine applications, as well as forged aluminum wheels for commercial transportation. With approximately 1,200 granted and pending patents, the Company’s differentiated technologies enable lighter, more fuel-efficient aircraft and commercial trucks to operate with a lower carbon footprint. For more information, visit www.howmet.com.
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; any future dividends, debt issuances, debt reduction and repurchases of its common stock; and statements regarding any acquisitions, including expected benefits. 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 energy costs, 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 anticipated or targeted financial performance, operations or competitiveness, or realization of expected benefits from acquisitions, including the effective integration of acquired businesses; (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 U.S. and foreign trade and tax laws, sanctions, embargoes and other regulations; (k) the outcome of contingencies, including legal proceedings, government or regulatory investigations, and environmental remediation; (l) failure to comply with government contracting regulations; (m) adverse changes in discount rates or investment returns on pension assets; and (n) the other risk factors summarized in Howmet Aerospace’s Form 10-K for the year ended December 31, 2025 and other reports filed with the U.S. Securities and Exchange Commission. Market projections are subject to the risks discussed above and other risks in the market. Under its share repurchase program, the Company may repurchase shares from time to time, in amounts, at prices, and at such times as the Company deems appropriate, subject to market conditions, legal requirements and other considerations. The Company is not obligated to repurchase any specific number of shares or to do so at any particular time. The declaration of any future dividends is subject to the discretion and approval of the Board of Directors after the Board’s consideration of all factors it deems relevant and subject to applicable law. The Company may modify, suspend, or cancel its share repurchase program or any dividend policy in any manner and at any time that it may deem necessary or appropriate. Credit ratings are not a recommendation to buy or hold any Howmet Aerospace securities, and they may be revised or revoked at any time at the sole discretion of the credit rating organizations. The statements in this release are made as of the date of this release, even if subsequently made available by Howmet Aerospace on its website or otherwise. Howmet Aerospace disclaims any intention or obligation to update publicly any forward-looking statements, whether in response to new information, future events, or otherwise, except as required by applicable law.
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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 the United States of America (GAAP). Certain of these data are considered “non-GAAP financial measures” under SEC rules. These non-GAAP financial measures supplement our GAAP disclosures and should not be considered an alternative to the GAAP measure. Reconciliations to the most directly comparable GAAP financial measures and management’s rationale for the use of the non-GAAP financial measures can be found in the schedules to this release.
Adjusted EBITDA is defined as Operating Income excluding Restructuring and other (credits) charges, Special Items and provision for depreciation and amortization. Special items, including Restructuring and other (credits) charges, are excluded from Adjusted EBITDA. Current and prior periods’ Adjusted EBITDA calculations have not changed although the definitions have been simplified.
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 U.S. dollar millions, except per-share and share amounts)
| Quarter ended | ||||||||||||
| March 31, 2026 | December 31, 2025 | March 31, 2025 | ||||||||||
| Sales | $ | 2,313 | $ | 2,168 | $ | 1,942 | ||||||
| Cost of goods sold (exclusive of expenses below) | 1,459 | 1,412 | 1,290 | |||||||||
| Selling, general administrative, and other expenses | 111 | 96 | 85 | |||||||||
| Research and development expenses | 9 | 10 | 8 | |||||||||
| Provision for depreciation and amortization | 74 | 73 | 69 | |||||||||
| Restructuring and other (credits) charges | (93 | ) | 88 | (4 | ) | |||||||
| Operating income | 753 | 489 | 494 | |||||||||
| Loss on debt redemption | — | 15 | — | |||||||||
| Interest expense, net | 43 | 37 | 39 | |||||||||
| Other expense, net | 2 | 7 | 9 | |||||||||
| Income before income taxes | 708 | 430 | 446 | |||||||||
| Provision for income taxes | 128 | 58 | 102 | |||||||||
| Net income | $ | 580 | $ | 372 | $ | 344 | ||||||
| Amounts Attributable to Howmet Aerospace Common Shareholders: | ||||||||||||
| Earnings per share - basic(1): | ||||||||||||
| Net income per share | $ | 1.45 | $ | 0.92 | $ | 0.85 | ||||||
| Average number of shares(2)(3) | 401 | 402 | 405 | |||||||||
| Earnings per share - diluted(1): | ||||||||||||
| Net income per share | $ | 1.44 | $ | 0.92 | $ | 0.84 | ||||||
| Average number of shares(2)(3) | 403 | 404 | 407 | |||||||||
| Common stock outstanding at the end of the period | 401 | 402 | 404 | |||||||||
| (1) | In order to calculate both basic and diluted earnings per share through December 31, 2025, preferred stock dividends declared of less than $1 for the quarters presented need to be subtracted from Net income. |
| (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. |
| (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 U.S. dollar millions)
| March 31, 2026 | December 31, 2025 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 2,435 | $ | 742 | ||||
| Receivables from customers, less allowances of $— in both 2026 and 2025 | 940 | 779 | ||||||
| Inventories | 1,975 | 1,849 | ||||||
| Prepaid expenses and other current assets | 307 | 409 | ||||||
| Total current assets | 5,657 | 3,779 | ||||||
| Properties, plants, and equipment, net | 2,614 | 2,593 | ||||||
| Goodwill | 4,078 | 4,022 | ||||||
| Deferred income taxes | 35 | 40 | ||||||
| Intangibles, net | 451 | 457 | ||||||
| Other noncurrent assets | 232 | 288 | ||||||
| Total assets | $ | 13,067 | $ | 11,179 | ||||
| Liabilities | ||||||||
| Current liabilities: | ||||||||
| Accounts payable, trade | $ | 1,058 | $ | 845 | ||||
| Accrued compensation and retirement costs | 263 | 343 | ||||||
| Taxes, including income taxes | 81 | 77 | ||||||
| Accrued interest payable | 39 | 47 | ||||||
| Deferred revenue | 129 | 147 | ||||||
| Other current liabilities | 109 | 121 | ||||||
| Long-term debt due within one year | 186 | 191 | ||||||
| Short-term borrowings | 450 | — | ||||||
| Total current liabilities | 2,315 | 1,771 | ||||||
| Long-term debt, less amount due within one year | 4,050 | 2,859 | ||||||
| Accrued pension benefits | 533 | 546 | ||||||
| Accrued other postretirement benefits | 36 | 38 | ||||||
| Other noncurrent liabilities and deferred credits | 611 | 612 | ||||||
| Total liabilities | 7,545 | 5,826 | ||||||
| Equity | ||||||||
| Howmet Aerospace shareholders’ equity: | ||||||||
| Common stock | 401 | 402 | ||||||
| Additional capital | 2,187 | 2,531 | ||||||
| Retained earnings | 4,625 | 4,093 | ||||||
| Accumulated other comprehensive loss | (1,691 | ) | (1,673 | ) | ||||
| Total equity | 5,522 | 5,353 | ||||||
| Total liabilities and equity | $ | 13,067 | $ | 11,179 | ||||
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Howmet Aerospace Inc. and subsidiaries
Statement of Consolidated Cash Flows (unaudited)
(in U.S. dollar millions)
| First quarter ended | ||||||||
| March 31, | ||||||||
| 2026 | 2025 | |||||||
| Operating activities | ||||||||
| Net income | $ | 580 | $ | 344 | ||||
| Adjustments to reconcile net income to cash provided from operations: | ||||||||
| Depreciation and amortization | 74 | 69 | ||||||
| Deferred income taxes | 15 | 18 | ||||||
| Restructuring and other credits | (93 | ) | (4 | ) | ||||
| Net realized and unrealized losses | 4 | 5 | ||||||
| Net periodic pension cost | 11 | 10 | ||||||
| Stock-based compensation | 21 | 14 | ||||||
| Other | 3 | 3 | ||||||
| Changes in assets and liabilities, excluding effects of acquisitions, divestitures, and foreign currency translation adjustments: | ||||||||
| Increase in receivables | (164 | ) | (189 | ) | ||||
| Increase in inventories | (110 | ) | (49 | ) | ||||
| (Increase) decrease in prepaid expenses and other current assets | (12 | ) | 24 | |||||
| Increase in accounts payable, trade | 220 | 58 | ||||||
| Decrease in accrued expenses | (100 | ) | (91 | ) | ||||
| Increase in taxes, including income taxes | 26 | 60 | ||||||
| Increase in noncurrent assets | (5 | ) | (1 | ) | ||||
| Decrease in noncurrent liabilities | (17 | ) | (18 | ) | ||||
| Cash provided from operations | 453 | 253 | ||||||
| Financing Activities | ||||||||
| Net change in commercial paper | 450 | — | ||||||
| Additions to debt | 1,200 | — | ||||||
| Repurchases and payments on debt | — | (1 | ) | |||||
| Debt issuance costs | (12 | ) | — | |||||
| Repurchases of common stock | (300 | ) | (125 | ) | ||||
| Dividends paid to shareholders | (48 | ) | (42 | ) | ||||
| Taxes paid for net share settlement of equity awards | (64 | ) | — | |||||
| Other | — | 1 | ||||||
| Cash provided from (used for) financing activities | 1,226 | (167 | ) | |||||
| Investing Activities | ||||||||
| Capital expenditures | (94 | ) | (119 | ) | ||||
| Acquisitions, net of cash acquired | (118 | ) | — | |||||
| Proceeds from the sale of assets and businesses | 225 | 5 | ||||||
| Sale of investments | 2 | — | ||||||
| Other | (1 | ) | (1 | ) | ||||
| Cash provided from (used for) investing activities | 14 | (115 | ) | |||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | — | 1 | ||||||
| Net change in cash, cash equivalents and restricted cash | 1,693 | (28 | ) | |||||
| Cash, cash equivalents and restricted cash at beginning of period | 743 | 565 | ||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 2,436 | $ | 537 | ||||
| 9 |
Howmet Aerospace Inc. and subsidiaries
Segment Information (unaudited)
(in U.S. dollar millions)
| 2024 | 1Q25 | 2Q25 | 3Q25 | 4Q25 | 2025 | 1Q26 | ||||||||||||||||||||||
| Engine Products | ||||||||||||||||||||||||||||
| Third-party sales | $ | 3,671 | $ | 974 | $ | 1,038 | $ | 1,087 | $ | 1,143 | $ | 4,242 | $ | 1,253 | ||||||||||||||
| Inter-segment sales | $ | 6 | $ | 2 | $ | 3 | $ | 2 | $ | 1 | $ | 8 | $ | 2 | ||||||||||||||
| Provision for depreciation and amortization | $ | 138 | $ | 33 | $ | 35 | $ | 37 | $ | 39 | $ | 144 | $ | 38 | ||||||||||||||
| Segment Adjusted EBITDA | $ | 1,129 | $ | 318 | $ | 343 | $ | 362 | $ | 393 | $ | 1,416 | $ | 458 | ||||||||||||||
| Segment Adjusted EBITDA Margin | 30.8 | % | 32.6 | % | 33.0 | % | 33.3 | % | 34.4 | % | 33.4 | % | 36.6 | % | ||||||||||||||
| Restructuring and other charges | $ | 1 | $ | — | $ | — | $ | — | $ | 88 | $ | 88 | $ | — | ||||||||||||||
| Capital expenditures | $ | 216 | $ | 85 | $ | 74 | $ | 73 | $ | 84 | $ | 316 | $ | 59 | ||||||||||||||
| Fastening Systems | ||||||||||||||||||||||||||||
| Third-party sales | $ | 1,576 | $ | 412 | $ | 431 | $ | 448 | $ | 454 | $ | 1,745 | $ | 471 | ||||||||||||||
| Inter-segment sales | $ | 1 | $ | — | $ | — | $ | — | $ | 1 | $ | 1 | $ | — | ||||||||||||||
| Provision for depreciation and amortization | $ | 47 | $ | 12 | $ | 12 | $ | 12 | $ | 12 | $ | 48 | $ | 13 | ||||||||||||||
| Segment Adjusted EBITDA | $ | 406 | $ | 127 | $ | 126 | $ | 138 | $ | 139 | $ | 530 | $ | 150 | ||||||||||||||
| Segment Adjusted EBITDA Margin | 25.8 | % | 30.8 | % | 29.2 | % | 30.8 | % | 30.6 | % | 30.4 | % | 31.8 | % | ||||||||||||||
| Restructuring and other charges (credits) | $ | 5 | $ | — | $ | 1 | $ | — | $ | (1 | ) | $ | — | $ | — | |||||||||||||
| Capital expenditures | $ | 26 | $ | 10 | $ | 9 | $ | 13 | $ | 20 | $ | 52 | $ | 17 | ||||||||||||||
| Engineered Structures | ||||||||||||||||||||||||||||
| Third-party sales | $ | 1,129 | $ | 304 | $ | 308 | $ | 307 | $ | 307 | $ | 1,226 | $ | 294 | ||||||||||||||
| Inter-segment sales | $ | 28 | $ | 7 | $ | 8 | $ | 7 | $ | 4 | $ | 26 | $ | 8 | ||||||||||||||
| Provision for depreciation and amortization | $ | 43 | $ | 13 | $ | 10 | $ | 10 | $ | 10 | $ | 43 | $ | 10 | ||||||||||||||
| Segment Adjusted EBITDA | $ | 187 | $ | 67 | $ | 68 | $ | 64 | $ | 66 | $ | 265 | $ | 66 | ||||||||||||||
| Segment Adjusted EBITDA Margin | 16.6 | % | 22.0 | % | 22.1 | % | 20.8 | % | 21.5 | % | 21.6 | % | 22.4 | % | ||||||||||||||
| Restructuring and other charges (credits) | $ | 12 | $ | (4 | ) | $ | — | $ | — | $ | — | $ | (4 | ) | $ | (93 | ) | |||||||||||
| Capital expenditures | $ | 23 | $ | 6 | $ | 7 | $ | 10 | $ | 13 | $ | 36 | $ | 12 | ||||||||||||||
| Forged Wheels | ||||||||||||||||||||||||||||
| Third-party sales | $ | 1,054 | $ | 252 | $ | 276 | $ | 247 | $ | 264 | $ | 1,039 | $ | 295 | ||||||||||||||
| Provision for depreciation and amortization | $ | 42 | $ | 10 | $ | 10 | $ | 11 | $ | 11 | $ | 42 | $ | 11 | ||||||||||||||
| Segment Adjusted EBITDA | $ | 287 | $ | 68 | $ | 76 | $ | 73 | $ | 79 | $ | 296 | $ | 90 | ||||||||||||||
| Segment Adjusted EBITDA Margin | 27.2 | % | 27.0 | % | 27.5 | % | 29.6 | % | 29.9 | % | 28.5 | % | 30.5 | % | ||||||||||||||
| Restructuring and other charges (credits) | $ | 1 | $ | — | $ | (1 | ) | $ | — | $ | — | $ | (1 | ) | $ | — | ||||||||||||
| Capital expenditures | $ | 45 | $ | 15 | $ | 8 | $ | 9 | $ | 4 | $ | 36 | $ | 3 | ||||||||||||||
Differences between the total segment and consolidated totals are in Corporate.
In the first quarter of 2026, the Company reorganized Howmet’s segments by moving a titanium alloy location from Engine Products to Engineered Structures as it better aligns with the operations of the Engineered Structures segment. The comparable periods of Engine Products and Engineered Structures have been recast to reflect the new alignment. The recasting had no impact on the Company’s consolidated results, financial position or cash flows.
| 10 |
Howmet Aerospace Inc. and subsidiaries
Calculation of Financial Measures (unaudited)
(in U.S. dollar millions)
Reconciliation of Total Segment Adjusted EBITDA to Consolidated Operating income
| 2024 | 1Q25 | 2Q25 | 3Q25 | 4Q25 | 2025 | 1Q26 | ||||||||||||||||||||||
| Income before income taxes | $ | 1,383 | $ | 446 | $ | 469 | $ | 495 | $ | 430 | $ | 1,840 | $ | 708 | ||||||||||||||
| Loss on debt redemption | 6 | — | — | — | 15 | 15 | — | |||||||||||||||||||||
| Interest expense, net | 182 | 39 | 38 | 37 | 37 | 151 | 43 | |||||||||||||||||||||
| Other expense, net | 62 | 9 | 14 | 10 | 7 | 40 | 2 | |||||||||||||||||||||
| Operating income | $ | 1,633 | $ | 494 | $ | 521 | $ | 542 | $ | 489 | $ | 2,046 | $ | 753 | ||||||||||||||
| Segment provision for depreciation and amortization | 270 | 68 | 67 | 70 | 72 | 277 | 72 | |||||||||||||||||||||
| Unallocated amounts: | ||||||||||||||||||||||||||||
| Restructuring and other charges (credits) | 21 | (4 | ) | — | — | 88 | 84 | (93 | ) | |||||||||||||||||||
| Corporate expense(1) | 85 | 22 | 25 | 25 | 28 | 100 | 32 | |||||||||||||||||||||
| Total Segment Adjusted EBITDA | $ | 2,009 | $ | 580 | $ | 613 | $ | 637 | $ | 677 | $ | 2,507 | $ | 764 | ||||||||||||||
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 is defined as Operating Income excluding Restructuring and other charges (credits) and Special items and Provision for depreciation and amortization. Special items, including Restructuring and other charges (credits), are excluded from Adjusted EBITDA. Current and prior periods’ Segment Adjusted EBITDA calculations have not changed although the definitions have been simplified. Differences between the total segment and consolidated totals are in Corporate.
(1) Pre-tax special items included in Corporate expense
| 1Q25 | 2Q25 | 3Q25 | 4Q25 | 2025 | 1Q26 | |||||||||||||||||||
| Acquisition and acquisition-related costs(1) | $ | — | $ | — | $ | — | $ | 2 | $ | 2 | $ | 6 | ||||||||||||
| Costs (benefits) associated with closures, supply chain disruptions, and other items | 1 | (1 | ) | — | 1 | 1 | — | |||||||||||||||||
| Total Pre-tax special items included in Corporate expense | $ | 1 | $ | (1 | ) | $ | — | $ | 3 | $ | 3 | $ | 6 | |||||||||||
| (1) | Excludes interest expense related to the Consolidated Aerospace Manufacturing, LLC acquisition. |
| 11 |
Howmet Aerospace Inc. and subsidiaries
Calculation of Financial Measures (unaudited), continued
(in U.S. dollars millions)
Reconciliation of Free cash flow
| Quarter ended | ||||||||
| 1Q25 | 1Q26 | |||||||
| Cash provided from operations | $ | 253 | $ | 453 | ||||
| Capital expenditures | (119 | ) | (94 | ) | ||||
| Free cash flow | $ | 134 | $ | 359 | ||||
| Cash (used for) provided from financing activities | $ | (167 | ) | $ | 1,226 | |||
| Cash (used for) provided from investing activities | $ | (115 | ) | $ | 14 | |||
The Accounts Receivable Securitization program remains unchanged at $250 outstanding.
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.
| 12 |
Howmet Aerospace Inc. and subsidiaries
Calculation of Financial Measures (unaudited), continued
(in U.S. dollar millions, except per-share and share amounts)
Reconciliation of Adjusted Net income
| Quarter ended | ||||||||||||
| 1Q25 | 4Q25 | 1Q26 | ||||||||||
| Net income | $ | 344 | $ | 372 | $ | 580 | ||||||
| Diluted earnings per share ("EPS") | $ | 0.84 | $ | 0.92 | $ | 1.44 | ||||||
| Average number of diluted shares | 407 | 404 | 403 | |||||||||
| Special items: | ||||||||||||
| Restructuring and other (credits) charges(1) | (4 | ) | 88 | (93 | ) | |||||||
| Loss on debt redemption | — | 15 | — | |||||||||
| Acquisition and acquisition-related costs(2) | — | 2 | 7 | |||||||||
| Costs associated with closures, supply chain disruptions, and other items | 1 | 1 | — | |||||||||
| Subtotal: Pre-tax special items | (3 | ) | 106 | (86 | ) | |||||||
| Tax impact of Pre-tax special items(3) | 1 | (26 | ) | 30 | ||||||||
| Subtotal | (2 | ) | 80 | (56 | ) | |||||||
| Discrete and other tax special items(4) | 9 | (26 | ) | (30 | ) | |||||||
| Total: After-tax special items | 7 | 54 | (86 | ) | ||||||||
| Adjusted Net income | $ | 351 | $ | 426 | $ | 494 | ||||||
| Adjusted EPS | $ | 0.86 | $ | 1.05 | $ | 1.22 | ||||||
Adjusted Net income and Adjusted EPS 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 (credits) charges, 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 Adjusted Net income and Adjusted EPS. The change in the titles of and removal of "excluding special items" from Net income excluding Special items and Diluted EPS excluding Special items to Adjusted Net income and Adjusted EPS has not changed the definition of these measures.
| (1) | Restructuring and other (credits) charges for the quarter ended March 31, 2026 included a gain on the sale of the Company's disk forging facility in Savannah, GA within Engineered Structures. Restructuring and other (credits) charges for the quarter ended December 31, 2025 included a non-cash pension settlement charge of $89 primarily resulting from the purchase of group annuity contracts with a third-party carrier to pay and administer future annuity payments for its U.K. pension plan which reduced gross pension obligations. |
| (2) | Includes legal and advisory costs, amortization expense of inventory step-up recorded in accordance with purchase accounting, and other acquisition-related costs. Additionally, includes interest expense related to the Consolidated Aerospace Manufacturing, LLC acquisition. |
| (3) | 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. |
| (4) | Discrete tax items for each period included the following: |
| · | for 1Q25, a net charge related to the expiration of a tax holiday in China $6, a charge for a tax reserve established in Germany $2, and a net charge for other small items $1; |
| · | for 4Q25, a benefit to release a valuation allowance related to U.S. foreign tax credits ($8), a benefit to release a valuation allowance related to U.S. state tax losses and credits ($6), a net benefit for prior year tax adjustments ($4), an excess benefit for stock compensation ($3), a benefit related to re-establishing a tax holiday in China ($4), a net benefit for other small items ($2), and a charge related to the expiration of a tax holiday in China $2; and |
| · | for 1Q26, an excess benefit for stock compensation ($21). |
| 13 |
Howmet Aerospace Inc. and subsidiaries
Calculation of Financial Measures (unaudited), continued
(in U.S. dollar millions)
Reconciliation of Operational tax rate
| 1Q26 | ||||||||||||
| Effective tax rate, as reported | Special items(1)(2) | Operational tax rate, as adjusted | ||||||||||
| Income before income taxes | $ | 708 | $ | (86 | ) | $ | 622 | |||||
| Provision for income taxes | $ | 128 | $ | — | $ | 128 | ||||||
| Tax rate | 18.1 | % | 20.6 | % | ||||||||
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) | Pre-tax special items for 1Q26 included Restructuring and other credits ($93) and Acquisition and acquisition-related costs $7. |
| (2) | Tax Special items includes 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 1Q26 included an excess benefit for stock compensation ($21). (Tax deduction is based on stock price at vesting date while book expense is based on stock price at grant date.) |
| 14 |
Howmet Aerospace Inc. and subsidiaries
Calculation of Financial Measures (unaudited), continued
(in U.S. dollars millions)
Reconciliation of Adjusted EBITDA and Adjusted EBITDA margin
| Quarter ended | ||||||||||||
| 1Q25 | 4Q25 | 1Q26 | ||||||||||
| Sales | $ | 1,942 | $ | 2,168 | $ | 2,313 | ||||||
| Operating income | $ | 494 | $ | 489 | $ | 753 | ||||||
| Operating income margin | 25.4 | % | 22.6 | % | 32.6 | % | ||||||
| Operating income | $ | 494 | $ | 489 | $ | 753 | ||||||
| Add: | ||||||||||||
| Restructuring and other (credits) charges | $ | (4 | ) | $ | 88 | $ | (93 | ) | ||||
| Provision for depreciation and amortization | 69 | 73 | 74 | |||||||||
| Acquisition and acquisition-related costs(1) | — | 2 | 6 | |||||||||
| Costs associated with closures, supply chain disruptions, and other items | 1 | 1 | — | |||||||||
| Adjusted EBITDA | $ | 560 | $ | 653 | $ | 740 | ||||||
| Adjusted EBITDA margin | 28.8 | % | 30.1 | % | 32.0 | % | ||||||
Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures. The removal of "excluding special items" from Adjusted EBITDA and Adjusted EBITDA margin has not changed the definition of these 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 is defined as Operating Income excluding Restructuring and other (credits) charges and Special items and Provision for depreciation and amortization. Special items, including Restructuring and other (credits) charges, are excluded from Adjusted EBITDA. Current and prior periods’ Adjusted EBITDA calculations have not changed although the definitions have been simplified.
| (1) | Excludes interest expense related to the Consolidated Aerospace Manufacturing, LLC acquisition. |
| 15 |
Howmet Aerospace Inc. and subsidiaries
Calculation of Financial Measures (unaudited), continued
(in U.S. dollar millions)
Reconciliation of Adjusted Operating Income and Adjusted Operating Income Margin
| Quarter ended | ||||||||||||
| 1Q25 | 4Q25 | 1Q26 | ||||||||||
| Sales | $ | 1,942 | $ | 2,168 | $ | 2,313 | ||||||
| Operating income | $ | 494 | $ | 489 | $ | 753 | ||||||
| Operating income margin | 25.4 | % | 22.6 | % | 32.6 | % | ||||||
| Operating income | $ | 494 | $ | 489 | $ | 753 | ||||||
| Add: | ||||||||||||
| Restructuring and other (credits) charges | $ | (4 | ) | $ | 88 | $ | (93 | ) | ||||
| Acquisition and acquisition-related costs(1) | — | 2 | 6 | |||||||||
| Costs associated with closures, supply chain disruptions, and other items | 1 | 1 | — | |||||||||
| Adjusted operating income | $ | 491 | $ | 580 | $ | 666 | ||||||
| Adjusted operating income margin | 25.3 | % | 26.8 | % | 28.8 | % | ||||||
Adjusted operating income and Adjusted operating income margin 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 and Operating income margin determined under GAAP as well as Adjusted operating income and Adjusted operating income margin. The removal of "excluding special items" from Adjusted operating income and Adjusted operating income margin has not changed the definition of these measures.
| (1) | Excludes interest expense related to the Consolidated Aerospace Manufacturing, LLC acquisition. |
| 16 |